The Challenges of Compounding Healthcare Costs

Healthcare costs are rising, and they’re affecting both self-funded employers and their employees.

For employers, healthcare benefits are often one of the largest operating expenses outside of payroll. For employees, the growing cost of coverage, deductibles, and medical bills places increasing financial pressure on household budgets.

The issue is simple, but serious. Healthcare costs are rising faster than wages, inflation, and – unfortunately – faster than many organizations can sustainably absorb.

Without meaningful, holistic solutions to reduce employer healthcare costs, members and employers will continue to face an unsustainable cycle of rising prices.

Limited options for employers

To relieve the financial burden of providing healthcare, self-funded employers often turn to difficult options:

• Increase employee contributions
• Raise deductibles and copays
• Reduce benefits
• Absorb higher costs internally

None of these options address the underlying problem. Instead, they shift costs from one area or stakeholder to another while the costs of healthcare continue to rise.

Employees feel the impact

Over the last 5 years, the average family coverage premium has increased by 26%.¹ And yet, from 1994 to 2024, healthcare costs have grown nearly 3x faster than wages.²

When the cost of receiving care outpaces families’ income, they are often forced to make difficult choices that result in delaying care or borrowing money to pay for it.

In 2024, approximately 31 million Americans borrowed a combined $74 billion to pay for medical expenses for themselves or a loved one.³ Medical debt is one of the leading contributors to personal bankruptcy in the United States.

For many, one unexpected or expensive health event becomes a major financial burden as well as a medical challenge.

The hidden cost: lost productivity

The impact of rising healthcare costs goes beyond expensive claims and premiums.

Employees often spend significant time navigating complex healthcare systems, disputing charges, and coordinating payments while attempting to maximize their benefits.

Research suggests that these activities can cost organizations one to two hours of productivity every week. Multiplied across the entire workforce, lost productivity compounds into significant financial losses.

Ultimately, employers aren’t just paying for healthcare costs – they’re also paying for the administrative burden created by a fragmented healthcare system.

Why cost-shifting isn’t working

Historically, organizations responded to rising healthcare costs by shifting more of the financial burden onto employees.

While this may reduce employer expenses in the short term, it often creates unintended consequences:

• Members delay seeking care
• Reduced preventive care utilization rates
• Poorer chronic disease management
• Increased financial stress due to more expensive downstream costs
• Lower employee satisfaction

All the while, total healthcare costs continue to rise year over year. A real, effective solution should address the root cause of the problem – how organizations purchase, manage, and utilize healthcare in the first place.

A different approach to healthcare cost management

OneVeracity’s integrated model moves beyond traditional cost-shifting strategies and focuses on the factors that contribute to higher healthcare spending.

Our healthcare cost containment platform includes strategies like:

• Improving access to preventive care
• Guiding members to high-quality providers
• Increasing transparency into medical and pharmacy costs
• Supporting employees with care navigation programs
• Using data to identify risks before they become costly claims

By addressing the holistic factors that contribute to an employer’s healthcare costs, our model drives measurable self-funded health plan savings without compromising high-quality care.

The bottom line

Healthcare costs are compounding, and most employers and members can’t keep up without comprehensive intervention.

OneVeracity empowers organizations to succeed and save money despite these rising costs by improving transparency, reducing waste, enhancing care coordination, and advocating for members.

Learn more about our Solutions designed to truly reduce healthcare costs for self-funded employers and their employees.

Sources

1. Kaiser Family Foundation. “2025 Employer Health Benefits Survey.” KFF.org, 2025. https://www.kff.org/health-costs/2025-employer-health-benefits-survey/
2. JAMA Network Open. “Patient Financial Burden and Medical Debt in the United States.” JAMA Network Open, 2025. https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2842464
3. Gallup. “Americans Borrow Estimated $74 Billion for Medical Bills in 2024.” Gallup.com, 2025. https://news.gallup.com/poll/657041/americans-borrow-estimated-billion-medical-bills-2024.aspx