Health Care Offerings Good, but Cost Hurts Fast-Growing Businesses

November 14, 2007 ( - According to the most recent PricewaterhouseCoopers (PwC) Private Company Services' Trendsetter Barometer, 57% of fast-growth private businesses claim to have suffered a negative impact from increased health care costs over the past 12 months.

A PwC press release said 43% of companies reported higher costs contributed to slower profit growth. Nearly half (42%) of the “Trendsetter” CEOs said their costs of providing health care benefits to employees are higher than those of large, public companies, but 31% disagreed.

Of those claiming higher costs, 55% do not believe they are at a disadvantage in competing with public companies for talent, while 42% do, the release said.

Most private company CEOs (58%) said their current health care plans are “successful”, while 21% said their plans are only “moderately successful,” and 14% reported mixed or no success. However, nearly half indicated they have no metrics in place to objectively measure the effectiveness of their health care plans.

Reported measurements of health care plan success included:

  • Improved employee morale – 32%,
  • Lower health care claims and costs – 18%,
  • Increased productivity – 11%,
  • Reduced absenteeism – 10%,
  • Improved employee health – 9%, and
  • Misc. – 16%.

The study found these companies are not utilizing options that could help lower their health care plan costs. Most (68%) companies offer employees a PPO Plan, and 46% offer an HMO Plan. However, only 6% reported they offer a consumer-directed health plan, and only 28% offer a wellness program.

Those that do offer wellness programs emphasize health care information services (88%) and exercise programs (71%).

PricewaterhouseCoopers’ Trendsetter Barometer tracks the business issues and best practices of privately-held companies identified in the media as the fastest-growing U.S. businesses. The results incorporate the views of 291 CEOs: 130 from companies in the product sector and 161 in the service sector.

More data can be found at .