Controlling Employee Healthcare Benefit Cost at Quality Auto Parts
Healthcare expenses are rising and now rival the labor cost and becomes employers’ top business financial concern. The industry of quality auto parts like the one manages by DeCarlo is one example of the many companies experiencing this problem of high cost of healthcare benefits for their employees. Profit of the company is greatly affected as well as the pricing of their products .and services. These made DeCarlo and the management searched for ways to minimize the company’s expenses, specifically the one allotted for the healthcare benefits. They look for effective means to solve these out-of-control healthcare costs. Present study shows that premium for employer-sponsored health coverage is rising at a rate of 7% to 8% a year according to a survey conducted recently. If these problems will not be solved and left unchecked it will endanger many companies.
Causes of the Problem
Probable causes of this growing problem are identified: due to federal legislation, increasing utilization of health services, skyrocketing malpractice rates, large catastrophic-illness claims, increase use of mental health and substance abuse services, increased used of medical service, high-technology medicines, cost shifting from government programs (Medicare and Medicaid) to private insurance, high physician fees, the AIDS crisis, the demographics of employees in the auto industry (higher percentage of older employees, and recent premium price increases.
A meeting with healthcare providers, insurers, and employers are important to address the problem and discuss possible solutions to answer the problem. The company should learn to balance and track their expenses. A more comprehensive plan should be under careful study.
Conclusion and Recommendations
Healthcare benefits are in fact necessary and good for employees. But if it will continue to increase; company funds and resources will be of trouble and will be affected as well. There are various solutions available which can help the organization.
Companies can control their benefit expenses by understanding their health insurance costs and their employee’s health priorities more accurately. Promoting health and wellness will keep the employees more physically fit. Managing relationship with the healthcare provider is also important because both groups can help one another in achieving their specific goals. Instituting wellness programs and adopting consumer driven healthcare are some of the ways to aid this dilemma. Conducting orientation of proper health maintenance is also applicable. A healthy, clean workplace must also be observed so sickness could be prevented. Employees must also apply proper healthcare practices to their homes and families so that they will not get sick, too.
Companies and their employees as well as the healthcare providers must be willing to
find solutions to this problem before they become worst, thus affecting the financial status of companies and the employees.
“Research Reports: Guide to Healthcare Cost Control: Employer Strategies, Tactics, & Benchmarks.” (2005). ioma: Business Intelligence at Work. Retrieved July 24, 2008, from http://www.ioma.com/issues/downloads/pdfs_noreg/HCCostsGuide08_TOC.pdf