Fight the Hike: 6 Ways to Shield Your Profits From Rising Health Costs

Asa CFO, rising health costs may make you feel helpless. You’re not a lawmaker, or a lobbyist, or a hospital administrator. What can you possibly do to stop this relentless tide from engulfing your company’s finances?

The answer might surprise you. While you may not be able to single-handedly halt price surging, there are several steps you can take to shield your company from its wrath.

With healthcare costs climbing steadily, companies are wrestling with how to manage these soaring expenses while still protecting their employees’ health. The numbers paint a grim picture: in just the past decade, healthcare costs for employers have jumped by over 60%. With medical inflation continuing to outpace general inflation, this trend shows no signs of abating.

Understanding the Threat of Rising Health Costs

We won’t sugarcoat it: The ceaseless climb in health costs has become a looming threat to almost all major companies’ finances.  The forces behind these costs are myriad: escalating prices for medical services, a surging prevalence of chronic diseases, and inefficiencies (such as complex claims process) entrenched within the system.

Wasteful spending is also a major culprit. The increasing complexity and specialization within the medical field has led to unnecessary services and procedures. Additionally, the advancement of medical technologies and treatments has expanded the array of patient options, often without clear guidance around their necessity or effectiveness. This has spurred the over treatment of patients, leading to higher overall health costs for members and companies.

Moreover, the lack of transparency in healthcare pricing has further compounded the problem. Patients and providers often struggle to obtain clear, accurate, and up-to-date information about the costs of medical services, leading to uninformed decisions and unnecessary spend.

So, what can you do about it?

Employers are caught in a perpetual balancing act, striving to manage these expenses without compromising the quality of their employees’ care. They may struggle to address the root causes of high health care costs and avoid superfluous expenses, while ensuring employees obtain top-tier care.

Enter benefits navigation. Benefits navigation (or guidance) helps employees make smarter, more cost-efficient and proactive decisions about their health care options. Navigation often includes real-time, personalized support around the clock, data-driven insights that help customize guidance and communication, and user-friendly tools designed to simplify the complex landscape of health benefits. By leveraging benefits navigation, companies can tackle the main drivers of rising costs, ensuring better financial stability for the company.

1. Address Escalating Prices

While health prices continue to rise in most areas of medicine, there are still ways to safeguard your company and its people from inflated spend. Benefits navigation can guide employees to the appropriate level of care, reducing unnecessary use of high-cost services like urgent care centers or emergency care. Whenever possible, benefits guides will steer members towards their primary care physician or specialist to prevent them from heading to the ER for every minor ache or pain.

They will also promote the use of telemedicine services for non-emergency health issues. Telemedicine offers a convenient and cost-effective alternative to in-person visits, allowing employees to consult with providers, right from their home—or even couch.

2. Manage and Prevent Chronic Diseases

The surging prevalence of chronic diseases like diabetes, heart disease, and obesity is a significant source of rising health care costs. Benefits navigation can play a crucial role in managing and preventing these conditions. Benefits guides will proactively reach out to employees, encouraging them to book wellness visits and engage in health management programs covered by their plan. They will also remind them to partake in preventative screenings and stay current on their vaccinations. They will send members reminders and updates through multichannel communication, including email, SMS texts, and push notifications.

By encouraging the use of preventative and monitoring services, companies reduce the development or acceleration of chronic or acute illnesses. This lessens the need for more costly medical interventions, lowering the overall spend for your company.

3. Reduce Administrative Inefficiencies

Administrative inefficiencies, such as cumbersome claims processes, add unnecessary costs to the health care system. Benefits navigation can streamline these processes by providing clear, step-by-step guidance  on submitting claims and referrals. This reduces the administrative burden on both employees and employers, leading to cost savings.

4. Curb Wasteful Spending

Wasteful spending, driven by unnecessary treatments and procedures, is an invisible but pervasive force inflating costs across the board. Benefits navigation can help curb this by offering employees evidence-based information about the necessity and effectiveness of various medical interventions. For instance, an employee considering a costly MRI for back pain might be steered to a lower-cost physical therapy program that has been proven effective for their condition; to encourage usage, the guide can provide information about the program’s offerings and success rates.

Benefits navigation will guide employees to the most top-rated, board-certified and cost-efficient providers and services for all care needs. Guiding employees towards top-tier care helps prevent unnecessary expenses and promotes value-based care. Additionally, benefits guides aim to direct members to licensed providers within the network, thereby averting costly out-of-network charges.

5. Enhance Transparency in Pricing

The lack of transparency in healthcare pricing makes it difficult for employees to make informed decisions about their care. Quality benefits navigation uses the Transparency in Coverage regulation to empower benefits guides to access more reliable, plan-specific cost data. Benefits guides can compare the data for different providers and facilities, leading members to cost savings.

For instance, if an employee needs a mammogram, benefits guides will review the cost data for different radiology clinics in the area, and direct members to the most cost-efficient, high-quality option. This transparency significantly lowers costs for both the individual and the company.

6. Leverage Data-Driven Insights

Benefits navigation leverages AI-backed insights to offer personalized guidance and communication. By analyzing the historical utilization, demographics, and claims data of plan members, AI can identify common health patterns, predicting issues before they arise.

This information helps benefits guides recommend preventative measures such as screenings. It sets members on a path of consistent, preventative care, covered by their plan. Without these insights, your employees might miss out on key interventions, leading to higher incidences of preventable and costly conditions.

Some Final Thoughts

By providing personalized, data-driven guidance and fostering transparency, benefits navigation empowers employees to make informed decisions about their healthcare. This approach not only reduces costs but also revolutionizes how companies help their workforce maneuver today's landscape.

Amidst the unyielding escalation of healthcare costs, benefits navigation transcends mere utility—it's a crucial investment in both the well-being of employees and the enduring financial stability of companies.

Next Step

Ready to confront the challenge of rising health costs and secure a stronger, healthier financial future for your company? We’re here to guide you through these turbulent times and forge a path toward lasting fiscal health. Contact us today.