It’s not just disease or wellness that impacts employee healthcare costs… it’s also location – where employees live. That’s why health navigation services are so important – they help people find high-quality cost-effective care, wherever they live.
Compass analyzed healthcare costs data from Milliman, a leading actuarial and consulting firm, and found that U.S. healthcare costs vary greatly by state (see charts below).
The reference chart at the bottom of this post presumes that the national healthcare average is 1.00. Therefore, if a state’s healthcare costs are 1.10, they are 10 percent higher than the national average. And if costs = 0.90, costs are 10 percent lower than the national average
States Where Healthcare is Less Expensive
The chart below shows the states where healthcare is less expensive. States where healthcare is less expensive, such as Alabama (whose healthcare costs are 20 percent lower than the national average) and Arkansas (which is 15 percent lower than the national average) are dominated by a single insurance carrier that uses its size to negotiate lower prices. The good news is that it is easier, on average, for people in these states to find high-quality, lower cost healthcare options.
States Where Healthcare is More Expensive
Conversely, two of the states with the most expensive care, Minnesota (42 percent higher than the national average) and Wisconsin (30 percent higher than the national average), are dominated by a small number of large hospital systems that use their size to negotiate higher prices from insurance companies. People in these states need extra help to identify high-quality, lower cost healthcare providers.
|11||New Jersey||1.07||23||South Dakota||1.00|
What Does This Mean for Benefits Professionals?
For companies with employees throughout the U.S. (or even just in one state) – these statistics can inform many of your healthcare benefits decisions.
If your employees live in states with lower healthcare costs, you’re lucky. Your organization’s healthcare costs are lower because, on average, healthcare providers are charging less. While you’re doing a good job at addressing your company’s healthcare costs, your employees can still benefit from help comparing prescription prices, connecting to other health benefit programs (i.e. telemedicine, employee assistance programs or EAP and disease management) and scheduling doctor appointments.
On the other hand, if your company’s employees reside in a location with higher healthcare costs, your employees need extra help to ensure they’re not being overcharged for healthcare services.
To learn more about how Compass help 2,000 employers and their employees to lower healthcare costs in states throughout the U.S., visit www.compassphs.com.
- No Matter the Health Plan, Employees Benefit from Healthcare Navigation Tools
- Top 3 States with ‘Unique’ Healthcare Price-Transparency Environments