“Hey Google—Is it health care or healthcare?”
The terms “health care” and “healthcare” are often used interchangeably, but there are differences worth noting—especially when it comes to strategy, spending, and workforce wellbeing.
Health care refers to the services provided by medical professionals. Health care services include the efforts and processes used to restore or maintain health, like preventative health care and mental health care.
On the other hand, healthcare refers to the entire field or system. For example, the “healthcare industry” or “healthcare providers” encompasses all aspects of the sector, from hospitals and clinics to pharmaceuticals and insurance.
The healthcare insurance industry plays a major role in our economy. Health spending—including dollars spent on insurance—has historically accounted for about 18% of the U.S. Gross Domestic Product (GDP). In my role as a Client Service Leader for Holmes Murphy’s Employee Benefits practice, addressing the economic impact of how we access health care has been an ever-increasing element in the client healthcare strategies we create.
The Economic Impact of Health Outcomes
Health care services, including doctor visits, hospital stays, surgeries, and other medical interventions, directly impact all employers. While most employers transfer all or a portion of their medical plan benefits risk to insurance carriers, healthcare trends continue to outpace inflation, creating budget pressures. Understanding the trend factors driving medical costs and changes in the healthcare industry is the first step in developing your business’s healthcare strategy.
The health of individuals and populations significantly impacts economic productivity and costs, yielding both positive and negative results for employers. Healthier employees are generally more productive, as good health reduces absenteeism and presenteeism (working while sick), enhancing productivity and overall economic output. Conversely, poor health outcomes lead to productivity losses and rising health insurance premiums, resulting in higher operating costs. Thus, employee health can either bolster or strain a company’s economic performance, depending on the overall health outcomes.
Strategies to Care for Employee Health
To address health outcomes, employers—and their insurance companies—need to adopt multifaceted strategies to simultaneously reduce health care utilization and improve the overall health of the workforce. Here are some effective approaches to consider.
- Comprehensive Wellbeing Programs: Programs that encourage healthy behaviors, such as regular exercise, balanced diets, smoking cessation, and stress management, can help reduce risk of chronic diseases. Encouraging employees to utilize preventive care services, such as vaccinations, screenings, and regular check-ups, can detect health issues early and prevent more serious conditions that require extensive medical intervention.
- Mental Health Support: Providing mental health support through Employee Assistance Programs (EAPs), counseling services, and stress management resources can help address mental health issues before they escalate.
- Site-of-Care Navigation: Alternative payment models and expanded prior authorizations can encourage doctors and patients to explore outpatient alternatives. These site-of-care navigation strategies include the use of bundled payments, capitation, and value-based care arrangements, which reward providers for delivering cost-effective care outside of the hospital. Telemedicine continues to play an expanded role, offering convenient access to medical professionals and reducing the need for in-person visits and associated costs.
- Chronic Disease Management: Providing resources and support for employees with chronic conditions, such as personalized care plans and access to disease management programs, can help manage their health more effectively and reduce complications.
By adopting strategies tailored to your population, your business can help reduce healthcare utilization, lower healthcare costs, and improve the overall health and productivity of your workforce. Monitoring industry innovation, such as artificial intelligence and nontraditional employee benefits, will be another key approach to creating successful outcomes.
Better Health for Your Budget
Health outcomes make a big impact—not just on people, but on businesses and the economy. Healthcare costs and insurance premiums are tightly connected, requiring strategic solutions designed to support your team and company. The Employee Benefits team at Holmes Murphy is always working to find smarter ways to manage costs and support better health. Reach out today to learn more about how we care for your unique potential.
