Companies Mull Ways to Improve Health Care Strategies

June 6, 2013 ( – To mitigate rising health care costs, more companies are considering strategies to improve how they pay for health care services, according to a survey.


In a survey by Aon Hewitt, 53% said moving toward provider payment models that promote cost effective, high-quality health care results will be a part of their future health care strategy, and one in five identified it as one of their three highest priorities.

“As health care costs continue to rise, a growing number of employers want to ensure that the health care services they are paying for are actually leading to improved patient outcomes,” said Jim Winkler, chief innovation officer for Health at Aon Hewitt. “Just as employers are requiring more of their employees to take control of their health, employers are seeking to hold providers more accountable. They are beginning to work directly with health plans to embrace more aggressive techniques to reduce unnecessary expenses and create more efficiency in the way they purchase health care.”

Employers are looking at focusing more on pay-for-performance models. Thirty-one percent of employers said they decrease or increase health care vendor compensation based on specific performance targets, and another 44% are considering doing so in the next three to five years. Additionally, while just 14% of employers currently use integrated delivery models, including patient-centered medical homes, to improve primary care effectiveness, another 61% plan to do so in the next few years.

”Vendor accountability models are moving beyond process-based metrics, such as customer service call answering speed, and shifting to ones that focus on fees at risk for clinical health risk improvement and overall medical spending increases,” said Tim Nimmer, chief health actuary for Aon Hewitt.

While utilization is low today, the survey revealed a growing number of employers also are interested in adopting reference-based and value-based pricing models in the next three to five years. These findings include:


  • While just 8% of companies today limit plan reimbursements to a set dollar amount for certain medical services where wide cost variation exists, almost two-thirds (62%) are considering adopting this type of reference-based pricing model in the future. According to Aon Hewitt, this type of approach has been commonplace for prescription drug coverage, with many employers requiring participants to pay the full cost difference between a brand name drug and its generic substitute.
  • Fifty-nine percent of employers plan to steer participants—through plan design or lower cost—to high-quality hospitals or physicians for specific procedures or conditions.
  • Thirty-eight percent of companies plan to participate in cooperative purchasing efforts with other employers or groups (coalition-based pricing). Twenty-one percent do so today.

”Employers are increasingly gaining comfort with the notion that they do not need to pay for the wide cost and quality variations that exist in today’s health care system,” Winkler said. “Their efforts to reduce inefficiency and shift the payment focus toward services and providers that produce higher quality outcomes are only just getting started. It is a shift that our health care system certainly needs.”

The Aon Hewitt survey polled nearly 800 large and mid-size U.S. employers and covered more than 7 million employees.