Despite a projected 8.5% increase in health care costs in 2024, two-thirds of employers say passing any or all of the increase on to their employees is off the table. Instead, companies are focused on encouraging preventive care and easing financial barriers to seeking care to help mitigate costs to "bend the trend."
Health care benefits also play a central role in recruiting and retaining employees. With 66% of employers ranking retention as their company's top HR priority for 2023, many are reluctant to share health care cost increases with their employees.
Rising levels of financial stress among employees – and the corresponding negative effect on workforce productivity – are additional cost-sharing considerations for employers. In a recent survey, only 42% of employees reported feeling financially well, the lowest rate since 2010.
As employers seek alternative options for absorbing the cost increases, three strategies are emerging: increased emphasis on preventive care, enhanced care access and expanded cost transparency.
3 strategies to manage health care costs
By educating employees to be better health care consumers, employers can better manage health care costs for their workforces. Let's explore three strategies.
1. Increased emphasis on preventive care
The pandemic, followed by increased inflation, led many employees to postpone regular checkups and recommended health care screenings. Forty-three percent of insured adults report they or their family members have delayed medical care due to financial concerns.
Along with the health impact on employees, delayed care can result in higher costs related to the increased severity of conditions. There are also more emergency room visits.
Employers have a variety of strategies to encourage employees to take advantage of preventive care benefits. Plan designs often incentivize preventive care with reduced or no copays. High-deductible health plans (HDHP) paired with a health savings account (HSA) waive the deductible for preventive care and give employees a tax-advantaged way to save for medical expenses.
Beyond financial incentives, integrated wellness programs, onsite screening events and personalized reminders are effective tools to help employers boost employee participation in preventive care.
2. Enhanced care access
Health care system complexity makes accessing care feel daunting to employees, causing delays that lead to higher treatment costs. Health inequities also come into play, with health care disparities related to race, socioeconomic status and gender accounting for an estimated $42 billion in lost productivity annually.
Employers can make care more accessible by offering virtual care options and increased schedule flexibility to accommodate appointments. Health care navigation, dedicated care teams and concierge care services enhance access by assisting employees with the time-consuming tasks of coordinating care and guiding them toward cost-efficient, high-quality care.
By addressing care access and equity, employers help employees reduce out-of-pocket costs and drive overall savings through improved health outcomes.
3. Expanded cost transparency
One of the most impactful ways employers can control health care costs is by empowering employees to become better health care consumers. Providing educational resources and decision tools helps employees compare available care options and make more informed choices.
At Harvard Pilgrim Health Care, we help employers put information at their employees' fingertips during the enrollment period and beyond. An interactive Decision Doc tool, powered by HYKE, enables employees to create a health needs profile and access cost comparisons and personalized guidance as they make their enrollment selections. Post-enrollment, the Estimate My Cost tool assists members in finding providers and comparing costs for more than 800 different services and procedures as needed.
Addressing rising health care costs without increasing the financial burden on employees requires employers to adopt multiple strategies, ranging from plan design structure to employee resources. Engaging employees by enhancing care access, improving preventive care and ensuring better transparency are essential for controlling costs while maintaining care quality for the workforce.
Learn more about how Harvard Pilgrim Health Care, a Point32Health company, can help build whole-health benefits packages to support employees and their families.
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
