4 ways to lower out-of-pocket healthcare costs

August 15, 2023 2:39 PM

A pharmacist helps a customer in a sunlit store.

Healthcare prices are only going up in the U.S., forcing more Americans to avoid care altogether or risk medical debt. However, employers can make a difference, just by implementing small-scale changes.

The U.S. has one of the highest costs of healthcare in the world, with total spend climbing to $4.3 trillion and total medical debt at nearly $200 billion. For many employers, reducing healthcare costs in the U.S. system seems like nothing short of a herculean task — but it's a necessary one if they want a successful business, underlines Becky Seefeldt, vice president of strategy at Benefit Resource, a pre-tax benefits administration company.

"Employers definitely need a vested interest in ensuring their employees are healthy, at least from a productivity standpoint," says Seefeldt. "If employees are concerned or unable to deal with their physical, mental and financial health, they're not going to be fully present at work."

In other words, when it comes to healthcare accessibility and lower costs, employer and employee interests are aligned. Seefeldt advises employers to first focus on adding tools and resources that help employees shop smarter for their care. For the most part, this means employers do not need to make big structural changes to their existing benefits while still making an impact.

Here are four ways employers can reduce healthcare spend for their employees, according to Seefeldt.

Empower employees to shop for their prescription medications

Employees should at least have access to information via their health plans that shows them the price difference between generic versus brand name products, notes Seefeldt. Employees should know where to find the comparisons and be encouraged to ask their doctors whether the generic medication can work for them.

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If employers want to go a step further, Seefeldt suggests employers offer access to tools like GoodRx, which compares drug prices across the U.S. and even provides discounts.

"When purchasing prescriptions, there may be vastly different prices for the same product at one pharmacy compared to another," she says. "Through relationships with other vendors, employers can provide a little bit more transparency."

Make sure employees know which urgent cares are in-network

While seemingly obvious, once someone is in a rush to see a doctor, they may forget to check if the urgent care is in-network. Seefeldt suggests employers educate employees on the difference between out-of-network care and in-network care, and even establish a current list of which local urgent cares are in their network.

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"If you go to an in-network doctor, you may be billed $200, but with your health plan the negotiated rate you pay is $100," says Seefeldt. "Understanding this difference can have a vast impact on how much you pay over time."

Encourage employees to take advantage of telehealth

Telehealth can not only save employees money on care, but save them from making an extra commute or missing work. Seefeldt advises employers to at least carry telehealth options for primary care visits and make sure employees know it's available. Most major health plans carry virtual care since the pandemic, but employees may not know they have that option.

Offer bill navigation and negotiation tools

Given that hospitals often overcharge patients for their visit, employees could use some help understanding their hospital bills, underlines Seefeldt. She suggests employers add a tool like MasterCard's HealthLock solution, which helps users by monitoring their medical bills for fraud and errors.

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"Navigating the billing process is certainly not something the average consumer is equipped to do," says Seefeldt. "So having some sort of cost advocate tool, particularly when faced with significant medical expenses, is worthwhile."