Understanding Healthcare Costs – Three Must Know Factors

The cost of health care is the primary concern shared by our business customers across Iowa and South Dakota. The concern is real – health care costs are projected to increase 9–10 percent through 2026¹.

Understanding what drives health care costs can help your business better manage this challenge.

There are a lot of factors pushing up health care costs, but among the most important are the ever-growing complexity of new treatments and diagnostic tools; the personalization needed to ensure a high quality, patient outcomes; and the specific care decisions health care providers make. All of these elements determine the total cost of care – or your organization's total spending on health care and health benefits for your employees and their families. Managing all the variables that impact the total cost of care for your organization can be extraordinarily complex. Finding balance between the cost, experience and patient outcome is our goal as a health insurance partner – ensuring your employees and their families get the right care, at the right time, at the ideal location.

Let’s bring some order to this chaos. Employers should think about these key elements when managing health care affordability for their businesses

1. Network and benefit design: Recognize and reward quality. Access to a broad array of health care providers and hospitals is the foundation of good health care. At Wellmark, our broad network of health care providers and strong, long-term relationships allow us to partner with providers to develop affordable and best-in-class solutions focused on positive health outcomes.

But access is only the first step. Looking forward, we must focus less on paying for quantity of services and much more on paying for quality of outcomes. Most health care providers operate on a fee-for-service model today – or quantity of services. However, in value-based payment models, providers are reimbursed based on the quality of care they deliver, which encourages proactive, preventive care that puts patient health at the center. Moving to value-based payment will require big changes in how providers practice medicine and how businesses structure their health care benefits, but the promise of lower costs and better outcomes is worth the effort.

2. Promote evidence-based clinical programs: Making sure your employees and their families, especially those with chronic or high-cost conditions, get the right care, from the right provider, in the right place and at the right time is essential in controlling the total cost of care.

At Wellmark, we take a whole-person care approach in designing our clinical programs including medical, pharmacy and mental health for the most effective care at the lowest cost. We are committed to helping providers and consumers use resources effectively and get patients the right care quicker through continued innovation with utilization management programs.

3. Engage employees and families: Having your employees and their families play an active role in their health is mutually beneficial. At Wellmark, we are committed to ensuring your employees and their families have the tools and resources they need to take an active role in their well-being and get the most from their health benefits. This includes services like virtual health coaching or behavioral health specialists available 24/7.

Each of these components must work together to deliver the greatest benefit to both you and your employees. At Wellmark, we are committed to working with our clients to design the right solutions for their employees’ health coverage needs while managing the cost to do so. For more information and insights, visit Wellmark.com/BlueAtWork.

¹ The gathering storm: The threat to employee healthcare benefits, Oct. 20, 2022, McKinsey