Study Firms Want Workers to Be Health Care Consumers

Having already implemented simple ways to shift health care costs to employees, many employers are looking at longer-term cost containment strategies.

March 16, 2007

As employer health care cost increases have begun to stabilize, more companies are focused on engaging employees to become better consumers of health care, according to a Watson Wyatt/National Business Group on Health annual survey published Thursday, March 15.

Overall health care costs grew by 8 percent in 2006 and are expected to remain at that level in 2007 and 2008, representing sharp declines since 2002, when costs grew by 14.7 percent.

The drop can be attributed in part to employers refusing to absorb cost increases. Having already implemented simple ways to shift health care costs to employees, many employers are looking at longer-term cost containment strategies. The survey says, “Employers are establishing and maintaining a consistent cost-sharing relationship with employees.”

Experts interviewed by Workforce Management for a special report on consumer-driven health care to be published April 9 have said that most employers have already implemented changes that shift costs to employees by increasing co-pays and premiums. According to the Watson Wyatt study, 84 percent of employers have a three-tiered prescription drug cost structure in which members pay more for a brand-name drug if a generic is available.

Long-term strategies employers are now looking at include high-deductible health plans as well as benefit designs that combine higher deductibles, which force employees to take an interest in the cost of their health care, with coverage of prescription drugs and visits to doctors.

These hybrid plans can be combined with disease management tools that help those with chronic illnesses get the health care they need to stay healthy, says David Cochran, senior vice president for strategic development at Harvard Pilgrim Health in Wellesley, Massachusetts.

To this end, employers continue to offer health management programs, such as health risk appraisals and programs that help reduce obesity.

The proportion of employers offering consumer-driven health plans has increased to 38 percent in 2007 from 33 percent in 2006.

“As long as cost trend goes two, three times inflation, there will be more consumer cost-sharing,” Cochran says.

Though employers who offer consumer-driven health plans, which have a high deductible and a health savings account, say they help control costs and increase employee involvement in health care decision-making, employees are less satisfied with the plans, according to the study.

Experts attribute this to the newness of the plans and the lack of tools that support consumer decision-making, including reliable price and quality information about medical providers.

“We need to provide patients with the appropriate tools and plan design so they can sort through the complex clinical situations they are facing,” says Lonny Reisman, CEO of Active Health, a disease management company owned by Aetna.

—Jeremy Smerd