3 Ways Technology Can Help Reduce Healthcare Costs
Healthcare costs are spiraling but are companies doing enough to address this? Gartner’s 2018 report finds only 30% companies have moved to high deductible health plans and the number of wellness incentives are on a decline. We delve deeper and outline meaningful ways to optimize healthcare costs.
For the modern employee, healthcare is a critical part of a benefits and compensation package. Now, healthcare costs aren’t rising as rapidly as they were a decade ago, however they are still expected to outpace general economic inflation.
“More than half of Americans have at least one chronic condition, according to the Centers for Disease Control and Prevention. From depression to high cholesterol, diabetes, coronary artery disease and more, these conditions can be extremely expensive over the long term and account for roughly 86 percent of all healthcare costs,” says Brian Norris, Vice President Analytics at OurHealth, a provider of care clinic solutions.
“Healthcare expenses, historically, go up and only up. As a country, we’re currently spending about $3.3 trillion of GDP per year on healthcare. By 2020, we’re projected to spend more than $5 trillion.”
Despite this rise in costs, organizations must offer effective healthcare programs for their employees. Here are 3 ways organizations can reduce healthcare costs:
1. Move to plans with higher deductibles and HSAs: Over time, several organizations have asked employees to share a larger portion of their healthcare costs to contain healthcare budgets. However, organizations that haven’t made this move can consider moving to a higher deductible plan, pairing them with a Health Savings Account (HSA). This will offer employees smarter tax breaks for the amount they save and spend on healthcare.
2. Improve employee awareness on health coverage: There are several ways to reduce healthcare costs and boosting program’s efficiency. What’s needed is clear communication with the employees on the type of options available, cost reduction approaches, and other ways to optimize programs. Companies can host seminars where employees are educated about the difference between an urgent care center and an emergency room, for instance, and can better understand how to read medical bills. There are numerous tools out there that can compare costs and recommend the most intelligent pathway.
Also read: DirectPath’s Health Care Cost Estimator to Reduce Employee Spends
3. Explore newer alternatives: Several organizations are looking to reduce healthcare costs by relying on the federal Affordable Care Act (ACA). The Small Business Health Options initiative or SHOP as created under the ACA, is meant for smaller organizations. Businesses with less than 50 full-time employees are not subject to the employer’s shared responsibility guidelines for insurance coverage.
That said, it is to be noted that this cannot be used as a loophole. Employers must endeavor to create strategies that improve their bottom line, but also help their workers get access proper care. Otherwise, there could be a negative fallout. Interestingly, this is where technology can make a major difference.
How Technology can Help Reduce Healthcare Costs
Let’s look at various ways emerging technologies are helping companies offer new and dynamic healthcare programs.
Promote healthier lifestyles through wearables
Today, cutting-edge devices like wearables can promote healthier lifestyles, thereby containing the demand for expensive treatment. There are several enterprise-grade wearables that constantly monitor an employee’s wellness levels and drive greater awareness on key health issues. For instance, wearables can track employee stress levels based on heartbeat patterns. Whenever there is a rise in heartbeat, it urges the user to perform breathing exercises — the long-term goal, here, is to keep employees healthy and conscious of their body functions which will reduce healthcare costs over time.
Also read: Strengthen Your Company Wellness Programs with Wearables
Disrupt the compensation mode with AI
New technologies like AI will also have a qualitative effect; diagnosis will become more accurate and drugs prescribed will be individualized. What this means is that the very nature of healthcare delivery and compensation will change. From the current pay-for-service model, treatment will move to a pay-by-success mode. Existing solutions which gather healthcare data lay the perfect foundation for this – consider Springbuk, a healthcare analytics software that has analyzed thousands of health claims and identified over $250 Million in potential cost savings for employers. This data when combined with AI, can also help boost treatment success rates.
Contain accessibility and administrative costs via telemedicine
Workplace telemedicine now is a growing trend. In essence, telemedicine leverages multiple channels and platforms such as video, email, smartphones, and telecom technologies to deliver critical medical information. This could also improve transparency and understanding about possible health issues, cost components, and billing cycles.
Also read: Here’s How To Get the Most Out of Your Telemedicine Benefit
These are some of the common ways in which technology can transforming the healthcare space. While urgent cases may need a different approach, technology can optimize and complement your healthcare program.
“Our recent survey shows technology can play an important role in helping patients stay engaged in their health and adherent to their medication. However, it must be done right to be effective. At Express Scripts, we use technology to help patients develop healthy habits and manage their medication adherence by tackling the biggest driver of non-adherence: forgetting,” said Kyle Amelung, a Senior Clinical Consultant at prescription management company, Express Scripts. Businesses must use the various tools available to make any employee healthcare initiative more connected, human, and goal-oriented — while also keeping an eye on margins.
