Share this:

Employers must make changes to reduce healthcare costs

While governors and presidential candidates launch healthcare initiatives in an ongoing campaign for attention, the real champions of healthcare reform are private sector employers.

America's business leaders began confronting rising healthcare costs long before the current political show horses entered the arena.

The public sector should pursue and implement cost reductions pioneered in the private sector.

Employers are applying market force economics to healthcare. Employee co-payments have increased. Making employees' healthcare costs more transparent to them and increasing their financial obligation is an important first step toward other more significant improvement steps.

While still relatively new and not widely understood, health savings accounts have great potential. Like individual retirement accounts, the significance of HSAs will become more apparent over time.

Lifestyle choices have an overwhelming influence on healthcare costs. The most significant change that must occur is consumer focus on wellness, disease prevention and disease management.

Progressive employers are investing in employees' health. Establishing a culture of wellness and prevention returns dividends not only in reducing healthcare expenses, but also as investment in employee morale, that can result in more job satisfaction, reduced absenteeism and increased productivity.

Management goals are shifting from reducing costs to reducing the need for healthcare services. Thoughtful leaders no longer consider health benefits a mere recruitment or retention feature; they embrace consumer focused health plans as an overall business strategy. Healthy people cost less and are more productive, making them competitive assets.

This approach is not an inexpensive undertaking and requires long-term commitment, just as continuous improvement efforts that guide many production facilities.

There's commitment to provide information and education tools for individuals to take more responsibility. Employees take diagnostic tests for baseline health risk assessments. This data doesn't disappear into HR files; it is the basis for employees' improved health literacy and progress tracking with personal electronic medical records. Other employer investments include on-site exercise facilities, subsidized health club memberships, wellness coaches and online tutorials and health information.

Diagnostic tests can detect life threatening conditions that, if left undetected and untreated, could lead to expensive treatments that easily exceed the tests' costs. Preventive medicine works and is cost effective.

It is illegal for employers to punish employees who choose not to participate, but there are opportunities to provide incentives, rewards and other motivations to help employees see tangible benefits from self-directed health and wellness programs. Employees gain personally, and companies can document cost-reducing behavior changes. Savings from wiser employee decisions such as fewer emergency room visits, shorter hospital stays, fewer workers' compensation claims, increased choice of generic and mail-order drugs and successful preventive medical interventions may return to employees as higher wages, reduced premiums or lower co-pays. When successful, these management initiatives clearly benefit employers and employees.

Employers need to step up and pay more attention to practices like those of Rochester, NY, where 70 employers with 25,000 employees have collaborated to improve quality of care, reduce costs and improve health. We all need to wake up: most Americans are too sedentary, don't make good diet and lifestyle choices and aren't smart, active healthcare consumers.

- Doug Whitley is president and CEO of the Illinois Chamber of Commerce. He can be reached at (312) 983-7100 or

Subscribe to