Landmark health care reform legislation, coupled with an uncertain economy, is sharpening employers’ focus on new strategies and tactics to mitigate costs and improve worker health and productivity, according to the findings of the 16th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care. Many employers are taking bold actions, and implementing new health benefit program changes to drive employee and provider accountability. What’s more, some employers are viewing the coming years as a unique opportunity to reshape their total rewards portfolio and make critical changes to their employee value proposition.
To help us assess emerging trends in employer-sponsored health care programs, nearly 600 survey participants provided detailed information about their health care programs, their strategies and practices, and the results of their efforts to manage health benefit costs and improve employee health.
Key Findings
Taking bold actions to manage costs and offer affordable care
In 2011, total health care costs per active employee, on average, are expected to reach $11,176, up from $10,387 in 2010 (Figure 7, page 5 in the report). In fact, employers pay 36% more for health care, and employees contribute over 45% more than they did five years ago. To mitigate costs, employers are redefining their financial commitments to health benefits by redesigning programs to incorporate enhanced point-of-care consumerism, positioning incentives more aggressively and redefining the employee versus dependent subsidy. Further, coming changes in the pre-65 and Medicare marketplace are fueling some employers to reconsider their commitment to retiree medical sponsorship.
Engaging all stakeholders in costs and care
Health care reform is providing employers with a catalyst to further engage all health plan stakeholders to hold the line on costs and focus on quality of care. For example, employers are designing creative engagement approaches, applying new ideas, such as behavioral economics, and leveraging social media to communicate critical messages.
Setting their sights on bigger changes ahead
While organizations have responded to the initial wave of mandates and regulatory changes under the new health care reform law, employers expect even bigger changes in the not-too-distant future with the opening of the insurance exchanges in 2014 and a potential excise tax, which takes effect in 2018 (Figure 16, page 9 in the report). Rather than rely on incrementalism, employers are considering significant changes in their health care strategy to stave off the excise tax.
Improving workforce health
Employers remain strongly committed to improving the health of their workforce. Along these lines, many employers are expanding the use of employee incentives to participate in lifestyle coaching, complete biometric screenings and take advantage of other measures (Figure 25, page 15 and Figure 26, page 16 in the report). Employers are also encouraging vendors to coordinate care, implement evidence-based treatments and use emerging technologies aimed at improving quality and efficiency (Figure 24, page 15 in the report).
Linking benefits, health and productivity
Taking a page from consistent performers’* playbook, more employers are monitoring their health plans and programs, and measuring results. These employers are assessing program performance, pinpointing areas that need improvement and targeting future investments (Figure 33, page 20 in the report).
What’s Next?
Health care reform provides employers with an unparalleled opportunity to reassess their health care strategy and consider where health benefits fit within their total rewards package and their overall business strategy. Those organizations that are thoughtful and nimble in assessing the post-health care reform landscape will position themselves to profit from the myriad larger opportunities that lie ahead.
Our survey report offers a detailed look at the changing dynamics in health care benefits and workforce health.
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