Employers not Doing All Possible to Manage Health Care Costs

May 11, 2006 (PLANSPONSOR.com) - Employers surveyed said they anticipate a 10% increase in the cost of providing health care to their employees in 2006, but can only afford 7%.

In summarizing the survey findings, Hewitt Associates said, though employers expressed this is a major issue for them, only 32% report having a written health care strategy to manage the expense.

The survey shows employers are not taking advantage of all possible options, despite their interest in doing so, Hewitt said. Three-fourths of survey respondents feel that offering employees tools and programs to better manage their health can lead to moderate to significant savings, yet few employers are providing provider performance data or following up on health risk questionnaires to move employees to manage their health.

The interest in these strategies implies that consumerism will be a continuing trend in health care, though, according to Hewitt. Eighty-two percent of employers expressed interest in health accounts tied to high-deductible plans, such as health savings accounts (HSAs). Nearly 60% of employers provide access to targeted condition management or wellness programs.

Ninety-six percent of responding employers said their greatest opportunity to create a proactive health care consumer is communication and education. However, employers indicated that current health risk questionnaire participation is only 20% with little or no communication or incentives. Hewitt says the potential with communication and incentives is 80% participation.

Hewitt’s Health Care Expectations survey of more than 460 respondents gathered information on employers’ current strategies as well as future intentions. Other key findings of the survey included:

  • Cost sharing for both employee and dependent coverage is leveling off. Three-fourths of employers said they are not increasing the percentage of cost paid by employees and dependents. Of those, 5% are decreasing the percentage, while it remains the same for the remaining.
  • There is more focus on generics and three-tier structures in prescription drug plans to drive utilization and costs.
  • Employers are looking to the government to support an educated health care consumer through legislation that defines provider and health plan information. However, employers did not support benefit mandates or a government-run health care system.