The Critical Role of Preventive Health in Reducing Employer Healthcare Costs

Healthcare is expensive for everyone... employers and employees alike.

About 50% of American adults report general difficulty affording healthcare costs,¹ and 48% of insured adults are concerned about paying their premiums.² Even the 153 million Americans with job-based insurance are struggling.³

According to eHealth survey data, a similar percentage of business owners faced this same struggle when covering their portion of employee benefits plans in 2022.⁴ As the cost of job-based health coverage in the U.S. is expected to continue rising,⁵ companies must consider cost-minimization strategies.

Preventive care is one such strategy, as it has the potential to help prevent significant health costs down the line.⁶ It can also maintain better employee health overall, thereby boosting productivity gains and reducing absenteeism-related losses.

Current healthcare cost landscape

According to KFF, annual employer-sponsored family health coverage premiums in 2023 reached almost $24,000.⁷ A Global Medical Trends Survey from WTW projects a nearly 9% general increase in the cost of benefits in 2024.⁸ This increase is due to a few contributing factors, including a catch-up with inflation, a return to routine medical visits post-pandemic, an uptick in specialty prescriptions for things like weight loss and, finally, a rise in chronic and expensive conditions.⁹ Chronic conditions largely account for America's $4.1 trillion in annual healthcare spending — 90% to be exact,¹⁰ with cardiovascular disease, diabetes and cancer being the three leading drivers. 

In addition to healthcare costs, U.S. employers lose about $36.4 billion annually due to chronic condition-related absenteeism.¹¹ Not to mention productivity losses due to presenteeism — when employees are at work but not operating at their total capacity as a result of an illness or other medical conditions.¹² 

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Understanding preventive health

The World Health Organization defines primary preventive health as "a set of interventions designed to prevent the first occurrence of noncommunicable diseases among people with identifiable risk factors."¹³ Introducing preventive health measures among employees would help them avoid chronic conditions, lessening the cost of medical care and absenteeism burden over time. According to National Health Statistics, chronic conditions account for at least 40% of healthcare provider visits, while preventive care is addressed in less than 22%.¹⁴

Prediabetes is a clear example of the cost-benefits of catching a condition early and preventing further exacerbation. In 2022, the annual cost of diagnosed diabetes in the U.S. was $412.9 billion,¹⁵ with the number of cases reaching around 29.7 million.¹⁶ An astounding 98 million Americans, on the other hand, are estimated to have prediabetes, with over 80% unaware of their status.¹⁷ As cases continue to rise, preventive screening and treatment strategies for individuals at risk of prediabetes or diabetes will be crucial in reducing these costs. 

Preventive health holds great potential, and yet, it is estimated that only 8% of Americans do routine preventative screenings.¹⁸

Preventive health strategies

Many preventive health strategies begin with awareness. In a general sense, this can mean providing employees with educational resources about a variety of conditions and best practices for prevention. However, more proactive and targeted routes may include biometric screening assessments, chronic care management and other lifestyle-based coaching.

Biometric screening

In 2023, 42% of large firms with employee health benefits reported offering biometric screenings to employees.¹⁹ Biometric screening is a broad category that includes the analysis of various characteristics such as height, weight, body mass index, blood pressure, blood cholesterol, blood glucose and aerobic fitness.²⁰ These preventive screenings can be used for initial health assessments (like identifying prediabetes) and monitoring progress over time (like ensuring that prediabetes does not progress to diabetes).

Employers can easily introduce this screening to their workforce with imaware's plug-and-play testing solution. With an extensive biomarker menu, employers can build custom at-home tests that target their employees' health concerns. Learn more about imaware's sophisticated testing infrastructure here. 

Companies can maximize screenings' positive impact by using them in tandem with a workplace wellness program that includes lifestyle coaching.

Lifestyle management

Heart disease, diabetes and cancer are three of the most expensive health conditions,²¹ and they're often linked to lifestyle factors. Tools and technologies like at-home health tests can help identify health risks related to these conditions. However, action is needed to prevent them from worsening and becoming more expensive healthcare expenditures.

Take a look at heart health, for example. Many cardiovascular disease cases are preventable,²² yet of 300 benefits managers surveyed, 75% listed heart disease, high blood pressure and high cholesterol as the top drivers of their healthcare claims.²³ An employee with high LDL cholesterol doubles their risk of developing heart disease because, over time, it builds up in the arteries and blocks blood flow.²⁴ With the help of biomarker data collected from the comfort of home, employees can be made aware of their risk factors, like high blood pressure or cholesterol, and given a chance to use a combination of medication and healthy decisions to improve their results.

Preventive health efforts that include both awareness- and action-based strategies are more likely to reduce costs effectively.

Paving the path to success with preventive health

Implementing a health plan is not enough to reduce costs — organizational leaders need to champion their preventative health goals, encouraging employees to do the same. Here are three important areas to address during this process: 

• Be aware: A recent healthcare survey discovered a significant disconnection between employers and employees regarding chronic conditions. Employers estimated that 32% of their employees had a chronic condition, while 59% of employees reported having at least one.²⁵ In order to successfully intervene and establish a culture of prevention, you'll first need to understand this disparity and work to become a more connected employer.

• Build the culture: Though the U.S. has some of the highest healthcare spending in the world, Americans see a healthcare professional, on average, less often than other high-income countries.²⁶ Since employees have the largest role to play in taking preventative action, they must be engaged in the process, and this may need to start by simply rallying them to utilize their benefits for regular health checkups — a barrier that often blocks cost savings. Some companies accomplish this with incentives for employees to complete certain health screenings or milestones. Though it takes time, creating a company culture that encourages a preventive approach to health can positively impact both health outcomes and care costs. 

• Utilize technology: Many advancements in health technology make frequent screenings and proactive lifestyle changes more convenient. In addition to at-home tests, this includes smart wearable devices, apps for tracking insightful health data, and even virtual coaching programs for performance training, nutrition, mental health, and more.  

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Summary

With Americans and their employers contending with rising health insurance premiums, proactive health measures have become imperative. The staggering contribution of chronic conditions to the $4.1 trillion in annual healthcare spending underscores the urgency of preventive initiatives. 

By fostering awareness and implementing proactive measures like biometric screenings and healthy lifestyle programs, companies can mitigate the financial impact of preventable health conditions. Overcoming the disconnect between employers and employees regarding health and nurturing a culture that champions preventive health is pivotal to creating a resilient, cost-effective healthcare ecosystem for businesses and their employee base.