Employers worry about healthcare waste, but a majority aren't managing it
- Employers said in a new poll that they're worried about waste in healthcare, but most (60%) aren't proactively trying to manage it. This was the conclusion of a study released by the National Alliance of Healthcare Purchaser Coalitions (National Alliance) and Benfield, a part of the Gallagher Human Resources & Compensation Consulting Practice.
- The survey also found that most respondents (57%) think that up to 25% of treatments for employees and their dependents are wasteful; 59% of respondents don't compile or analyze data to track waste, and those that do (34%) depend on vendors to do so. Employers cited medical imaging, such as MRIs and X-rays, and medications as the biggest contributors to waste. And while proactive employers are less likely to perceive treatments as significant contributors to waste, they're more likely to manage treatments to reduce waste and report greater success in curbing waste than employers that don't compile data.
- Laura Rudder Huff, senior consultant for Benfield, said that to reduce healthcare waste, employers can start collecting data to flag healthcare inefficiencies in their workforce and community and form coalitions with vendors and organizations to improve the healthcare market. The survey also recommends that employers reduce healthcare waste by asking vendors to share data on waste, report on their plans to curb the overuse of medical procedures and consider adopting value-based benefit designs that discourage using low value services.
Employers might not be as proactive about reducing healthcare waste as they need to be, but they're acutely aware of the need to find ways to curb rising healthcare costs. Ellen Kelsey, chief strategy officer for the National Business Group on Health (NBGH) told HR Dive in March that employers' top three healthcare worries are waste in the system, wrong treatment approaches, and inappropriate or inadequate care, as all drive up medical costs. She also cited misdiagnoses as a driver of higher healthcare costs.
More employers, especially large organizations, are getting directly involved in addressing healthcare costs, including shifting their position from one of passing on cost increases to employees towards flagging the causes of the increases and getting costs under control. These more activist employers also are zeroing in on treatment outcomes, looking for more efficiency in the delivery of care, and improving access to services through accountable care organizations (ACOs), centers of excellence (COE) and performance networks. Wellbeing programs focused on preventing or managing chronic health conditions also are expected to control the growth in costs.
Data collection and analysis is central to managing healthcare costs. Employers will need to gather information about their cost-containment strategies and analyze the data to find out if these strategies are effectively meeting their goals.