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Cutting Health Care Costs
by Dale Collie
Inc. Magazine recently printed an article giving nine ways to
cut health care costs. They give us great tips (smile) like:
"Shop around, consider health care savings accounts," and "find
a broker who works for you."
The article even tells us to "be our own insurer" -- and which
employer didn't already think of this if they are large enough
to become self-insured.
Where has Inc been? We've all be doing these things for years
and we still see the cost of employee insurance going up 15% and
more every year. You'd think a hard hitting magazine like this
would come up with something more creative.
Inc. even tells us to "band together" and reduce costs by having
a larger pool of employees - which might be easier said than
done. The most creative approach they have is to be "careful who
your covering." Two categories are cited - be careful about
providing health coverage to transient employees - those who
leave soon after their coverage begins - and those who have
Inc. figures that the working spouses should have their own
coverage and employees are juggling their own costs by teaming
up on the lower cost policy.
The author of this article makes good points for the truly
uninformed, but we're going to need more than this to survive
the cost-of-insurance-crisis that plagues corporate America.
Point number nine in the Inc. article comes closest to solving
the problem when it tells us to "get healthy." But they still
miss the target when they describe two strategies already
implemented by everyone who can afford to do so. First, throw
out the junk food vending machines and bring in health snacks.
Second, offer wellness programs that include health screening,
annual physicals, and incentives for weight loss, non-smoking,
and so on.
Don't get me wrong here. I'm not complaining about any of these
programs. The point is that these strategies are not news. Some
companies can still profit by implementing these "traditional"
methods of lowering health care costs.
The really innovative companies, however, know that the biggest
savings are to be had in controlling workplace stress from a
Many companies recognize the cost of employee stress, and some
of them can even recite the statistics such as those recently
released by ComPsych Corporation:
**67% of employees exhibit signs of high stress levels
**28% show constant but manageable stress
**44% lose 1 hour or more productivity due to stress
**48% miss 1-2 days per year due to stress with 52% missing 3-6
days and more
A few years ago, Harvard Business Review quoted a study that
found 60-90% of all doctors visits were stress related. American
Psychologist reports that stress costs American business as much
as $150 billion each year.
Companies who control workplace stress improve lives, increase
productivity, and boost the bottom line. The money saved by
"shopping" the cost of policies is limited. Insurance companies
can't and won't sell insurance at unprofitable rates. Medical
facilities are not going to reduce prices below operating costs.
We can beat up the brokers and switch insurance companies as
often as we want. We'll only see slightly lower prices.
We can raise the amount paid by employees, but we'll have to
increase compensation to make up the difference. And we can only
cut spouse coverage for a few employees. Even the most loyal
workers will stay if we put to big a dent in their bank account.
So the logical solution is for us to decrease our use of the
insurance. Insurance companies will help with this. They're
interested more in reducing claims than they are with price.
ComPsych found that workload was the cause cited by 40% of
stress workers. Other studies show that the primary cause is
"lack of control."
Corporate leaders will find the greatest savings by challenging
their CFOs to benchmark costs such as health care, absenteeism,
tardiness, absenteeism, and low productivity. They can do the
math and decide which it is more profitable - monkeying with the
insurance costs or hiring an adequate workforce, training
leaders to control stress, and improving productivity.
Copyright 2010 - Dale Collie - All Rights Reserved
Dale Collie, author and professional speaker, named by Fast
Company as one of America's Fast 50 innovative leaders.
Experience as Fortune 500 executive and business owner, US Army
Ranger and professor at West Point. His book "Winning Under
Fire" (McGraw-Hill) is published in English, Russian, and Chinese. www.CourageBuilders.com
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