Combating healthcare costs in the digital age: A quick guide for self-insured employers

More than half of all Americans receive health insurance through their employers.[1] In 2016, about 40% of private sector establishments reported they self-insured at least one of their health plans.[2] A self-insured employer is one that, instead of paying a predetermined premium to an insurance carrier, pays for healthcare claims out-of-pocket and assumes the financial risk of its employees.

There are several benefits of self-funded health plans: customization for the workforce instead of a “one-size-fits-all” model, improved cash flow due to absence of prepayment for coverage, and no health insurance premium taxes. Self-funding makes it imperative for such employers to meet the healthcare requirements of their employees in a preemptive, cost-effective fashion, while also creating systems to bolster healthy behavior and outcomes.


In order to successfully navigate these challenges, employers should consider a combination of disease management programs, proactive health management tools, and on-site or employer-sponsored health clinics to address the health needs of their employees in a holistic manner.


The elephant in the room is chronic disease: we know that employees diagnosed with chronic disease can be costly to employers—not only are there direct healthcare costs due to medications and frequent doctor visits, there are also indirect expenses associated with absenteeism and loss in productivity. Per the Centers for Disease Control and Prevention (CDC), six in 10 Americans[3] live with at least one chronic disease like heart disease, stroke, diabetes, or cancer. Therefore, chronic disease management should be an important facet of any undertaking by self-insured employers to manage their healthcare costs.


The core elements of disease management should include vitals tracking, medication adherence, and management of nutrition and physical activity.


Vitals such as pulse, blood pressure, temperature, and blood oxygen saturation represent the body’s basic functions, help assess the physical health of a person, and provide clues to disease prognosis. Changes in vital signs prior to clinical deterioration are well documented[4] and, therefore, regular vitals tracking becomes a compelling activity to enable early detection of preventable outcomes, which is key to timely intervention.

Monitoring medication intake is also critical when it comes to disease management. To offer some perspective, in the United States 3.8 billion prescriptions are written annually; approximately one in five prescriptions[5] are never filled and, of those filled, about 50% are incorrectly taken (i.e., incorrect dosage, frequency, or timing). These are staggering numbers that emphasize the need for a trusted method to manage medication adherence.

Benefits of diet and nutrition management and regular physical activity are well known and widely researched.[6] Adults who make a conscious effort to manage nutrition and get regular physical activity can reduce the risk of many chronic conditions.


Employers have at their disposal several strategies to encourage and motivate their populations to do some or all of the above. One such approach is to adopt a digital health monitoring program that enables employees to establish health goals and keep a check on their vitals, medication, and wellness-related activities via smart medical devices.


Today, one in five Americans[7] uses a smartwatch or fitness tracker; the increasing adoption of digital technology paves the way for employers to also integrate wellness initiatives into these health programs (e.g., weight loss goals via healthy eating programs, or exercise routines and tips and tricks to stay fit), thus taking a holistic approach toward disease management. With the employees’ consent, data obtained from such programs can be shared with care providers, who can access a health profile outside episodic visits and become equipped to better manage chronic issues in collaboration with the employees, thus improving health outcomes.


Not limiting their programs to disease management, employers should also promote proactive health management strategies and tools to motivate healthy employees to remain healthy. The same concept of vitals and wellness tracking can be extended to the healthy population as well (i.e., those not diagnosed with any chronic condition) with the goal of prevention and early disease detection. Data obtained through monitoring of vitals over a period of time can reveal trends that employees and their care providers can jointly use for health management. This type of proactive management empowers employees with awareness around their health and helps them stay alert to changes, thereby enabling early detection and timely intervention by the medical team if necessary.


If employers are to institute a preventive digital health and wellness program that takes a holistic approach toward health management, it is critical to do so in collaboration with an onsite or similar employer-sponsored clinic. A qualified, employer-approved health professional at a convenient location who can work with employees to keep a pulse on their health and take actions to effectively prevent or manage adverse health outcomes creates a recipe for successfully helping employees take control of their own health and build lifelong healthy habits.


Employers that want to successfully reduce healthcare costs for themselves and their employees, while also implementing tactics to improve the health of the workforce, should commit to the idea that health and wellness management is an essential business strategy. They have to consider a combination of well thought-out programs, monitoring tools, and touchpoints to achieve the outcomes needed to create an environment where they are not only empowering employees to build healthy habits, but also playing a central role in developing a more resilient and sustainable health system for the future.



[1] USA Facts (March 23, 2020). How do most Americans get their health insurance? Retrieved March 12, 2021, from https://usafacts.org/articles/how-most-americans-get-their-health-insurance-medicare-employers/. [2] Employee Benefit Research Institute (August 1, 2019). Self-Insured Health Plans: Recent Trends by Firm Size, 1996-2018. EBRI Issue Brief. Retrieved March 12, 2021, from https://www.ebri.org/publications/research-publications/issue-briefs/content/self-insured-health-plans-recent-trends-by-firm-size-1996-2018. [3] See the CDC website at https://www.cdc.gov/chronicdisease/index.htm. [4] Churpek, M. et al. (May 1, 2017). The value of vital sign trends for detecting clinical deterioration on the wards. PubMed Central. Retrieved March 12, 2021, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4834231/. [5] CDC (November 17, 2017). CDC Grand Rounds: Improving Medication Adherence for Chronic Disease Management — Innovations and Opportunities. Morbidity and Mortality Weekly Report (MMWR). Retrieved March 12, 2021, from https://www.cdc.gov/mmwr/volumes/66/wr/mm6645a2.htm. [6] WHO (March 4, 2002). Diet, nutrition and the prevention of chronic diseases: Report of a joint WHO/FAO expert consultation. Retrieved March 12, 2021, from https://www.who.int/dietphysicalactivity/publications/trs916/summary/en/. [7] Pew Research Center (January 9, 2020). About one-in-five Americans use a smart watch or fitness tracker. Retrieved March 12, 2021, from https://www.pewresearch.org/fact-tank/2020/01/09/about-one-in-five-americans-use-a-smart-watch-or-fitness-tracker/#:~:text=About%20one%2Din%2Dfive%20Americans,smart%20watch%20or%20fitness%20tracker&text=As%202020%20begins%20%E2%80%93%20and%20health,June%2.