It’s no secret that health care costs are rising. A number of factors contribute to these increasing costs—some of the biggest contributors include:
Increasing Pharmaceutical Costs and Use:
Health care costs are growing in part due to the increased use of prescription drugs, and an increase in the number of newer, more expensive drugs prescribed. Though prescription drug manufacturers have revolutionized modern medicine, these advances come at a cost.
As pharmaceutical companies develop new drugs to treat serious medical conditions, the market for those drugs expands accordingly. The trend in the pharmaceutical industry is to maximize profits by developing drugs to treat conditions for which there were previously no drug treatments. These new “lifestyle” drugs treat or control conditions like nail fungus, impotence, obesity or hair loss. Manufacturers then use direct-to-consumer advertisements that encourage customers to ask their doctors for prescriptions for these medications.
The increased use of lifestyle medications and direct-to-consumer advertising have raised serious questions about where America’s health care dollars are being spent and if consumers are getting the best value for their money.
New, Expensive Medical Technology:
New medical devices, diagnostic tests and medical imaging tools are enabling doctors to deliver care that would have been impossible in years past. Medical technology, just like pharmaceuticals, has revolutionized medicine and improved the lives of many people—but those advances have also come with hefty price tags. As the number of older Americans increases, these new devices and treatments are being used even more and with escalating price tags.
The health care system is primarily geared toward providing acute care and curing diseases. However, many people need care for chronic conditions such as heart disease, cancer, stroke and diabetes. Chronic conditions are the major cause of illness, disability and death in the United States, and they account for a significant portion of health care spending.
Before managed care revolutionized the American health care system, individual medical providers determined the fees for their services. However, with the domination of managed care plans, most providers have been forced to negotiate their prices lower or risk losing patient volume from managed care plans willing to exclude non-compliant providers from their networks.
In order to maintain or regain some negotiating power, providers in many communities have consolidated their medical practices, effectively monopolizing procedures within specific service areas. These large provider groups have a much greater ability to negotiate with managed care plans that wish to provide convenient care options for their members.
Health care costs and, consequently, employee health benefits costs have been increasing at a very high rate for nearly a decade. Unfortunately, cost increases are still outpacing the rate of inflation, making health care a growing cost burden for consumers.
As costs increase, frustration grows for health insurance buyers and the consumers of health care in our nation. Advances in medical technology and expanded pharmaceutical dependency will only grow and continue to drive your health care higher. So, what is a business owner to do? How can consumers of health insurance better manage the costs of the benefit they are providing?
Association Health Plans (AHPs) will allow businesses to join together through an Association such as NATM to form a larger, more influential buying pool for the purchase of health insurance. This leverage should allow the AHP to negotiate more aggressive insurance pricing as well as the cost of administering those plans.
NATM Members from more than 20 states have already provided information for NATM’s Association Health Plan (AHP) evaluation.
To learn more about how to leverage NATM Membership to better manage healthcare cost:
Plan to join Marsh and McLennan Agency for the workshop session scheduled at the 2019 NATM Convention & Trade Show on Wednesday, Feb. 20 at 8:00 am. Schedule a one-on-one meeting with Marsh and McLennan Agency consultants during the 2019 NATM Convention & Trade Show to discuss your specific employee benefit challenges, strategy and NATM’s Association Health Plan initiative. Contact Lane McNeil at Lane.McNeil@natm.com to sign up.
Complete a Data Collection form for your company and if you want to be included in NATM’s AHP evaluation, please submit the completed form to Lisa Clark at Lisa.Clark@marshmma.com.
Contact Lisa Clark if you have specific questions regarding your employee benefit plan or NATM’s Association Health Plan progress prior to the 2019 Convention at Lisa.Clark@marshmma.com.
For more information about Marsh & McLennan Agency, visit www.marshmma.com.