How Medical Employers Manage Their Health Insurance Costs

When it comes to nonclinical management challenges, today’s medical practices struggle to balance the effects of continuing staffing shortages against intensifying financial pressures that, among other things, can hinder successful recruitment efforts. Like other businesses, for example, they are being squeezed by rising operating costs. Medical supplies and necessary technology are among the expenses that are hard to keep up with, especially as supply chains and pricing undergo significant disruption in a volatile political and economic environment. As medical costs continue to rise, health insurance rates rise in tandem, and physician groups pay the price like everyone else. Pay is important for attracting and keeping both clinical and office professionals. But so are great benefits, and health insurance tops the list. Several strategies can enable managers to gain better control over health benefit costs and give themselves a recruiting and retention advantage. Medical practices are no different from any other small or midsized business when it comes to budget busters: Health insurance accounts for between 30% and 40% of their total compensation costs. One common cost-savings strategy has been to shift to high-deductible health plans, transferring more of the cost burden to employees. But it’s not an ideal solution during a worker shortage and, in fact, may discourage existing employees to short-change themselves on wellness for financial reasons. A smart approach is to take the long view, with more sophisticated strategies for effectively navigating a difficult environment. The roller-coaster ride of today’s environment for health care costs may never even out. But experienced partners can help employers smooth out the ride and create a benefits plan that is effective and sustainable for the long term.

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Pete Reilly is the practice leader and chief sales officer of global insurance brokerage HUB International’s North American health care practice. In this role, he directs and coordinates HUB’s health care planning, growth, and strategic initiatives.