Healthcare costs are rising fast, with increasing service prices and higher care use driving up overall spending. Employers are rethinking how they fund and deliver benefits to keep care affordable and high quality. One way they can do this is to explore new funding models that guide employees to the right care and support smarter care decisions. These steps can help lower health expenses without reducing benefits.
Choose transparent funding models for predictable costs
You can consider adopting funding models that offer transparency and predictable costs. Two effective options are level-funded plans and Individual Coverage Health Reimbursement Arrangements (ICHRA). ICHRAs give employees a tax-free allowance to buy individual, ACA-compliant coverage. This shifts premium risk away from the employer and gives employees more choice and flexibility. Level-funded plans blend self-funding transparency with steady monthly payments and stop-loss protection. Regular claims reporting helps identify costly conditions and pricing differences. Both models need trusted vendor partners, clear communication with employees, and data analytics to turn plan design into measurable savings.
Target high-cost services with smart strategies
Next, you may want to focus on services where prices and outcomes vary the most. Use a two-part approach: pilot direct contracts or centers of excellence for specific high-cost services, using bundled pricing and quality standards. At the same time, look to improve access to primary care through onsite or virtual clinics and integrate behavioral health into primary care. This helps catch and treat issues early. Clear pricing for services with wide cost variation reduces surprise bills, while stronger primary care lowers the need for expensive treatments.
Make high-value care easy to use
Funding and contracts only work if they change behavior. Frame benefit changes around better outcomes and employee experience—not just cost savings. Give employees clear comparisons of expected results and total costs. Remove administrative hurdles to preferred care options and use incentives that encourage better experiences. When high-value care is easy to access and benefits are clear, employee engagement rises, and employers see both clinical and financial improvements.
Use data to drive results
Finally, apply a disciplined, data-driven approach to turn strategy into results. Focus on one or two high-impact initiatives, measure outcomes and total cost of care, and adjust based on what the data shows. This approach helps slow healthcare cost growth, protect benefits, and improve your employees’ health experience.
To learn how your organization can evaluate funding models, pilot high-value care strategies, and turn claims data into measurable savings, contact an MMA advisor.
