You’ve probably heard the term “financial wellness” before. But have you ever considered it as a strategy for your healthcare budget? There’s this idea that spending a lot of money on healthcare is worth it because it means patients are getting high-quality care. In reality, there’s almost no correlation between cost and quality of healthcare. That’s why it makes sense to narrow in on the spending — you don’t have to break the bank to guide your employees to high-quality care. Here are three reasons why healthcare is as much a financial wellness problem as any other part of your benefits package.
1. Healthcare expenses are continuing to rise — you need a strategy
It’s no secret that healthcare is expensive, but costs are increasing faster than you might think. The most recent PWC report projects that by 2020, medical costs will have risen more than 6%. So even if you feel comfortable with your healthcare budget at the moment, you’re probably going to need to change a few things in the near future. This is where a financial wellness management program comes in — to outline a strategy for healthcare savings that can benefit you now, and help you adapt to future hurdles that might come your way.
Most financial wellness programs, though, don’t account for healthcare spending. When employees are asked “what would most help you achieve your future financial goals”? The majority answer lower healthcare costs. However, only 12% of employees say their company is helping them manage and save for healthcare costs. There’s a gap between financial planning and healthcare.
More than a third of Americans say they could not afford an unexpected medical bill for more than $100 without going into debt. But, employees aren't trying everything to lower their bills as only 7% of people research doctors, facilities or costs ahead of time to avoid high bills, according to Amino’s research.
Neglecting to save for medical expenses may be partially explained by lack of awareness, so employees can’t properly budget or save money to begin with. For example, the median network rate (what a patient + their insurance company would pay combined) to fix a broken arm in America is $1,100, yet most almost 50% of employees estimate it costs less than $500. Only 7% of Americans estimated within the correct price range.
This is why a consistent, comprehensive financial wellness strategy that accounts for healthcare can make such a difference for your budget. Investing in access to accurate healthcare data and expert guidance to care for your employees is a great place to start.
2. High-cost healthcare ≠ high-quality healthcare
In order to combat the myth that it’s okay to spend a lot of money on healthcare, let’s break down a few key metrics.
First, the United States’ healthcare spending is approximately 200% greater than other economically developed countries — but ranks almost 30th in the world for life expectancy and ranks poorly on other indicators of quality. It would be one thing if high spending matched safety, but it doesn’t, so why should we continue to waste money?
On a local level, Amino’s data collection with Leapfrog Hospital Safety Grades found that for hospitals in urban areas, the range of price and quality is so wide, you can’t rely on price to find the best care.
Of the top 5 most expensive hospitals in the San Francisco Bay Area, 3 have a safety rating of grade C or below. In New York City, the most expensive hospital has an F grade safety rating. Of the top 5 most expensive hospitals in Los Angeles, none of the facilities had a grade A safety rating.
And to make matters worse, you can’t rely on patients to be good consumers of care because it’s really hard to find this data. That’s why healthcare financial wellness incorporates more than just the financial component — it includes transparency to connect the link between cost and quality of care. Guided service to a provider where cost and quality match, is a tactic in a healthcare financial wellness strategy.
This is where you can come in with the tools such as sponsoring onsite clinics or healthcare navigation tools. Amino, the only healthcare financial wellness platform, is powered by more than 12 billion de-identified commercial health insurance claims for 220 million patients. We’ve taken this data and baked it into Smart Match — an Amino technology which guides employees to providers and facilities that are in-network, highly experienced, safe, and affordable, all within seconds.
3. Healthcare costs are the #1 financial concern for your employees
Medical expenses are the most important financial concern for employees in the United States. And, the pressure of this financial burden impacts far more than how much money is in their pockets. Things like productivity, employee retention, physical and emotional well-being, relationships, and work attendance, are all affected by finances and healthcare according to the 2019 PwC Financial Wellness Survey.
As more and more employers are embracing financial wellness as a category — 20% of companies offered a financial wellness program in 2016, 83% of companies offer a financial wellness program today, 97% of companies are predicted to offer one in the next 1-2 years — healthcare financial wellness is something that will set you apart.
If there’s one thing to remember, it’s healthcare costs mean a lot to your employees and their families! Keep considering this when creating a financial wellness strategy. Understanding the nuanced, personal stress in healthcare, and planning to combat it, will set a standard at your company that fosters health and saves money.
Healthcare, more than anything, is a budget buster. Financial wellness when it comes to healthcare is all about giving employees smart guidance. At Amino, we’re pioneering a whole new category of financial wellness: healthcare financial wellness. To learn more Amino features and how we see healthcare fit into the financial wellness conversation, click here.