For many Americans, employer-sponsored healthcare coverage is a valuable benefit. Over 150 million Americans receive health coverage through an Employer Sponsored Plan[1]. There is a great strain on employers to continue to offer these benefits, especially as the cost to provide coverage continues to increase at a rate much higher than inflation. According to PWC’s Health Research Institute, the growth of medical costs in the employer insurance marketplace has increased consistently over the past 5 years between 5.5 and 7 percent annually[2]. Why should we care as employees and what can we do to help control healthcare costs and the price of insurance?
Due to the consistently high increases in health coverage premiums, employers must consistently review their healthcare program. When prices increase too much employers may take actions, such as increasing deductibles or copays, increasing employee cost share, or doing away with an employee healthcare program altogether. When benefits are decreased, or cost share is increased, the employee is directly impacted. For this reason, all employees covered under an employer health program should endeavor to be good consumers of healthcare.
How can we as employees be good consumers of healthcare? After all, shopping for healthcare is confusing and not transparent. There’s no published pricing chart and insurers don’t and won’t share procedure reimbursement rates. Despite this, there are some basic steps we can all do as employees to help lower utilization and overall health care costs, which ultimately saves our employers and ourselves.
Here’s how you can be a good consumer of health care:
- Engage in healthy lifestyle choices. You’ve heard it before, but it just makes sense that living a healthy lifestyle is directly related to lower healthcare costs. For instance, it’s estimated that “obese adults spend 42 percent more on direct healthcare costs than adults who are a healthy weight”.[3]
- Select the right provider. In a non-emergency situation selecting the right provider is not only important for receiving the correct level of care, it is also important for controlling healthcare costs. Health plans are designed to steer you toward the right level of care and there are direct consequences for employees that do not optimally utilize care.
The biggest factor for controlling costs when choosing a healthcare provider is to choose a network provider. It is typically much more cost-effective to choose an in-network doctor over an out-of-network doctor as your health care plan has negotiated a fee schedule for services provided by a network doctor. Out-of-network doctors are not relegated to the provider’s fee schedule and may charge significantly more for procedures. Health insurers pass these increased fees on to the consumer through higher deductibles, copays and coinsurance.
Here are the general types of healthcare facilities. Selecting the appropriate level of care will typically result in the most efficient use of health care dollars. Consult your plan design documents or Summary of Benefits and Coverage for the cost associated with each type of provider.
- Primary Care Physician – when you have a non-emergency, non-urgent health care need you may choose to see your Primary Care Physician (PCP). Your PCP knows your health history and typically knows you best.
If your PCP is not available, or you need urgent care you may consider another option:
- Telemedicine – this option is becoming more popular as it allows you to “visit” a doctor or health professional by phone or video.
- Urgent Care – these centers are convenient, typically offering liberal service hours and walk in appointments. Consider this option for urgent, non-emergency, treatment.
Sometimes you will want to see a healthcare specialist, a Doctor with expertise in a specialized area of medicine.
- Specialists – visits to Specialist Doctors often come after the referral from a PCP, however many medical plans allow you to see a specialist without a referral. Consult your plan design for specific deductible, copay or coinsurance information. Specialist visits are typically more expensive than PCP visits as the doctor has received specialized training in a specific area of medicine.
In emergency situations it is appropriate to seek emergency care. Because of the urgent nature of emergency care, the staffing and facilities it is typically the most expensive type of medical care.
- Emergency Care – Medical emergencies are typically defined as “the sudden and unexpected onset of a medical condition that:
- Is threatening to life, limb, or eyesight
- Requires immediate medical treatment or
- Manifests painful symptoms that requires immediate response to alleviate suffering”[4]
- Shop for prescription drugs utilizing your health plan formulary:
- Generic versus Brand – Typically when a generic version of a drug is available it is more cost effective to choose the Generic drug. Ask your doctor if suitable generic drugs are available when receiving a prescription.
- Know your Health Plan’s Formulary. According to Doctor Michael Bihari, “a drug formulary is a list of prescription drugs…that are preferred by your health plan.” Providers typically provide a booklet that describes the formulary, lists the approved medications, and explains the coverage tiers and payment levels. Consult this booklet or your provider’s online formulary resource for more information.[5]
- Shop for services. There are some good online healthcare resources that allow you to shop for medical services and prescription drugs. BCF Group recommends the following sites that provide guidance on selecting lower cost providers.
- https://www.healthcarebluebook.com – provides a “Fair Price” tool that gives the consumer fair price information for procedures, tests or services in a given geographic area. While Health Care Blue Book provides a free “Fair Price” estimate for services, an employer sponsored membership fee is required to use their low-cost provider tool.
- https://www.goodrx.com – compare prices for prescription drugs from over 60,000 U.S. pharmacies.
By utilizing these strategies, you can become a better healthcare consumer and contribute toward driving down healthcare costs for your employer and yourself.
[1] Kaiser Family Foundation, kff.org, “Premiums for Employer-Sponsored Family Health Coverage…”, Sep 19, 2017
[2] PWC Health Research Institute, pwc.com, “Medical Cost Trend Behind the Numbers 2019”, June 2018
[3] the State of Obesity.org – A project of the Trust for America’s Health and the Robert Wood Johnson Foundation, stateofobesity.org, “The Healthcare Costs of Obesity”
[4] Air Force Medical Service, airforcemedicine.af.mil, “Seek Urgent/Emergency Care”
[5] Verywellhealth, verywellhealth.com, “Understanding your Health Plan Drug Formulary”, July 20, 2018