Employees Resist CDHP Efforts

A Towers Perrin survey found that the new employee opposition is contributing to a widening gap of views on health care that threatens to undermine employer efforts to bring workers more into the picture as active consumers. It has also compromised the perceived value of health benefits in many organizations.

“The clear trend among employers is to try to enlist employees as allies in the effort to control health care cost growth by educating them about the problem and encouraging them to be more thoughtful consumers of health care through changes in plan design and related initiatives,” said Jim Foreman, managing director of Health and Welfare for Towers Perrin’s HR Services business, in a news release. “Our survey suggests that many employees just aren’t buying it, in part because they’ve been largely shielded from the true cost of health care during the managed care era and view rising costs as the company’s problem. What comes through loud and clear in our survey is that, for employees, health care is all about me.”

For employers, the continuing double-digit growth in health care costs has sparked a growing conflict between key business and talent management goals. The vast majority of employers (92%) said that senior leaders in their organizations view health care costs as a serious business issue that must be addressed.

From the employer side, companies have no trouble recognizing the important role that health care benefits can play in attracting and retaining employees. More than three-quarters (79%) of employer respondents said their senior leadership also believes that offering competitive health benefits is critical to meeting their key talent management goals, both now and in the future.

Employers Cope With Health Cost Hikes

In response to the cost pressures, almost all U.S. employers have cost shifted to employees, either through increases in employee contributions for coverage (87% of employer respondents) or through reductions in benefit levels (81%).

Most employers are also moving forward with efforts to help employees be better consumers. For example, 71% of the employers surveyed have provided information and tools to help employees make better coverage decisions. Some 63% have introduced information and tools to help employees be better health-care consumers. Over half (52%) also introduced information or programs to encourage employees to adopt healthier behaviors, the survey found.

Also notable is that over a quarter (27%) of the participating employers have implemented consumer-driven health plans (CDHP) in the last few years, while fully half will implement or consider offering CDHPs in the next few years. Less than a quarter (23%) of the responding companies have no plans to explore CDHPs in the near term.

However, employee responses reveal that working Americans are becoming increasingly oppposed to the employers’ health care cost shifting. For example, only 28% of the employees surveyed feel it would be appropriate for their employers to ask them to absorb additional cost increases, while only 15% feel that further benefit reductions are appropriate. Last year almost half (46%) of employees in a similar survey felt it was appropriate for their employers to ask them to absorb more cost increases.

Importantly, the vast majority of the employees surveyed (82%) believe they are already good consumers – up from 72% of employees in last year’s survey.

“Employers recognize that helping employees change behavior – use health care dollars more carefully and adopt healthier lifestyles – will play an important role in controlling cost growth,” Foreman said. “But achieving the desired behavior changes will be difficult if employees think they are good consumers already and don’t trust the company’s motives with regard to costs.”

Many employees either aren’t getting the message or aren’t buying it. Notably, only a third (34%) of our employee respondents agree that rising health care costs have implications for the success of their companies (43% flatly disagree). And just over half (53%) said they believe what their companies communicate about rising health care costs.

“Our findings suggest that the disconnect may stem from the fact that many employers’ communications have focused primarily on costs and their impact on the company,” Foreman said. Only about a quarter of our employer respondents (28%) say they communicate with employees about health care issues other than costs. And surprisingly, only 31% feel that their companies have sent clear messages about what employees need to do to be effective health care consumers.

The 2004 Towers Perrin Health Care Consumerism Survey: Aligning Employer and Employee Interests, which involved a survey of more than 1,000 employees of midsize and large U.S. companies and a companion survey of executives and managers at more than 120 major U.S. firms.