We spent nearly $10,000 per person on healthcare last year. That’s a higher healthcare bill than Americans have ever paid, and it accelerated at the fastest rate ever since the Great Recession in 2007. This new data comes from the Department of Health and Human Services.
We know that this astoundingly high number is largely driven by the expansion in healthcare coverage for millions of Americans enabled by the Affordable Care Act. We also know that rising prescription drug costs played their part. It’s not surprising that the lion’s share of our $3.2 Trillion health bill was spent caring for the sickest of patients suffering from largely preventable chronic diseases.
While the federal government and households were hit the hardest, businesses who sponsor employee and family health plans also took a big blow; they payed 20% of this bill. 2015 saw a notable increase in enrollment in employer-sponsored plans (1.4%) as the labor market continued to improve.
But there are bright spots–pockets in America that have been able to hold their healthcare bills steady, despite external pressures. Chicago is one such anomaly; for the past five years, the city has kept its healthcare bill for employees and retirees roughly flat, at about $450 million a year. We can learn a lot from their strategy, particularly as it relates to employer-sponsored healthcare.
Although the cost to cover employees has grown by 25% over the past 5 years, a few of the strategies Chicago used to counteract this trend included:
- introducing incentives for employees to seek higher-value doctors and other healthcare providers
- offering incentives for members to buy generic drugs rather than more expensive branded versions
- redesigning its copayments to encourage people to see primary care physicians
- creating incentives for employees to obtain MRIs and other scans at independent facilities, which often charge less than hospitals do
By continually measuring, educating and reshaping the behaviors of its citizens, Chicago has been able to improve the value of its healthcare while holding costs stable. The endeavor has required constant attention and effort. And to continue its progress, Chicago will have to keep making changes, but unlike many other parts of America, it is headed in the right direction.
Plan sponsors: you can also transform your population into a success story that bucks the national trend. Start by empowering your members with health intelligence that is actionable. Then steer and reward them to manage their health continuously. Your wellness program is the perfect place to start.[Photo credit: m.a.r.c. via Creative Commons.]