"Containing Rising Healthcare Costs: Ten Innovative Strategies
for Employers to Consider"
No author cited
Hay Group, November 2004.
Available Online
According to this Hay Group report, employer health care spending has risen
at a faster than expected rate over the last four years. Between 1994 and
2000,
medical premiums experienced annual increases in the single digits. According
to the 2004 Hay Benefits Report, however, the past four years have seen
whopping double-digit annual rate increases, including a 10.5 percent increase
in 2004.
The report gives several reasons for the rapid rise of health care costs,
such as:
- The rise of prescription drug prices, particularly injectables.
- Employee preferences for Preferred Provider Organization (PPO) plans
over the more restrictive and less costly Health Maintenance Organization
(HMO) and Point of Service (POS) plans.
- Increased public pressure on insurers and health plans which limits
managed restrictions on care.
- An aging employee population that requires more care.
- The declining health of the American population overall, particularly
in the areas of obesity, diabetes, and heart disease.
- The rise of malpractice insurance premiums.
Hay suggests the following 10 steps to help curb the rise in health care
costs:
- Negotiate with insurers
- Evaluate funding effectiveness
- Evaluate administrative effectiveness
- Consolidate plan offerings
- Ask employees to share the burden
- Redesign prescription drug programs
- Redesign retiree medical programs
- Actively manage employee health
- Check out consumer-driven health plans
- Promote smart employee consumerism through communication
The report cautions that not every strategy will work for every company
and suggests that businesses align their approach with their culture.
Print this
page
