Where Healthcare Dollars are Being Wasted and What Employers Can Do About It

Overutilization of Healthcare Services

More healthcare isn’t always better.

Duplicate testing, unnecessary imaging, and procedures that don’t improve patient outcomes contribute to unnecessary healthcare spending. For example, tests may be duplicated because providers don’t have access to historical results. Patients may undergo tests that may not be medically necessary because they are standard practice.

This doesn’t mean employees should avoid medical care. Rather, they should feel empowered to have conversations with their providers about whether a test or procedure is appropriate, whether previous results can be used, or whether there are lower-cost alternatives.

Employers can help by providing education and encouraging employees to become active participants in their healthcare decisions.

When employees ask informed questions, they often receive more coordinated, efficient care while avoiding unnecessary costs.

Employer-members of The Alliance can reach out to their Account Executive for resources on encouraging smarter healthcare consumption.

If the answer to any of these questions is no, your organization may be missing opportunities to reduce unnecessary spending and improve employee health outcomes.

Choosing the Wrong Site of Care

One of the most common sources of avoidable healthcare spending is receiving care in an inappropriate setting.

Emergency departments provide lifesaving care. However, many emergency room visits involve conditions that could have been safely treated in a primary care office, urgent care clinic, or virtual visit.

Similarly, urgent care should not replace an ongoing relationship with a primary care provider.

Primary care physicians understand a patient’s medical history, coordinate preventive services, manage chronic conditions, and help patients navigate the healthcare system. Without that relationship, care can become fragmented, leading to duplicate services, unnecessary specialist referrals, and higher overall costs.

Employers can reduce unnecessary spending by helping employees understand where to seek care based on their medical needs.

Simple benefit design changes, clear education, and care navigation tools can guide employees to the right care at the right time while improving both outcomes and affordability.

Paying More Than Necessary for Imaging and Infusion Services

Different healthcare facilities charge different prices for the same services.

An MRI performed in a hospital outpatient department may cost two or three times more than an identical scan performed at an independent imaging center. The same is often true for infusion therapy, where patients can frequently receive the same medications safely in lower-cost infusion centers rather than hospital-based settings.

Unfortunately, employees often don’t know they have options.

Without access to care navigation tools and education, many patients simply receive care wherever they’re referred.

Self-funded employers can help employees identify Preferred-Value Providers that deliver great care at lower costs.

By guiding employees toward independent imaging centers, infusion providers, and other high-value care options, employers can generate meaningful savings without limiting employee choice or compromising quality.

Inefficient Management of Chronic Conditions

A small percentage of employees often account for a large share of an employer’s healthcare spending, largely due to chronic conditions such as diabetes, hypertension, heart disease, asthma, and musculoskeletal disorders.

When these conditions are managed effectively, employees stay healthier and more productive, miss less work, avoid unnecessary hospitalizations, and experience a higher quality of life.

Many chronic disease management programs focus on treating illness after complications develop instead of helping employees prevent those complications in the first place.

Self-funded employers have an opportunity to change that.

By investing in preventive care, primary care relationships, care management programs, medication adherence, and employee engagement, employers can improve health outcomes while reducing avoidable and costly complications.