The 8.5 percentage-point gap in cost increases between a best-performing and a poor-performing company is very significant. Through focused initiatives such as building data warehouses and using hard-dollar ROI calculations, best-performing companies lower cost trends, minimize employee absence and earn higher rates of employee satisfaction with their programs.

Rather than using financial incentives to encourage seriously ill hospital patients to reduce plan spending, directing them to high-quality delivery centers will be far more effective in making them better consumers and controlling plan costs. In some areas of the country, using high-quality care centers may cut plan expenditures for the most expensive cases in half.