Given the annual cost of healthcare, you’d expect the U.S. to have one of the best-performing systems in the world.
What’s the old adage say, ‘You get what you pay for?’ Sadly, that’s not the case. All recent data points to high spend and increasing costs for employers and ineffective usage. For example:
- According to research from The Commonwealth Fund, the U.S. spends more on healthcare than any other high-income country, but has the lowest life expectancy.
And though we spend more than any other country, healthcare costs continue to rise each year—both for families and their employers.
- Families: The average single and family premium increased 4% last year (while wages only increased 3.4% and inflation increased 2.1%), based on KFF data.
- Employers: PwC’s Health Research Institute found that the medical cost trend for employers increased 6% this past year, (a higher increase than the past 3 years).
On top of all of that, we have the pandemic-related fluctuations to take into consideration. COVID is expected to cause even higher healthcare costs for employers in 2021 and beyond:
All these increases come at a time when employers already spend $1.2 trillion each year on health benefits.
The fact is, reining in health costs is no longer an abstract “nice to have” item on your organization’s financial to-do list—it’s an essential business imperative if you want to remain competitive, sustain healthy growth, and provide shareholder value.
HR and C-suite alignment… or lack thereof
With the importance of healthcare cost containment to future business success, we wanted to learn more about how the C-suite and human resources are joining forces to solve this challenge.
The C-suite and HR must be partnering to decrease healthcare and benefits spend for their organizations, right? Well….in many cases, they’re simply not.
Our report found disconnects between company leaders and their HR teams in the areas of:
- Prioritization: How important is reducing healthcare costs for the business?
- Figuring out the root causes: Why aren’t you getting more bang for all those bucks?
- Identifying potential ramifications if rising costs aren’t addressed: What, exactly, is at stake?
So how do they overcome this hurdle? We know the C-suite is committed to controlling healthcare costs, and to do so, they need to achieve lockstep alignment with their HR partners. Moreover, HR teams are benefits experts, they know what matters to employees, their organization’s healthcare history, and overall benefits offerings.
If companies want to wrangle in out-of-control healthcare spending, they need to leverage the expertise of both the C-suite and HR. But, this is easier said than done. Read on to find out where the problems start, and how to bring them to an end. It’s past time to work together to reign in runaway healthcare costs for good.
Table of Contents
- Section 1: Prioritization predicament
- Section 2: Division of duty
- Section 3: The cost of confusion
- Section 4: The debate on healthcare investment
- Section 5: The ripple effect of rising costs
- Section 6: The (almost) agreement between HR and C-suite
- Section 7: Top lessons learned
Short on time?
Skip ahead to section 7 for everything you need to know.
- Section 8: Taking control of healthcare spending
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