How to Reduce Healthcare Costs for Employers

Today, most companies are asking: how can health care costs be reduced? It’s not a simple topic for a number of important reasons. Not only are health insurance and claims spend quite complex in nature, but employers must also weigh savings against how valuable the benefit may be to employees and their families. People depend on their employer-provided health insurance to take care of them. 

Especially when it comes to chronic conditions like digestive disease. The need for healthcare and medical support for long-term illness is ongoing. What can employers do to help employees with these issues while still remaining cost-efficient?

Let’s talk about three areas with strong opportunities to reduce healthcare spend. We’ll show you how to continue to provide much-needed services, and even maximize what you do offer through unique, digital healthcare employee benefits that can boost your competitive edge while saving money over time.

  1. Strategies to Reduce Healthcare Costs
  2. How Technology Can Reduce Healthcare Costs
  3. Unique Employee Benefits

Strategies to Reduce Healthcare Costs

In the United States, healthcare is expensive. Here’s the big picture: According to the Centers for Medicare & Medicaid Services, U.S. healthcare spending was $3.6 trillion, or $11,172 per person in 2018. Spending on healthcare accounted for 17.7 percent of the overall gross domestic product (GDP) in 2018. 

The insured share of the population was 90.6 percent (30.7 million people) in 2018.

Companies are the biggest providers of health insurance: 49% of the population receives healthcare through their employers.

For members of the Society of Human Resources Management, we recommend checking out the Managing Health Care Costs toolkit for companies starting with a top-down approach. 

Average U.S. healthcare cost per person is

$11,172

The High Cost of Chronic Gut Problems

Once employers drill down into where costs are coming from, it’s common for companies to learn they spend lots of money each year on rather unexpected areas of medical claims. Chronic disease can account for a significant amount of annual spend. 

Due to their chronic nature, digestive issues can mean annual healthcare costs that soar into the thousands of dollars per patient. When the prevalence of each condition among the population is factored in, the overall price of ignoring digestive conditions is rather high. 

Two top areas of medical spend for chronic digestive disease:

Emergency Care

8.3M

ER visits for digestive complaints per year

Source: CDC.gov

Prescription Drug Costs

Specialty Rx drugs can cost up to

$72K/year

per person

Source: Perks.Optum.com

Employee Health Benefits

Most employers re-negotiate insurance contracts on an annual basis to secure optimal plans and pricing. There may be little (or even no) wiggle room to reduce costs while still providing quality care and levels of service to employees on the primary level. 

However, other strategies outside of primary insurance can actually address the number and types of claims made by employees. For instance, it’s possible to manage and even reduce certain kinds of spend through patient education/self-advocacy solutions.

How Can Patient Education Reduce Healthcare Costs?

When people have educational resources to guide them, they can make more informed decisions regarding lifestyle, nutrition, medication and even how to advocate for themselves at doctor appointments. These healthy changes can have a cumulative cost-savings benefit over time.

For example: Employees with company-provided access to dietitian services and educational resources can learn to plan healthier meals and tackle poor nutrition habits. Over time, employers might see fewer claims for conditions related to high cholesterol, obesity or diabetes.

Next, let’s talk about how patient education resources like the ones we mention above tie in beautifully with a promising area of healthcare: how simple digital technologies can reduce health care cost.

How Can Technology Reduce Healthcare Costs?

Right now, we’re seeing an exciting digital transformation in healthcare. 

Healthcare is no longer exclusively tied to in-person office visits. Thanks to technology innovations being fine-tuned every day, patients in rural areas can now “see” specialists thousands of miles away. Telemedicine, or telehealth, is transforming rapidly with lots of exciting implications for future healthcare efficiencies.

Digital Healthcare Trends

Digital and tech innovation is changing our daily lives all the time. Like most industries, healthcare is impacted by consumer behavior and preferences in a big way. This is consumerism.

“Consumerism, in the context of healthcare, is a patient-centric orientation of health products and services with a focus on empowerment and ease of use,” says Dr. Simon Mathews, Chief Medical Officer of Vivante Health.

“There’s a great opportunity for providers to give patients better access to services,
better support, and more personalized experience.”

