Every American feels the pain of rising healthcare costs. Higher premiums, more required authorizations, claim denials, or higher deductibles — but it doesn’t have to be that way.

Healthcare costs rising faster than inflation is not inevitable. The solution is neither a single-payer system, which removes the profit motive, or a Medicare Advantage privatization model.

There are practical, actionable steps employers, employees, and the government can take to address the issue via independent self-insurance, increased employee responsibility, and government policy.

True Self-Insurance

True self-insurance, unlike conventional ASO (Administrative Services Only) plans tied to insurer networks, allows employers to select providers based on cost and quality, much like choosing the best equipment for their business. This model aligns incentives — employers save, and employees receive better care.

Commission-based brokers are paid by carriers and incentivized with bonuses, trips, and higher commissions to keep employers in the same plan and grow premiums. Although the Consolidated Appropriations Act of 2021 mandates brokers disclose all compensation, many avoid full transparency. In contrast, fee-based advisors, typically paid by employers, often offer performance-based compensation tied to savings — an approach that aligns incentives and reduces costs.

All employers should consider certified independent fee-based Health Benefits Advisors. Only 2% are fee-based and not commission-based, ensuring the advisor’s interests align with both the employer and the employees. These advisors can use tools like Transparency Organizations, such as validationinstitute.com, to sift through inaccurate claims data from providers. The more employers that adopt this approach, the more price and outcomes transparency increases. This empowers consumers and fosters competition, driving down prices while improving quality.

Engaged Employees

Employees play a critical role in improving healthcare outcomes and controlling costs. They are primarily responsible for their healthy eating, sleep, stress management and exercise. Simple, proactive steps can help individuals take control of their healthcare spending:

Preventative Care Services: Many health plans cover annual check-ups and screenings at no additional cost. Utilizing these services can catch potential health issues early, reducing long-term expenses.

Use Prescription Price Comparison Tools: To find the best prices for medications by comparing costs across different pharmacies and discount programs.

Most employees are unaware of the tools available to reduce their out-of-pocket healthcare costs. Leading advisors recognize that engaging and educating employees requires a high-touch concierge advocacy program. Chelsea Ryckis, president of Ethos Benefits, emphasizes the importance of using text messaging to support employees and their families by booking appointments, finding in-network providers, reviewing hospital bills, assisting with mail-order pharmacy needs, etc. Text outreach ensures employees receive help where and when they need it.

Engage with Wellness Programs: Many employers and insurers offer wellness programs that provide incentives for healthy behaviors like exercising, quitting smoking, or attending nutrition workshops.

Additionally, Health Savings Accounts (HSAs) promote smarter healthcare choices by allowing pre-tax savings for medical expenses but are only effective if deductibles and co-pays remain reasonable.

Shifting the healthcare model from “diagnose and treat” to “predict and pay” could revolutionize delivery — provided employees are assured their medical data won’t be used against them through increased premiums, claim denials, or policy cancellations.

Government’s Role

The government has a critical role to play in addressing healthcare costs through targeted education and policy reforms. To achieve meaningful change, the focus must shift from funding inefficiencies to promoting long-term solutions:

Integrate Nutritional Health into Education: Medical schools and K-12 curriculums should prioritize nutrition and preventative health as foundational knowledge.

Limit Subsidies to Increase Access: Government subsidies should make healthcare affordable,  and accessible, not support higher costs. Funding inefficiencies only perpetuate a never-ending cycle of inflation.

Restrict Government-Funded Food Programs to Healthy Options: Programs like WIC, SNAP, and school meal plans must exclusively support nutritious foods. Encouraging better nutrition will lead to a healthier population, reducing chronic diseases and associated costs.

Special Supplemental Nutrition Program for Women, Infants, and Children: Some states have successfully improved health outcomes by restricting sugary drinks and requiring the inclusion of fresh fruits and vegetables. These changes have led to better dietary habits among low-income families and lower obesity rates among children.

Local School Initiatives: School districts across the country have replaced processed meals with fresh, healthy options. For example, schools that introduced salad bars and locally sourced ingredients have reported measurable health improvements among students, including lower BMI rates and higher energy levels.

What Success Looks Like

There are already examples of organizations and nations managing healthcare efficiently. Rosen Hotels in Orlando has demonstrated the potential of self-managed insurance, cutting costs without sacrificing quality of care. Caterpillar used nationally certified health coaches to help its employees with type II diabetes and was able to reduce its expense by 16%.

On a national scale, Singapore spends just about 5% of its GDP on healthcare, achieving efficient outcomes through cost-sharing systems and targeted subsidies. Singapore integrates nutritional programs with community health initiatives, often using technology like mHealth apps to support dietary compliance and monitor health outcomes.

Similarly, Finland has achieved remarkable success in healthcare delivery by focusing on preventative care and community-based health initiatives. Finland’s emphasis on early interventions, nutritional health, and public education has resulted in lower rates of chronic diseases Success is attributed to a healthcare system that prioritizes primary care and integrates it seamlessly with public health.

Ed Gaskin is Executive Director of Greater Grove Hall Main Streets and founder of Sunday Celebrations.