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Four ways employers can reduce healthcare costs and accelerate equity

By Brightside, an Accolade Trusted Partner | April 25, 2023 | 6 min read

Employers attempt to improve employee health in a number of ways. Still, most struggle to see meaningful results because they underestimate the critical role the workplace has on all facets of employee health–including physical, mental, emotional, financial, and social well-being. As a result, many well-intentioned employers invest in programs focused on downstream health issues (e.g., weight management, smoking cessation, Employee Assistance Programs) but don't address true root causes or health equity issues.

The World Health Organization (WHO) defines social determinants of health (SDOH) as non-medical factors like income, education, food insecurity, and work-life conditions. According to the WHO, SDOH accounts for 30-55% of health outcomes. As the place where people spend most of their time and often where they experience the most stress, the workplace is a primary SDOH.

Employers have an immense opportunity to positively influence all aspects of employee health, as well as their access to healthcare, economic stability, and other SDOH factors when they offer benefits that help remove the financial challenges employees face.

Here are four ways employers can lower healthcare costs and accelerate equity by tackling SDOH and improving employee financial health.

1. Address the root causes of mental health issues

Anxiety and depression are the most common mental health issues. Medications for stress-related conditions (such as antidepressants, sleep medications, high blood pressure, and ulcers) are commonly prescribed drugs that are costly to employers. Research shows that employees struggling with mental health challenges miss four times more work than peers who are not struggling, which costs $47.6 billion in lost productivity annually.

While 82% of employers say they’ve increased access to employee mental health benefits in the past year, only 50% of employees agree. The reason could be due to the fact that mental health solutions are designed to help employees cope with stress–but do not focus on eliminating the source of the stress itself.

Given that 87% of Americans name money as their top source of stress, employers can help address the root causes of at least some employee anxiety with trusted solutions that improve their financial health. To ensure employee comfort, financial benefits should ensure confidentiality and privacy for staff due to the sensitive, stigmatized nature of personal finances.

2. Improve health inequalities

Financial strain is the most critical factor in making healthcare decisions for low-income individuals. In fact, if financially stressed individuals utilized healthcare at the rate of the most affluent, overall spending could decrease by as much as 30%, according to Richard Cooper, MD.

While healthcare costs stand in the way of healthcare for about half of all Americans, they disproportionately impact Black and Hispanic adults, workers with lower incomes, and women. Larger shares of adults in these groups say they've delayed or not sought medical care due to costs and/or skipped or avoided filling prescriptions compared to other populations.

In addition, traditional systems and policies continue to fuel racial and ethnic health disparities. For example, as of Q2 2022, Black families had 25 cents for every dollar of White family wealth, and Hispanic families had 23 cents per every dollar of White wealth. Data also shows that White 401(k) plan participants invest 26% more per month toward their retirement accounts than Black 401(k) plan participants, on average, and that 48% of Black employees live paycheck to paycheck, compared with 37% of White employees.

Wealth inequalities coupled with employees’ inability to afford medical care often leave no choice but to make trade-offs. For employers, this leads to even higher healthcare costs, absenteeism, lost productivity, and turnover and further reduces employee wellness in already disadvantaged groups.

Improving health equity requires that employers think beyond traditional financial wellness solutions, such as financial education, financial coaching and point solutions that address only niche needs and tend to focus on the future.

Employee financial benefits that deliver holistic, personalized, unbiased financial support and real solutions that actively address employee needs in the here and now help employees afford to tend to their medical needs and start the necessary journey to improved financial resilience that’s critical to addressing health equity barriers.

3. Support care follow-through

Even employees who do seek medical care may not follow-through on treatment recommendations due to associated costs like travel for surgery, required follow-up visits, or the inability to keep up with expenses if a medical procedure involves time away from work. This is a genuine issue for the seven out of 10 Americans who are living paycheck to paycheck, and one of the reasons that poor financial health is the fifth biggest killer in America.

Employers can help employees overcome these barriers with the support that addresses the full scope of their financial needs, whether that's finding an affordable loan to fund travel for surgery or preparing a budget for a temporary pay reduction. By providing employees with actionable ways to take care of their health and reduce their financial stress, and access to bias-free financial products that do not make them even more financially vulnerable, employers can ultimately improve health outcomes.

4. Stop health-related expenses from becoming a vicious cycle of illness

Medical bills are the driver behind more than 65% of bankruptcy filings, and 41% of adults have debt caused by medical or dental bills. Like the disparities seen in the groups most likely to delay or skip medical care due to cost, Black and Hispanic adults, women, parents, low-income earners, and uninsured adults are disproportionately impacted by medical debt.

Without the support that offers personalized guidance and options to handle medical expenses based on a person's unique financial situation, along with access to affordable, non-predatory financial solutions, employees are at risk of falling into a vicious cycle of debt, financial strain—and potentially more health issues. In addition to increased anxiety and insomnia, financial stress is linked to chronic health problems, including diabetes and heart disease.

Financial Care is the answer

Many employers don’t realize that financial wellness programs that are limited to providing financial education, self-serve automated digital experiences, or narrowly focused support like retirement planning or student loan refinancing don’t address the most critical financial needs of their employees. That’s why we created Brightside Financial Care.

Similar to how Accolade helps employees navigate the cost, complexity, and confusion of healthcare, Financial Care meets employees in the moments that matter and offers personalized, proven solutions that support their immediate needs, as well as continued support for all the next steps they’ll take in the journey to improved financial health. Financial Care puts the holistic well-being of employees at the forefront and addresses the SDOHs, healthcare inequities and systemic issues that impact an employee's financial situation and, ultimately, their health.

Financial Care was created for progressive employers who understand the breadth and complexity of their employees’ financial needs and want to make a true impact on employee financial well-being and their bottom line. To learn more about Brightside, visit https://www.gobrightside.com/employers/

Brightside is part of Accolade's Trusted Partner Ecosystem which exists to simplify benefits selection for our customers and drive a more integrated experience for our members.

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