TIP: If you are enrolled in a managed care plan or HMO, always try to choose doctors, hospitals and other providers that participate in your insurance company's network.
Across the country, health care costs have been increasing at rates that pose stiff challenges to employers, public health agencies and state and federal governments. It’s no longer news that our health care system is ailing or that the current rate of health care cost inflation is unsustainable. Many factors contribute to the crisis. High costs of medical malpractice, dramatic increases in hospital costs, the increasing numbers of under-insured and uninsured in need of care, reduced public-sector spending, widespread use of expensive prescription drugs, the high costs of new medical technologies, workforce labor shortages, increased patient volume and longevity and consumer-driven demands for increased and better care have all been implicated in the problem.
According to U.S. Census Bureau statistics, 177 million Americans rely on employer-sponsored insurance for their health care coverage. Health plans are often an important factor in employee recruitment and retention and employers are understandably reluctant to withdraw this important benefit. But with health care spending increasing at roughly twice the rate of inflation, health-related costs are consuming a larger and larger share of both employers’ profits and workers’ salaries. And employers everywhere are taking steps to mitigate the effects.
How Employers Are Controlling Health Care Costs
Among the tactics currently being explored by employers to help control their health care spending are:
- Focusing on changing the health behaviors that contribute to increased costs
- Providing financial and other incentives for participation in health risk assessments and other health promotion programs
- Increasing employee copayments and coinsurance to promote cost-effective use of prescription drug plans and health care services
- Increasing the employee’s share of premium contributions to encourage cost-effective plan selection
- Eliminating high-cost health insurance plans or restricting enrollment in higher-cost plans
- Capping the portion of health care costs paid by the employer
- Increasing the portion of premiums paid by retirees for themselves and their dependents
- Establishing programs to help chronically ill employees better manage their illnesses (using strategies such as medical interventions, reduced drug copays and incentives)
- Incentivizing employees to take better care of themselves and charging those who do not higher premiums
In addition to specific cost-control strategies now being considered and applied by employers, a number of hotly debated topics are have been under examination by employers, policymakers and industry leaders in the national health care arena. These topics include:
- Universal access to health care
- Public health campaigns focused on diet and lifestyle change
- Drug pricing and pharmaceutical industry regulation
- Health savings accounts and related tax incentives
For more information on current issues and trends in health care at the national level, see:
Healthcare.gov is a federal government website managed by the U.S. Department of Health & Human Services. It includes both public and private health insurance options from across the nation, extensive information about consumer rights, how to navigate the health insurance marketplace, and how the Affordable Care Act can help. Get more information here...
The Health Research Institute of PricewaterhouseCoopers provides intelligence, perspective and analysis on trends affecting health care spending and service delivery. Read specific reports on industry trends and issues
Busted: Ten Myths about Healthcare, from the Spring/Summer 2008 issue of Findings, University of Michigan School of Public Health. Read the article here
Sick Around the World: Can the U.S. learn anything from the rest of the world about how to run a health care system? This PBS FRONTLINE documentary examines how five capitalist democracies deliver health care, and what the United States might learn from their successes and their failures. Watch the program online
The University of Michigan Center for Value-Based Insurance Design was established in 2005 to develop, evaluate and promote value-based insurance initiatives that achieve improvements in health outcomes and contain health care costs. Get more information here