36,000 employees of Verizon went on a strike mid-April to protest against the company’s policies regarding salary, healthcare benefits, plus job and retirement security. Union leaders have alleged that Verizon made approximately $39 billion in profits but is not taking care of its employees. The leaders also allege that Verizon is refusing to negotiate any terms that would benefit the employees in the long run.
Verizon, however, has a different story to tell. It states that the wireline contract proposal includes an increase of wages by 6.5%, retirement benefits and a good healthcare plan that will benefit the employees while trying to reduce healthcare costs. Rising healthcare costs are now posing a challenge for giants such as Verizon, resulting as one of the key factors at issue being brought up during negotiations between Verizon and the union leaders.
Earlier, on March 18, 20 senators signed a letter which stated that the CWA (Communications Workers of America) have offered to negotiate savings in healthcare, however, there are still some gray areas such as treatment of ill and injured workers that have been overlooked and need to be included.
Verizon and many other companies that have large numbers of employees are often not able to pinpoint the detailed reasons behind the rising healthcare costs. Many factors such as program ineffectiveness, declining population health, non-optimized pharmacy spend, unmanaged chronic conditions and increasing population health risk are hidden drivers behind the rise in these costs. The one main thing missing is that no action is being taken with the available healthcare data. Employers who use predictive intelligence to drive targeted solutions have a better handle on their healthcare cost risks. By understanding the depths of employee engagement and benchmark data, employers can make better, informed decisions on how their healthcare dollars are utilized with the goal of improving care and lowering costs.
For one of our clients we saw that 30% of the spend was wasted due to overuse of ER, poor non-optimized PBM, hospitalization. The reasons can vary for each employer. More critically, employers often do not have access to the critical information that is required to take action when it comes to healthcare. Even if they do, the data is so complicated that it becomes an overwhelming task to analyze it. It is time for employers to understand their healthcare risk and cost drivers, understand which programs are and are not delivering value, and then use financial and clinical benchmarks to prioritize actions. This could also be one of the main reasons why Verizon is struggling with its healthcare costs.