Top 5 reasons that employers aren't winning on employee health and healthcare costs in the current system
Value Big Left: 1. Incentives
1. Misaligned incentives drive healthcare costs and poor health outcomes
Most players within our current healthcare system operate with misaligned incentives, with physicians being paid for services rendered rather than for the outcomes delivered.
This system incentivizes doctors to
- Take on a high number of patients and see them as quickly as possible
- Perform high-cost procedures
And this comes through in numbers like these:
- 2,500 patients per physician
- 7 to 14 minutes per appointment
- 18.5 days wait time for an appointment
Top 5: 1a Results
The result? Poor outcomes.
Primary care is an essential touch point for patients in the healthcare system. Without convenient and accessible primary care, patients experience:
- Avoidable visits to the emergency room
- Unnecessary visits to specialists for treatments that can be delivered in the primary care setting
- Low-value referrals for screenings, imaging and more
And, worse yet, cost-sensitive patients avoid using the healthcare system altogether, leading to a cascade of claims down the road.
2. Chronic conditions
2. Chronic health conditions are pervasive, and increasing
- More than 75 percent of healthcare costs are due to chronic conditions.
- 35 percent of U.S. adults are pre-diabetic.
- 49 percent of the population is at risk of heart disease.
The issue is even bigger than what the diagnoses show: The CDC found that more than 15 percent of U.S. adults have one or more of the following conditions but are undiagnosed:
- High cholesterol
Between the at-risk and undiagnosed populations, many people on employer health plans aren’t being treated for chronic disease.
2. Chronic conditions, part 2
Managing chronic conditions is essential
Chronic conditions are treatable. But, without someone to diagnose and manage them aggressively, they can quickly spiral out of control.
Unmanaged chronic conditions lead to poor quality of life, lost productivity, and higher healthcare costs. Effectively managing chronic disease is a critical battle for employers to win but one that the traditional healthcare system is ill-equipped to address.
3. Declining health and rising healthcare costs are not your employees’ fault
From 2003 to 2013, there was an 80 percent total premium increase for employers and an 89 percent increase for employees.
Declining health across the country is just one factor in the employer healthcare cost equation and isn't solely driving the 5 to 10 percent rises in costs for many employers.
3. Long-term Cost Increases
- Lack of primary care access driving patients to high-costs care settings
- Little differentiation between services of similar quality with disparate costs
- Pricing model incentives not aligned to sustainable inflation rates
These factors present significant challenges for employers trying to manage their healthcare supply chains.
Faced with these rising costs, many employers believe they must choose between shifting costs to employees or cutting benefits, and they seek to do this by offering different plan types, increasing co-pays and deductibles, and adjusting other factors in traditional benefits plans.
To truly manage the cost and quality of healthcare for employees and their families, employers need a way to improve the health of employees and dependents and to work with transparent and accountable healthcare providers.
4. Driving healthcare consumerism is good but not a panacea
Many employers work to address the healthcare system’s inefficiencies and lack of transparency by implementing high-deductible or consumer-driven health plans. This drives employees to be better consumers of healthcare services, which is generally a good thing.
To be effective, however, these health plans need to be implemented alongside
- Significant employee and dependent education
- Tools to aid them in being "good" consumers of healthcare
- Trusted advisors in the healthcare system partnering with employees and their families.
For many employers, employees are encouraged to proceed with tools alone. And, the Kaiser Family Foundation recently found that two-thirds of people say it is too difficult to find out how much healthcare costs.
Without this combination of elements, employees simply absorb more out-of-pocket costs—or avoid healthcare altogether.
4. Healthcare Consumerism, part 2
What results from barriers to care
While many plans offer free preventive care, many do not go far enough—particularly for patients with chronic conditions. These plans can result in perceived or actual barriers to care, causing patients to skip important treatments and medicines because of out-of-pocket costs.
The answer is a combination of healthcare consumerism and healthcare advocacy: Implementing solutions that remove financial barriers to employees accessing care while driving consumer-based decisions for care that is either more discretionary or is necessary but has high price variability (e.g., diagnostic imaging, surgeries).
At Paladina Health, patients can use the services as much or as little as needed—at no cost to them. And, their Paladina Health physicians partner to ensure they are using the healthcare system in efficient, high-quality ways.
5. “Standard” health benefits are no longer a means to attract talent
Employers initially started offering health insurance coverage as a way to attract talented employees.
And today, nearly three quarters of employees saying they might choose one job over another because of employee benefits. So, it’s companies with outstanding benefits that set themselves apart with sought-after talent—and in retaining trained and qualified employees.
While some organizations shift variables and costs to control their annual healthcare spend, many employers are moving toward offering new health benefits aimed at improving the health of employees and their families and giving better access to the healthcare system.
Top 5: Differentiated Employer
In the words of one Paladina Health patient, Clarissa:
“It’s a huge perk our companies are giving us to be able to use Paladina Health care."
By offering Paladina Health, organizations can improve their overall benefits offerings, while setting themselves up for long-term healthcare supply chain control.