Businesses feeling the sting of increasing health care costs

Despite a large increase in the number of people purchasing health insurance from health exchange markets, a majority of Idahoans and Americans still receive their health insurance benefits through their employers. That’s according to the Henry J. Kaiser Family Foundation (Statistics found HERE). Yet as the cost of those insurance plans increases, so does the strain on an employer’s bottom line. This is especially true for smaller businesses.

“We’ve seen rates increase from 25 to nearly 40 percent over the past few years,” saidDoug Sayer, founder and chief business officer of Premier Technologies Inc. in Blackfoot. “It certainly affects our business. The rising costs of health insurance, being that it’s very significant, is something that we just can’t pass that on to our customers.”

Premier Technologies Inc. specializes in high tech manufacturing. Sayer said they compete on a global scale and have to regularly out-bid other companies for contracts and work. Rising health care costs makes it more difficult when foreign companies don’t have the same constraints.

“We feel a responsibility as an employer to make sure that our employees have health, dental, vision, and all the coverage that their families are going to need,” said Sayer. “It affects us and our employees when these rates go up.”

Sayer said they’ve spent a significant amount of time going over their benefits to provide a balance between what employees need, and what’s fiscally sound for the company.

Reasons for increasing health care expenses are many, but one big reason is the sheer increase in the number of people using the system. Another is the demand for more technology in the medical system.

“So utilization is definitely one reason,” said Justin Manwaring, director of support services for Mountain View Hospital who specializes in haggling for lower prices for medical equipment. “Technology is another reason (for higher medical costs). We have the option of robotic surgery. It’s certainly the more expensive avenue for procedures, but it’s the preferred route for consumers.”

Manwaring said there are many other facets causing health care costs to increase. A recent Forbes article (found HERE) shows the industry that has the highest predicted profit margins in the US is health technology. On the other end of the spectrum, health care services like hospitals, will see some of the lowest profit margins out of major U.S. industries.

Manwaring said he thinks the best way to control health care costs is through competition. “We’ve spent the better portion of the last three years focusing on costs,” said Manwaring. “To win the competition you have to be able to offer the best product at the lowest cost.”

Manwaring said if people who need procedures done should shop around to find the best price. “Consumers need to realize they have a choice. They can ask thier doctor’s for opportunities to go somewhere else, or have the doctor to give them some options.”