Active management of healthcare delivery and cost control has not typically been seen as an integral part of the mission for human resource (HR) departments. But changing times — and skyrocketing costs — have pushed healthcare performance management (HPM) center stage for companies that want to boost productivity, while investing benefits dollars in better health outcomes for their employees.
This shift away from traditional ways of managing employee health benefits stems from a clear and universal reality: rising healthcare costs increasingly pose a core business challenge. Indeed, U.S. healthcare spending approached $2.25 trillion in 2007 — more than 16 percent of the gross domestic product according to the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services. Employers increasingly are feeling the bite of those rising costs. A 2008 study conducted by the health policy journal Health Affairs showed that average annual premiums increased 5 percent to $4,704 for single coverage and $12,680 for family coverage. The study’s data was derived from interviews with 1,927 public and private employers.
New research echoes those trends. According to a Dec. 2010 report from RNCOS Industry Research Solutions “U.S. Healthcare Sector Forecast to 2012”, national healthcare spending is expected to grow at a compound annual growth rate of around 5 percent during 2010-2013.