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Reducing your Health Plan Costs

How Do You Begin and Cut Costs without sacrificing quality care

Being able to identify a problem is one thing. Being able to do something about it is a completely different issue. As business leaders, we utilize a variety of tools and data to help us affect change that will impact and improve our organizations’ productivity or profitability. On rare occasions, we find line items that can address both. At Wilmington Health, we have found by working with employers to address elements of their company’s health insurance plan, we can do both simultaneously.

So first, let’s identify where your plan ranks amongst other employer backed health plans across the nation. Based on data from the 19th Annual Towers Watson National Business Group on Health Employer Survey on Purchasing Value in Health Care, the average (or mean) employer saw a $400, or 4.4%, cost increase per employee from 2013 to 2014.


If you look at total plan costs on this same chart, you’ll see an increase of nearly $600, meaning that employees also saw a $200 increase in their healthcare plan costs (calculated by subtracting the difference between the employer plan cost increase and the total plan cost increase.) In effect, employers are picking up 2/3 of the overall plan cost increase on a year over year basis. So clearly this issue needs to be addressed by employers.

Also, based on the same survey and data, some employers are taking the challenge of reducing healthcare costs head on. For those employers that decided to make changes to their healthcare plan, there is a definite trend that they are  obtaining better control of their health plan costs. By taking charge of their healthcare plans, regardless of whether they were a “low-performing” or “high-performing” plan, companies saw a median cost reduction of 1.5% in only four years.


That is a major turnaround for a line item expense that often sees double digit increases every year.

So how did those companies achieve these results and affect real change on their health insurance premium expense? Well, they take a systematic approach that requires looking at multiple aspects of their plan and how they support their employees’ abilities to achieve better health and remain there. We’ve seen the opportunity to affect real change fall into four major areas of their health insurance benefit:

  1. Creating Targeted Employee Programs,
  2. Restructuring Healthcare Benefits,
  3. Optimizing Your Health Plan Network of Providers,
  4. Developing Incentive Programs for Healthy Living.

Each of these items can have a major impact on the resulting health plan utilization and future premium expense to both the employer and the employee. I’ll be writing in future Insight articles about how you can address each of these items related to making changes to your health insurance benefit, so keep an eye for those.

Wilmington Health is working with many employers throughout the Southeastern North Carolina area to help them maximize every dollar they spend on this critical employee benefit and significant employer expense. Our goal is simple: guide our patients toward achieving a healthy life and your company maintain a healthy bottom line. Feel free to contact us at employersupport@wilmingtonhealth.com to set up an appointment to review your health plan and find the right mix of health benefits and value.


Jeff James is the chief executive officer at Wilmington Health and part of the team of providers and staff driving change in the health care system to reduce cost, improve quality and enhance the patient experience. Since 1971, Wilmington Health has been committed to the care and health of its community in Wilmington as well as all of southeastern North Carolina. Wilmington Health is structured as a multispecialty clinic with primary care providers integrated into the system. In this way, Wilmington Health is able to provide a comprehensive and coordinated approach to the care of all its patients.