Reducing Health Care Costs

Paper Summary:

In this article, the writer discusses that a full-scale health care benefits crisis appeared to loom as employers were reported to spend $300 billion annually on the health insurance of employees, their dependents and retirees. Further, the writer discusses that health care related costs and premiums were expected to adversely affect the U.S. economy and, therefore, these preferred strategies could not continue indefinitely without a proportionate and adverse impact on total employee compensation. The writer looks at how employers act to reduce health care costs.

From the Paper:

"The mass media, major consulting groups and health care experts agreed that health care costs were a critical or significant concern to the vast majority of chief operating officers, chief human resource officers and other business leaders. As against the estimated 14% increase, employers said they could accommodate only an average annual increase of 9%. This difference meant that employer costs would increase by approximately 54% in the next five years. During that period, employee contributions could increase three times until all the involved parties resorted to some proactive approach to contain the rise. HR leaders agreed that better value and lower health costs at between 83% and 96% if they worked together with employees for this purpose."

Sample of Sources Used:

• Bell, Nancy N. Oh My Aching Back! Many Companies Have Successful Programs to Reduce the High Cost of Employee Back Injuries. Business and Health: A Thomson Health Care Company, April 1991
• Hirschman, Carolyn. Commuter Connections: Helping Employees Reduce Their Commuting Expenses Can Cut Employees' Costs Too. HR Magazine: Society for Human Resources Management, 2004
• Hyland Stephanie L. Health Care Benefits Show Cost-Containment Strategies. Monthly Labor Review: United States Bureau of Labor Statistics, Feb 1992
• Papalla, Mark. Class-Based Pensions. Journal of Accountancy: American Institute of CPA's, 2005
• Roberts, Gary E. Municipal Government Part-Time Employee Benefits Practices. Public Personnel Management Association for Human Resources, 2003

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• Analytical Essay # 119664 : "The Rising Cost of Health Care and its Impact on Employers"

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