Health care costs are sky rocketing out of control. We all feel it in our pocketbooks, both as businesses and as individuals. Who’s to blame? Greedy insurance companies? Incompetent doctors? Blood sucking trial lawyers? Perhaps all three?
Who knows? The important fact is that, for whatever the reason, employee health care costs are creating an ever-increasing burden on the corporate balance sheet.
There is no question that health insurance is the most coveted benefit American workers, particularly those with families, receive from their employer. Over the past several decades, an ever-increasing segment of the work force has been granted health care insurance from their employers, to the point where most of us now consider employer-funded health insurance to be our birthright guaranteed under the constitution by the Founding Fathers.
For employers in a highly competitive labor market, generous health insurance benefits were often the key to attracting and retaining quality workers. Now, facing a difficult economy with health care costs expected to rise somewhere in the neighborhood of 15 percent in 2003, companies continue to look for ways to scale back expenses.
One of the ways employers are doing that is by increasing employee financial participation -- in the form of higher co-pays and higher deductibles -- in the overall cost of the benefit. However, for companies that are considering opening a new facility, there is another way to reduce health care costs.
As you examine various locations for your next facility, one factor you need to examine closely is the cost of adequate health care in a particular location. Believe it or not, health care costs — just like wages, taxes, and home prices — do vary from city to city, and from state to state.
What makes for good health care from a company’s standpoint? Reasonable quality at a low cost.
Various organizations provide data on insurance costs in communities throughout the country. Others provide data on accredited health care plans. Still others provide information on the quality and quantity of health care providers. To find the true cost of health insurance, you need to look closely at all of these areas.
Simply going with the lowest bidder may reduce your premium costs, at least in the short run, but it may be at the expense of decent health care coverage. That, in turn, will eventually lead to lower employee morale and higher turnover. Sure, in today’s job market, people aren’t as likely to simply pack up and leave, but wise corporate leaders need to look beyond the present to, say, next year, when the economy is humming along, unemployment rates drop below 5 percent, and the era of greater labor mobility returns.
As long as your company is evaluating a number of cities for your next facility location, don’t forget to consider the differing costs of health care. The savings involved are just as real as those involving taxes or wage rates.
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