Hrm Chapter 11

CHAPTER 11: IDENTIFY AND CONTRAST AMONG VARIOUS WAYS THAT EMPLOYERS CAN CONTROL THE COST OF HEALTH CARE.

The cost of health care programs has become the major concern in the area of employee benefits. Several approaches are used to contain health care costs, including reduction in coverage, increased coordination of benefits, increased deductible or copayments, use of health maintenance and preferred provider organizations, various consumer-driven health plans, incentives for outpatient surgery and testing, and mandatory second opinions where surgery is indicated. Employee assistance programs and wellness programs may also contribute to cutting the costs of health care benefits and to make sure the same expense is not paid by more than one insurance reimbursement.

Methods for containing health-care costs tend to focus on three primary areas: the plan itself (structure, purpose, and goals), how the plan is paid for (self-funded versus fully funded, as well as participant contributions), and the factors influencing demand (largely determined by the employee population). In each area, tools exist to manage cost increases and potentially control the scope and nature of benefits. One of the most commonly used tools is cost shifting--transferring some percentage of plan costs to the employees who use the services--which can reduce direct costs to the employer. Cost shifting does not directly reduce total costs of insurance, although it can influence participants' behavior in ways that will reduce costs. The containment of health care expenses can be achieved through various medical delivery systems such as Health Maintenance Organization (HMO), Preferred Provider Organization (PPO) and a different Consumer-Driven Health Care Plans (CDHPAs)

Health maintenance organizations (HMO) are Organizations of physicians and health-care professionals that provide a wide range of services to subscribers and dependents on a prepaid basis. The organization were designed to hold...