Healthcare News & Insights

Employee health habits have a big impact on hospitals’ costs

You may not think the health of your hospital’s employees is as important as your patients’ health, but think again: Employees’ health habits can have a significant effect on your hospital’s bottom line.

According to a report from Truven Health Analytics, after looking at health data from thousands of hospital employees and comparing it to statistics from people in other industries, hospital workers were less healthy, which led to an increased use of healthcare services and higher healthcare costs.

This translates into a huge strain on hospital’s budgets. In fact, the report stated that overall, health benefit costs take up 4% of hospital operating revenue.

Another indicator of the drastic impact employee health has on hospital spending: A large hospital system with 16,000 eligible employees could save $1.5 million every year by minimizing employee health risks by merely 1%.

And it’s not just large hospitals that would see financial benefits. The study found that in an average medium-sized hospital, nearly 70% of operating profit is used on healthcare benefits to employees.

Tweak plan offerings

As one way to save your hospital money on providing employees with healthcare benefits, set up your benefits plans to encourage employees to seek care in your particular health system, instead of at another competing hospital or from an out-of-network physician.

Consider using a high-deductible plan where employees pay a higher share of their health costs if they seek care outside of your network.

Creating a culture of health in your hospital

Making healthy behavior a priority for hospital employees is another way to mitigate risk and cut healthcare spending. Placing a focus on employee health has led to cost savings in countless other industries, but hospitals are lagging behind.

It’s an interesting irony that hospital workers charged to give quality care to patients often don’t extend the same care to their own health, but hospital execs can stop this trend by working to create a healthier culture in their hospitals.

Here’s a five-step plan you can follow to get your hospital’s employees on the right track:

  • Analyze your workers’ risk:  Collect data that shows just how much workers are at risk for certain health conditions and how much it’s costing your hospital. This info can include employee claims data (diagnoses, procedures and costs), health risk assessments where employees answer questions about certain lifestyle risk factors and demographic data.
  • Define goals: Once you’ve nailed down the risks, you can come up with a plan to improve employee health outcomes that works for your hospital’s population.
  • Implement policies:  Use your goals to create policies at your hospital that encourage health and reward healthy behaviors in employees. Some ideas include offering more balanced snacks in vending machines or providing incentives for meeting wellness benchmarks.
  • Measure progress: Regularly evaluate how your policies are working and tailor them so you’ll receive the results you desire in your employees.
  • Communicate often: Involve employees in every step of your hospital’s wellness plan and be sure to continually remind employees of the importance of healthy behavior. Yes, it will improve your hospital’s profits, but it will also improve your employees’ lives.

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