Employers Still Worrying Over Health Cost Hikes

September 27, 2005 (PLANSPONSOR.com) - Employers now fret as much about health care costs as they do about labor expenses even as they continue shifting health cost hikes to their workers.

A news release from Buck Consultants about its National Health Care Strategy Survey said the poll found that 60% of respondents ranked health care as their first or second greatest business cost concern – more than any other cost.

While 82% of respondents are very concerned or greatly concerned about current health care costs, even more (86%) are worried about future health care costs – namely, five years from now.

Health care cost control strategies are evolving. By far, the most common current strategy is cost-shifting to employees. However, respondents believe that, in the future, the most successful strategies will be employee-centric, according to the poll. These future strategies will be aimed at giving employees more accountability for health care decisions, educating employees to be knowledgeable consumers of care, and providing incentives to adopt healthy lifestyles.

“Interestingly, our study found that cost-shifting to employees is the most common strategy currently used to control costs,” Dr. Phillip Polakoff, a Buck Principal and head of its Lifetime Health Strategy practice, said in the news release. “But respondents who rely primarily on cost-shifting actually report less success than others in controlling costs.”

Other survey findings included that:

  • The three factors that employers think have the largest effect on current health care costs are employees’ attitude that they are entitled to benefits, employees’ insensitivity to the real cost of health care, and poor employee health habits and lifestyle.
  • Organizations reporting success in controlling health care costs tend to employ health risk assessments, wellness programs, employee education, and systems that track employees’ health-related behavior changes.

Respondents believe obstacles exist in giving employees more accountability for managing health care decisions. The most common obstacles include:

  • employees’ lack of preparedness for added financial risk
  • employees’ sense of benefit entitlement
  • employees’ current inability to make informed health care decisions
  • the lack of reliable data on quality of care.

The survey was conducted in the second quarter of 2005 and covered nearly 400 US employers. Respondents had an average of 11,000 employees. The survey is available for $200 by contacting Shawn Garcia at 203-352-1630 or at www.bucksurveys.com .