Breaking the cost barrier: how preventative care can transform your healthcare strategy

Healthcare costs are crushing American businesses. Every renewal brings another double-digit increase, and employees are drowning in deductibles they simply cannot afford. But what if the solution isn't about finding cheaper insurance—what if it's about changing how we think about healthcare entirely?

Three leading experts in the benefits space recently shared their insights on how removing financial barriers to preventative care can actually reduce overall healthcare costs for employers. Their message is clear: the old way of doing business isn't working, and innovative approaches to preventative care offer a path forward.

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The breaking point has arrived

"Every employee is feeling and seeing it and we're past a breaking point," says Adam Berkowitz, President at Level Health. "They can't afford their deductibles and companies can't continue to sustain cost increases every year."

The numbers tell the story. Healthcare premiums have outpaced wage growth for decades, and high-deductible health plans have shifted more costs directly to employees. The result is people avoiding necessary care because they can't afford it, leading to more expensive problems down the road.

But this crisis has created an opportunity. "This space is ripe for innovation," Berkowitz notes. "There's a significant tailwind to drive change right now, and a sense of urgency in the employer market to do something different."

That urgency is forcing benefits leaders to reconsider fundamental assumptions about how healthcare should work. The traditional model of high deductibles and fee-for-service care is failing both employers and employees.

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The real problem: system-wide waste and misaligned incentives

The current healthcare system is riddled with inefficiencies that drive up costs without improving outcomes. Berkowitz explains the core issue: "There's a very long line of how the dollars flow between patient and provider and along that supply chain is where you get bloat and abuse, because there's a lot of hands in the pot and it's not very transparent."

The consolidation of major insurers has made this problem worse, not better. "The BUCAs have gone on an acquiring spree to the point that they own almost the entire vertical of healthcare financing and payment delivery," Berkowitz observes. "United employs more doctors than the largest health systems combined and I think it's the fourth largest pharmacy in the country."

These conflicts of interest can create perverse incentives. Instead of focusing on keeping people healthy, the system profits from treating illness. Fee-for-service models reward providers for doing more procedures, not for achieving better health outcomes.

Andrew Fondow, SVP at AON, sees through the marketing promises from traditional carriers. "We've heard pitches for years on this from the carriers," he says. "The broker needs to know enough to see through the noise of what the insurance company just told them to work out whether it's another bill of goods that's not going to work versus a model that actually does work."

When pressed for actual data on their cost management programs, carriers often fall short. "When we ask to look under the hood we get told that it's not possible," Fondow explains. "So, now I've peeled back the layers of the onion and it stinks."

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A new approach: preventative care without barriers

The solution lies in removing financial barriers to preventative care and early intervention. When employees can access care before problems become crises, everyone wins.

"In a subscription-based model it's not fee-for-service," Berkowitz explains. "Patients get better, and doctors can provide better levels of care. It's healthcare versus sick care."

This shift from sick care to healthcare requires a comprehensive approach. Fondow illustrates this with a practical example: "We have to come together around Bill who has this heart issue from years of a bad lifestyle. That means bringing an entire care team together to help him, because depression has set in due to the health issues he has going on, his obesity is a problem and is made worse by his lack of motivation which comes with his depression."

Rather than treating each condition separately with different specialists and copays, an integrated approach addresses the whole person. This prevents the cascade of complications that drives up costs exponentially.

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The focus on affordability

Beth Grellner, Managing Director at WTW, confirms that affordability is the top concern for employers today. "The number one issue in our 2024 Best Practices survey was affordability," she reports. "There's high interest in the idea of co-pay only programs, so alternative plan designs will be helpful."

Co-pay only programs eliminate deductibles for preventative services, making it easier for employees to get the care they need before problems escalate. These programs recognize a fundamental truth: a $50 copay for a preventative visit is much cheaper than a $50,000 emergency room visit.

However, Grellner cautions that plan design changes alone aren't enough. "That does not bring down the unit cost of providing care in terms of the negotiations that happen between the insurance carriers and the hospitals," she notes.

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The technology advantage

Technology is enabling new approaches to preventative care that weren't possible just a few years ago. "We see a tremendous amount of telemedicine for behavioral health and we can do so much now that we didn't have access to," Grellner observes.

Virtual care can dramatically reduce the cost of preventative services while making them more accessible to employees. A virtual mental health session or diabetes management consultation costs a fraction of an in-person visit and can be accessed from home or work.

But technology alone isn't the answer. "Point solutions need to be strategic and foundational because a lot of these treatments need to be done in the doctor's office," Fondow emphasizes. "HR probably isn't equipped to help you reverse your diabetes."

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Making the case for change

For benefits advisors and HR leaders, the challenge is convincing leadership to try something different. "The challenge is convincing an employer that it works before they've tried it," Berkowitz acknowledges. "Employers have bought and consumed health insurance the same way for four or five decades, so telling them that it can be done differently is not such an easy thing to sell."

But the urgency of the current crisis is changing that calculation. "Change always comes with risk but I think the urgency has now outweighed that risk," Berkowitz says.

The data supports this shift toward preventative care. When employees can access early intervention without financial barriers, chronic conditions are managed better, emergency room visits decrease, and overall healthcare spending drops.

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The path forward

The healthcare system is broken, but that creates an opportunity for forward-thinking employers. By removing financial barriers to preventative care and focusing on keeping employees healthy rather than just treating them when they're sick, companies can break the cycle of ever-increasing healthcare costs.

"It's an exciting time to be in this space because there is opportunity to benefit all parties," Berkowitz concludes. "We're aligning all of these parties and putting them together to deliver a cohesive health plan to people."

The transformation won't happen overnight. It requires new thinking, new partnerships, and the courage to challenge decades of established practice. But for employers willing to embrace change, the potential rewards—healthier employees, lower costs, and sustainable benefits programs—make the effort worthwhile.

The breaking point has arrived. The question isn't whether change is coming to healthcare benefits—it's whether your organization will lead that change or be forced to follow.

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