Fiscal Responsibility in Healthcare for Municipalities

Local and state governments manage effective spending across multiple critical categories, such as public welfare, elementary and secondary education, housing, hospitals, police and more. In addition to providing public services that make smart use of taxpayers’ dollars, municipalities also have to pay salaries and benefits for the employees who oversee this foundational work. 

Managing employee labor budgets becomes increasingly difficult, as the cost of healthcare has consistently risen over the past few years, and is expected to grow to its highest level in years in 2026, according to PwC’s newest research into annual medical cost trends.

PwC projects an 8.5% year-on-year increase in group market medical cost trend for 2026. This puts municipalities in a tough position of deciding whether to pass more cost to employees or reduce the available budget for public services to keep up with rising costs.

Many municipalities have taken matters into their own hands, saving money and increasing worker health through employer-sponsored healthcare. 

What is fiscal responsibility in healthcare?

Fiscal responsibility in healthcare means managing costs sustainably so the system doesn't spend more than it can afford while still delivering quality care.

In practice, based on the PwC report, this involves:

• Controlling rising costs: medical cost trend continues to rise, pressuring everyone in the system to spend smarter.
• Efficient use of resources: health plans are embedding AI into care management and cutting underperforming programs  to reduce waste.
• Smart drug spending: drug spending grew by $50 billion in 2024, pushing plans to tighten pharmacy oversight and embrace biosimilars.
• Data-driven decisions: using claims analysis and benchmarking to avoid overpaying providers.

The bottom line: spending wisely today to avoid a bigger financial crisis tomorrow.

How employer-sponsored care can help

Municipal employers realize significant savings by leaving the fee-for-service healthcare model behind in favor of accessible value-based care. Marathon Health offers that care direct to municipal clients in a few ways:

• Onsite and nearsite health centers: Private health centers at or near the workplace. The City of Plantation has saved $6.7M over 12 years with this approach. 
• Network health centers: Mecklenburg County employees and their families enjoy the convenience of visiting a health center both close to work and home with this access model.
• Virtual primary care: Virtual health centers staffed with providers licensed for all 50 states.

When employers utilize Marathon Health, they see:

• 42% reduction in ER & inpatient costs
• $1,800 annual savings per engaged employee that uses Marathon Health
• 42% reduction in emergency room and inpatient costs

Improved engagement and health

The rising cost of healthcare unfortunately doesn’t equate with increased wellness. In fact, health access and outcomes continue to decline in the U.S., based on research by The Commonwealth Fund. 

“We currently live in a reactive sick care system that's unconnected,” says former Marathon Health VP and HealthCare Consultant Eric Neuville. “It's a relative value unit system, so the more medical professionals do, the more money they make.”

But in a value-based model, providers are rewarded for helping patients improve their health. In addition, employees gain increased access to care, making them more likely to engage. 

In the City of Plantation, more than 96% of employees utilize the health center.

"I like to look at the health center data, and for me, the biggest thing is to make sure the employees are engaged, especially the high-risk employees and those with chronic conditions," says Beverly Ambrosio, City of Plantation Benefits and Wellness Manager. "It's key because it tells us they're working to make improvements."

Marathon Health statistics show:

• 95% satisfaction rate
• 67% of patients improve biometric measures

“If you improve the wellbeing of your employees, they're more productive at work,” Neuville says. “With improved outcomes, you save on overall costs. Anyone can provide a free gym membership, and that’s cool. But free healthcare, including behavioral health and patient navigation, that’s life changing.”

Marathon Health serves more than 180 public sector organizations nationwide, representing hundreds of thousands of patients. Learn more about cost-saving solutions for public organizations.