Six Ways to Lower Rising Health Costs for Companies
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6
min read
April 1, 2026
Healthcare Cost Management: What's Costing Your Organization More Than It Should
Healthcare is now the second-largest cost behind payroll for most self-insured organizations, and for 2026, the Business Group on Health projected a median 9% increase, the highest rate of growth in over a decade, driven by high-cost claims and a workforce with growing and complex care needs.
Every year, the response to healthcare cost management is the same: adjust the plan design. Renegotiate with the carrier. Shift more cost to employees.
These levers matter, but they have a ceiling. And for many organizations, that ceiling has already been hit.
There is a third lever that determines whether any of those efforts really pay off, and it is the one that gets the least attention.
Key takeaway
The Lever Nobody Is Pulling
Benefits cost control has two levers most employers focus on when approach healthcare cost management: plan design and carrier negotiation. Neither of them controls what your members really do with the plan:
- Where they are going for care.
- Which benefit they are choosing when they need it.
- Whether they use the lower-cost path or default to the fastest available option.
That employee behavior (not your plan design) is one of the most significant drivers of employer healthcare cost variance. And unlike plan design, those decisions happen in real time, one member’s decision at a time, largely invisible until they show up in the claims data.
The same plan produces different cost outcomes depending on how employees use it. Across a workforce, that behavior gap is a major driver of claims variance.
What the Behavior Gap Looks Like in Practice
Say John, an employee at your company for the last five years, needs to take his daughter in for an MRI. He searches online and books the first result: a hospital-based imaging center. The claim: $2,800. A facility four miles away, same insurance, same scan: $400.
It wasn't John's fault, but it wasn't a plan design failure either. Even experienced employees like John don't have their plan details memorized -- he needed someone there to warn him about this price difference in the moment. The carrier contract was solid. No one was there when the decision was made.
Scale that across a workforce making similar decisions about facilities, prescriptions, referrals, and follow-up care, and the healthcare cost impact becomes significant and predictable.
Why Plan Design Alone Doesn’t Fix This
Plan decisions are made once a year in advance, designed around the average plan member. But member behavior is anything but average.
Benefits are most often used in high-stakes, inconvenient moments, like when you got the flu on a Sunday and all the urgent care centers were closed. Or when your daughter had to see a specialist, and the first search result you got was located an hour away. Or when your mom called you crying because her prescription was no longer covered, and she and dad couldn't afford the additional expense.
The traditional model expects members to act rationally every time they need care. They don’t. Because healthcare events can be frightening and navigating a health plan is complicated. No employee carries that knowledge home with them when they need to make a care decision on Tuesday night.
This is why employer healthcare costs keep rising even in organizations with strong plan design. The plan is only as effective as the decisions employees make when they use it.
What Actually Changes the Outcome
Guided navigation is the behavioral infrastructure supporting plan design and plan performance, and the missing piece in most healthcare cost management strategies. It puts support at the point of decision, not at open enrollment, not in a PDF, not behind a portal that employees do not visit until they are already confused.
When employees have real-time guidance from a knowledgeable source, they take the recommended action at a dramatically higher rate than when they navigate alone. That change in behavior alters where care happens, which benefits get used, and ultimately what the employer pays.
Organizations that have made this shift report measurable changes in claims patterns, higher utilization of lower-cost care options, and a clearer story to tell at renewal.
The Cost Pressure Is Not Letting Up
Healthcare costs are projected to rise at a median of 9% in 2026, following two consecutive years of actual costs exceeding employer forecasts. Employers that rely only on plan design and carrier negotiation to manage that trend are working with two of three available levers. The third lever, employee behavior at the point of care, remains largely unaddressed in most organizations.
Employers making progress in their healthcare cost management strategies in 2026 are the ones closing the gap between what a plan is designed to do and what employees do with it.
If employer healthcare costs are on your agenda in 2026, our practical guide covers five ways to change the outcome before claims arrive. Click here to download.
