Innovative Employer Healthcare Practices

It is no secret that spending on healthcare has steadily been on the rise. As discussed in this article from The Commonwealth Fund, approximately half of the U.S. being insured by their employer, many employers have shifted the financial pressure to their employees to offset this burden. Up from 9.1 percent in 2010, premium contributions and deductibles totaled 11.6 percent of median income in 2020.

Though costs are shifting to employees, employers continue to face financial strife related to providing health benefits. In this article from Health Affairs, the average annual growth rate of healthcare spending is estimated to be slightly over 4%, with costs rising 44% for employers from 2007-2016. Spending on ambulatory services has increased by 5.7% annually when compared to all other healthcare services, which follows the trend nationally that health-systems are focusing on growing their outpatient service lines.

What can employers do for their employees during this time of unprecedented increases in cost of care?

Some companies are bypassing insurers to partner directly with large health-systems. In this HBR article “How Employers are Fixing Health Care”, a few employer examples discussed include large companies such as Walmart, Lowe’s, McKesson, GE, and Boeing who have created a model to contract directly with health systems such as Geisinger, Mayo Clinic, Johns Hopkins, and Virginia Mason. These partnerships have allowed employers to offer specialized and comprehensive healthcare services that are lower in cost, naming this tactic a “Centers of Excellence” strategy. Outcomes being produced by these creative models have demonstrated thus far are superior to standard care. Employees are returning to work sooner, avoiding unnecessary healthcare costs such as lower rates of surgical intervention, reduced readmissions, and decreased medication spend.

Further, the aforementioned article discusses how employers can partner with Accountable Care Organizations to offer services that are focused on preventative care and care coordination. Walmart, for example, offers “accountable care plans” as an employee benefit. 

New disruptive models such as the Amazon/JP Morgan Chase/Berkshire Hathaway’s Haven are being created. Haven’s CEO, Atul Gawande, has offered that this company will focus on patient advocacy, changing healthcare through disruption of barriers, and creating sustainable models of care that will be highly impactful and beneficial.

Of course, small or mid-size companies may need to think differently about how their involvement in controlling cost is designed. Partnering with healthcare coalitions such as those in the National Alliance of Healthcare Purchasers to increase purchasing power and access resources to help navigate innovative strategies. Additionally, small to mid-size employers can consider reaching out to larger employers or health-systems to determine if there are synergies or adapted models that could be developed to fit their employees’ needs.