3 Ways to Lower Your Employer’s Health Care Costs in 2023 – InsuranceNewsNet

With inflation a major concern for consumers and businesses alike, many are acutely aware that health care is not exempt from rising costs.

according to Centers for Medicare and Medicaid ServicesNational spending on health will grow at a rate of 5.1% each year through 2030, reaching $6.8 trillion. The COVID-19 pandemic has seen healthcare dwindle and the pool of healthcare workers dwindle, supplies get stuck in shipping containers, and prescription drug prices skyrocket, pushing healthcare costs to an all-time high. Although these costs were moderate in 2022, they are still higher than normal and are expected to increase each year. due to higher costs, CMS expected That the share of the insured in the population will decline to less than 89.8% in 2030 and that this decline will be due to lower employer offer rates and lower employee acceptance rates for health care.

To help their clients manage healthcare costs in 2023, brokers must help employers understand why healthcare costs are rising in the first place, help employers plan for the future, and stress the importance of healthcare literacy to employees.

1) Understand why healthcare costs are rising

There is no single reason why health care costs are rising; The answer varies by plan and employer. While new prescription drugs, life-saving treatments, and deferred care during the pandemic have driven up overall health care costs, supply and demand, as well as an increase in the cost of prescription drugs and shortages of providers, are also affecting costs.

in 2022, 19 hospitals either close it or declare bankruptcy, and according to American Hospital AssociationAnywhere from 53% to 68% of the nation’s hospitals ended 2022 with their operations in the red. the The average patient stay has also grown, resulting in an increase in fees for the remaining service providers. in addition to, says the US Bureau of Labor Statistics Every month of 2022 saw about 3% of the healthcare workforce quit their jobs, and this trend is not likely to go away anytime soon. Brokers should explain these macro trends to employers so they can get the full picture of rising costs.

However, employers should work with brokers and carriers to assess their claims data and identify high or recurring cost claims. determining the frequency of controllable factors such as inappropriate use (such as going to the emergency room in non-emergency situations and using high-cost medications when less expensive alternatives are available); Patterns of health problems (back or other musculoskeletal problems), elective procedures performed in high-cost facilities, versus uncontrollable factors such as the occurrence of premature birth, cancer, or prolonged COVID-19, can indicate potential plan design, solutions Communication and education.

2) Plan ahead

Although open enrollment for 2024 seems a long way off, employers and HR teams should start preparing now to keep costs down for all parties involved. according to Report By Optavise, 89% of brokers surveyed report that clients rely on them to contain healthcare costs.

Building on insights from the claims analysis referenced earlier, potential solutions might include adding virtual primary care networks, revisiting cost-sharing formulas, and incentivizing staff to seek out lower-cost care options. Cutting costs doesn’t have to wait until 2024; Mediators can begin identifying partners to implement advocacy and transparency programs to help employees shop for care, and they can help employers communicate tangible ways to save money and start healthy healthcare spending habits among employees. By planning ahead for the next open enrollment season, employers can reduce overall health care spending companywide, ultimately reducing costs for both the company and its employees and their families.

3) Emphasizing the importance of literacy in the field of health care

according to Consumer survey conducted by OptaviseEmployees want to understand how benefits affect their finances. Workers also expressed interest in improving their understanding of how health care costs can be managed as part of financial wellness. Twenty-nine percent of employees want to know how to research health care costs and why it matters, 39% want to understand how to avoid surprise medical bills, and 33% want to know how deductible, share/co-insurance, and out-of-pocket maximum work and what they mean for the portfolio .

Too often, employees self-educate on these important topics rather than seek expert advice: Found Optavise Only 30% of respondents reported learning about health insurance terms and procedures from a member of their employer’s human resources team in 2022. However, 21% reported learning about terminology and processes from a third-party supplier (such as a benefits guru or realtor) provided by their employer. Employment, up from 16% in 2021. Employers recognize they need help accessing their workforce 95% of brokers reported moderate to high demand for help with benefits communications in 2022, and the same can be expected for 2023. Helping employees understand their benefits through online resources, one-on-one meetings, and question-and-answer sessions not only improves employees’ understanding of them. health insurance plan, but it can also empower them to make the right decisions.

Showing employees how they can get the most out of their plans, such as using in-network specialists and primary care physicians, can keep costs down throughout the year. Greater use in primary care, for example, is associated with lower costs, greater patient satisfaction, fewer hospitalizations, and fewer emergency department visits. additional, Annual checkups are a great way to catch health problems before they become acute or chronic and therefore more expensive to treat.

Open communication with employees is helpful in reducing costs. Few employees actually understand or relate that the medical services they use directly affect the cost of their health plan. Brokers understand that their success depends on their ability to truly connect with and advise their clients. Identifying and discussing why their clients’ healthcare costs are rising are critical first steps to achieving this success, but they must be followed by an action plan to ensure a successful financial future for their clients and employees for years to come.

Kim Buckeye is Optavise’s Vice President of Client Services. may be contacted at [email protected].

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