Benefits June 28, 2004

Companies Bend Under Health-Care Cost Weight

June 28, 2004 (PLANSPONSOR.com) - Continued cost increases in health-care over the past few years have forced 75% of companies to make changes in their health-care plan design.
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Looking to curtail health-care cost increases, companies are turning toward preventative measures, including 67% of the 373 HR professionals polled that are providing participant incentives to encourage healthy behavior. To do this, 76% of respondents report using Employee Assistance Programs to promote healthy lifestyles. Additionally, more than half (52%) use educational programs to inform employees on how they can take steps to improve their overall health, according to the 2004 Health Care Survey by the Society for Human Resource Management (SHRM).

Other moves include some companies (16%) partnering with other organizations to purchase health-care coverage collectively to receive discounted group rates. Additionally, 74% of survey respondents support legal changes to allow employees to band together to purchase health care coverage.

Not surprisingly, given year after year of double-digit cost increases, SHRM found cost was the number one factor in evaluating health care plans, with 93% of organizations using cost as a prime piece of data in health care evaluation. By comparison, 44% of companies evaluate their health plans based on quality of treatment, 14% evaluate the outcomes of treatment and 7% evaluate provider availability.

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