Latest news with #costcontainment
Forbes
5 days ago
- Health
- Forbes
The Simple Habit That Can Deflate America's $7T Health Tab
Spoiler alert: You — not Congress — may be the most powerful cost‑containment tool in U.S. medicine. National health spending is projected to surge to $7 trillion this year and swallow more than 31% of the GDP within a decade. Yet as much as a 30% of that outlay is pure waste: redundant scans, fraud and abuse, avoidable ER marathons, labyrinthine billing systems, you name it. If a quarter of every health‑care dollar is currently passing through the paper shredder, maybe the fix isn't one more policy tweak, but a new mindset for low-cost healthcare: Conscious Care Consumption. Think of it as financial mindfulness for your body. Why Costs Keep Climbing (Even When Your Pulse Doesn't) The U.S. health system consumes money for sport — bloats the deficit, starves state budgets, drags down American companies and hurts the middle class. Before we dive into fixes and remedies, let's zero-in on the three leakiest holes in the healthcare hull — the habits that quietly siphon billions every year. First, we over-rely on high-cost care — think sprinting to the ER for a 100-degree 'emergency' fever. Nearly 40% of emergency visits aren't true emergencies, and that mismatch punishes both wallets and wait times. Second, we navigate poorly: four specialists for one cranky back means four copays, four separate appointments and a cascade of scans. Third, we let fear run triage. A 2 a.m. online doomscroll on chest pain can trigger an unnecessary hospital work-up. Anxiety itself is a notorious bill-inflator. A hospital joke nails the absurdity: the priciest piece of equipment isn't the MRI or the robot surgeon — it's the physician's pen. One admission order or 'just-in-case' test, and that pen can incinerate $30,000 faster than any device on the ward. It's the perfect symbol of how reflexive decisions, not just fancy machines, torch budgets. As a healthcare advisor, I'm the person they call after the $9,800 ER visit for a sinus infection. I unwind the chaos — duplicate scans, out-of-network detours — and reset care through primary care, urgent care and smarter meds or a plan created ahead of the emergency. It's fixable, but it's cheaper to prevent. The goal isn't 'cheap care.' It's low-cost healthcare with high-quality outcomes. Plan first. Panic never. The playbook: four moves to contain costs Build a home base. A durable relationship with a primary care physician is the cornerstone of cost-efficient care. Patients who keep regular PCP visits rack up fewer duplicate tests and fewer non-emergent ER trips. Layer in your plan's 'cheat codes'—no-cost preventive visits, in-network labs, and 24/7 telehealth—and you've built a clinical and financial safety net before anything goes sideways. Navigate smarter, not harder. Create an escalation path and stick to it: PCP first for routine or chronic issues; urgent care for same-day but moderate problems; telehealth for quick guidance on straightforward stuff (rashes, mild colds); ER only for the big, scary, time-sensitive events like chest pain or stroke symptoms. Codify it in your phone favorites so panic doesn't pick the venue. Optimize meds and diagnostics. Ninety-day mail order can boost adherence and cut abandonment rates by nearly 40%. Stack manufacturer coupons or assistance programs on top for specialty drugs. And before repeating imaging or labs, ask whether anything clinically changed; if not, duplication rarely helps you—or your bottom line. Keep emotion in check—without ignoring it. After-hours symptom spike? Pause and assess: can this wait for tomorrow's PCP slot or a quick telehealth consult? Most mechanical back pain, for instance, improves with movement and conservative therapy, not an immediate MRI. That's where a pre-agreed action plan comes in: a simple 'who to call, where to go' playbook that keeps treatment decisions proportional to the real severity and urgency of the moment, not the panic level. Aligning emotions with clinical reality trims interventions and preserves outcomes. Employers & Insurers: Your Turn at the Wheel Employers and health plans wield outsized influence over how, and how much, care gets consumed. The most effective strategies start with benefit design that nudges behavior rather than mandates it. Lower co-pays for primary-care visits, add a surcharge to non-emergency ER trips, or reward employees who choose a primary-care provider and complete an annual visit — each signals exactly where the plan wants members to begin. Pair that with automatic enrollment in 90-day mail-order prescriptions, then return a portion of the pharmacy savings to employees. Suddenly, prudent choices feel less like sacrifices and more like perks. Education matters just as much, but only if it's digestible. A wallet‑sized 'Where to Go' guide on the break‑room fridge beats a forty‑page PDF no one will read. Sweeten the message with telehealth credits during cold‑and‑flu season and you've replaced the usual urgent‑care dash with a five‑minute video consult. Finally, navigation allies can turn theory into action. Patient‑navigators and expert advisory teams — think trained care sherpas who phone‑check high‑risk members and book follow‑ups — have slashed avoidable emergency‑department use by more than 40 percent in real‑world pilot. That's not a rounding error. It means beds freed, budgets balanced and employees who make it to work instead of spending four hours under fluorescent triage lights. The bottom line Recalibrate incentives, simplify guidance, and add hands-on navigation, and Conscious Care Consumption stops being a slogan and starts showing up on the balance sheet. The gray wave collides with costs: as Boomers age into higher-need years, the only sustainable path is healthcare built on smart navigation and primary care first. When families practice it consistently — PCP first, urgent care for the quick stuff, ER for the real emergencies — they get what everyone actually wants: low-cost healthcare without low-quality care. The habit is simple; the impact isn't.
