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Cost Control

Educate Employees about Care Options to Manage Healthcare Costs

The Baldwin Group
Updated: April 23, 2024
3 minute read

Healthcare costs are soaring. As the chart here shows, hospital spending, physician services, and prescription drugs are among the key drivers.

Projected growth for three drivers of healthcare costs

(Average annual increase through 2030)

Hospital Spending:                             5.7%

Physician and Clinical Services:       5.6%

Retail Prescription Drugs:                 5.0%

Source: 2022

With each one of these areas projected to increase through 2030, managing costs is critical. Fortunately, knowing which care options to use and when can help rein in healthcare costs for both employers and employees.

Leverage lower cost sites of care

Hospital utilization for non-life-threatening emergencies continues to drive up spending. In fact, using the ER is the most expensive option for receiving routine care. Alternatives, however, including urgent care facilities and telemedicine can provide lower costs for certain types of treatments because they operate with lower overhead, taking unnecessary costs out of the system.

Understanding which site can deliver the most appropriate type of care and where to have those services performed can be key to containing costs. Here’s how employees can use each one to help keep costs down.

Urgent care facilities or walk-in clinics

Non-life-threatening symptoms, such as: eye/ear infections, colds, flu, congestion, fever, allergies, bug bites, skin rashes, flu shots, sprains/strains, vomiting, diarrhea, stomach pain, painful urination, annual physicals, and vaccines

The average cost of an ER visit can be $1,400. But a trip to an urgent care facility for the same treatment may only cost about $100-150 on average.

Imaging centers

Specialty drug treatments through either injection or IV

These centers can cut costs for specialty meds by at least 50 percent versus going to a hospital.

Ambulatory surgical centers

Non-complex, outpatient surgeries, including: routine colonoscopies, hysterectomies, and certain musculoskeletal procedures

Ambulatory surgery centers can lower costs for hospital outpatient procedures by 59 percent.

Hospital ER

Any medical condition that may be life-threatening and require fast or advanced surgery, including: chest pain, difficulty breathing, stroke, fainting, burns, head injury or concussion, eye injury, seizure, bleeding associated with pregnancy, etc.

Expand telehealth for a broader range of health services

Expanding telehealth offerings beyond general wellness visits can provide more cost-effective and convenient options for a wider range of health services, including mental health, behavioral care, primary care, and emergency services.

For employers and employees alike, the savings can be significant. Making virtual health services accessible can help to limit employee time away from work and in turn, help employers regain approximately $3,600 per employee every year in lost productivity due to off-site doctor appointments. And employees can save almost 50 percent over a traditional in-person appointment.

Telehealth visit = $79

In-person visit = $149


Communicate navigation and concierge services

Many employers offer health navigators or concierge services as part of their health offering, but it is important to communicate the value these navigators provide at the time care is needed throughout the entire year. Help members understand that by intervening before a service or prescription is ordered or a claim is filed, health navigators can make recommendations for receiving an optimal and cost-effective level of care and can help avoid decisions that could end up costing more. For instance, if a patient needs an MRI, a navigator can direct him/her to a free-standing imaging clinic, where the cost can be lower than a hospital for the same service.

Let’s discuss how different care options can help manage healthcare costs for both you and your employees.

Tags in this resource

ER plan utilization telehealth urgent care wellbeing
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