A NEW APPROACH TO HEALTH BENEFITS COST CONTAINMENT

You’re probably like most companies in America, struggling to maintain profitability, fighting constant increases in the cost of doing business, especially in the area of health and productivity. You’ve seen health costs rise on your radar to a strategic level and you’re looking for a “new approach” to deal with this concern. You realize that the actions you’ve been taking aren’t working, and your company’s survivability may be at risk.

Healthcare benefits are increasingly unsustainable for American businesses. This concern has become one of the top issues for shareholders and CEO’s regardless of industry. Many employers are not staffed, nor do they have the expertise to develop or implement strategies to effectively deal with this issue. There are a number of “healthcare cost containment providers” who sell their services, without generating a proven ROI. Furthermore, many consulting houses do not provide “hands-on” assistance in executing proven strategies for employers, and their advisory services are extraordinarily expensive.

“Health risk management” is the concept of taking a proactive approach to reducing health risks, just like managing and reducing other business risks, such as general liability, safety, property and casualty, etc. Health risks that are preventable or manageable should be targeted, in a legally compliant manner, to reduce the risk of unnecessary expenses in the future. It doesn’t matter whether these conditions are brought on by unhealthy lifestyles or genetic factors. The key concept is to manage health risks of a covered population in a positive way that leads to better health and greater productivity of a workforce, without unnecessarily shifting costs to employees and their families.

Managing health risks requires a willingness on the part of the employer to proactively invest in improving the health of their covered population. This investment involves less emphasis on cost shifting, and more emphasis on identifying health cost drivers, and using incentives to motivate long term behavior change. To effectively manage health risks, employers must design and implement effective communication, education, data analysis, and intervention strategies, creating a “value based benefits” approach that results in a sustainable ROI.