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Majority of employers’ health costs focus on employees with chronic illnesses

Published on November 13th, 2019 by Triton Benefits & HR Solutions

For employers who provide healthcare, a large amount of their spending goes toward a small number of people. The Employee Benefit Research Institute conducted a study over the course of five years that involved examining 5.8 million people with access to employer health benefits. The study shows which types of employees use the most amount of employer-based healthcare and the most common health services they purchase with it.

It turns out that 20% of those insured by an employer account for 80% of total healthcare spending in the U.S. Among that 20%, many are living with chronic illnesses. The nature of these illnesses require people to receive more healthcare service in order to maintain happy and healthy lives.

Which chronic illnesses are most prevalent?

The majority of employer-funded healthcare services go toward employees with the following medical conditions:

  • Diabetes
  • Hypertension
  • Respiratory disease
  • Connective tissue disease

Not only do these employees see their doctors more, but they also spend a lot more money at pharmacies. Prescription drugs account for a lot of the medical costs associated with chronic illnesses. According to the five-year study, among the top 10% of high-cost employees, 52% of total healthcare spending went toward purchasing prescription drugs.     

What can be done to reduce health spending?

With an understanding that chronically ill employees will require more health benefits, employers can take steps to keep their total health costs low. This starts by effectively managing the healthcare options you're currently providing.

Are you tailoring healthcare plans around the specific needs of your employees? If not, you might be wasting money by paying for moot coverage. Prescription drugs, as mentioned, along with pharmacy services and drug therapies account for a majority of employer-based health costs. That's why many employers are turning to alternative sources of chronic care for their employees. For example, there are specialized pharmacies designed to service people with specific conditions. Many employers are pushing their employees toward these pharmacies because they provide a more cost-efficient care.   

Are your employees healthy?

Ask yourself whether you're facilitating a healthy work culture for your employees. Do you have any programs that educate and encourage healthy habits at work? If you're trying to avoid paying large healthcare bills out of the company's pocket, sometimes the most you can do is motivate your employees to have healthier lifestyles and offer guidance from health industry professionals.

To learn more about best practices for providing health insurance to your employees, connect with us at Triton today.   

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