Why Employers Should Care About Costly Healthcare Waste

Healthcare waste creates significant issues for organizations. Consider: the healthcare industry wastes $750 billion per year on unnecessary tests and treatments, according to a new study from the National Alliance of Healthcare Purchaser Coalitions and Benfield published in Employee Benefit News. While 60 percent of employers consider this waste an issue, the same percentage is not taking steps to manage wasteful spending.

The survey found 54 percent of health spending waste is caused by unnecessary medical imaging tests, such as MRIs and X-rays. In addition, specialty drugs, unnecessary lab tests, and specialist referrals are high-cost culprits. For many employers, the challenge is understanding where their healthcare dollars are going and whether employees are receiving high-value healthcare services.

Employers are becoming more proactive when it comes to managing their healthcare costs. Direct healthcare is one strategy. Eleven percent of employers say they plan to pursue a direct healthcare deal in 2019, up from 3 percent in 2018, according to the National Business Group on Health. By bringing healthcare services to where an employee works or near their home, employers can have a direct impact on outcomes and overall wellbeing of their workforce.