The Rising Costs of Healthcare: A Double Edged Sword

    a person opening an empty money wallet

    Three years into the pandemic, life is shifting into a more normalized state – but with hefty aftershocks. Americans are facing rising costs from inflation, including everything from fuel, to food, to services. They are paying more, for less.

    Employers are reeling from the same effects. Healthcare is one of the highest operational costs, and inflation may pose a headache for budgeting.

    In recent surveys, over half of executives fear inflation – and the rising utilization of health services from delayed screenings and long COVID – will negatively impact their healthcare spending. It’s a top fiscal concern.

    But staying the course and keeping a current benefits plan isn’t so simple.

    The pandemic has created another debacle for employers – hiring shortages. A robust benefits plan that highlights wellness can attract and retain talent. In fact, career seekers cite benefits as a top perk for selecting a new job. But traditionally, modifying a healthcare plan shifts the cost burden to employees, causing higher deductibles, co-insurance, and copays.

    Here presents a double edged sword that can easily frustrate everyone involved, including insurance consultants that weigh creative options at renewals.

    But there’s a tool agents and employers have in their back pocket – consult through a team that specializes in employee benefits. Employee benefits are different from other types of insurance. While employers and insurance agents traditionally create processes that minimize commercial risk exposures and resulting claims, benefits plans are designed to accommodate claims. However, claims and utilization of services can be used as a precious resource to analyze better ways to handle them.

    Consultants specializing in benefits have one goal in mind – enhance benefits and reduce costs. And the two can be done at the same time! Benefits consultants can bring new insight into a healthcare plan to target areas that could be better managed, including:

    • Accessing tools that can evaluate and benchmark current plans among industry peers and local geography to highlight areas where spending or specific offerings may not be in alignment.

    • Contracting with specialty consultants that can help employees facing a difficult diagnosis schedule and manage their condition in a cost-effective way.

    • Developing programs that help improve wellness through coaching and manageable activities.

    • Helping educate and onboard employees, enhancing their health literacy and empowering them to utilize benefits efficiently.

    • Working with employers to analyze viability of moving to a different funding strategy for their benefits, bringing more control over their benefits contract, tax implications, and agreements with vendors like Pharmacy Benefits Management (PBM) and local hospitals.

    • Finding areas where specific claims could be better managed, such as pharmacy costs that could be renegotiated or placed within a rebate program.

    Budgeting for healthcare can be overwhelming, but it doesn’t have to be. With the right team in place, you can plan with confidence.

    If you are faced with challenges of budgeting for benefits, the Keystone team of benefits consultants can help. Email us, and a benefits specialist will reach out to you.