Let’s face it. Healthcare costs can weigh heavily on your company’s bottom line. In fact, according to the Aon Hewitt Health Value Initiative database, the average healthcare cost per employee topped $11,000 in 2015.
There are two ways companies can go about lowering costs.
The first is what most people think of – reduce benefits – but it’s also loathed by employees. How many times have benefits managers said that reducing benefits is a last gasp at saving money? It destroys morale, makes it hard to retain key employees, and makes it harder to recruit talent. Reducing benefits can mean anything from higher deductibles, higher co-pays, and a higher cap on out-of-pocket spending to fewer services covered.
The second is strategic – get more out of every dollar invested in healthcare spending. So, if your company has opted for self-funding, you’ve already taken the first step to reducing costs, without sacrificing quality.
How else can you get more value out of every dollar invested?
- Unbundle services – When services are bundled together – stop-loss, medical, Rx, dental, vision, wellness, and other voluntary benefits – you get some at a fair, or even low, market cost. But you also get some at a higher than market cost. With bundling you end up paying the price…literally. The problem is compounded since you don’t even know the breakout of the individual vendor fees because everything is lumped together. When you unbundle you have transparency and can see exactly what you are getting and how much you are paying. Your company then has the latitude to shop around from the best in category vendors at the best price.
- Understand your employee base – The more you know about your employees’ healthcare needs and the factors that influence them, the more you can select the appropriate vendor services for your company. A company in Utah with 200 employees will have a different healthcare plan profile need than a company in Florida with 500 employees.
- Encourage systematic positive behavior – Positive. Positive. When you see a positive trend related to employee healthcare behavior, it should be further encouraged. Think smoking cessation, taking medicines as prescribed, better nutrition, and having annual physicals.
- Vendors that specialize in cost mitigation – It’s a whole new world out there in healthcare, and you don’t need to confine yourself to the plain vanilla healthcare vendors. If you spot a trend, there’s probably a specialized vendor to help you figure out how to contain the cost. We’re talking everything from out-of-network repricing services to telemedicine.
To learn more about the benefits of self-funded healthcare plans, download our white paper Maximizing Your Company’s Self-Funded Healthcare Benefit Plan today.