Health Wellness ProgramHealth and Wellness Programs and Wellness Program Consulting

During the past decade healthcare insurance premiums have climbed steadily. This is taking a toll on the bottom-line of employers, cutting into earnings, limiting growth and forcing a reevaluation of a once sacred employee benefit system. According to a projection by McKinsey & Co., at the present rate, by 2008 health benefits will eclipse earnings at the average Fortune 500 organization.

Businesses, through private healthcare insurance employers, are the leading provider of healthcare services in America. In 2004, 59.8% of American citizens were covered by a company-based healthcare insurance program, accounting for 88% of all private healthcare insurance. Yet the growing costs of Healthcare, ever-rising drug prices and a steady rise in chronic illnesses have brought the corporate world to a breaking point.

For many companies the increasing burden has become too difficult to carry. During the past five years healthcare insurance premiums have grown an average of 11.6% annually, more than four times the average rate of inflation and employee earnings over that time.3 Not surprisingly, this growth in costs has caused the number of companies offering Health Care services during that time to drop from 69% to 60%.4 In addition, in 2005,  healthcare insurance premiums jumped 9.2%, more than three times the rate of inflation – and that was the lowest increase in the past five years.

In this environment corporations need to find progressive ways to mitigate the rising costs of Medical Care coverage. Seemingly, the easiest strategies to accomplish this goal would be to cut benefits coverage or pass on agrowing burden to workers and retirees. More than 80% of corporations have chosen one or both of these options in the past few years and almost half of all sizable corporations are likely to increase the amount workers pay in 2007.5

However, these methods do nothing to address the fundamental causes of increasing costs, one of which is a population that needs increased medical. To make a lasting and substantial influence on costs and overriding health, companies need to look beyond a antiquated reactive-based approach.