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3 Ways to Reduce Employee Healthcare Costs While Improving Outcomes

Published on: July 9, 2025 /
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Reducing healthcare expenses for employees while also ensuring the care they receive is of the highest quality requires a smart balance of how efficiently things operate clinically, keeping operations efficient, and consistently prioritizing the patient experience. 

Businesses have numerous ways to develop sustainable programs that reduce expenses without compromising their employees’ health. Below are some ways that take these concepts and turn them into workable solutions.

Venturing Into 24/7 Integrated Care Models

Organizations often neglect the potential value that high-acuity subacute care facilities can offer in lowering overall healthcare expenditures. By moving some of the complex treatment needs out of the costly hospital environment and into specialized subacute facilities providing round-the-clock care, employers are able to attain both clinical and financial benefits.

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Subacute care centers, handled by licensed RNs, occupational and respiratory therapists, and other skilled professionals, coordinate advanced interventions 24/7. This consistency not only reduces the likelihood of complications that lead to readmissions, but also reduces lengths of stay by offering individualized rehabilitation programs that conventional skilled nursing facilities cannot provide.

When employers are connected with subacute providers who track outcomes with good care coordination, they get to observe their patients’ recovery in real-time. Catching potential issues early enables them to act promptly, preventing costly hospital stays. This creates a more efficient care pathway allowing employees to return to their regular lives rapidly after receiving the appropriate subacute treatment, resulting in long-term improvements in how well they perform and what they pay in long-term disability costs.

Implementing Preventive Wellness Programs to Reduce Chronic Disease Expenses

A health-oriented strategy starts well before the development of an illness. Providing well-structured preventive wellness programs as part of the benefits package enables individuals to take charge of risk factors for chronic diseases, like diabetes, high blood pressure, and heart disease.

By incorporating health screenings, one-on-one coaching, and biometric testing into an engagement model of sustained participation, employers create a self-management culture that delivers quantifiable outcomes. By providing employees with real-time feedback on their lifestyle decisions, backed by digital monitoring, telephonic health coaching, and on-site visits, employees are more likely to prevent long-term medical claims.

Negotiating Value-Based Contracts and Measuring ROI

The old payment model for healthcare is flawed. Under usual fee-for-service systems, doctors and hospitals are paid for each test, procedure, or visit they conduct. That’s problematic: providers are incentivized to make more money by doing more stuff whether or not patients are improving. 

Value-based contracts flip everything around. Rather than simply paying for the number of services provided, these contracts tie payment to patients improving and receiving excellent care. The healthcare provider gets more money when a patient does better, doesn’t go to the hospital, or receives excellent care. It’s a win-win all the way: patients receive better care, costs decrease, and providers are compensated for getting it right.

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A great example is related to bundled payments where employers work with providers and decide on a single price for various services, like hospital stay, surgery, and follow-up care related to an entire episode, like knee replacement. This forces care team members to work efficiently and prevent complications that would often drive those healthcare costs up.

Endnote

In short, organizations now have access to various methods to reshape the way they engage in employee healthcare. By focusing on payment models that pay for results, companies are better positioned to lower expenses while building healthier workforces.

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