The Centers for Medicare & Medicaid Services projects the total cost of healthcare in the United States will grow at an average rate of 5.5% per year over the next decade, reaching $5.7 trillion by 2026. To put that in perspective, that’s about a full annual percentage point faster than the expected growth of the Gross Domestic Product (GDP) over the same period. To save money on healthcare costs, business leaders need to consider current trends, research helpful tools and help their employees to become wise healthcare consumers in order to create a lower-than-market healthcare cost trend for their companies.
The drivers of high healthcare costs
Each year, PwC’s Health Research Institute (HRI) projects the growth of medical costs in the employer insurance market for the coming year. The HRI has found that for 2019, the medical cost trend remains stable, with a growth rate of 6%—consistent with the previous five years. However, the HRI also stresses healthcare costs are reaching an unsustainably high level. Efforts to cut utilization have run their course. Employers looking to drive the medical cost trend curve downward must now address other factors including rising pharmacy prices, higher deductibles, overall inflation, and increased out-of-network fees.
Savvy employers can lower healthcare costs
In order to have a real effect on healthcare costs, employers need to think differently and leverage innovative solutions. Ideally, these efforts will not only save both patients and the organization money, but simultaneously improve the employee experience from the examination to the billing and payment process. Technology innovations, like transparency platforms, can be leveraged to identify low-cost, high-quality providers. Consolidated billing statements and clear Explanation of Benefits (EOB) can help streamline the billing and payment experience. And wellness programs can help keep employees healthy and out of the hospital.
Keep rising costs in check
Understanding what drives rising costs can help keep them in check. Employers should work with employees to ensure total understanding of healthcare policies. This will allow employees to take control of their healthcare decisions and keep tabs on the costs they’re incurring.