Before employers shift more healthcare costs to workers, they should ask hospitals a question

Key Points:

• Employers should prioritize assessing the efficiency of current healthcare resource utilization before agreeing to pay more or expanding capacity, similar to how they manage other major suppliers.
• Hospitals often create artificial peaks in demand by scheduling elective procedures on certain days, leading to apparent shortages that could be alleviated through better patient flow management rather than costly expansions.
• Examples from Cincinnati Children’s Hospital and The Ottawa Hospital demonstrate significant financial savings and improved outcomes achieved by optimizing existing capacity instead of investing in new infrastructure.
• Healthcare costs are a major concern for employers and employees alike, with rising premiums and out-of-pocket expenses impacting wages and hiring; operational improvements can help control these costs without sacrificing care quality.
• While some healthcare inflation drivers are unavoidable, employers should leverage their purchasing power to demand evidence of operational efficiency from providers before accepting higher prices or additional capacity investments.