Premiums Are on the Rise & Here’s How They’re Being Spent
Recent data shows that the vast majority – more than 80% – of health care premiums are spent on four things:
The largest component of these is prescription drugs, accounting for 23.3 cents out of every health care premium dollar.
Why Is So Much Spent on These Four Things?
The relevant question for employers is, why? Once the root cause behind this trend is understood, companies and organizations can make changes to ensure the trend doesn’t apply to them, so far as they can help it.
So, why are these four components responsible for such a large portion of health care premium spend? The primary answer is both simpler and more complex than you might imagine: A lack of healthcare consumerism.
Healthcare consumerism refers to an overall approach to health care benefits that sees them as a consumer good, meant to be “shopped for” like any other consumer good. Moreover, this approach also emphasizes the proactive involvement of the consumer in their own health care. Following this approach therefore means both finding the best price for care and working to prevent the need for costly items like prescription drugs to begin with.
Put most simply, it is the absence of this healthcare consumerism approach that is behind the cost trend in question.
How Healthcare Consumerism Can Help
Of course, understanding a problem is generally easier than actually solving it. Even if employers understand that they should strive to promote healthcare consumerism among their employees, that’s not the same as knowing how to do this, let alone actually doing it.
With this in mind, here are just a few basics when it comes to making healthcare consumerism part of your employee benefits strategy:
Making the Complex Simple
Most health care premiums are spent on just four things. With healthcare consumerism and the right advisor, your company or organization can respond to this trend effectively.