Employers can lower health costs by steering care — SkimNews
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- Employers pay $28,303 on average for family health coverage but rarely reject high hospital prices, passing costs to workers through suppressed wages.
- Walmart directs employees with serious conditions to centers of excellence like the Mayo Clinic, covering all costs and often avoiding unnecessary surgeries.
- CalPERS set a reference price for hip and knee replacements in 2011, requiring members to pay the difference if they chose pricier hospitals, which led high-cost hospitals to cut prices.
- Self Fund Health offers small Wisconsin employers a model that can make flying patients to Johns Hopkins cheaper than local care, with free access to preferred low-cost providers.
- Atrium Health responded to North Carolina’s tiered network by waiving patient cost-sharing, neutralizing incentives to avoid high-priced systems while maintaining high prices.
- Brokers earn commissions tied to premiums, creating misaligned incentives, though federal law requires them to disclose these payments to employers.
Why it matters: Workers effectively pay for bloated health care through lower wages, while hospitals and insurers benefit from unchecked pricing. When purchasers like CalPERS or Walmart shift patient volume, prices fall—proving market forces can work if employers stop passively accepting high costs and actively steer care.
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