Health Care Cost Concerns Drain You

It is difficult to go 24 hours without thinking about the health care crisis facing small businesses in the United States. There are numerous challenges to deal with when leading a small organization, but it seems as if the challenge of providing affordable medical benefits, is near the top of the list. Sure, there are issues that may pose more serious strategic threats, but the cost of medical insurance is an issue that can drain you. One certainty, access to medical benefits is widely known to be one of the main objectives for most US workers when seeking employment, and medical insurance is a major component of any competitive compensation package. At Horst Engineering, we have continually strived to provide a fair benefit that is better than the market or industry standard for organizations our size. Of course, we have struggled with the challenge like most companies, and have faced nasty price increases every year. We have switched insurance companies, tinkered with the cost sharing model, and changed the benefits, all in an effort to mitigate the spiraling costs.

I don’t have a great macroeconomic solution for the problem. It is a terrible situation that I have studied closely, but few issues are as complicated as this one. I will not attempt to determine if it is: the short term financial goals of insurance companies that drive the cost, the terrible health habits of the US population, the management and costs of medical care, the life expectancy demographics, the prescription drug problems, the price gouging of some medical professionals, the lack of education and lack of leverage of the consumer, the cost of research and development, the constant introduction of expensive technologies, the cost of caring for the uninsured, the cost of government regulations, or any of the host of other issues that have contributed to the problem. The litany of issues make you think that the whole system is broken.

For a small business leader, it can feel that way. We have had our own challenges in educating our workforce. We constantly preach that each person should take more responsibility for their medical costs and play a greater role in proactively managing their health and the health of their families. There is no silver bullet, but it is obvious that by focusing on three things, you can make a big impact. If everyone in the country focused on these three things, then the whole system could get a big dose of help.

1) Exercise             2) Nutrition             3) Stress Management 

I was recently discussing the issue with the President and CEO of the Connecticut Business & Industry Association. He and I lamented the difficulties that the member companies face. Connecticut is a manufacturing dependent economy and a high cost place to do business. Manufacturing companies tend to have older workers because of the skill and experience involved with performing the critical tasks. Manufacturing companies have also had a hard time attracting younger workers who are steered towards service economy jobs. Age is a big factor in insurance costs. It is worth noting that the Mexican health care system is very different. The system is government run and has its own issues with many workers lacking access to quality medical care. However, many businesses locate in Mexico and other lower cost regions, in an effort to help manage their overall benefits costs.

In the US, I have become a big fan of Health Savings Accounts. For the first time this year, we offered a High Deductible Insurance Plan (HDIP) and companion HSA option. Time will judge the success of this offering, but in theory, by providing the right tools and incentives for employees/consumers to manage their health care needs, we can lower the overall cost. I think about this all of the time, so I’m certain that I will write about it again.

Good links:

http://en.wikipedia.org/wiki/Health_savings_account

http://www.cbia.com/ins/hsa/cr/default.htm

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