Read: Implications of Consumerism in Health Care 

According to Dr. Mathews, new technologies, digital platforms, and online communities are driving healthcare consumerism. This will have the biggest impact on transparency and delivery of care. 


Transparency will impact three major areas:

Quality of Care

Patients will have open access to crowdsourced ratings of service and can learn more about disease-specific clinical recommendations and find the best providers for their needs.

Cost

With greater sharing and availability of cost data online, patients will be able to “shop around” for greatest value for common medical tests and services.

Clinical Decision-Making

Medical data used by doctors/researchers will increasingly come from outside the clinical setting. This can lead to more informed clinical decision-making and help develop more effective treatments.

Regarding delivery of care, this can take two forms. “Technology-driven consumerism can make traditional care delivery more efficient, for instance, with things like online booking of appointments, but it’s also creating new models outside the traditional healthcare settings,” says Dr. Mathews. “This can include entirely virtual options where patients have access to care anytime and can incorporate health data from novel digital sources such as wearables and mobile apps.” 

In other words, a digital transformation in healthcare will make care more accessible, cost-efficient and effective in the near future.

Benefits of Digital Health

In fact, we’ve already seen how effective digital healthcare can be in a time of crisis. When the COVID-19 pandemic hit, digital healthcare became more relevant and cost-efficient than ever:

How to Reduce Costs Using Digital Technologies to Improve Health and Care

It doesn’t take a pandemic to prove the value of digital technology for employers to find real value in innovative, condition-specific point solutions. The rewards of approaching employee wellness with targeted add-on benefits delivered through tech platforms are measurable.

One large company recently worked with Vivante Health to reduce healthcare cost for its digestive disease-related claims, which was identified as one of its top five areas of spend.

How can you learn how much you spend on digestive disease claims? Ask for a claims analysis

This company discovered that employees enrolled in our digestive health program (which consists of a user-friendly app, direct access to dietitians and health coaches and emergency support from a nursing professional and other options for gut health care) saved the company an average of more than $150 per person per month. That’s 35% less spent on medical claims than employees not enrolled in the program.

Other employers who recently signed with Vivante Health to provide comprehensive care solutions for employees with digestive disease and related conditions include:

Unique Employee Benefits

There’s another piece to healthcare cost reduction that can’t be overlooked: the costs related to employee retention and productivity.

Companies who choose to offer additional benefits through point solutions are placing value on the core ingredient that makes their companies special: their people.

Genuine attention to human detail can make employees happier and healthier. And happy, healthy employees may be more likely to be productive, creative and take fewer sick days.

Plus, extra benefits and incentives can attract the best and the brightest talent out there and help encourage them to stay.

What are Unique Employee Benefits or Incentives?

When we talk about unique benefits, we mean anything that goes beyond the more traditional (and expected) things like retirement accounts, standard health/dental/vision insurance and PTO. Drilling down to find out what the primary concerns are for target employees can help inform what sort of extra benefits and incentives a company might want to add:

Promoting wellness is good for culture. Health and wellness benefits are increasing in popularity. In fact, 66% of human resources managers in a Robert Half survey said they’ve increased their companies’ health and wellness offerings to employees:

Regarding wellness, diving into specific health challenges and offering comprehensive, digital health benefits for things like chronic disease management can be a true differentiator for a company’s human resources team.

Solutions to Reduce Healthcare Cost

There are many opportunities to manage employee healthcare costs.

First: examine possible strategies. Perform a claims analysis to identify areas where healthcare spending is higher. Chronic digestive disease conditions fall under a variety of insurance codes. A claims analysis can give companies a clear understanding of how much they spend each year for medical treatment of these conditions.

Second: consider digital technologies to improve healthcare. Innovative, consumer-friendly tech platforms can really help drive spending efficiencies and help employees stick to self-care and preventative programs to improve wellness.

Third: Offer unique employee benefits. Not only can these kinds of “add-ons” really promote a strong, healthy culture and incentivize the best and brightest talent to join and stay with your organization, they can create real bottom-line savings over time.

A number of digital health solutions are available to help employees manage chronic conditions. For details about how GIThrive fits into the big healthcare cost reduction picture, we’d love to talk with you. Contact us anytime for a quick introduction to how we help drive real change for employers and their employees.

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