Why is it so hard for employers to get high-quality, low-cost health insurance?

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shutterstock_101696335The United States is notorious for providing low-quality healthcare at some of the highest prices in the world. Most industries show a correlation between the cost of service and the value offered to the consumer, but the average health insurance cost in healthcare has stubbornly refused to go down despite years of political tinkering and policy adjustment.

How can employers provide high-quality and affordable insurance within a healthcare system that is inherently ineffective and expensive?

Consumer Demand and Choice

We spend hours bargain-hunting and comparison-shopping for our phones, computers, and televisions, yet most people devote a fraction of that time to choosing a healthcare provider. The lack of consumer demand for affordable options contributes to a system of unfocused quality.

Patients aren’t the only ones to blame for the lack of options – the healthcare infrastructure also plays a significant role. Healthcare providers continually promote the variety of services and options available and leave the burden of choice to patients, all the while suggesting expensive and unnecessary treatments that boost the hospital’s bottom line. Patients with limited incomes often have few viable insurance options and yet are forced into situations where specialty procedures (i.e., those that generate the most revenue) are advised by medical professionals. These treatments may not be covered by basic insurance, or can leave patients with thousands in out of pocket expenses, forcing patients to pay thousands and contributing to the illusion of choice that exists between patient and provider.

Low Organizational Transparency

It’s a story we’ve all heard: Our prescription co-pays get raised, we get upset, and call someone to complain. This story has a twist, though – the prescription price hike was caused by the manufacturer and your insurance company is actually footing much of the bill.

A lack of organizational visibility is one of the biggest drawbacks to the U.S. healthcare system. Unlike most industries where providers are expected to be price competitive and also be accountable for what they offer consumers, healthcare processes work behind closed doors. The lack of visibility keeps patients in the dark about important safety and quality information, including issues related to hospital procedures and medical mistakes. The lack of organizational transparency leads to a higher average health insurance cost and creates frustration and finger-pointing at the wrong parties.

Issue Avoidance

Expensive insurance options cause individuals in need of care to avoid necessary treatments. The leading cause of bankruptcy in the U.S. is medical bills – with nearly 3/4 of those having health insurance! This avoidance creates bigger health problems for the patient that will cost even more to fix down the road. Unfortunately, healthcare providers are avoiding the issue as well; most businesses are reluctant to change processes that generate income, and U.S. healthcare has established itself as a business first.

Providing affordable and high-quality healthcare, and reducing the average health insurance cost, is no simple task. Before better healthcare options become available, consumer demand and personal control over healthcare must increase, along with more visible organizational policies that support wellness across the board.