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How Healthcare Consumerism Reduces Employer Benefits Costs

Imagine a world in which every American is a subject matter expert in the price and process of purchasing medical services. In this ideal healthcare system, each person actively shops around for medical services, comparing prices of services instead of going to just any facility or healthcare provider without giving it a second thought.

Healthcare consumerism is a trend that has been gaining momentum in the U.S. for the past several years. It is a large-scale effort that aims to make the process of accessing healthcare services more efficient and transparent. Healthcare consumerism is intended to make using healthcare services more affordable by encouraging employer-sponsored benefits plan participants to become conscious consumers. This will ultimately improve patient outcomes and levels of satisfaction with the medical care they receive, and reduce costs within the entire healthcare industry.

According to DataPath, healthcare consumerism is designed to:

  • Facilitate closer communication and collaboration between healthcare providers and patients.
  • Improve patient participation and adherence to treatment recommendations.
  • Increase patients’ knowledge, understanding, and awareness of healthy lifestyle practices.
  • Heighten focus on preventative medicine by encouraging healthy activities and habits.

As an employer, if you want to help reduce benefits costs for your business by encouraging your workforce to participate in healthcare consumerism, you’ll need to set your employees up for success by providing the information and resources they need to make well-informed decisions.

In this blog post, we’ll take a deep dive into the game-changing trend of healthcare consumerism. We’ll give employers tips for cultivating a culture of savvy benefits plan participants by providing proactive education that encourages healthcare and insurance literacy.

Benefits Programs That Give Employees More Autonomy

The main point of healthcare consumerism is transforming employer-sponsored benefits plans by putting plan participants in the driver's seat. When your employees feel empowered and well-equipped to use their own decision-making and purchasing power in their healthcare decisions, they transform from passive benefits users into savvy investors who play an active role in their own health journeys.

Three of the most popular vehicles that enable employees to have more direct control over their healthcare spending are:

  • Flexible spending account (FSA)
  • Health savings account (HAS)
  • Health reimbursement arrangement (HRA)

These accounts are all designed and operate slightly differently, but each provides a tax-advantaged account that allows participating employees to save funds to pay for out-of-pocket healthcare costs. These accounts are largely controlled by the employee, which gives that individual a sense of personal agency and investment in their journey as a conscious healthcare consumer.

Encouraging Insurance Literacy Through Proactive Education

There’s no getting around it—navigating the ins and outs of the healthcare and insurance industry is challenging. A troubling four out of five consumers find it difficult to compare the cost and quality of healthcare services during their decision-making process. Though not unexpected, these numbers are cause for concern, given that 75% of consumers feel their healthcare decisions are among the most important—and expensive—decisions they’ll make in their lives.

One significant reason employees are not using their benefits to maximum effect is that using insurance is just plain complicated. Each plan comes with its own set of rules about which doctors are in-network, which products and services are covered, different degrees of coverage, and what your out-of-pocket costs for things like co-pays and deductibles will be.

There is also a mountain of healthcare-related jargon that you need to understand in order to use your benefits effectively. Industry-specific terms like FSA, primary care, in-network covered services, copay, coinsurance, and deductible are concepts that your employees may not be familiar with.

Encouraging healthcare and benefit plan literacy among your employees will help them become more thoughtful and informed participants in their healthcare journeys. It will also empower your workforce to reap the maximum value from their health benefits. In order to get employees more involved in their healthcare choices, employers will want to provide outreach and education, help with the enrollment process, and inform them about any changes that might affect their plan or the care they receive.

Related Reading: Crucial Benefits Communication Strategies

Consider developing a straightforward, step-by-step guide to help workers use their health benefits effectively. You’ll want to make sure the language is easy to understand. Include a glossary of common industry terms and a simple explanation of benefits for each plan option. Be sure to include the plan carrier’s and/or broker’s contact information so your employees know where to turn if they have questions about their benefits.

Learn how to boost employee engagement while minimizing healthcare costs for your organization.

Andrew Grove

Andrew Grove is Executive Vice President of Sales & Account Management for the Employee Benefits Consulting division. He leads several aspects of the division, including the management of the sales team and its resources. Andrew is a Licensed Health Insurance Counselor as well as a Licensed General Lines Agent—Life, Accident, Health, and HMO, and he has received numerous training certifications and awards.

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