Employers Trying New Approaches To Control Health Care Costs
Having concluded that cost-shifting to employees alone is not enough to bring their health care benefits expenditures under control, some large employers are testing new health care purchasing models, according to a report on health insurance benefits strategies by Deloitte Consulting LLP and the Deloitte Center for Health Solutions.
A survey of 152 large employers indicated that most respondents currently offer PPOs (86%) and HMOs (57%) to some or all of their employees. In addition, 24% of respondents reported they are now offering a consumer-directed health plan (CDHP) as a benefit option. While the majority of employees of the companies surveyed chose to participate in PPO or HMO plans in 2006, results showed that 6% of employees had enrolled in CDHPs.
When asked which type of health plan they believe offers the most effective approach for managing costs and maintaining quality, 40% of respondents chose a CDHP; 35%, a PPO; and 18%, an HMO. Noting that a significant percentage of respondents who rated CDHPs as effective do not yet offer them, researchers speculated that growth in CDHP adoption will continue.
When asked to identify the primary driver for their company’s health care strategy in 2006, 87% of respondents cited cost; 11%, employee recruitment and retention; and 3%, the cost of health plans for retired employees. When asked which issue has the greatest impact on their health care costs, 31% named rich plan design; 22%, increasing utilization; 21%, catastrophic claims; and 16%, prescription drugs.
Shifting costs to employees was found to be the common strategy for controlling health care expenditures, with 49% of respondents citing either changes in plan design or increases in employee contributions as their primary method for controlling costs. However, researchers noted, 65% of respondents in a 2003 survey reported using cost-shifting as their main strategy, suggesting a fundamental shift in strategic direction could be underway.
The findings also indicated that growing numbers of employers are encouraging employees to become better health care consumers, while instituting wellness and disease management programs. Nearly three-quarters (74%) of respondents said they offer a disease management program, either through their health plan or a specialty carrier, and 93% reported offering some sort of wellness program, such as a flu shot, smoking cessation program, or fitness program.
