Employers pay for most of the healthcare in this country and they are tired of the health care industry wasting their money. When I meet and talk with CEOs in Michigan they tell me they are getting crushed by their healthcare costs, but feel powerless to do anything about it.
According to Mercer the average total health cost per employee in 2022 was $13,020. That means the average employer with 100 employees is paying $1,132,000 for their healthcare each year. A number that will continue to rise twice the rate of inflation over the next five years.
Employers know they must provide a healthcare benefit their employees value to attract and retain talent, but they can’t afford the rising costs. Meanwhile they’re inundated with vendors selling all kinds of healthcare solutions such as virtual care, employee health programs and care navigation services. Every year they hear their healthcare broker say they need to increase deductibles, copay, or premium contributions in order to shift more of the costs to employees. Shifting more cost to the employee who is already shouldering on average 22% of the cost only devalues the benefit your employees value the most. It seems like a problem without a solution. But what if there was a way reduce the total cost of care by 20-40% while improving the quality ad access to healthcare.
It’s time to be honest with the employers in America. Most programs are being pedal only to move money around the table or they don’t impact the total cost of healthcare. There are only two ways to reduce the total cost of care and both are provider solutions. If everything that is done in healthcare is a unit of care, think hospitalizations, ER visits, prescription medications, diagnostic tests, surgeries, and specialty visits. If each of those is a unit of care then only way to reduce the total cost of healthcare is by
- Reducing the unnecessary unit consumption of care and/or
- Reducing the per unit cost of care
Those are the only two ways. The existing healthcare system is not built to do this. In fact, it is purposely built to do the opposite. The stakeholders in healthcare want to drive up unit consumption and unit cost of care because that is how insurance companies, hospitals systems, and brokers make their money. The more money that flows through the system, the more each stakeholder makes.
Fortunately there’s a provider solution that works to drive down both the unit consumption of care and the unit cost of care. It’s called direct primary care and it’s revolutionizing how care is delivered and financed across the country. In future videos I will discuss how advanced high value direct primary care reduces unit consumption and cost and the surprising proven results it has on reducing employers health care costs.
