The Problem
The U.S. pays significantly more for healthcare than anywhere in the world, with lower or no better outcomes than other industrialized countries. Getting value for our healthcare spending is a major issue. Employer-provided healthcare plans grow more expensive every year…. with employers and employees bearing the cost burden.
Employer-funded healthcare is in danger of becoming an unaffordable employee benefit.
- Average total premium cost now exceeds $20,000 - a dramatic amount relative to cash compensation
- Average employee premium portion now $5000+
(not including employee costs of co-insurance, copays, and deductibles)
Employers are forced to push more costs to employees, especially deductibles.
- Employee contribution costs are increasing much faster than wages.
Employers want employees to be more cost conscious and are using higher deductibles to motivate employees to shop and buy smart.
- Vast majority of plans now require deductibles and deductible amounts are increasing
- Average deductible amount for all covered workers is $1,400 for single coverage
- An increasing % of covered workers are on high deductible health plans (HDHP) with a minimum family deductible $2,800 / average deductible $4,600
Higher deductibles are not working as intended.
- Employers are pushing costs to employees but the cost increase curve has not flattened at all.
Why are higher deductibles not reducing cost?
- Employees have not been provided tools or pricing to effectively shop for healthcare services.
- Some providers publish list prices... that no one actually pays.
- Insurance payers have been unwilling to make public their discounted prices for comparison across providers.
- Patients are challenged to even define what services they want from long, confusing lists of provider service codes and descriptions.
High deductibles are not working for providers either.
- Providers now collect from many patients instead of a few insurance companies, increasing billing, collection and write-off costs.
- 80% of physicians report patients delaying care until after they meet insurance deductibles - often exacerbating patient health problems and creating provider capacity utilization issues. *
- Most physicians report that their office staff spend more than 300 hours per year investigating and educating patients on their insurance coverage. *
*University of Chicago survey of 704 physicians
