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Five Questions for Ted Nussbaum

Ted Nussbaum, Watson Wyatt's director of group and health care consulting service in North America, advocates consumer-driven health care to help contain costs.

March 3, 2006

Ted Nussbaum
Watson Wyatt Worldwide

Ted Nussbaum has held various leadership roles since joining Watson Wyatt in 1993, culminating in his recent appointment as director of group and health care consulting services in North America. A consultant for more than 30 years, Nussbaum has witnessed the evolution of the health care benefits industry--from the days of trying to control costs by managing the provider side of the equation to today’s modern approach of managing the consumer side. Nussbaum recently spoke about consumer-oriented health care plans with Workforce Management staff writer Gina Ruiz.

Workforce Management: Consumer-oriented health plans are in the spotlight today. What are some of the nuances in this area that have not yet been fully explored?

Ted Nussbaum: Many companies are unaware that there are cultural and behavioral dynamics involved in consumerism. This stuff is new for many workers, and they don’t necessarily know how to make the most of it. Employers can provide a helping hand by designing a well-thought-out information and educational strategy that influences behavior. This is just as important as implementing the actual consumer plan.

WM: Are there any words of wisdom for companies considering launching consumer-oriented health programs?

Nussbaum: It is critical to make this type of decision using evidence, rather than intuition and good wishes. Companies should have a clear vision of what they want to accomplish and have a system in place to measure the outcome. But companies should have realistic expectations of what consumer-oriented plans can deliver.

WM: How can a company determine whether it is ready to take the consumer leap?

Nussbaum: A good rule of thumb is to compare your performance relative to that of best-practices companies. Companies in this echelon have below-average rates in absenteeism, presenteeism and are on the lowest quartile of medical cost increases. The level of success that a company experiences with consumer-oriented health plans is a function of where it is on the continuum of best practices.

WM: What makes best-practice companies most ready for consumerism?

Nussbaum: If you are moving along the continuum of a best-practices company, chances are your organization already has dynamic health care programs in place. These companies are probably implementing lifestyle-change programs, running health-risk appraisals and segmenting their workforce population to understand their health status. This makes for a workforce that is more engaged and savvy about health care plans, and therefore better equipped to make the transition to more sophisticated consumer-oriented health programs.

WM: What is the most important way employers can bring down health care costs?

Nussbaum: We recommend for companies to run a return-on-investment analysis of their health care programs. What is the dollar-for-dollar value of the lifestyle-change programs, the medical programs and the health-risk appraisal efforts? The return-on-investment analysis is important because it lets companies have a better understanding of how they are performing. Management can then step in to tweak their plans--enhancing activities that render value and minimizing those that don’t.

Workforce Management, February 27, 2006, p. 7 -- Subscribe Now!