Cost Shifting Doesn’t Change Behavior


Sometimes what started out as a good idea runs its course –  like disco.  And cost-shifting in health care.

A number of years ago employers began to shift more of the cost of health care to employees.  There were essentially two reasons for this.  One was that the employer could no longer afford to maintain the status quo. The second reason was the thought that an employee who was more involved in the financial decisions effecting his/her healthcare would be a prudent shopper and buyer of those services. So costs were ultimately shifted through higher deductibles and copays.

It seems the gain envisioned by these strategies has been exhausted. In a recent article in the May 7, 2012 issue of Business Insurance, Louise Kertesz reports that while moving the financial incentives around, employers failed to address the root cause, i.e. “education on what’s appropriate and efficient medical care and accountability for people making their decisions.”  So we find that efforts such as wellness programs are most effective when incentives address results, not mere participation. (Isn’t this like everyone on the last-placed T Ball team receiving a trophy for good participation?).

Buying health care can be incredibly complicated and downright spooky. Most all of us need advice – we need an advocate – in deciding what, when and how to buy.  OMCA principals, physicians and nurses have been doing this for 35 years and we can help you and your employees with decisions that will save money and maintain clinical competence.  The cheapest health care is still that which produces the best outcome.

Call Us.  We can do better.

William V. Faris, JD
Chief Executive Officer

Posted in Group Benefits Programs, Medical Cost Containment, OMCA