How to reduce employer healthcare expenses with preventative MSK care

Healthcare expenses are one of the most pressing challenges for employers today. Premiums, claims, and hidden productivity losses add up quickly, and the numbers keep climbing. In 2024, family premiums for employer-sponsored coverage rose 7 percent to $25,572 on average, outpacing wage growth for yet another year.¹

For benefits leaders, this creates a difficult balance: protecting the bottom line while providing meaningful coverage for employees. Shifting more costs to employees may relieve short-term pressure, but it often backfires. When employees delay or skip care, expenses resurface in the form of higher claims, lower satisfaction, and greater turnover.

The good news is that not all healthcare expenses are beyond your control. By focusing on preventative, high-value care and choosing vendor partners who guarantee results, employers can reduce spend while improving the health and experience of their people. Musculoskeletal (MSK) care is one of the clearest examples.

The full picture of employer healthcare expenses

Most employers focus on visible expenses: premiums, deductibles, and claims. But that is only part of the picture. Hidden costs, such as absenteeism, presenteeism, and disability claims, can add as much as 30 to 40 percent on top of direct medical spend.²

Consider MSK pain. Employees struggling with back or joint issues often miss work or perform at reduced capacity. Sword Health’s data shows untreated MSK conditions cost employers an average of $2,916 per member per year in lost productivity alone.³

When these hidden costs are overlooked, the total impact of healthcare expenses is consistently underestimated. And when leaders underestimate the full picture, they can miss opportunities to take meaningful action. That is why analyzing one of the biggest and most preventable categories of spend, MSK, is so important.

Why MSK care is a top cost driver

MSK disorders account for the single largest healthcare cost category in the U.S., surpassing cancer and cardiovascular disease.⁴ They account for hundreds of billions in direct medical spend each year, plus billions more in lost productivity. The challenge is not just how common MSK issues are, but how easily they escalate:

• A minor back strain may begin with an office visit and pain medication.
• Without timely physical therapy, it can progress to an MRI, injections, or even spinal surgery.
• Each step raises the bill: a $200 therapy session can balloon into a $20,000+ surgical claim.

Research shows that when physical therapy is initiated early, total costs fall significantly. In fact, starting PT within three days of low back pain onset reduces the cost of care by up to 54 percent compared to waiting four weeks or longer.⁵

For benefits leaders, this is a reminder. It is not only about the high-dollar claims that appear at renewal time. It is about the small issues that quietly grow into tomorrow’s big-ticket expenses.

The multiplier effect of delayed care on healthcare spend

Healthcare expenses do not just add up. They multiply. For frontline or manual workers, an untreated MSK condition increases safety risks and workers’ comp claims. For desk-based employees, pain leads to reduced focus, absenteeism, and higher disability claims.

MSK is also linked to mental health challenges. Employees in pain are more likely to experience depression, anxiety, and sleep problems.⁶ These co-occurring conditions drive additional healthcare expenses and prolong recovery.

This multiplier effect makes MSK one of the most powerful levers employers can pull to contain healthcare expenses. And yet, it is also one of the areas where employers have the clearest opportunity to change outcomes for the better.

How digital-first care reduces MSK care expenses

Traditional PT models make access hard: long wait times, travel to clinics, and rigid schedules. These barriers lead to dropout rates as high as 50 to 70 percent.³

Digital-first care removes these friction points. With Sword Health, members can:

• Begin treatment in an average of 6.3 days⁷
• Complete programs at an 81 percent rate, nearly double traditional PT³
• Access care outside business hours, with 42 percent of sessions happening evenings or weekends³

When care is available on-demand, more people finish their treatment plans and recover fully. And when more people recover, the expense curve shifts: fewer surgeries, fewer repeat claims, fewer disability days.

This is not just a better way to deliver PT. It is a smarter way to control healthcare expenses at the population level.

Digital MSK drives savings beyond medical claims

Reducing medical claims is important, but the ripple effects matter just as much. Sword Health reduces MSK-related medical expenses by an average of $3,177 per member per year.² But the full impact is broader:

• Productivity recovery worth $2,916 per member per year³
• 64 percent reduction in depression symptoms⁶
• 50 percent reduction in anxiety symptoms⁶

When employees feel better, they perform better. That means healthcare expenses shrink not just on paper, but in the lived experience of your workforce.

For benefits leaders, this turns cost containment from a defensive strategy into an opportunity: healthier employees, stronger retention, and sustainable spend.

Predictive analytics can help prevent downstream MSK costs

Even with strong preventative care, some claims will always pose a risk. But many of the costliest MSK events can be predicted before they happen.

Sword Predict uses AI to identify members at risk of costly surgeries or imaging. By reaching out up to eight months earlier and guiding those employees into conservative care, employers avoid claims before they hit.

The result is measurable. Employers see up to 4.4x ROI in high-risk populations.² Instead of waiting for claims to escalate, leaders can proactively shape outcomes.

Sword’s outcome-based pricing model also ensures employers only pay when members achieve meaningful improvements in pain, function, or productivity. This shifts risk off the employer and onto the vendor. Finance teams gain defendable ROI. HR leaders can demonstrate value with transparency. And employees get access to care that actually works.

When all sides win, reducing healthcare expenses becomes a sustainable strategy rather than a temporary fix.

Start reducing healthcare expenses with smarter MSK care

Healthcare expenses will always be a significant cost center. But they do not have to be a runaway line item. By focusing on hidden costs, preventing small problems from becoming big ones, and holding vendors accountable for results, employers can bend the expense curve without cutting benefits.

MSK care is a prime place to start. Sword Health combines digital-first access, predictive analytics, and outcome-based pricing to deliver proven results for both budgets and employees.

For leaders under pressure to control spend while caring for their people, this is one of the clearest wins available: better care, lower expenses, and stronger long-term health outcomes. Set up a call with a Sword expert today to see how you can start delivering more effective care for your people.