The Impact of Rising Healthcare Costs
For many companies, rising healthcare costs are the 800-pound gorilla that can cause a negative ripple throughout the organization.
Healthcare spending is not just a growing expense: It's a huge opportunity cost in terms of lost investment in R&D, innovation, wages, and other factors that have direct impact on morale, productivity, and employee retention.
Controlling Healthcare Costs
Employers are using a wide range of strategies to try to control healthcare spending, including narrow-network health plans, high-deductible health plans, centers of excellence, employee incentives and telemedicine.
But these strategies aren't making the meaningful impact on costs that companies need. They might bend the medical cost trend by one percentage point, but settling for 5% annual growth in healthcare spending is not sustainable.
It's not necessary, either. Because these cost-control tactics still aren't addressing the root issues, like the inefficient use of healthcare resources. In fact, the overuse, underuse, and misuse of healthcare account for an estimated 40% of healthcare spending. And that's a huge opportunity.
The CFO's Role in Managing Healthcare Costs
Managing spiraling healthcare costs is no longer the responsibility of just HR. More and more, CFOs are partnering with HR to create a strategic plan to reduce claims spend.
The CFO's role has expanded to encompass not just cost control but strategic growth, and workforce performance is a key driver. As they have become more focused on employee productivity, CFOs have become more involved in employee health and benefits.
New Strategies for Managing Healthcare Spending
Healthcare can be a complex system to navigate. But what if there were a solution that made healthcare easier for employees? Want to learn proactive strategies that finance and HR can partner on to have the greatest impact on reducing healthcare costs?
Read Best Practices for Partnering with HR for Success to find out more.