January 16, 2025

For executives responsible for managing their organization’s health plan, there’s a crucial question worth asking: Is our current system really designed to treat each individual and improve their health? On the surface, the answer might appear to be “yes.” After all, the system has data, information, resources, and influence at its disposal. But take a step back and ask yourself: How is it working for you? If the system truly prioritized individual health, the numbers would tell a different story. Healthcare costs in the U.S. would be at least half of what they are today. Instead, costs continue to rise at a staggering rate of 5% to 10% annually, leaving organizations and their employees struggling under the weight of increasing premiums, higher deductibles, and diminished outcomes. The Misaligned Incentives Here’s the hard truth: The current system is not designed to treat the individual effectively. Why? Because misaligned incentives drive it. Many players in the healthcare ecosystem profit more when costs go up. In fact, rising costs are often baked into their business models. This misalignment has created a scenario where nearly one-third of healthcare spending is wasted on fraud, waste, and abuse. These inefficiencies enrich middlemen and other unnecessary stakeholders while leaving employers and employees to foot the bill. Worse yet, 70% of high healthcare costs could have been prevented if root causes were addressed earlier. A Smarter, More Aligned Approach What if we could use the same intelligence—data, information, and systems—but act on it differently? What if we focused on making people healthier and tackling waste at its core? This approach is not only possible but also financially and operationally realistic. By investing in high-quality care that addresses the root causes of health issues, organizations can achieve better outcomes and lower costs. High-quality care is the least expensive care because it prevents the need for costly interventions and reduces the churn of treating symptoms without resolving the underlying problems. A Path to Sustainable Savings Consider this: if we worked to eliminate a portion of fraud, waste, and abuse each year for the next five years while improving the health of employees, could we stabilize our costs? The answer is a resounding “yes.” Here’s what that path looks like: The Payoff By realigning incentives and focusing on root causes, companies can break the cycle of escalating costs. Over time, this shift leads to a healthier workforce, more predictable expenses, and a competitive edge in attracting and retaining talent. As leaders, it’s up to us to ask the tough questions and take bold action. The fly in the sauce isn’t going to fix itself—but we can. Together, we can create a system that works for individuals, organizations, and the bottom line. Are you ready to take the first step toward a healthier future for your team and your company?