Employers Implement Creative Solutions to Control Health Care Costs

February 21, 2007 (PLANSPONSOR.com) - Preliminary findings from a forthcoming study on health-care costs show employers are implementing solutions that focus on improving employee health and access to health care in an effort to control expenses.

According to a press release from Watson Wyatt Worldwide, its survey conducted with the National Business Group on Health found more than three out of four of the surveyed companies (78%) offer a nurse line, while 72% offer health risk appraisals. The survey also found 42% of employers are implementing programs that focus on reducing obesity among employees.

To provide easier access to health care, 23% of firms surveyed have opened on-site clinics at some locations and 14% have opened on-site pharmacies, the release said.

According to survey findings, annual median increases for health care costs will remain at 8% in 2007 and employers expect cost increases to stay at 8% through 2008. The survey also showed employers seem better able to predict health care costs in recent years as 82% of respondents said their costs were at or below budget in 2006, and 84% said the same was true in 2005.

“The rate at which health care costs are increasing may be stabilizing, but it is still three times higher than the annual rate of inflation overall,” said Ted Nussbaum, director of group and health care consulting at Watson Wyatt, in the news release. “With no reduction in cost increases, it becomes even more important to engage employees to carefully consider health care choices and make the most of health care dollars.”

The 12th annual Watson Wyatt/National Business Group on Health Survey is based on responses from 573 large employers that collectively employ 11 million full-time workers. Copies of the survey report will be available in mid-March.