In the majority of organizations today, the rising cost of health care is the most significant challenge being faced when it comes to overall labor cost. Health care coverage is also the most significant benefit that employees value, thus creating a serious dilemma between an organization and the employees. In the majority of cases, organizations are forced to reduce coverage, and increase premiums or co-pays to help manage escalating costs. However, such action only results in short-term relief while increasing the financial burden on the workforce and eroding employee commitment.
The overall cost of healthcare is fundamentally driven by two factors — the actual cost of health care and employee (including family) utilization. In most organizations the vast majority of employees only utilize a minimal amount of the health care benefit dollars, while the minority of the employees correspondingly utilize the majority of the dollars. This minority is composed of two groups of employees: Those with serious medical conditions as well as those that are simply not engaged. It is this later group that actually utilizes the majority of the health care dollars. While the actual cost of health care cannot be controlled the use can be effectively managed.
Through plan design changes that drive effective consumerism the use of health care can be directed as well as reduced to appropriate levels, thus reducing cost for the organization while maintaining valued benefit coverage for the employees. Working together the organization and the employees can achieve both their needs.
The majority of health care plans in organizations today are reactive plan designs, that provide coverage for injuries and illnesses with minimal coverage for proactive preventative care. Consequently, there is little disincentive to using the reactive health care coverage and even less incentive to use the preventative coverage. The paradigm shift that must occur is a move from a “health care” benefit to a “care of your health” benefit program. Such a program encourages a healthy life style and reinforces a proactive approach to health care, while reducing the reactive use of health care benefits.
Plan designs that drive health care consumerism coupled with a pro-active “care of your health” benefit program will result in both short- and long-term positive impacts while still maintaining a positive work environment. However, a move to such a program design, in order to maximize effectiveness, requires careful planning and the creation of a detailed multi-faceted strategy. Core to this strategy is the establishment of a corporate culture that supports health and wellness.
How DPS can help you:
DPS, through actual leadership in restructuring health care benefit plans that have achieved the desired balance between the needs of an organization and that of the employees, can assist an organization in developing plans and strategies to effectively manage the health care dilemma facing most organizations today. With proven results, DPS can help reduce short-term costs while establishing a program that will generate long-term savings, all the while maintaining positive employee relations.