Slowing Health Costs? Not for Employees.

A terrific chart from the Kaiser Family Foundation (KFF) and Health Research Educational Trust (HRET) shows why, despite the relatively slower 5% per year growth in healthcare care costs over the past five years, consumers aren’t “feeling the love.”

As documented in the KFF’s  2015 Employer Health Benefits survey published last week and reported in both the Wall Street Journal and Vox, increases in worker’s earnings (which tracked closely with overall inflation) were well less than half of premium increases from 2010 to 2015 and less than 1/8 of the increases in deductibles.

Although we can’t prove causation, can can draw a correlation between such disproportionate increases in deductibles and the disproportionate growth we’re seeing in the total costs of care being incurred by people with chronic disease.  It appears, based on our analysis, that the routine or “typical” services these folks are receiving are decreasing as deductibles rise.  Meanwhile, their total costs of care – including their potentially avoidable complications/costs – are going up.

In other words, it would at least appear that the strategy of shifting costs is now working against both employer and employee.  What would work better?  A strategic approach that segments the challenges by the type of care.

Strategies and tactics for differentiated solutions will be the topic of our next several blogs.