Employers Should Demand Hospital Efficiency Before Shifting Rising Health Costs to Workers
Employers facing higher health-benefit expenses are urged to first question hospital efficiency rather than simply passing costs to employees.
Mercer forecasts a 6.7% jump in employer health-benefit costs for 2026, the steepest increase in 15 years, pushing average expenses above $18,500 per employee. As many large employers plan to raise workers’ out-of-pocket contributions in 2027, the article advises them to first ask hospitals whether current resources are being utilized efficiently. Illustrations from Cincinnati Children’s Hospital Medical Center and The Ottawa Hospital reveal that optimizing patient-flow and scheduling can generate $137 million and $9 million in annual savings respectively, while also improving care.
The piece stresses that self-insured companies possess significant buying power to require evidence of operational improvements before agreeing to higher fees or new capacity. Although not all facilities can replicate these gains, the argument is that better use of existing assets should precede additional investment. The broader context includes rising premiums, a Gallup poll showing low affordability, and the looming midterm elections, underscoring why employers must scrutinize healthcare spending.
Why it matters
Employers can curb rising health-care bills for workers by ensuring hospitals run more efficiently before accepting higher costs.
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