Breaking Down Healthcare Waste: How Employers Can Stop Overspending This Fall

Healthcare costs continue to rise, yet much of what employers pay for isn’t delivering real value to their businesses or their employees. According to the National Academy of Medicine, nearly 25–30% of U.S. healthcare spending is waste, representing hundreds of billions of dollars lost annually. For employers, this means a significant portion of benefit budgets may be going toward inefficiencies, unnecessary services, or administrative bloat rather than supporting actual employee health.

This fall, as businesses prepare for open enrollment and year-end planning, it’s the perfect time to identify and eliminate healthcare waste. At Health Compass Inc., we partner with employers to uncover hidden costs and replace them with smarter, preventative-first solutions like Vital110 that deliver real value.

What Is Healthcare Waste?

Healthcare waste refers to spending that doesn’t improve outcomes or support meaningful care. It takes many forms, including:

• Unnecessary services: Tests, procedures, or prescriptions that provide little benefit or are duplicated.
• Administrative inefficiency: Excessive paperwork, billing errors, or redundant layers of processing that drive up costs without improving care.
• Overpriced services: Lack of transparency allows hospitals and carriers to charge wildly different rates for the same procedure.
• Delayed care: Employees avoiding preventative visits due to high costs or confusion, leading to expensive emergencies later.
• Unmanaged chronic conditions: Conditions like diabetes or hypertension that could be controlled early but are left untreated until they become high-cost claims.

For employers, these forms of waste result in higher premiums, unpredictable claims, and dissatisfied employees who feel their benefits don’t meet their needs.

The Fall Planning Advantage

Fall is a critical time to address waste because it aligns with both open enrollment preparation and budget season. Reviewing utilization data, costs, and employee feedback now helps you identify inefficiencies before committing to another year of overspending. September and October planning also give you leverage to negotiate alternatives and implement new solutions before renewals take effect.

Five Steps to Reduce Healthcare Waste This Fall

1. Audit Utilization and Claims Data

Start by reviewing claims and utilization trends. Identify services employees aren’t using and compare costs across providers. If utilization of preventative services is low, that’s a red flag for higher future costs. Many businesses discover they’re paying for underutilized programs or experiencing redundant billing.

2. Prioritize Preventive Care

Preventive services are among the most cost-effective ways to reduce waste. Annual labs, screenings, and checkups prevent high-cost emergencies and chronic condition escalations. With Vital110, employees gain no-cost access to routine care, eliminating financial barriers that lead to delayed treatment.

3. Leverage Virtual Care

ER visits for minor issues are one of the biggest drivers of waste. Unlimited, no-cost virtual primary and urgent care empowers employees to get answers quickly and affordably, preventing unnecessary hospital claims. This single change can significantly cut overspending.

4. Eliminate Administrative Inefficiencies

Traditional carriers often bury employers under complex billing and opaque reporting. Demand transparency and work with partners who simplify navigation. Employers who consolidate services into clear, accessible platforms like Vital110 save time and money while improving employee experience.

5. Strengthen Chronic Condition Management

Conditions like hypertension, diabetes, or high cholesterol are manageable if caught early. Preventative labs, health assessments, and regular check-ins spread throughout the year reduce the likelihood of expensive complications. Encouraging employees to use these tools lowers waste from unmanaged chronic care.

The ROI of Cutting Healthcare Waste

Eliminating waste isn’t just about cost avoidance—it’s about reinvesting in care that matters. Employers who reduce inefficiencies benefit from:

• Lower premiums and renewal rates: Waste reduction helps control long-term spending trends.
• Improved employee satisfaction: Employees value benefits they can actually use and understand.
• Increased productivity: Access to preventative and mental health care reduces absenteeism and presenteeism.
• Better retention: Competitive, transparent benefits help you stand out in peak hiring seasons.

Case Example: Cutting Waste in Action

A professional services firm with 130 employees faced year-over-year premium increases despite modest claims. After a fall audit with Health Compass Inc., the firm discovered underused wellness stipends, excessive ER claims for minor illnesses, and low engagement with preventative care. By replacing outdated programs with Vital110, utilization shifted to virtual care and screenings, ER claims dropped by 19%, and overall spend stabilized. Employees reported higher satisfaction and confidence in their benefits.

Why Inaction Costs More

Employers who fail to address healthcare waste risk paying higher premiums year after year without improving employee outcomes. Worse, employees often disengage from benefits they see as confusing or unaffordable, leaving them vulnerable to costly health crises. Inaction isn’t just wasteful—it undermines both financial stability and workforce well-being.

Final Thoughts

As you plan for open enrollment and year-end, make healthcare waste reduction a top priority. By auditing data, promoting prevention, expanding virtual care, and simplifying administration, you can cut costs while strengthening employee loyalty and productivity.

Take the first step today. Partner with Health Compass Inc. to identify and eliminate waste in your healthcare strategy this fall, and replace it with smarter, more effective benefits that truly work for your business and your people.