Health & Medical
Healthy returns
How to take the pain out of health care costs
By Carolyn LaWell
Smart Business Cleveland | June 2009
Page 1 of 4
George Stadtlander, chief underwriter and vice president of individual small group market, Medical Mutual of Ohio
You’re looking at your expenses and that health care cost is just glaring at you. If only you could chop that number.
In fact, many employers are. The economic downturn has caused 60 percent of employers to change their health plan or strategy, according to a National Business Group on Health/Watson Wyatt Worldwide study. With the median health care cost per employee estimated to reach $7,400 this year, many employers are transferring costs to their employees.
That may be an idea of your own, or a route you’ve already taken. But insurance providers and health care experts are cautioning you to think twice if you want true savings and you want to hang onto your employee base.
“If you take a short-term approach and just limit benefits, our experience, and I think the experience of most employers and health plans around the country, is that is very short-sided,” says David Strand, chief operating officer of Cleveland Clinic. “The better approach, we believe, is to focus on health improvement and focus on quality of life improvement for your employees and invest in those things that are geared toward those purposes. By doing that, you will inevitably reduce costs far more than you can simply by cutting benefits.”
More than 75 percent of employers’ health care costs and productivity losses are linked to employee lifestyle choices, according to the Centers for Disease Control and Prevention.
Cutting or renegotiating your health benefits can save money. But until you understand what’s driving your costs — your employees’ bad habits — you’re not going to reach the root of the problem. The bottom line is, the more your employees use their insurance, the more you’re paying.
