A New Approach in Health Care Cost Management that Does Work

The new approach, referred to in this article, is working right now for companies that have adopted it. As a result, those companies pay substantially less for health care and enjoy productivity levels that are the envy of their peers. So why haven't more businesses adopted this highly effective approach?

PARADIGM SHIFT

Before business leaders or HR professionals can even contemplate a fresh approach to controlling health care costs, they have to be open to looking at the facts surrounding the problem in a new light. In other words, they have to experience a paradigm shift.

A paradigm shift isn't easy to accomplish. As human beings, we are creatures of habit, and we're accustomed to thinking in established patterns. Moreover, the current way of thinking about health care costs ¯ that they're a huge problem individuals can't possibly address in a meaningful way ¯ is reinforced by what practically everyone else says about the issue, from politicians to CEOs to union leaders. Most assume that the problem is intractable and that the only way to deal with it is to address the symptoms.

But there is a new way to think about the problem of health care costs, a way that puts the problem in a context in which it becomes clear that you can effectively address it. And the good news is, there's nothing mysterious about it; it's perfectly logical and based on a principle with which we are all familiar, consciously or not.

The key is to realize that there is typically an imbalance between cause and effect, efforts and results. For example, most employers and HR professionals realize that the majority of their company's productivity comes from a minority of its employees. In other words, 80% of sales might be attributed to 20% of the sales force. This principle extends to practically every aspect of life. Here are some more examples:

· 80% of cost savings result from 20% of cost-savings measures

· 80% of crimes are committed by 20% of criminals

· 80% of hors d'oeuvres will be consumed by 20% of the guests