Health should feel personal, accessible, and, most importantly, affordable to everyone.
However, with healthcare costs skyrocketing by 8% annually, employees are stressed physically and financially, and employers are under pressure to find sustainable solutions.
As healthcare costs continue to rise and show no signs of slowing down, employers must find a way to stay ahead of this trend.
Understanding what’s affecting these cost trends is crucial for finding practical solutions.
In this article, we will explore the critical factors behind the increase in healthcare expenses and introduce how Personify Health’s innovative navigation and advocacy services through the world’s first personalized health platform can address these root causes.
What’s Causing Healthcare Costs to Rise?
According to PwC analysts, the current trajectory of the medical cost trend is set to cause spending growth to reach a 13-year high.
The soaring prices for prescription drugs, ongoing inflationary pressures, and the high prevalence of chronic diseases like diabetes and heart disease are just a few of the many factors behind these unmanageable increases.
In the past 20 years, we’ve worked with over 7500 clients and 25% of Fortune 500 companies to improve the health and wellbeing of their employees and reduce healthcare costs.
Here are the most common factors we’ve seen that contribute to ever-growing cost trends.
For the HR/Benefit Leader
Improper or Less Than Ideal Use of Healthcare: Many employees use the wrong level of care due to several factors, such as low health literacy, lack of cost and quality transparency, and social determinants of health (SDOH) issues. For instance, employees often visit the emergency room for minor issues that primary care could take care of—additionally, skipping routine check-ups results in undetected conditions that become more expensive to treat later.
Low Engagement in Benefits: Employees often lack understanding of when and how to use their benefits and where to access them. This results in underutilization of available resources and can lead to unmitigated health risks and poorer outcomes, thereby increasing costs.
Increasing Number of High-Risk, High-Cost Claimants: Without proper engagement and navigation, more employees become high-risk claimants, significantly increasing healthcare expenses.
For the Employee
Complex Healthcare Landscape: Navigating the healthcare system alone is confusing, leading to avoided or delayed care. With multiple providers, insurance plans, and care options, the healthcare landscape is a maze that is difficult for employees to navigate without guidance. For example, understanding when to go to the emergency room versus urgent care is a common issue.
Uncoordinated Care and Claims: Employees face an undue burden, especially in vulnerable states, when care and claims are not coordinated across multiple providers and specialists. Because of that, an employee might see numerous specialists who do not communicate with each other, leading to redundant tests and higher costs. This lack of coordination can lead to higher costs and stress.
Benefits Overwhelm: Confusion about benefits prevents employees from using relevant resources when needed, exacerbating health issues and increasing costs.
As you can see and no doubt know, many factors drive these increases, so it’s crucial to take the time to understand which ones are impacting your specific company and employee population.
What’s the Impact of Rising Healthcare Costs?
Rising healthcare costs significantly affect you, your business, and your employees.
For the HR/Benefit Leader
Cost Shifting to Employees: Employers often shift more costs to employees through higher premiums, deductibles, and high-deductible health plans (HDHPs). This can lead to dissatisfaction and financial strain, especially since health insurance premiums are increasing at a rate higher than wage growth.
Budget Pressure: Rising costs put pressure on budgets, leading to the removal or reduction of benefits such as wellness programs or paid family leave. These losses can result in absenteeism, presenteeism, and lost productivity due to worsening health and stress.
Lost Productivity: Employees spend significant time navigating their healthcare needs. Our recently released 2024 Insights: Employee Health and Productivity Report showed that they spend an average of 2-3 hours per week navigating healthcare needs. This translates to a staggering loss of over 100 hours annually per employee.
For the Employee
Unmitigated Health Risks: Delayed care and confusion about benefits can lead to worsening health conditions, which are more costly to treat later.
Financial Insecurity: High medical costs can lead to debt and financial instability. According to EBN, 67% of people go bankrupt due to medical costs, even though many of them have health insurance.
Barrier to Care: Higher premiums and deductibles create financial barriers to receiving necessary care, leading to a cycle of worsening health and increasing costs.
How Are HR Leaders and Employees Currently Trying to Combat Cost Increases?
Some employers are investing less or stripping away benefits due to limited engagement and returns. Others are adding more benefits or point solutions to support employees and address growing health concerns. However, this often feels like throwing spaghetti at the wall, trying different solutions like onsite health clinics or health reimbursement arrangements (HRAs) without a cohesive strategy.
Employees often turn to family, friends, social media, or Google for advice. However, these sources can provide inaccurate or overwhelming information. Some might abandon their search or skip care altogether, leading to more expensive emergency room visits or worsening health conditions.
How Can Personify Help HR Leaders Solve This Problem?
This quote from the head of Walmart’s benefits perfectly encapsulates the urgency and complexity of the healthcare cost crisis:
“Projected healthcare costs for commercial segments in 2025 are the highest since 2012. This is not good news for self-funded employers, individual and small group policyholders, and ultimately the end consumers of healthcare…patients. For my entire 30-year career, I’ve heard it said that ‘our system is not sustainable.’ My question now is, how can something so ‘unsustainable’ be sustained for so long? And who has the courage to do something about it?”
This clearly shows the urgent need for innovative solutions in healthcare. And that’s exactly what our company has set out to do.
We aim to address this unsustainability head-on and transform the healthcare industry.
We offer a range of innovative solutions designed to tackle these rising costs, including personalized care navigation, advocacy services, and data-driven health management.
Care Cost and Quality Transparency: Our platform will help your employees find the best care at the best cost. We offer digital and live steerage to help members locate and use high-quality, lower-cost providers and procedures.
Benefits Education and Navigation: Struggling with gaps in care? Our platform can close 20% of them. We ensure you maximize your benefits through personalized concierge guidance, leading to better utilization and healthier outcomes. We help employees understand and use benefits that meet their needs.
Proactive Outreach & Early Intercepts: Prevent health issues before they escalate. Our platform leverages predictive analytics to identify and engage high-risk individuals with the right message at the perfect moment. We can intercept health problems early on by delivering timely, personalized messages.
Advocacy: Our advocacy team will support your employees with benefits, claims, and clinical advice when they need it most, empowering them to make smarter healthcare decisions that can lead to as much as a 10% reduction in healthcare costs.
Care Management Services: Ensure your employees receive the care they need without overspending. Our Personal Health Advocates provide case management, chronic disease management, and utilization review to help make taking care of your employees more efficient and affordable.
Reporting and Analytics Dashboard: Transform your raw data into powerful, actionable insights with our cutting-edge analytics tools. Evaluate your program’s performance, monitor engagement levels, and identify potential health risks with precision. Easily access robust self-service reports to target underperforming segments and track emerging trends. Click here to explore the dashboard for yourself.
All-in-One Service: Simplify your healthcare with our all-in-one personalized health platform. From benefits navigation to care management and wellness solutions, we cover every aspect of your workforce’s healthcare needs.
Experience the Future of Healthcare
Our 20 years of wellbeing expertise and 60 years in third-party administration have taught us what works. Our platform has been proven to drive a 2:1 positive ROI and 14% total healthcare cost savings compared to the market.
With these successes as our foundation, we’re ready to tackle even greater innovation in the industry.
That’s why we’ve created the world’s first and only personalized health platform that supports every aspect of the health journey.
It’s time to move beyond the unsustainable and take bold steps toward a future that empowers people to lead healthier lives.
Don’t wait! — Request your free demo today to learn how Personify Health can be your partner on the journey to creating a more sustainable healthcare system with reduced cost trends and a healthier, more productive workforce.