Managing Employee Healthcare Costs Alternate Perspective | Mercer

Managing Employee Healthcare Costs Alternate Perspective | Mercer

Our Thinking / Voice on Growth Economies /

Managing Employee Healthcare Costs: An Alternate Perspective
Calendar13 6월 2017

With medical costs continuing to rise year after year, nearly 80%[1] of employers across Asia are unable to demonstrate return on investments of their benefits programs. Searching for ways to contain costs remains as one of the top priorities for HR yet much of the focus is on traditional methods such as negotiating premium costs.

Often, companies have a one-dimensional understanding of their medical scheme gleaned through external benchmarks. Employers stand to benefit by shifting to a more marco approach, based on an understand of how other stakeholders in the healthcare ecosystem impact their medical scheme.

Where to start with cost containment: discovering the unknown

Often, companies have a one-dimensional understanding of their medical scheme gleaned through external benchmarks. Employers stand to benefit by shifting to a more macro approach, based on an understanding of how other stakeholders in the healthcare ecosystem impact their medical scheme.

The increasing cost of care on a medical benefits plan can result from either the use of expensive facilities and drugs or from abusive provider behaviors. The latter, which can range from over-prescription of medication to the encouragement of frequent and unnecessary testing, is a prevalent trend across many countries in the growth markets, especially where regulations around doctor behavior and drug pricing are feeble. For example, according to the 2016 Mercer Marsh Benefits Medical Trends Around the World Survey, 64% of insurers in the Middle East and Africa consider it to be a main reason for increasing employer medical costs. It is therefore imperative to direct care toward the right providers in the market and to continuously monitor their behaviors.

How to execute on alternative healthcare strategies to manage costs

Standard traditional medical coverage will not suffice as the epidemiology and risk factors in today’s population change and become more severe. A strong provider network strategy sits at the core of an effective medical program that meets these needs while keeping medical inflation in check.

There are many cost containments areas within the healthcare value chain that may be unknown to employers. Discovering the four ways employers can uncover these areas to execute on alternate strategies outlined in this article will help organizations manage employee healthcare costs.

 

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