Strategies to Control Health Care Costs

You may not be in the business of health care, but controlling costs of health care is vitally important to your organization, just as it’s important to our overall economy. We recently published some top strategies you can use to help control costs.

Encourage Quitters

Helping your workforce stop smoking addresses smoking’s accompanying health burden. This can have an immediate impact to your bottom line, as well as your employees’ health and pocketbooks. Employers that cover evidence-based tobacco cessation treatments through their health plan could save $1.90 to $5.75 for every dollar spent, according to one study*, and the National Commission on Prevention Priorities estimated a $22,434 lifetime savings in health expenditures for former smokers**. 

Reduced health costs, lower employer premiums, and increased productivity (no smoke breaks, fewer sick days) are among the many benefits. Most important is the improved health – it begins 20 minutes after quitting, as a smokers’ blood pressure and heart rate drop. Eventually improved health includes reduced risk for stroke, heart disease and a host of cancers. Cessation may also improve covered family members’ health if they’re no longer exposed to second-hand smoke.

Provide Incentives and Penalties to Drive Behavior

Let’s look at that smoker again – how do we encourage them to improve their health? Employer-sponsored incentives can help. These incentives can take the form of low or no copay for treatment, lower premiums for nonsmokers, or disincentives such as eliminating smoking ‘huts’ and smoke breaks. Interventions and programs such as smoking support groups at the workplace can also help provide the environment people need to quit and remain nonsmokers.

Help Establish Primary Care and Educate Employees

Educate your employees, because informed health care consumers make better consumers. This is more than telling employees the price of an MRI. Providing employees with tools to empower improved health can prevent utilization-intensive problems. One way to do that is by helping your employees connect with a primary care provider and aligning incentives, such as fully covered regular check-ups, to support the preventive care a primary doctor can provide. 

These steps can yield numerous health benefits and are the least expensive for employee and employer. By accessing care in an office visit, primary care doctors can better ensure that medical conditions are well-managed, possibly catch serious disease early when it’s more treatable, and provide that extra measure of safety that electronic medical records bring.

In the last few years, the Froedtert & the Medical College health network took this strategy a step further and introduced on-site nurse practitioner clinics to enhance access and convenience for our staff. We’ve been able to communicate it as an enhanced benefit while demonstrating a trend of reduced health risks.

Educate your employees on their options regarding where to access care. Walk-in and urgent care clinics should be utilized after hours for those health conditions that can’t wait, while the emergency room should be reserved for just that – emergencies.

Be Aware of 80/20 

You’ve likely heard of the “80/20 rule” as it relates to the Affordable Care Act and how it guides what insurance companies can spend on health care vs. administrative fees. But there is another important “80/20 rule” of thumb to be aware of: 80 percent of the costs are incurred by 20 percent of people, according to studies from the Agency for Healthcare Research and Quality and others. 

Although most of these expenses come early in life (at birth) and then much later, primary care can manage chronic conditions like diabetes and high blood pressure before hospitalization is needed. For employers, this may mean moving financing to the “front” of the process, focusing on prevention and care management to reduce the need for higher cost interventions. It also underscores the need to include coverage for tertiary or advanced care, most often found at academic medical centers, to ensure the latest treatment options are available for complex health care needs. 


* Washington Economics Group, Inc. The Net Benefits and Economic Impacts of Investing in Employee-Smoking Cessation Programs in the Public and Private Sectors of Florida. March 6, 2008. 

** Solberg LI, Maciosek MV, Edwards NM. Tobacco Cessation Screening and Brief Counseling: Technical Report Prepared for the National Commission on Prevention Priorities, 2006. July 2006, 325(7356):128.

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