Forbes
30-06-2025
- Business
- Forbes
Group Health Plan Funding: Alternative Considerations For Employers
Teah Corley is the founding principal and CEO of EmployerAdvocates. The landscape of employer-sponsored healthcare is rapidly evolving, with rising costs (registration required) driving the need for innovative funding alternatives. As a group health plan consultant for more than 20 years, I have seen many small and mid-sized employers—particularly those with fewer than 200 employees—think their only viable option is a fully insured plan through a national carrier. However, this approach often defers critical cost controls and financial advantages to the insurance companies. The Hidden Costs Of Fully Insured Plans In a fully insured model, employers relinquish control over cost containment and forfeit pharmaceutical rebate revenue. These rebates—paid by manufacturers to pharmacy benefit managers (PBMs) to secure approved drug list (formulary) placement—are retained by insurers rather than benefiting the employer's health plan. Additionally, fully insured employers often lack access to transparent claims data, making it difficult to analyze cost drivers or implement strategic savings initiatives. Ultimately, cost-containment options are limited, and premium increases leave employers with little recourse beyond plan design changes or cost-shifting to employees. Exploring Alternative Funding Models For many employers, the prospect of self-funding can be daunting due to concerns over cash flow and risk exposure. However, alternative strategies—such as level funding and group captive models—could offer a reasonable middle ground, enabling cost control and financial flexibility without assuming the full self-insured risk. Level funding mirrors the structure of a fully insured plan, but with a crucial distinction: When claims are lower than expected, employers can recoup surplus funds rather than losing them to an insurer. In a fully insured model, this excess funding is retained by the insurance carrier. The level-funded model provides greater financial predictability while offering the potential for cost savings. For employers seeking even greater control, group captive funding allows employers to share risk through risk pools spread among multiple employers. Under this model, each participant self-funds claims up to a predetermined stop-loss threshold, beyond which costs are covered by a shared risk layer and, ultimately, a reinsurance policy. This structure allows smaller businesses to leverage the benefits traditionally reserved for large self-funded employers, such as lower pharmacy spend—in my experience, employers often see a 13% to 15% reduction in drug costs when transitioning from a fully insured to a self-funded model with full rebate pass-through. This number is also consistent with what we hear from our peers across the country. Other benefits may include: • Full transparency into claims data for strategic cost management • Retention of pharmaceutical rebates to offset expenses • Reduced administrative costs and ability to plug-and-play best-in-class vendors • Greater control as self-funded employers control their own custom plan designs and implement custom cost-containment solutions Employers also have the option of advanced funding models whereby a plan's full three-year projected liability, plus a buffer (often 15% to 25%), is underwritten and funded in advance. This three-year advanced funding is provided via a private capital raise with a capital partner that retains the risk with the employer leveraging the interest earned on a large sum over three years. This model creates a static, reliable budget and fixed monthly contribution over 36 months. The corpus is held in a special purpose entity trust and the health plan's monthly fixed costs and claims are paid from the trust. The trust itself carries the debt at a 102% collateralization level. This advanced funding strategy can be wrapped around and co-exist with a fully insured, level-funded or self-funded model to create stability and predictability over an extended period beyond the traditional one-year policy cycle. Making The Right Choice For Company Needs I've noticed employers that employ 50 to 200 people are the most vulnerable to the misconception that the only option for an employer this size is to fully insure its health plan risk through an insurance carrier. Historically, selecting a fully insured plan was the only option for employers in this size range. Captive models that allow employers to share a layer of risk at the stop-loss level have gained momentum in recent years as a mechanism for allowing smaller employers to self-fund a portion of health plan risk to gain greater control over cost containment. Many employers operate under the misconception that self-funding exposes the plan to open-ended risk. To the contrary, self-funded plans that incorporate a layer of stop-loss insurance or a shared captive layer of risk have a known maximum liability, very similar to fully insured plans. The key difference is that self-funded plans have access to greater transparency, control and cost-containment flexibility. When it comes to the risks that employers need to know about to make fully informed decisions, it's important for employers to fully understand the policy terms and limitations. For example, a self-funded strategy with stop-loss or a captive funding strategy will include a stop-loss insurance policy to protect the employer from upside risk. Each policy type has a maximum liability, but may also contain limitations or exclusions. It's also important for employers to fully understand the "attachment point" or the maximum liability that the employer will be responsible for versus what liability the stop-loss or captive will assume. Reading and understanding the policy terms and exclusions to fully understand the maximum liability can help employers better mitigate risk exposure. The Future Of Employer-Sponsored Healthcare As healthcare costs continue to rise, employers can explore innovative funding strategies to maintain affordability and control. Level funding and captive models may present compelling alternatives that help balance risk, transparency and financial efficiency. For forward-thinking businesses, these approaches could offer a pathway to sustainable, cost-effective healthcare solutions—without sacrificing the quality of employee benefits or financial stability. Employers may want to request a funding analysis from their broker or consultant to compare and contrast the financial implications, pros and cons of each funding model to make fully informed decisions. The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
