Right now the US is experiencing a period of modest increases in health spending, the lowest growth levels in 52 years according to a NY Times article. Click here to read the full article.
This is absolutely normal in times of recession, but the cost growth rate will come zooming back if the recession abates. A chart in the linked NY Times article illustrates that.
This is happening everywhere in most every plan.
Why does health spending abate in recession times of recession? One reason is workers defer elective surgery when they fear they’ll be be a victim of the next 10% staff reduction.
A phenomenon is that benefit managers tend to give credit for the slowdown in health care spending to whatever they’ve done lately. (Hey, we’re all humans, right?) I dub this benefit management “false positives.”
Here’s what I’m hearing about this go round. “My company’s health costs are flattening out because”:
- We added wellness, or deleted it
- We added disease management, or deleted it
- We did special communications to members
- We had health fairs
- We changed consultants, brokers, TPAs, etc.
- We did a “buy right” campaign
- We raised awareness of health costs
- We did (something too laughable to print here)
- We did none of the above
I just hope this temporary slowdown doesn’t let benefit managers become complacent. The star benefit managers out there know better.
Tom Emerick is the President of Emerick Consulting, LLC, and Partner and Chief Strategy Officer with Laurus Strategies, a Chicago-based consulting firm, and cofounder of Edison Health. Prior to starting his consulting career, Tom was with Walmart Stores, where his last position was Vice President, Global Benefit Design, which involved designing and managing benefits for over 1.3 million employees in the U.S., and 300,000 plus in international. For about six years, Tom also headed up Walmart’s Six Sigma and process improvement initiatives. Prior to Walmart, Tom had positions with Burger King Corporation, British Petroleum, and American Fidelity Assurance Company. In 2009, Tom was named by Healthspottr as one of the top 100 innovators in healthcare the US for his work on medical ethics. In December 2012, Tom was listed in Forbes.com as one of 13 unsung heroes changing healthcare forever.