Quit Wasting My Healthcare

Coordinating Consumerism with Wellness

Many benefits consultants and human resources representatives I have spoken with are very focused on wellness programs as their main strategy for employee healthcare cost-containment.  They want to not just lower their medical spend this year, but they also want the slow the rate of increase in the future.

Let me repeat this goal:  They want to not just lower their medical spend this year, but they also want to slow the rate of increase in the future.

They believe that by keeping their employees and their dependents healthy they can decrease healthcare service utilization and lower claim costs.

This leaves some unanswered questions for those who have invested in wellness, but have not seen their claim costs go down.  Some employees are still going to have medical problems and others are going to have chronic diseases.  If the number of employees using healthcare services decreases due to the success of a wellness program, what happens if those who still go to the doctor generate even higher claim costs?

A wellness program may decrease the rate of obesity from 30% to 15% in a company and decrease the rate of hospitalizations for cardiovascular events from 10 per year to 5—at an average cost of $10,000 per hospitalization and follow-up care, that is $50,000 in savings.

But what if that same company has an unchanged rate of allergic rhinitis and sinusitis—runny nose and congestion—that is not related to weight loss.  Those employees will still go to the doctor.  What if the prescription rate of brand-name medication increases—that’s $1,200 per year.  What if the rate of CT scans of the sinuses increases—that’s $2,000 per scan.  What if the rate of sinus surgery increases—that’s $8,000 per surgery.  For one person with these added claim costs, the total is $11,200.  If that company has five people with sinus problems, then you’ve just negated the savings from the wellness program.

Wellness is great and it is here to stay for many employers and it should continue to grow.  However, to achieve the goal of “lower claim costs now and a lower rate of increase in the future” employees and their dependents must make higher-value healthcare decisions.  They must consider the cost of the diagnostic and treatment decisions that they and their doctor make.  They must ask for the generic allergy medication, they must consider going to a radiology facility that only charges $500 instead of $2,000, they must know in advance what surgery costs and have it performed at a facility that charges $4,000 instead of $8,000.  There is a very competitive and untapped market for healthcare services and consumerism helps unlock that market.

Should you consider cost in an emergency—NO.  But most medical problems are not emergencies. 

There are innumerable opportunities to lower costs and improve the quality of care through consumerism—through making higher-value healthcare decisions in conjunction with your doctor.  The combination of wellness and consumerism is very powerful—it will improve health, improve quality and lower costs.