Why You’re Paying More for Employee Benefits but Getting Less | Bill Hammett

One of my questions in the, we talked about it at the beginning here, employers spend a tremendous amount of money providing benefits, providing health care, and yet employees often still don't understand or appreciate it.

Why is there such a disconnect, do you believe?

Yeah, I mean, business owners are spending an extraordinary amount of money on employee benefits, but but many of them are getting very little emotional or cultural return for the investment they see a massive invoice every month and their employees mostly just see a deduction from their paycheck and a health insurance card they hope they never have to lose this disconnect where employers think they've purchased appreciation because they purchase benefits but that doesn't come automatically they employees need to see the the investment understand the benefits and experience that support when they need care so So that's been a major issue and something that I think is something you can solve and you can solve for in business.

How do you solve? You communicate the benefits, total compensation statements.

So employees... employers providing total compensation statements where you can say, this is how much I'm spending on your health insurance.

This is how much we're spending on your 401k match, dental, vision, and let them see it.

Let them see how much more.

I know they think they get paid $75,000, but with taxes and PTO and benefits and 401k matches, $105,000 a year employee.

So that's one way.

So let me pull the veil back a little bit for the employee so they can see what's going on.

Number two, education, constant drip of information about resources, about how do you find a doctor? How do you utilize the services? How do you choose a health plan that's right for you? And when the inevitable problems happen, where do we go for support? And so those two things are very central to what I would suggest.

And on our end, we have a very longstanding drumbeat of of educational uh pieces of information and we make ourselves very available for employees when something goes wrong

got it so what is in the what is creating the constant driver of ongoing increase in insurance costs

so there's not a thing but there's many things right there is there every every stakeholder in this whole healthcare space, which by 2033 will be one fifth of our GDP.

So one of every $5 you spend in 2033 will be involved in healthcare in some kind of way.

So there's lots of blame to go around.

My thing right now, the thing that I, if I had to point at one thing that's the biggest cost driver, it's something called medical loss ratio.

It's built into the Affordable Care Act.

It is meant to make sure that insurance companies spend an appropriate amount of the dollars they receive on claims.

Very good.

But it's tied to a percentage.

And so insurance companies have over the last several years started vertically integrating.

The four largest insurance companies are the owners of the four largest pharmacy benefit managers.

These insurance companies are owning doctors' offices and clinics.

They're surgical centers.