Containing Healthcare Costs
In line with the previous article, healthcare costs are on the rise and are moving up faster than inflation. The projection for 2025 is an increase of around 8 percent, with a big driver being pharmacy costs, which now account for over a quarter of overall healthcare expenses, with “Big Pharma” pouring money into advertising. Some tips to help employers contain costs – at least a bit – include the following (from Online Sources):
As much as possible, consider using an RFP process to obtain better pricing from healthcare vendors, and monitor the return obtained for the money spent with them. More cost-effective options may be available.
Try to find providers that can deliver specialized medical care that meet specific cost and quality benchmarks, including ongoing/chronic illnesses (e.g., diabetes).
Because pharmacy is multi-faceted, consider exploring alternatives for pharmacy providers, including different vendors for different types of medications. The example is given of pairing employees using GLP-1 medications with resources for nutritional counseling, diabetes management, etc.
Help employees navigate the healthcare delivery system, including education(s) and counseling to explain cost-sharing programs and help them in their decision-making.
For larger employers, consider building a worksite health center or team up with other nearby companies to do so. This can be quite an expensive proposition but can also produce considerable savings in the longer term.
Analyze claims data to determine vendor performance, network utilization, geographic limitations, etc., to determine the optimal approach for the employer.
Things to guard against that can adversely affect employee morale or usage include excessive cost-sharing, cost-containment programs that adversely affect one group of employees as opposed to others, and implementing an overly complex program that challenges employees’ comprehension and strains those within the company who are responsible for administering the plan.