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Survey Reveals Employers Rethinking Health Care Benefit Offerings

February 23, 2010
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A growing number of employers either have revamped or are about to revise their health care benefit strategies in response to the recession and continuing health care cost inflation, according to a survey released Monday, February 22.

Employers also are greatly concerned about their workers' poor health habits, which they cite as a primary cost driver, but also say they are disappointed in the effectiveness of vendor programs, according to the survey by the National Business Group on Health and Towers Watson & Co.

In fact, employers are so frustrated that they are losing confidence that they will be able to continue to provide such benefits in the future.

Only 57 percent said they are very confident they will continue to offer health care benefits 10 years from now, down from 62 percent in 2009 and 73 percent in 2007.

The annual NBGH/Towers Watson Survey on Purchasing Value in Health Care found that 83 percent of employers either have made significant changes or expect to revamp their health care strategies in the next two years, up from 59 percent in 2009.

These moves come at a time when median health care cost increases are projected to rise 6.5 percent—more than twice the rate of inflation.

“Employers frustrated with high costs and limited employee interest in personal health management will be forced to take more aggressive steps to drive down cost increases while keeping workers healthy and productive,” Helen Darling, president of the Washington-based NBGH, said in a statement of the survey’s findings.

“The downturn has amplified the pressure on companies to find ways to support effective health management programs under budget constraints,” Ron Fontanetta, senior consultant at New York-based Towers Watson, said in the release.

“For employers, the current environment is a clarion call to adjust their health plan strategy, reassess vendor relationships and aggressively address the challenge to encourage workers to become better advocates for their own health,” Fontanetta said.

Sixty-seven percent of employers point to employees’ poor health habits as a top challenge to maintaining affordable benefit coverage, with 58 percent indicating that the biggest obstacle to changing employees’ health-related behavior is lack of engagement, followed by lack of sufficient financial incentives to encourage participation (31 percent) and lack of an adequate health management program budget (30 percent).

In response, 66 percent of employers plan to offer financial incentives to employees to complete a health risk assessment, up from 61 percent in 2009. In addition, 56 percent of employers now offer employees access to health coaches, up from 48 percent in 2009.

However, employers said they are disappointed with vendor program delivery in this area, with 66 percent indicating that vendor programs designed to encourage lifestyle changes are not at all or only slightly effective.

The 15th annual survey was conducted from November through January with 507 employers that collectively employ 11.5 million workers. The full report will be available in March.

 

Filed by Joanne Wojcik of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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