What Are Cost Containment Strategies?

October 31, 2022

First Stop Health

Cost containment is the business practice of maintaining expense levels to prevent unnecessary spending, or thoughtfully reducing expenses to improve profitability without risking long-term damage to the company. 

Why Do Employers Need Healthcare Cost-Containment Strategies? 

With worsening inflation comes increases in healthcare costs. In fact, about 70% of employers are bracing for a 6% increase in healthcare costs per employee in 2023.1 With these increases, 54% of employers expect their healthcare spending to be over budget next year. No wonder 67% of employers say that managing healthcare costs is their top priority.2 But how can they address the challenge of rising healthcare costs?  

There is one approach that can help employers incur a lower cost increase: Implementing cost-containment strategies with virtual care.  

Virtual Care 

Virtual care is a win-win.  

By offering employees low-to-no-cost virtual visits with a doctor, virtual care helps employees get diagnosed and treated without having to step out the door. This means employees can get the care they need quickly and conveniently. Because of the ease of access, employees are more inclined to use virtual care, driving greater utilization for increased cost savings.  

Employers benefit because virtual care is an effective healthcare cost-containment strategy, as it allows employees to avoid more expensive healthcare modalities, such as in-person care at a doctors’ office, urgent care centers and emergency rooms. With every virtual visit, employees avoid the medical claims that these options typically incur. 

The Keys to Cost Containment 


First, for employee-facing cost-containment strategies to work, employers need to ensure employees will actually use them. Utilization is key to cost-containment initiatives. Driving utilization requires a robust employee-engagement program that should be provided by the virtual care company.  


The second key is discovering what’s working and what’s not. Employers often struggle to measure the success of a cost-containment strategy. More employers are investing in benefits to aid in the recruitment and retention of employees, however their focus on the return on investment (ROI) for these programs is lagging.3  

Population Health Management with Detailed Reporting 

Population health management programs look at demographic and claims data to identify chronic illnesses like hypertension, diabetes and heart disease. With real-time, de-identified population health data reporting, employers can combat the high costs of treatment by suggesting case-management strategies for conditions stemming from those major health problems. 

This can be an effective, if complicated, way to manage costs in the medium-to-long term. Case management requires a lot of work when a patient’s needs are especially complicated. But that’s where virtual care can help. With early prevention tactics and hands-on care management for chronic conditions that virtual care provides, employers can experience a decrease in high-cost claims attributed to these conditions. 

Utilization, ROI and reporting on population health are the three keys to measuring the success of cost-containment strategies. Virtual care outcomes should be reported in real-time to employers to track the success of the program.  

First Stop Health (FSH) Virtual Care Solutions  

FSH TelemedicineVirtual Primary Care and Virtual Mental Health solutions deliver patient-first care to members where and when they need it. Plus, it’s a first day benefit, providing employees with the care they need immediately. With Telemedicine, members have access to 24/7 urgent care for episodic health concerns. Virtual Primary Care consists of preventive and chronic care to help coordinate and manage the many touchpoints of members’ healthcare journeys. Virtual Mental Health provides counseling to members, and in conjunction with Virtual Primary Care guidance and medication management, can lead to better whole-person health. 

With FSH Virtual Care, we guarantee the success of our programs with utilization or savings guarantees. If the guarantee is not met, a credit is applied to the following contract year, ensuring cost containment. Employers also have access to a custom dashboard to see their service success in real time. This helps assess overall population health and further supports cost-containment strategies.  

  1. https://www.fiercehealthcare.com/payers/employers-expect-healthcare-costs-rise-next-3-years 
  2. https://healthpayerintelligence.com/news/employer-sponsored-health-plan-costs-expected-to-increase-in-2023 
  3. https://www.benefitspro.com/2020/09/09/companies-investing-more-in-benefits-but-lag-in-measuring-roi/ 

Originally published Oct 31, 2022 12:00:00 PM.