How Employee Engagement Can Reduce Healthcare Costs

Americans don’t agree on much, but everyone acknowledges that healthcare costs are just too high. Even employees who have no complaints about their employer-sponsored insurance are aware that providing high-quality coverage puts a big burden on the company. Ballooning insurance costs translate to financial strain, which trickles down to employees in the form of budget cuts and staffing changes.

That’s why it makes so much sense to include employees in discussions about rising healthcare costs. That might represent a radical change from the status quo in some companies, but it’s a change worth making. Employee engagement looks different in each company, and it’s up to the employer to find the blend of programs and initiatives that’s most beneficial – both for employee health and satisfaction, and for the bottom line.

Wellness Programs

Offering to foot the bill for employees’ gym memberships and smoking cessation programs can really pay off in the long run. In the 2013 RAND Wellness Programs Study, which included more than 600,000 employees, researchers found that employers who offered wellness programs saw a return of investment of $1.50 in health care costs for every dollar spent on the programs. Other studies have found ROIs of $2 to $3 per dollar spent on wellness programs. As long as the employer designs wellness programs without violating the privacy of or excluding any employees, these offerings can be hugely successful for everyone.

Price Transparency

“How much will that cost?” is a question that too few Americans know to ask of their healthcare providers. Without knowing the costs that are associated with services, employees commit to out-of-pocket expenses that they can’t afford. Encouraging employees to ask their providers for price transparency empowers them to make the best choices for themselves and their families, while also helping to keep their employers’ costs down. Massachusetts law requires physicians and hospitals to provide price estimates when patients ask for them. Make sure employees know that they can exercise that right.

ER Overuse

It’s definitely not an employer’s place to tell employees not to not to seek medical treatment. That’s a decision that only the individual and his or her doctor should make. But when patients visit the emergency room for a non-emergency visit, the costs pile up quickly. In a 2015 survey done by the American College of Emergency Physicians, 75 percent of ER physicians reported that their departments have seen patient numbers increase slightly or greatly since the rollout of the Affordable Care Act. Considering the average ER visit costs upwards of $1,000 – and some visits cost significantly more – it’s clear that unnecessary trips put a financial burden on both employees and employers. Taking steps to curb those trips is in everyone’s best interest. That might mean making it easier for employees to access clinics and urgent-care centers and/or setting ER copays at a higher rate to discourage nonessential visits.

Pharmacy Costs

Prescription drug costs are skyrocketing, making it difficult or sometimes impossible for employees to afford the medications that they and their families need. Using a pharmacy carve-out method – in which an employer contracts a pharmacy benefits manager (PBM), who administers the employer’s pharmacy benefits – gives the employer the flexibility to design a pharmacy plan that meets its specific needs, and to negotiate for the lowest-priced benefits. This strategy also allows for more price transparency than other methods, meaning that the employer’s costs and the employees’ out-of-pocket costs are limited.

Have questions about how to cut costs without sacrificing the quality of coverage your employees receive? As always, contact us with any questions.


Contact Block (Blog)

Recent Comments

    Newsletter Signup

    Signup to start receiving the latest newsletters from StopLoss right to your email.
    Stay up to date on insurance trends and insights.

    Back to Top

    In 2011, the top 5 most expensive medical conditions treated in US hospitals were: Septicemia, Osteoarthritis, Complication of device, implant or graft, Liveborn, and Acute myocardial infarction

    From 2010 to 2013, the number of claims that were individually $1 million or above rose by 1,000%

    In 2017 approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape.

    In 2014, 98% of large firms (= 200 Workers) offer 1+ wellness programs to their employees.

    The most costly 1% of patients account for 20% of national health expenditures – accruing average annual expenses of nearly $90,000 per person.

    6% of firms offering fully-insured plans report they intend to self-insure because of Obamacare.

    In 2014, PPO plans remained the most common plan type, enrolling 58% of covered workers.

    In 2012, 93% of businesses with 5,000+ employees and 80% of companies with 1,000-4,999 employees were self-funded

    Massachusetts has the third-highest prevalence of self-funded insurance in the small-group market (Fewer than 50 employees).

    In 2013, the average deductible was $2,906 for individuals selecting plans from marketplaces. This compares with average deductibles of $1,135 for an individual with employer coverage.

    In 2013, the average annual premiums for employer-sponsored health insurance are $5,884 for single coverage and $16,351 for family coverage, up 5% and 4% respectively from 2012.

    From 2010 – 2013, cancer followed by chronic/end stage renal disease and leukemia accounted for the top 3 costliest illnesses.