Essay

5. Current Hot Topic (covered in Chapter 12 Benefits): What can firms do to control health care costs? (This is an excellent question to include recent material from the Wall Street Journal).

What can firms do to control health care costs?

US healthcare cost has been soaring for decades in an astronomical manner. According to Whitehouse between 1965 and 2010, American health care cost rose at an average of 4.5 percent year to year. In 2010 total health care cost in US was 2.6 trillion and American business paid 21% of it (Jay Hancock). Many consumers and small business have been struggling to afford health insurance premiums for their employees. Many employers are not able to offer health care coverage at all. In 2012 only 50% percent of the companies having 10 or fewer employees offered coverage to their workers (atena).

American companies have constantly been trying various ways to controlling healthcare cost for decades.

Exchanges

Exchange creates even competition among service providers resulting competitive cost savings for the consumers. Companies continue to hunt for new concepts such as private exchanges. Private exchanges are similar to the public exchanges created under the federal health care law. The difference between the two is that they are available only to employees of certain companies and are not offered on the open individual market. Like the public exchanges, to compete with other companies insurers will compete more aggressively on price. The exchange should help creating more choices for choosing plans and more innovative solutions for consumers. They would also push for better deals with hospitals and doctors and do better managing potentially expensive diseases. The main idea behind the exchanges is to allow consumers to choose the type of plan they want instead of having the government or the employer force a plan to them.

Consumer-driven Plan

Another way firms are trying to save healthcare cost by offering Consumer-Driven Health...