Why Do Employers Need Population Health Management Solutions?

Dr. Poorva Singh
Mon 22 Aug 2022
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About half of the United States population is covered by healthcare insurance sponsored by employers, either directly as an employee or as part of an employee’s family, making employers the largest contributors to America’s healthcare insurance sector. From 2011-2021, healthcare costs in the U.S. have risen 50% while healthcare quality and health outcomes remain inferior to comparable countries (OECD).

Since the Affordable Care Act went into effect, the proportion of self-insured employers has risen from 33% in 2000 to 60% in 2020. These employers bear the cost of all the claims which are incurred by their employees in contrast to fully-insured employers who only pay a premium to insurance companies for their employees’ healthcare coverage. This rise in the number of self-insured employers has substantially increased the expenditure of employers on employee healthcare.

The rising employer healthcare costs in the U.S.

With healthcare expenditures increasing overall, the burden on employers has increased the most. In normal circumstances, employee healthcare coverage is the second largest expense after salary expense. During times of crisis, like the COVID-19 pandemic, self-insured employers saw a huge jump in healthcare expenses to the tune of millions of dollars, pushing many to the brink of bankruptcy. This makes it imperative for employers to figure out ways to counter these rising healthcare costs to help them reduce operational expenses.

Why employers should be concerned with employee healthcare

With the increasing cost of healthcare, employers are spending more each year to ensure their employees receive quality healthcare. However, employee out-of-pocket expenses have also risen from $4,000 in 2011 to $6,000 in 2021. This increase has exceeded the rise in wages and cost of living increase and put an additional financial burden on employees. The pandemic has put a focus on healthcare like never before and employees look at good health benefits, such as low deductibles and low out-of-pocket expenses, as a major determinant of job-market decisions.

This has compelled employers to transition from fully-insured to self-insured healthcare delivery models and come up with novel ways to reduce their employee healthcare expenditure. The pandemic has proven how poor health of employees can impact the productivity of a company and employers are now focusing on keeping their employees healthy by focusing on preventive and behavioral health, increasing member engagement, and holding payers and providers accountable for their performance. Comprehensive healthcare coverage is crucial to acquiring and retaining new talent and employers need to prioritize taking care of their employees’ health without making a big dent in their paychecks and the company’s bottom line.

How population health solutions can help employers reduce costs while maintaining care quality

It is safe to say that employers need to achieve a Herculean target—reduce healthcare expenses while maintaining the benefit coverage of employees. Population health management solutions can enable employers to understand the health risks of their employees and improve care delivery. As this requires specialized data analytics expertise, many employers feel they don’t have sufficient manpower, understanding, or financial resources to create a solution internally. The best course of action is to partner with an experienced PHM solution provider to manage it for them.

Innovaccer’s Population Health Management solution powered by the Innovaccer® Health Cloud is the most robust PHM solution available in the market. It integrates clinical and claims data to analyze the existing health risks of employees, their care plans, provider performance, network leakage, and cost drivers. This empowers employers to know an overall view of the employee populations' health risks and care gaps and benchmark the providers based on quality and cost metrics. With the insights on the annual healthcare expenditure for their employees, it helps them negotiate better with the payers and providers. The solution also provides for care management and member management dashboards which simplify and improve the quality of care provided to employees via remote care/telehealth, preventive health alerts, reduced ED admissions, and medication management.

Improving the health of your employees while reducing healthcare costs is beneficial not only to your bottom line but also to the productivity of your organization. Learn how Innovaccer’s Population Health Management Solution can reduce your healthcare benefits spending while maintaining optimal coverage for employees.


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Tags: Population Health Management
Dr. Poorva Singh
Product Marketing Manager

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