Over the last four years health care cost increases have leveled out at around 6%. This flat trend may have created a false perception that it is possible to maintain these small increases into the extended future.

That's not the case and many company executives received a rude awakening upon reading the "Health Care Reform: The Perils of Inaction and the Promise of Effective Action" report from the U.S. Business Roundtable.

One of the key findings in this report indicates that without significant changes, annual health care costs for employers will increase from $10,743 (average per person per year) to $28,530 by 2019. Find all the details at www.businessroundtable.org/healthstudy.

As the title of the Roundtable report suggests, U.S. businesses now find themselves in positions in which it is imperative to take action in order to prevent the approaching train wreck.

Companies tend to overlook the fact that health care reform has to occur on more than one level at the same time.

If companies sit idly by waiting for our representatives in Washington to figure out how to extend coverage to the 46 million uninsured without spending more money, they'll be in sore shape to deal with any increases at all.

The following five steps will deliver immediate cost reductions significantly faster than any federal health care reform ever could and they apply to every company, no matter the industry or size.

1. Don't implement a wellness program.

If you want to remove the barriers of the third-party-payer system and at the same time encourage employees to make better lifestyle choices you don't need a stand-alone wellness program.

What you need is a health promotion program that is fully integrated with the delivery of your benefits while offering powerful incentives. Incentives are effective if they have the power to inspire 80% or more of your workforce to actively participate in your health promotion initiatives.

Health promotion and wellness might be considered synonyms but I would recommend staying away from the word wellness.The term wellness has garnered a bad reputation in most industries because there's a rumor going around that wellness programs don't work.

Why? Because too many companies continue to regard wellness as a one-size-fits-all solution that will solve their health care problems. It will not and it cannot.

2. K.I.S.S. (Keep It Simple Stupid)

Regardless of the label you use to describe your health care cost management efforts, make sure that you keep your solution simple. I had the opportunity to discuss the subject of health promotion with a senior executive of a national health plan just a few weeks ago. He indicated that the majority of companies are investing in some form of health improvement efforts, but most of these programs have become so complex that it is difficult for employees to understand them, let alone for management to oversee them efficiently and for HR or the benefits team to administer them. You don't need another headache; keep it simple.

3. Partner with your workforce.

Before you even begin contemplating how to cut health care costs, consider that this also presents a great opportunity to partner with your workforce. This is especially important if your target is to achieve high levels of participation. Create buy-in early in the process by considering the needs and interests of your employees. Your company's ability to provide health care coverage in future years is something that employees have a vested interest in. Give them the statistics from the U.S. Business Roundtable report and help them to acknowledge the 800-pound health care cost gorilla that has been sitting in the room for a while. Communicate your goals to your employees and don't be afraid to ask for their help.

4. Take action now.

Don't wait for the government to present a solution. You could be waiting a very long time and you will lose valuable time. As an employer, you have untapped possibilities to manage health care costs by removing the barriers of the third-party-payer system and by influencing the lifestyle choices your employees are making day in and day out. Take initiative and get one step ahead today.

5. Develop your own strategic plan

First understand what matters most in managing health care cost. What is driving your cost? Write down all of the health care cost drivers you can think of on a sheet of paper, take a step back, and see if you can boil them down to one common denominator. How would your medical claims change if your employees drank more water, were more physically active, ate smaller portion sizes and smoked less? You would be able to cut your health care cost by more than 50% (and I would suggest even by more than 75%).

Contributing Editor Michael Puck, SPHR, is the benefits practice leader for 33,500 employees at a global defense, security and aerospace company, author of "Health care Cost Management - The High Road" and founder of www.8020wellness.com.

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