How Can Companies Reduce Healthcare Costs?
Decisions regarding health plans and benefits within an organization are not something to be taken lightly, as this can be quite the expense for businesses. However, many employers still make these decisions blindly, which results in them overpaying and their employees receiving poor healthcare. The goal of reducing healthcare costs is beneficial for both employers and their teams, and by working together to find the best possible strategy, it is a win-win situation for everyone.
However, as an employer, you should always take the lead in helping your employees understand the costs associated with health care. It is actually possible to cut down on healthcare costs whilst still providing top benefits for your employees. Here is our guide to reducing healthcare costs in your organization.
1. Implement Group Health Insurance
Group health insurance has quickly become the predominant choice when it comes to reducing healthcare costs for employees. Each time your organization purchases a health care insurance plan, you will have to pay a monthly fee called a “premium” to the healthcare provider. Your insurance company will also share a portion of your business’s medical costs in case any emergencies happen, and they have to get involved. The insurance experts at GroupEnroll.ca explain that with group health insurance, due to the fact that the risks for the insurance company are spread over a certain amount of people (group members), as opposed to the full responsibility for the risks in the case of the typical individual health insurance plan – employees can get away with cheaper premiums.
The insurance company will not have to pay substantial money for bills to compensate for unfortunate incidents. With this type of plan, employees can have peace of mind about their financial situation, since group insurance is tax-free. Quality group insurance will also help in attracting more talent to your organization, as new employees will be pleased that they do not have to think too much about overpriced healthcare costs.
2. Switch to HDHP
Switching to a high deductible health plan (HDHP) is another effective way that you can take control of the benefits and healthcare costs within your organization, as it allows your employees to cut down on the cost of medical premiums while pushing up deductibles. Introducing HDPD and explaining it to your workers can be difficult at first since normal out-of-pocket expenses and traditional health plans operate in a different way, which leads to confusion. Once your staff understands the many benefits of HDPD and how much money they can save, they will get on board with your plan.
3. Cooperate with Pharmacy Managers
Pharmacy benefit costs are one of the major parts of healthcare expenditure, and unfortunately, the government has so far proven itself to either be inept or complicit when it comes to the scandal of prescription drug prices. Because of the financial burden on employees who need prescriptions, this is also one of the most stressful aspects of healthcare costs that employers have to consider.
However, there are some ways to get around this issue, but it requires brokers and pharmacy benefit managers (PBMs) to arrange a meeting and work together to eliminate any conflicts of interest. This will enable them to align the benefits of both sides to bring the best results. By adjusting the formula to a more affordable one, it is possible to bring down the cost of medicine for your organization, and this will also affect the long-term employee benefits; due to the fact that they can get better treatments for their medical problems without having to settle for a cheaper, less effective drug.
4. Reassess Your Processes
By reviewing your business’s processes when it comes to healthcare, there is a lot of money that can be saved solely in the details. A more diligent claims process, rebate reimbursements, policy adjustments, clinical programs, and drug utilization reviews related to employment benefits can all save your company money and free up resources for important operating needs or salary raises. One thing you need to keep in mind is that you must notify your employees of any significant formula changes in advance in order for them to keep track of the situation and change their medication regimens accordingly.
5. Switch Healthcare Providers
It is very typical for employers to look for the healthcare provider that offers the most attractive insurance package (in terms of the balance between price and services provided) for our employees through a bidding process – and there are many ways to enhance the sense of competition in order to better head towards the goal of cost-effectiveness. Bidding out insurance plans on a semi-regular basis is actually a very effective method of getting the best deal, and these days this method is being widely used in many organizations. Doing this will help you to be fully prepared for negative situations such as when your healthcare provider offers an unreasonable renewal plan, and you want to work with another provider.
However, putting plans out to bid too often does come with certain drawbacks that you have to take into consideration before taking this step as it can negate the potential value that you may have realized as an employer. It is vital that you keep an eye out for managing and keeping “rate creep” under control. By negotiating long term, multi-year contracts, along with obtaining certain additional benefits from your provider, you will be able to counter those drawbacks effectively.
Taking the right steps as an employer will help your employees to get the protection that they deserve from the needlessly expensive and complex healthcare system. This will allow you to ensure that your staff is getting the most out of their benefits package, while at the same time, will stop your business from wasting money on inflated medical fees and costly treatments. With both your business and your employees saving money, everyone will be a lot happier.
Healthier employees who are assured that they are fully protected in case of a medical situation make far better employees. This will lead to less absenteeism, more productivity, and a better workforce overall. Therefore, finding strategic ways to cut down on health care costs is a worthwhile effort – both for your business as a whole and for the employees who keep it operating day in and day out. Take these tips into consideration and see if you can start saving money.