Before employers shift more healthcare costs to workers, they should ask hospitals a question

American employers are approaching an uncomfortable choice: absorb another large increase in healthcare costs or pass more of it on to workers.

Mercer projects that employer health-benefit costs will rise 6.7% in 2026, the steepest increase in 15 years, pushing the average cost above $18,500 per employee.

Nearly half of large employers expect medical plan changes in 2027 that will increase employees’ out-of-pocket costs.

Before employers ask workers to pay more, however, they should ask healthcare providers a question they routinely ask every other major supplier: Are we using what we’re already paying for efficiently? Companies would not respond to an inefficient manufacturing operation simply by purchasing more machinery.

A CFO considering a major capital investment would first ask whether the shortage was real or resulted from how existing resources were managed.

Yet employers spend enormous sums purchasing healthcare without consistently demanding the same operational discipline.

Consider hospital capacity.

Emergency demand is inherently variable: hospitals cannot schedule heart attacks, automobile accidents or appendicitis.

Elective procedures, however, are scheduled.

Many hospitals concentrate scheduled surgeries and admissions on particular weekdays, creating artificial peaks in demand for beds, nurses, operating rooms and diagnostic services.

Emergency patients may wait for inpatient beds, nurses become overloaded and surgeries are delayed.

What appears to be an absolute shortage may partly be a scheduling problem.

Hospitals that have addressed this artificial variability provide an important lesson.

At Cincinnati Children’s Hospital Medical Center, changes in patient flow management improved access to critical care capacity while allowing surgical activity to grow.