According to a study by the Government Finance Officers Association (GFOA) of its members, 79% said they’re placing a greater emphasis on preventive care, and 77% said they’re promoting healthy behaviors as a cost-control technique. An equal number said they’ve established Section 125 “cafeteria” plans and are focusing on maximizing participation in pre-taxed benefits. Only 4% said they planned to eliminate health benefits.
The study also showed the most common cost-savings techniques were not always the most effective. Health plan design changes, including carving out pharmacy benefits, expanding use of generic drugs, implementing health savings accounts and tightening provider networks, were the fourth most often-cited strategy at 71%. Yet just over half of those making health plan design changes strongly recommended that strategy to others. In fact, some strategies getting the strongest endorsements apparently aren’t being widely implemented.
Moving noncore benefits to employee-paid voluntary benefits was recommended by 87% of those who implemented this change, but only a third of employers have done so. Using a benefits carrier to handle benefits education and communication was recommended by 84%, but just over half have made this move.
Study participants who implemented cost-control strategies reported significant savings in their employee healthcare benefits. More than half (55%) of government employers reported saving at least 6%, and 40% of them saved more than 10%. However, a quarter of respondents said they didn’t know how much they’ve saved.
A report based on the survey, “Containing Health Care Costs: Proven Strategies for Success in the Public Sector,” is available at www.coloniallife.com.