And Why Employers Pay More When They Settle for “Good Enough”
In most industries, higher quality comes with a higher price tag.
Healthcare breaks that rule.
When employees receive high-quality care, total plan costs decline. Claims data, utilization patterns, and real-world outcomes consistently show the same result: better care reduces spending by preventing waste, complications, and delays.
Quality care isn’t just better medicine.
It’s better economics.
Here’s why.
1. Quality Eliminates Waste — and Healthcare Is Full of It
An estimated 25–30% of healthcare spending is unnecessary. Common examples include:
- Duplicate imaging
- Incorrect or delayed diagnoses
- Unnecessary surgeries
- Emergency room visits that could have been virtual or outpatient
- Prescriptions selected for margin rather than clinical value
- Complications from poor initial care
- “In-network” pricing that varies hundreds of percent for the same procedure
Waste drives cost.
Quality removes it.
2. High-Quality Providers Get It Right the First Time
When employees see the right specialist, receive an accurate diagnosis, and follow evidence-based treatment, downstream care becomes simpler and less expensive.
Poor-quality care creates a cascade of cost drivers:
- Repeat testing
- Failed treatments
- Infections and complications
- Readmissions
- Extended disability leaves
- Chronic conditions that worsen over time
A single bad medical decision can add $20,000–$300,000 in annual plan spend.
High-quality care sharply reduces this risk.
3. Strong Primary Care Prevents High-Cost Events
Effective primary care reduces:
- Avoidable ER visits
- Unnecessary specialist referrals
- Poorly managed chronic conditions
- Late-stage diagnoses that become catastrophic
Every dollar invested in high-quality primary care can return $10–$14 in avoided downstream costs.
Weak primary care does the opposite—it pushes employees into a fragmented, high-cost system.
4. High-Quality Facilities Have Fewer Complications
The same procedure can produce dramatically different outcomes depending on where it’s performed.
For example, a knee surgery may cost:
- $28,000 with a 1% complication rate
- $64,000 with a 12% complication rate
Complications aren’t rare anomalies—they are predictable drivers of excess cost.
High-quality facilities consistently deliver:
- Shorter hospital stays
- Lower readmissions
- Fewer infections
- Faster recovery
- Better long-term outcomes
All of which reduce total employer spend.
5. Quality Requires Transparency, Not Hidden Margin
Low-quality or legacy arrangements often bury costs inside:
- Spread pricing
- Opaque PBM contracts
- Bundled carrier fees
- Inflated hospital charges
- Redundant carve-outs
High-quality partners prioritize:
- Transparent pharmacy pricing
- Clean, accessible data
- Claims visibility
- Value-based care models
- Incentives aligned to outcomes
Transparency alone eliminates waste.
6. Better Experience Prevents Costly Escalations
When employees can’t navigate healthcare, they:
- Bounce between providers
- Receive conflicting guidance
- Default to the ER
- Delay care until it’s expensive
- Make medication errors
- Get lost during specialty care
High-quality navigation reduces unnecessary utilization and accelerates resolution.
A better experience isn’t just humane—it’s cost control.
7. Quality Care Reduces Disability and Lost Productivity
Medical quality affects more than claims. It directly impacts:
- Short-term disability
- Long-term disability
- FMLA utilization
- Return-to-work timelines
Accurate initial care leads to faster recovery, fewer complications, and earlier returns to work—often weeks sooner.
Fewer lost workdays mean lower employer cost.
8. Poor Quality Is the Most Expensive Feature of U.S. Healthcare
What drives health plan inflation isn’t richer benefits or employee overuse.
It’s:
- Misdiagnosis
- Unnecessary procedures
- Preventable ER visits
- Inappropriate imaging
- Pharmacy waste
- Low-value providers
- Lack of coordination
When employers prioritize quality, these costs fall away.
The Bottom Line
Healthcare is the rare industry where better outcomes cost less.
Employers who lead with quality experience:
- Lower claims
- Fewer catastrophic events
- Healthier employees
- Reduced downtime
- More predictable renewals
- Stronger member satisfaction
Quality isn’t an upgrade.
It’s the most effective cost-containment strategy available.
That’s why Totem Solutions focuses on aligning care quality, transparency, and navigation—so employers stop paying for waste and start investing in care that actually works.
