Survey confirms: We have an affordability crisis in healthcare

Rising healthcare costs aren’t new. It’s one that’s been plaguing American businesses and families for some time. But with the cost of healthcare projected to increase at the highest rate in 13 years, are we finally at a point where we make a change?

We all see the many headlines with startling statistics further reiterating that there is a problem with healthcare affordability:

• More than 40% of Americans are experiencing medical debt.
• More than 80% of people are dissatisfied with the cost of healthcare.
• Prices for healthcare increased 3% in the past 25 years, compared with an 86.1% increase for all goods and services.

To best help our clients navigate the current healthcare issues plaguing workers, we asked 2,500 Americans how they feel about their healthcare coverage. The results are somewhat alarming and show that we still have a lot of work to do in making healthcare affordable and accessible. Some of the key findings from the survey include:

• More than a third of respondents skipped or postponed necessary healthcare or medications due to costs—of them, 42% had their medical conditions worsen.
• Health plan premiums are the number one factor causing difficulty in affording healthcare, followed by out-of-pocket maximums.
• In order to have lower healthcare costs, 60% of respondents would go to a primary care provider, doctor or hospital further away from their homes.

These results underscore what we at Imagine360 already know: the healthcare system is failing American families and businesses.

Healthcare costs impact employees’ health and career decisions

As is, businesses across the country are faced with the unfortunate task of passing on increased healthcare costs to employees or cutting back on other business expenses. But even with employers choosing to pass on these costs to employees, the effects on the business are also evident.

In the past 12 months, 38% of survey respondents skipped or postponed necessary healthcare or medications because of the cost. What’s worse, this number has only increased by 11% in the past two years. This can lead to employees missing more time at work to play catch up on a condition that could have been better managed earlier on, or in the form of higher healthcare costs to cover the care required for developed complications.

Additionally, a robust and affordable health plan directly impacts high-quality workforce retention and recruitment. Our survey found that 67% of respondents said health plan benefits play a big role in searching for or staying at a job. More than a quarter of respondents said they would take a pay cut at a different job if it offered better health benefits.

Even if employers choose to pass the costs down to their employees, it becomes a matter of how and not if the company will inevitably be impacted.

Employers need to step in to be part of the solution

More than a quarter of respondents said it was difficult for them and their families to cover healthcare costs. As the ones footing the bill, it’s up to employers to do their part in alleviating this difficulty by talking with brokers about alternative health plans that are viable for both the company and its most important asset—the employees.

Employers bear the responsibility of offering health plans that keep costs under control without sacrificing value, like those that utilize reference-based pricing (RBP). RBP uses standard rates, including Medicare, as a baseline to make fair and transparent healthcare payments and is proven to save nearly 20% on overall healthcare costs. Despite many regulations, there is still a significant lack of price transparency in more traditional health plans and employers don’t have the full understanding of what they and their employees are paying for.

Moreover, the issue of fair and transparent pricing goes beyond just employers and extends into the general perception of healthcare. Nearly 70% of our survey respondents said that the cost of healthcare was unfair, and nearly 60% said the costs of health visits should be more transparent.

These “unfair” costs of healthcare usually come along with the convenience of more traditional health plans. But I’m confident if an employer asked their employees if they would drive 10-15 minutes further away if it meant saving hundreds of dollars on healthcare, a significant percentage would be in favor. Even 60% of people in our survey said they would drive further to a clinic or hospital if it meant a lower bill.

While a health plan using reference-based pricing may require members to spend a little more time on their drive to the doctor or to call ahead of their appointment, it is part of a solution to the many concerns Americans highlighted in our survey: costs, transparency and fairness.

As is, employers are leaving employees to foot the bill for healthcare expenses without understanding as to what they are paying for. And despite employers’ best efforts—including more than doubling employee healthcare contributions over the past 20 years—healthcare still isn’t affordable for many Americans.

It’s time that employers recognize their role in the crisis of healthcare affordability. But the question remains: will they stand idly by hoping for the problem to diminish on its own or will they be the solution to the problem?