Why high deductible health plans are not the answer to rising benefit costs.

The rising cost of health care benefits is affecting everyone from the lowest hourly employees to C-level executives. Every year, business owners are faced with the same dilemma… how to curb costs without sacrificing the quality of care and the morale of their employees.

According to an on-going study by the Kaiser Family Foundation, most companies are opting for high deductible plans that push much of the cost back to the employee.

And yet, none of the employers that were polled for the study have seen significant savings in their annual health benefits expense.

Overall, high deductibles are not working to save employers money. EVERYONE is paying more.

According to the Kaiser study, the average deductible from employer-provided health plans has quadrupled in the last 12 years to $1,300. It’s not uncommon to see plans with a $5,000 deductible, or more.

41% of Americans are now enrolled in high deductible plans, and almost half of those report they don’t have enough money in savings to cover the deductible.

The results of this “low savings high premium trap” is that many people simply forego treatment. The system actually has default financial disincentives in place that discourage the use of health care benefits.

Even Americans with chronic conditions such as diabetes use less medical care if they have a high-deductible plan, according to the Health Care Cost Institute, which examined three years of insurance data for 10 million workers.

That avoidance behavior is problematic for employers who choose to self-fund their health benefit programs. When high-risk populations — such as diabetics and those with heart disease — forego treatment the result is a predictable spike in hospital visits, serious complications, and a corresponding spike in costs for the employer.

Dr. Donald Cornforth, CEO and Chief Medical Officer of Incentive Health, said that those high risk populations account for 85% of the cost of any company’s health benefit coverage.

“If you want to mitigate costs, you have to focus on serving those high-risk populations in a very positive, pro-active way,” Cornforth said. “The secret is to provide the right incentives to everyone involved.”

Instead of avoiding treatment, high risk employees need incentives to actively manage their illnesses and embrace wellness programs. That’s how employers can keep costs down.

And not only that, Cornforth and his team at Incentive Health also build-in incentives for their providers to provide efficient, integrated care.

“The right care, at the right time, from the right doctor at a reasonable, knowable cost. That’s what’s been missing, and that’s what will, ultimately, save employers a lot of money,” Cornforth said.

“We need to reverse the trend toward high deductible plans, because those are not working for anyone,” Cornforth says. “They’re bad news not only for the patient, but also the employer. The data is absolutely conclusive on that.”