Health care costs in industry.

Abstract

The costs of providing health care in industries must remain affordable and rational. While recognising that employers have a moral commitment to workers' health and welfare, it must also be realised that resources committed to this end are finite. Furthermore, if these resources are spent on the minority, then all the more, the interests of the majority must be defended, as ultimately, medical expenses must form part of the wage costs. Both demand and supply factors of health care must be tempered. The factors influencing demand include the abuse and inappropriate use of health services, unhealthy lifestyle factors, the ageing of the population and the threat of litigation, while the factors affecting supply include new technology, easy accessibility and the creation of demand by doctors. Cost containment strategies should include the collection and interpretation of data on health care costs, the rationing of services, and cost sharing. Cost sharing is one of the most persuasive means through which a sense of cost sensitivity on the part of the consumer can be achieved. This can, and should, be incorporated in whatever form of purchase plan that employers wish to implement.