The Employer Health Cost Crisis Nobody Is Measuring

Healthcare costs continue to rise at a pace that concerns employers, consultants, brokers, carriers, and policymakers alike. What has received far less attention is whether the healthcare industry is measuring the right problem. Most employers can identify how much they spent last year. They can explain their pharmacy trend. Yet many cannot answer a more fundamental question: how much future healthcare risk exists within their workforce today?

Healthcare costs are generally measured after they occur. Employers receive reports explaining claims that have already been incurred and prescriptions that have already been filled. The information is valuable, but it is retrospective. By the time a healthcare expense appears in a report, the underlying health condition often existed for years.

The Cost Problem Starts Long Before the Claim

Most of the conditions driving healthcare inflation do not appear overnight. Type 2 diabetes often develops after years of insulin resistance and metabolic dysfunction. Cardiovascular disease frequently progresses for decades before a major cardiac event occurs. Long before a diagnosis appears in a claims report, risk factors are accumulating beneath the surface.

A Different Way to Think About Healthcare Costs

For decades, employers have primarily measured healthcare as an expense. However, the growing influence of chronic disease and metabolic health suggests that healthcare should also be viewed through the lens of risk. Costs represent the financial outcome. Risk represents the underlying driver. The organizations that learn to measure both may be better positioned to understand where healthcare spending is headed and why.