Addressing Rising Healthcare Costs with Employees
Virtually all employers are being faced with the ‘squeeze’ of rising healthcare costs that are outpacing the growth of revenue streams. Unless they are assisted in understanding why that squeeze is occurring, employees see only their side of the picture: the employer wants to deduct more from their pay for insurance. (Or, if the employer is paying the entire cost, raises are getting smaller.) Helping employees to understand the whole picture is an important aspect of the employment relationship. The big question becomes how to do that. From OAA come the following strategies:
Develop clear, concise and simple messaging. It is very important to use straightforward language to explain why costs are rising and what steps the organization is taking to manage them. Consider highlighting any positive changes, such as coverage for more specialty drugs or added wellness benefits.
Educate employees on cost drivers and plan usage. Employers can share insights on how employees can use their plans effectively, avoid unnecessary costs and understand the value of their benefits. Resources like cost comparison tools and provider directories can be helpful for employees. These may be available from the insurance providers themselves.
Highlight cost-containment efforts. Show employees what the company is doing to manage costs (e.g., negotiating with providers, using reference-based pricing, offering telehealth or investing in wellness programs). This reassures them that the company is actively working to protect their benefits.
Use real-world examples. For example, explain how a new high-cost medication impacts premiums or why increased mental health utilization is a positive but costly trend.
Explain macroeconomic factors. The main point for employees to understand is that these rising costs are not specific to the organization—they are happening everywhere. To help employees understand the bigger picture, employers can explain why costs are increasing (e.g., inflation, labor costs, diagnostics and therapeutics advances and provider consolidation).
