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The coming days and the staggering costs of health insurance

 The coming days and the staggering costs of health insurance

The coming days and the staggering costs of health insurance

A new study finds that dealing with health insurance officials costs the US economy billions in lost work time and lost productivity.

Everyone seems to have a terrifying story about health insurance: 

Discussions have been held with robot agents about what is being covered and what is not covered. Huge bills from a doctor you didn't know outside the network. Payments that take months to process.

Health insurance in the United States is interwoven and complex

It is no secret that health care in the United States is tangled in a lost bureaucracy. A 2019 study estimated that administrative complexity was the largest single source of waste in healthcare - greater even than fraud or overpricing - and imposes an annual cost of $ 265 billion.

The true extent of this waste, according to a new study from the Stanford Graduate School of Business, is even more shocking. It found that administrative "sludge" in health care insurance costs employers and the economy billions of dollars in lost work time, employee stress, absenteeism, and low productivity.

Health insurance and the US economy

Specifically, researchers estimate that the economy loses $ 21.6 billion annually simply from the time employees spend on the phone with health insurance representatives. 

On top of that, the study estimates that companies lose $ 26 billion annually from additional absences on the part of employees who have to deal with health benefit managers and $ 95 billion from reduced productivity that arises from people spending time on the phone with them. Health insurers are less satisfied with their jobs. 

All those large losses to the economy can be minimized if business owners hold interest managers accountable for minimizing administrative hassles in the system.

Drain your productivity

If this sounds like a mere grumble, it isn't. Surveys conducted to assess how much time employees spend on the phone with benefit managers and how those meetings affect their work.

To date, most of the research on healthcare sludge has focused on the paperwork costs incurred by health care providers such as doctors and hospitals. 

Our new development, which I can't believe no one has seen before, is the amount of lost employee time and the measurable effect of that time on employee fatigue, burnout, increased absenteeism, and decreased job satisfaction.

If you don't hold health insurers accountable, you shouldn't expect them to do a good job - and they don't.

The team started by polling people about how much time they spent on the phone in the previous week with health insurance officials. 

The researchers used data collected from surveys of the Gallup Board, a group of 110,000 members formed in 2005 and designed to represent the adult population in the United States. The sample size in the surveys used in this study was approximately 6,300 individuals.

There are weeks, of course, when people don't talk to health insurance companies at all. But on average, respondents reported that they had spent approximately three minutes of working time and 5.5 minutes in total during the week prior to such calls. 

And the inference that for about 130 million full-time workers in the United States, with an average cost per worker of $ 37 an hour, those phone calls add up to a nationwide cost of $ 414 million per week in lost work time. 

Part-time employees contributed another $ 50 million to lost work for the week. Finally, the annual cost of the lost work was $ 21 billion - faded while speaking on the phone with health insurance representatives.

Health insurance and the impact on worker morale

The next step was to consider whether those encounters make people more resentful and less involved in their work.Sure enough, the people who spoke with the benefits officer were less satisfied with their jobs and more likely to be absent from work.

Even when researchers control the self-reported health of people, those who spoke with a helpful person the previous week were 10% less likely to be satisfied with their workplace and 14% less likely to feel connected. 

They were also more likely to make their companies pay for their dissatisfaction: Employees who spoke with the benefits manager were 35% more likely to be absent from work for a day or more, which adds up to a nationwide annual cost of $ 26 billion.

Drawing on extensive research on the link between job satisfaction and worker productivity, the reduced job satisfaction resulting from spending time on the phone with health insurers is estimated to cost the country an additional $ 95 billion annually in reduced productivity.

Who is really to blame?

It is more wrong with insurance companies than with the companies that hire them and then fail to hold them accountable.

CEOs are the ones who should care about this, but they are only interested in how to reduce direct medical costs, unaware that the indirect costs of turnover, absenteeism, and decreased productivity are several times the direct costs of ill health.

We do not hold these outside officials accountable. We don't measure how long it takes them to process claims, how much exacerbation they cause employees, or whether they actually help recruit and retain through their actions. If you don't hold health insurers accountable, you shouldn't expect them to do a good job - and they don't.

Companies say they offer health insurance to attract and retain talent, but they offer an advantage that is managed so that it often doesn't feel like a benefit. If employers choose the best performing health insurance companies and eliminate the administratively ineffective ones, they will get more value for the money they spend.