Only one in five American adults receives routine preventive medical care each year. And even fewer people seek medical care when they first need it. How come? The reason is overwhelmingly unified: cost.
The fact that healthcare is expensive is not news. In the United States, an average of $10,224 was spent per person on healthcare in 2018, more than doubling countries like Germany, France, Canada, the UK, and others.
With healthcare costs rising for both individuals and their employers, both groups seem to be working towards the same goal of spending less in that area. However, employers who cut healthcare coverage and employees who skip necessary medical care – although both intending to save money – end up costing companies more in the long run.
The Sick Day Paradox
When people don’t seek the medical care they need due to cost, they use nearly 70% more sick days than those who seek medical care, according to a study from the Integrated Benefits Institute. Those sick days translate to decreased productivity since the individual is working fewer hours per week. If that condition is not managed, it can lead to long-term absenteeism issues which perpetuate the issue further.
Employers are trying to reduce their healthcare costs too. This often comes in the form of changing or eliminating coverage options. However, when employers eliminate coverage, it often forces employees to forego medical attention. When employers change coverage to HDHPs to lower cost, employees fear the high out-of-pocket expenses and don’t get care then either.
As earlier established, employees who don’t get necessary care take drastically more sick days. Those productivity losses eat away at organizations’ bottom lines, which makes employers have to consider cutting healthcare coverage further. Again, the paradox continues.
So what can be done to get employers and employees out of this paradox?
Strategically crafting benefits plans
To break the cycle, employers need to strategically analyze and revise their benefit plan to make healthcare affordable enough that employees seek medical care, yet can still be sustained financially. One of the most effective ways to achieve this is through pairing benefits that work together to mutually benefit employers and employees.
For example, HDHPs are often a go-to healthcare option for employers because they are cost-effective. As previously mentioned, however, the steep out-of-pocket expenses cause many employees to shy away from getting care. Pairing that HDHP with an HSA on the other hand, makes the situation more mutually beneficial. Employers maintain the cost benefit of an HDHP, while employees get assistance with out-of-pocket expenses and a triple tax benefit.
Unfortunately, there is no indication that healthcare costs will decrease in the near future, so employers need to come up with creative solutions to lower costs without sacrificing care for their employees. They should see healthcare offerings as an investment in the well-being of their employees, and create an environment where employees do not hesitate to seek the medical care they need.
Sources:
https://www.ibiweb.org/new-ibi-study-lower-wage-workers/
https://www.benefitspro.com/2019/07/24/unaffordable-health-care-results-in-more-employee-sick-days/
