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The Top 3 Trends in Healthcare Cost Reduction


American employers may have received a reprieve from Obamacare’s “Cadillac” tax, but it hasn’t diminished their struggle to keep health benefit costs to an affordable level.

After much study and years of trial and error, a handful of successful strategies have emerged for large employers to reduce their healthcare costs. Worksite clinics are leading the way in delivering on these strategies. Though the clinics came close to be labeled a luxury in tax terminology, a 2015 poll of large employers by Mercer found that nearly half of employers with an onsite clinic said the costs are relatively minor (5% or less of their overall annual healthcare spend). What’s more, a full 72% of survey respondents said they view “managing employee health risk and chronic conditions” an important operational strategy and they consider “worksite clinics a long-term strategy toward controlling health care costs.”

This helps explain why the number of large employers offering onsite clinics increased to 29% in 2015 from 24% the previous year.

These statistics matter because reducing absenteeism and mitigating chronic health conditions have a direct impact on an employer’s bottom line. So do cost management strategies associated with healthcare consumerism, such as high-deductible health plans that incentivize workers to spend more carefully.

Here are 3 healthcare cost reduction strategies that are trending into the future.

1. Improving cost transparency.

Medical charges can’t hide behind the curtain of insurance much longer – not when consumers are taking the money to pay out of their own pockets. From 2010 to 2015, the proportion of insured workers covered by high deductible health plans increased from 13% to 24%, according to the Kaiser Family Foundation. Employers like high deductible plans because they come with lower premiums. Employers sometimes sweeten the pot by contributing to an employee Health Savings Account, offsetting part of the employee’s deductible costs. This is important to employees because they are shouldering an increasing share of the costs of their healthcare. The Milliman Medical Index survey found that from 2010 to 2015, while employer healthcare benefit costs increased 32%, employees experienced a whopping 43% jump in costs through payroll deductions and out-of-pocket expenditures. Wages during the same five-year period rose only 10%, falling far short of covering healthcare inflation.


Taking such a big bite out of the family budget is predicted to drive much greater consumer demand for pricing transparency, and proponents of health care consumerism believe that such transparency will hold down costs for everyone. People will look harder at what they are paying for when they go to the doctor or hospital, and they will want to shop around for better value. The “purchase” of lab tests, imaging services and prescription drugs will be especially price sensitive, with people asking, “Do I need this?” and, “Can I find the identical thing for much less?”

Employers have become experienced in communicating the differences among benefit plans, and helping employees make benefit elections. The demand will continue to grow for employers and their insurance carriers to apply those communication skills to helping employees spend their healthcare dollars more wisely. This may involve online transparency tools and smartphone apps that promise to aid in comparison shopping.

The Healthstat solution embraces transparency tools, but takes several very big steps further. Our onsite clinics provide a wide range of standard laboratory tests and prescription medications at little or no cost to our clinic participants. The greatly reduced pricing for these services is paid by employers, who can easily see the value they receive. And a key role of our clinicians is to help their patients effectively navigate the local healthcare system and coordinate their care, providing continuity and improved access to top quality services at reduced cost. If you’re going for the Triple Aim, the Healthstat strategy delivers – better quality care, at lower cost and with enormous patient satisfaction.

2. Embracing the digital revolution.

The movement is afoot to combine social, mobile, analytics, cloud and sensor technologies (SMACS) to create a seamless patient experience that leads to both medical cost savings and improved health outcomes. There will be no shortage of entrants into the healthcare market trying to link devices and consolidate data. You can count on Healthstat to keep you on the cutting edge of technology.

Accenture Health forecasts that investment into healthcare digital startups will reach $6.5 billion by 2017. The four main areas of investment, at well over a billion each, are:

a. Infrastucture – including health analytics and interoperability solutions. b. Treatment - including personalized medicine, virtual care, telehealth and care coordination. c. Patient engagement – solutions ranging from wearable devices to wellness incentives, focused on encouraging individual behavior change. d. Diagnosis – clinical as well as consumer tools designed to look into the state of an individual’s health, including devices that allow remote monitoring or discovery of disease that is pre-clinical and pre-symptomatic.

3. Taking a seat at the analytics table.

When it comes to assessing the value delivered by your approach to employee healthcare, the thinking is shifting from tactical to strategic. That takes input from HR, benefits managers, risk management, finance and the C-suite. It requires the ability to look at the business value of a healthier workforce, including less traditional healthcare measures such as short-term disability, long-term disability, leave of absence, worker’s compensation, absenteeism, presenteeism, overall productivity and employee satisfaction and retention.

Measurable goals for an onsite clinic include expanding access to care, improving population health and managing the cost of care. Healthstat provides a complete reporting picture that allows our clients to identify the true value delivered by their Healthstat onsite clinic – now and into the future.

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