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Save on your healthcare costs with immediate and long-term solutions



Save on your healthcare costs with immediate and long-term solutions

 

Since companies started offering healthcare insurance as a benefit during World War II to entice employees during the wage freeze, costs have increased steadily while benefits have vacillated.

 

“In recent years, we had an area employer whose benefit plan paid as much as 97 percent of all employee health costs,” said Tom Butterbaugh, director of managed care at Baptist Health Paducah, “but because of the cost, the pendulum is swinging back.”

 

Why are healthcare costs so high? Although there are complex reasons, the simple answers are:

  • We are living longer, needing more healthcare.
  • The costs to produce and obtain lifesaving pharmaceuticals and technology are increasing.
  • The healthy population – the country’s workers covered by employer-provided health plans – pays more to offset providers’ costs not covered by government-covered plans for the disadvantaged, elderly and disabled.

 

In today’s economy, employers large and small desperately look for ways to reduce healthcare costs while retaining their employees.

 

Butterbaugh said they can best approach the issue like any other business plan with short-term, intermediate and long-term results.

 

For quick savings

 

To reap some immediate savings, employers can have their brokers:

  • Make sure the dependents you are insuring are supposed to be covered. For example, if you are extending coverage to college-age students, require proof that they are in college. “This alone has saved some companies a significant amount,” Butterbaugh said.
  • Manage coverage of employee spouses. If your employee’s spouse can get coverage through his or her own employer, require him or her to have primary coverage there before joining your plan as a dependent.

 

Intermediate results

 

Many employers now are looking at consumer-driven plans, which could provide some savings in two to three years as employees become better healthcare consumers.

 

Kiplinger says while most employers experience about a 7 percent increase yearly in insurance costs, aggressive employers can hold increases to about 1 percent by offering a multi-pronged approach, combining a high deductible insurance with the tax advantage Health Savings Accounts and/or Health Reimbursement Arrangements.

 

The intent of these plans is not to keep employees from getting necessary care; in fact, many still pay for preventive care because they find that paying the full amount of annual physicals, mammograms, prostate screenings, flu shots, colonoscopies and prenatal visits actually reduces costs.

 

Consumerism arrangements encourage employees to spend healthcare dollars more wisely. Employees who have been accustomed to paying $10 or $20 co-pays without much thought for the total medical costs will suddenly spend more carefully when faced with sharing medical costs.

 

Perhaps that doctor’s visit or name-brand prescription isn’t necessary after all.

 

“When they have more ‘skin in the game,’ it causes them to pause and think about what’s needed, and where to get it” Butterbaugh said. “For example, if I have a cold and I have to pay a higher deductible, I think more about going to the doctor when I know it’s viral and can be treated with over-the-counter medicines.  Similarly, I’ll be less likely to use an emergency room for a minor illness that could wait to see my primary care provider”

 

Long-term solutions

 

Companies can see a real return – Forbes estimates $3 for every $1 invested – in five to 10 years with wellness programs. If employees improve their health overall by participating in fitness programs and attending early-detection screenings, they will need less medical care and will be productive longer.

 

“The other benefit of wellness programs is that they create employee loyalty and improve retention,” Butterbaugh said.

 

As the region’s largest employer, Baptist Health Paducah offers a wellness program for its 1,700 employees, including the American Heart Association’s Start! Walking program, smoking cessation assistance and free screenings. It is offering programs to smaller companies, too.

 

Finally, Butterbaugh suggests employers shop around for the best deals in insurance for their employees. “You should hire a broker the same way you hire your accountant,” he said. “Interview several, pick the best and then stay with him until he’s not providing the return you expect and then don’t be afraid to change.”