In recent months and years, terrorist threats, the floundering economy and a deteriorating education system have rocked our nation’s core and caused us to reevaluate our values and priorities. Every day, we are bombarded with headlines regarding these events. But there is another issue that stands to define our future as much as any major event in the last 30 years— the rising cost of healthcare. Healthcare inflation threatens the system as we know it. A collaborative effort can help ensure that healthcare is affordable and attainable by everyone.
Today’s complex healthcare environment includes numerous factors that contribute to the skyrocketing price tag. While we are able to identify these factors, the varied interests of physicians, hospitals, insurers, lawyers, consumers and other stakeholders prevent simple solutions. The only thing everyone seems to agree on is that finding a solution will take some significant compromises by all.
Perhaps the first step toward finding a solution is simply identifying what factors contribute to rising healthcare costs. A recent PricewaterhouseCoopers study revealed several areas that drive premiums upward.
• Rising hospital and physician costs
• Prescription drugs and medical technology
• Fraud and abuse
• General inflation
• Legislative mandates
• Increased consumer demand and utilization
• Litigation and risk management
• Medical errors, fraud and lifestyle factors
Many of these factors are interdependent, and modifying one of them could have a ripple effect on the others.
The good news is, despite year-to-year increases in healthcare premiums, more than 60 percent of employers are offering healthcare coverage to their employees today. However, as healthcare becomes more expensive, employers are passing more of the costs to their employees. While this is an effective method of educating consumers about the costs of healthcare services and encourage wise use of these resources, medical care may become a luxury employees cannot afford. In turn, these individuals could join the ranks of the 47 million Americans who are uninsured.
A long-term solution will take creative thinking and collaboration by all parties. However, in the short-term, all stakeholders can take measures to curtail these rising costs. Insurers can help their members manage diseases that may require weeks, months or a lifetime of treatments, offer health education, sponsor health screenings, offer coverage for select preventative care programs and keep administrative costs to a minimum. Healthcare consumers can make lifestyle changes, such as maintaining a healthy weight, exercising and not smoking. Legislators can limit the number of laws that add to the administrative costs of providing healthcare coverage. Physicians and hospitals can continue to focus their efforts on providing high quality healthcare that will actually result in lower costs. Pharmaceutical companies can ensure that enough educational materials are available to physicians, hospitals, patients, pharmacies and managed care organizations to select only the most appropriate products when needed.
Employers can also take measures to help keep healthcare more affordable for their workers.
Reevaluate an employees health plan type and benefit structure to reduce premium expenses. Make plan changes to revise benefit structures to reduce premium costs.
Consider employees’ demographics when selecting a health plan. Involve employees in the selection process to meet their needs in a health benefits plan, or assess employees’ life stage. For example, many employees may be willing to trade a lower deductible and have higher office copays in exchange for increased wellness benefits or vision coverage.
Continuously improve employee knowledge and involvement in healthcare issues, particularly cost. Share responsibility through employee premium contributions. Consider instituting worksite wellness programs that would reward health habits such as smoking cessation programs and fitness clubs at lunch or “transparency” tools that provide consumer’s access to cost and quality information.
Recognize that healthcare coverage is not just a cost of doing business, but also an investment in employees and the success of their business. Recognize the importance of productivity and provide tools to help employees stay healthy. Look for innovative products and tiered benefit designs, collaborative efforts with network physicians and hospitals can help ensure the delivery of quality, cost-effective care.
Americans have been grappling with the issue of rising healthcare costs for more than a quarter of a century. There is, of course, no easy solution. One thing is certain, insurers, employers, consumers, hospitals, physicians and lawmakers must work collaboratively to solve the healthcare affordability challenges.
