Grand Rounds Blog

While the cost of health benefits for large U.S. employers is projected to remain steady at 6% in 2017,1 it still outpaces general economic inflation. Thus, employers continue to face the challenge of lowering and managing their health care spend while still providing value to employees and their families.

This is especially true for the retail sector, which employs roughly 10% of the U.S. workforce — or more than 15.7 million people2 — and spends an average of $8,854 on health care per employee per year.3 And given the low profit margins and high turnover in the industry, it’s no surprise that benefits managers at large retailers are more cost-conscious and looking to implement programs that show immediate savings.

The U.S. spends about $4 billion annually to cover substitute teachers and related administrative cost.

Here are three key factors that present unique cost and health care challenges for the retail sector.

Diverse and Widely Dispersed Workforce

The retail sector is comprised of part-time and full-time employees that span hundreds of different occupations, including cashiers, retail salespeople, stock clerks, truck drivers and more. Needless to say, finding a health care benefit that meets the needs of such a diverse workforce is very challenging. And given the retail sector’s higher proportion of part-time workers (17.8 percent of total part-time workers in the U.S.)4 compared to other industries, these employers are also facing increased health care costs associated with the Employer Shared Responsibility Provision of the Affordable Care Act (ACA).

Geography also plays a role in employers’ health care costs. Retail employees are often spread across different regions, including rural or remote areas with limited access to quality health care. This disparity can be both dangerous to employees (e.g., higher complication rates from unnecessary procedures) and costly — research shows that poor-quality care can cost employers between $1,900 and $2,250 per employee each year.5

A Less Consistent Workforce

According to the Bureau of Labor and Statistics, retail is among the industries with the highest turnover, with a rate of 5 percent a month.6 The costs associated with turnover (e.g. recruiting, training, etc.) can add up, especially with low-wage employees that make up the majority of the retail workforce. More specifically, the average costs to replace an employee earning less than $30,000 a year is 16% of their annual salary.7 This could add up to almost $3,400 per employee in the retail sector, and doesn’t even take into account intangible costs associated with lower productivity and overall employee engagement. Given these additional cost burdens, it’s even more imperative for retail employers to manage their health care spend.

The remarkable thing is no mater where you live, Grand Rounds is going to find the right doctor for you. I look forward to being the person I used to be. Carmen, Teacher

High Propensity for Labor-Related Injuries

Many jobs in the retail sector tend to be labor-intensive and present physical challenges, such as back pain and other conditions that may require orthopedic specialty care. According to the Bureau of Labor and Statistics, musculoskeletal disorders are among one of major injury risks for retail workers,8 especially among those who manage storerooms, stock shelves and unload trucks.

Given consumers’ tendency toward low health literacy and the resulting poor health care decisions, retail employers risk overspending on unnecessary procedures. In fact, Grand Rounds research has found that unnecessary procedures are most common in orthopedic cases.

The Data-Driven Solution

Innovative benefits leaders in the retail sector are partnering with Grand Rounds to address these challenges and ensure their employees are receiving the best possible care. More importantly, they are implementing strategic, mutually-beneficial programs — instead of relying on narrow networks, consumer-driven health plans (CDHP), or high-deductible health plans (HDHP) which shift more of the cost burden onto employees.

Through our data-driven approach to analyzing physician quality, Grand Rounds is uniquely positioned to help retail employers address their health care challenges by:

Guiding employees to the most qualified doctor for their specific needs so they receive the proper diagnosis and treatment right from the beginning. Our award-winning care team also supports patients through every step of the in-person visit, from collecting medical records to scheduling the appointment.

Connecting employees to world-class experts from around the country for remote second opinions if the right expertise is not available locally. By breaking down geographic barriers to quality health care, we’re helping all retail employees — regardless of where they live — receive the best possible care when they need it most.

Ultimately, matching the right physician with the right patient from the very beginning helps make health care delivery more efficient by avoiding unnecessary and costly procedures. This leads to meaningful impact for both your employees and business.

Meet two retail employees and hear their success stories in the video below.

Meet Stacey & Jordan from Grand Rounds on Vimeo.

 

 

 

 

 

 

 

Sources

  1. “Large Employers’ 2017 Health Plan Design Survey,” National Business Group on Health, https://www.businessgrouphealth.org/pressroom/pressRelease.cfm?ID=281, August 2016
  2. “Occupational Employment Statistics,” Bureau of Labor and Statistics, U.S. Department of Labor, http://www.bls.gov/oes/current/naics2_44-45.htm#00-0000, accessed August 2016
  3. “2015 Best Practices in Health Care Employer Survey,” Willis Towers Watson/NBGH, https://www.towerswatson.com/en-US/Insights/IC-Types/Survey-Research-Results/2015/11/full-report-2015-towers-watson-nbgh-best-practices-in-health-care-employer-survey, November 2015
  4. “Wages in the Retail Industry: Getting the Facts Straight,” National Retail Federation, https://nrf.com/resources/retail-library/wages-the-retail-industry-getting-the-facts-straight, October 2014
  5. “Reform in Action: How Employers Can Improve Value and Quality in Health Care,” Robert Wood Johnson Foundation, http://www.rwjf.org/en/library/research/2013/01/how-employers-can-improve-value-and-quality-in-health-care.html, January 2013
  6. “Why Retailers Are Suddenly Desperate to Keep Their Least-Valuable Workers,” Bloomberg, http://www.bloomberg.com/news/articles/2015-03-06/why-retailers-are-suddenly-desperate-to-keep-their-least-valuable-workers, March 2015
  7. “There Are Significant Business Costs to Replacing Employees,” Center for American Progress, https://www.americanprogress.org/wp-content/uploads/2012/11/CostofTurnover.pdf, November 2012
  8. “Disproportionately high: Study on injuries among retail workers surprises researchers,” National Safety Council, http://www.safetyandhealthmagazine.com/articles/disproportionately-high-study-on-injuries-among-retail-workers-surprises-researchers-2, January 2011

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