In the Eye of the Storm

EACH YEAR, COMPANIES MUST weather increasing healthcare costs. But businesses can combat rising insurance prices if they stay informed and manage potential expenses.

Several industry surveys help companies to know the latest research on healthcare costs. For example, a recent survey by the Kaiser Family Foundation and the Health, Research and Education Trust, both based in Washington, D.C., found that the best way to decrease expenses is through disease management. Disease management involves carefully monitoring and managing health conditions. The joint survey collects data from 2,800 companies and is considered a key barometer of U.S. employee health cost trends.

The survey also found that the average cost of a family coverage premium is between $9,068 and coverage costs $3,383 for a single person. Of that amount, the average premium an employee pays annually for family coverage is $2,412, up 49 percent from three years ago. And an employee's average cost for individual coverage is $508, a 52 percent increase from three years ago.

Despite these double-digit increases, employers still are reluctant to drop health insurance coverage for employees. Three out of five Americans receive employer-sponsored health benefits. But as insurance premium costs increase, employers often are forced to shift more healthcare costs to workers. Significant percentages of employers surveyed say they will increase employee contributions and cost-sharing in the future.

According to the Washington, D.C.-based American Association of Health Plans (AAHP), a few of the healthcare insurance expenses that affect employers' overall costs include:

Decreased competition: Intense competition in the health insurance market was once a reality. Now, the few remaining health insurance providers seek profitable businesses. This has left employers with fewer insurance options and premium increases.

Higher compensation for hospitals and medical groups: Today, some hospitals refuse to participate in managed care networks. Hospitals are advertising their strengths and capabilities to encourage patient loyalty without regard to their insurance companies. The result is that healthcare providers are demanding higher compensation, and insurance companies are passing these higher costs onto employers.

High cost treatments and drugs: Medical technologies and drug discoveries have advanced. However, they are costly and the demand for them, by medical consumers, is increasing.

Changing demographics: The majority of Americans, Baby Boomers, is aging and requiring more medical attention.

Government mandates: Healthcare plans are required by law to have certain benefits. For example, health plans must pay for women to stay in the hospital a minimum number of days following childbirth. While many of these mandated benefits are worthwhile, they add costs to insurance plan costs.

For waste companies and all healthcare-providing employers, it can be challenging to find cost-saving healthcare options for their employees. Consequently, it is important to effectively communicate new choices and changes, as well as possible employee-contribution increases, to find the best and most affordable solutions for their workforce.