Let me start by saying that I am a dyed-in-the-wool believer in our version of capitalism.  All the good, the bad, the ugly, I firmly believe it is the most efficient and fair system yet devised.  I hesitated discussing this topic on a short blog post, but I firmly believe that healthcare is a distinct problem for us as an industry.  I don’t have the answers, but I do know that the costs of the current system make providing health coverage to our employees increasingly difficult, if not impossible, to maintain. 

Normally, when costs rise beyond a standard rate of inflation,  the market generally sees an opportunity to earn money and fills that need with hospitals, outpatient care facilities, etc.   Young people train as doctors, nurses and anesthesitists because the demand is so great.  In essence, the void is filled by competitive forces and costs normalize over a period of time.  If they don’t, and the cost of service outstrips the consumer’s ability to pay it, we have a healthcare version of a bubble bursting.  This is how it should work.  But something in the system is not functioning, costs rise annually well beyond inflation, and the losers are the business that pays all or a portion of healthcare coverage costs for their employees and the employees themselves.

Now that we have determined that I can see a giant brick wall crashing down around me, what is the solution?  What have some of you done to lessen your healthcare coverage costs, or at least ease the insatiable rate increases?  A construction company, billing $45/hr. or so for skilled tradesman does not have the additional revenue to absorb double digit percentage increases yearly.  In this market of declining revenue, the simple solution is to drop coverage for your employees.  This can cause a downward spiral effect as quality employees leave for locales that offer health coverage.  Not a pretty picture from any vantage point.

Some firms are exploring  Health Savings Accounts (HSA’s) and Health Reimbursement Accounts (HRA’s).  In effect, these are high deductible plans with a fairly substantial co-pay.  In the HSA, the employee keeps the funds in the account at the end of the year, in the HRA the employer keeps them.  Folks in our industry have told me that these work well for construction firms where the majority of workers are under the age of 35 and in relatively strong health.

Other firms I have spoke with have joined forces with groups in order to leverage purchasing power.  Perhaps the local Home Builder’s Association has an option availabe.  In any regard, providing coverage is increasingly expensive, and many of our brethren in the industry, through no real choice of their own, have to opt out of providing coverage to their employees.  We all lose in this instance.  Our best and brightest will not stay with us for long without a competitive benefit package. 

In short, please explore all available options (Group plans; HMO’s; increase co-pay; HSA’s or HRA’s) before eliminating the benefit altogether.  Keep open lines of communication with your staff.  Examine your plan yearly and shop it competitively.  Some employees may be willing to fore go a raise in order to keep their premiums affordable.  Our national healthcare system is in trouble.  Our ability to stay a worthy competitor for bright young talent hangs on our industry’s ability to provide good pay and benefits, along with quality of life issues.  I personally don’t believe a socialized medical system is the solution.  But I also know that high single digit or double digit annual cost increases are simply not sustainable and will cripple our industry.

What have some of you done to provide this benefit affordably to your staffs?  I, and many others I will assume, would love to hear any and all options available to us.