  |
|
|
|
Workplace Healthcare: The Newest Wrinkle in Cost Containment© Ronald J. Rakowski
In the "old" days (pre-1980, or so), employers paid most or all of the cost of the healthcare coverage that protected employees while maybe, just maybe, requiring employees to pay a small amount if they wanted to cover their dependents. Companies continually upgraded and expanded healthcare benefits and willingly assumed most of the financial burden associated with those improvements. In that same time frame, employees had to make only a few healthcare decisions because the benefits under employer-sponsored plans were generally the same for all employees. Typically, employees could elect to participate or not to participate in their employer's healthcare plan; that was about the only choice they were offered.
As employers began recognizing and calculating the financial impact healthcare costs had on the bottom line, they began searching for solutions. Early on in the process, employers were surprised to discover that they were a big part of the problem. By continually improving healthcare benefits, employers had unwittingly taken their employees, the "consumer," out of the healthcare purchase picture. Who cared if the cost of a doctor's visit went up 15 or 20 percent every year when the company's healthcare plan picked up most or all of the increase? I certainly didn't! Responding to ever increasing healthcare costs, employers initially shifted some of the costs to employees via increased contributions, increased deductibles, elimination of reimbursements for wasteful practices such as non-emergency weekend hospital admissions, and increased co-payments for doctor visits and prescription drugs. This "cost shifting" strategy continues today as healthcare costs resume their upward spiral. Unable to handle out of control healthcare cost increases, many smaller firms, those with 25 or fewer employees, have been forced to drop healthcare coverage for their employees. In a June 2, 1998 article published in THE WALL STREET JOURNAL, author Rodney Ho reported that the small firms that sponsor healthcare plans for employees decreased by more than seven percentage points over a one-year period (39% vs. 46%). Employer healthcare cost containment strategies have also increased the number of uninsured people who withdrew from employer-sponsored plans because they were unable to afford the "cost sharing" associated with those strategies. In a March 1998 article published in HR MAGAZINE, author Jay Greene predicted that the number of uninsured workers in the United States is expected to climb to 30 million by 2005.
The copyright of the article Workplace Healthcare: The Newest Wrinkle in Cost Containment in Workplace Issues is owned by Ronald J. Rakowski. Permission to republish Workplace Healthcare: The Newest Wrinkle in Cost Containment in print or online must be granted by the author in writing.
|
|
|
|
