An op-ed published on Bloomberg says most business CEOs are "curiously passive" about the rising costs of healthcare and are failing to implement the most basic management tools to deal with the problem.
Darrell Moon, CEO of Orriant, a wellness-program provider, wrote the piece, titled "It Takes a CEO to Save the U.S. Healthcare System." He says healthcare costs are now the third-largest expenditure for companies today and that company CEOs can take steps to solve the problem that politicians in Washington can't.
Here are seven steps Mr. Moon recommends business CEOs take to curb healthcare costs:
1. Give incentives to insurance brokers. He recommends paying brokers on a fee-for-service basis or offer them a bonus tied to the amount by which they can reduce a plan's costs, not its benefits.
2. Give incentives to managers. "[R]are is the boss who offers bonuses to human resources and benefits managers who reduce claims costs for the company. It's long past the time for CEOs to get the incentives working in the right direction inside their companies," says Mr. Moon.
3. Give incentives to healthier employees. "The point here is that CEOs can't keep handing out unlimited health benefits without strings attached. Employees who don't even try to modify their heath risks should pay more," says Mr. Moon. He recommends accountability-based wellness programs to deliver savings.
4. Employ disease-management programs to target the costliest health risks. Claims costs for employees with depression can much 70 percent higher than non-depressed workers. CEOs can deal with higher-cost risks, like depression, by promoting a wider utilization of employee assistance programs that can provide intervention and counseling.
5. Stop getting ripped off by pharmacy-benefit managers. Mr. Moon recommends CEOs use a new breed of transparent PBMs that provide health plan members and administrators with drug price sheets and claims data.
6. Join with other companies or providers to trim costs. Employer-owned cooperatives, like the Employer Health Care Alliance Cooperative of Wisconsin, can provide more collective bargaining power. Partnering with providers directly can also help align incentives to lower healthcare costs.
7. Pay for results, not services. Walt Disney, American Express and other companies are paying physicians' bonuses for reducing employees' health risks. "This gets results," Mr. Moon said in the report.
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Darrell Moon, CEO of Orriant, a wellness-program provider, wrote the piece, titled "It Takes a CEO to Save the U.S. Healthcare System." He says healthcare costs are now the third-largest expenditure for companies today and that company CEOs can take steps to solve the problem that politicians in Washington can't.
Here are seven steps Mr. Moon recommends business CEOs take to curb healthcare costs:
1. Give incentives to insurance brokers. He recommends paying brokers on a fee-for-service basis or offer them a bonus tied to the amount by which they can reduce a plan's costs, not its benefits.
2. Give incentives to managers. "[R]are is the boss who offers bonuses to human resources and benefits managers who reduce claims costs for the company. It's long past the time for CEOs to get the incentives working in the right direction inside their companies," says Mr. Moon.
3. Give incentives to healthier employees. "The point here is that CEOs can't keep handing out unlimited health benefits without strings attached. Employees who don't even try to modify their heath risks should pay more," says Mr. Moon. He recommends accountability-based wellness programs to deliver savings.
4. Employ disease-management programs to target the costliest health risks. Claims costs for employees with depression can much 70 percent higher than non-depressed workers. CEOs can deal with higher-cost risks, like depression, by promoting a wider utilization of employee assistance programs that can provide intervention and counseling.
5. Stop getting ripped off by pharmacy-benefit managers. Mr. Moon recommends CEOs use a new breed of transparent PBMs that provide health plan members and administrators with drug price sheets and claims data.
6. Join with other companies or providers to trim costs. Employer-owned cooperatives, like the Employer Health Care Alliance Cooperative of Wisconsin, can provide more collective bargaining power. Partnering with providers directly can also help align incentives to lower healthcare costs.
7. Pay for results, not services. Walt Disney, American Express and other companies are paying physicians' bonuses for reducing employees' health risks. "This gets results," Mr. Moon said in the report.
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