Employers' response to health care costs
Hewitt Associates
Press Release
December 2, 2003
Hewitt Study Shows Employers Critically Concerned with Health Care
Costs and Looking for Creative Solutions
Employers are struggling to cope with continuing double digit health care
cost increases, more interested than ever in consumer-driven plans and actively developing strategies and economic incentives to drive and enable better employee health care decisions, according to a new survey by global human resources outsourcing and consulting firm Hewitt Associates.
Hewitt’s survey of nearly 650 major U.S. companies revealed that companies
anticipate an average health care cost increase of 14 percent for 2004, but can only afford to absorb an increase of 9 percent.
Companies’ interest in implementing consumer-driven health plans as a means to control costs continues to grow, according to Hewitt’s survey. The most common consumer-driven models currently in use or planned for 2004 are customized design plan, which allows employees to customize their benefit options, levels and contributions for physician, hospital and pharmacy benefits (13 percent of companies surveyed) and health accounts plus high deductibles (12 percent).
Consumer-driven health plans that combine a health reimbursement account
with PPO coverage after a bridged deductible are also growing in popularity…
… the number of employees and participants in consumer plans will grow
exponentially over the next five years…
Employer confidence in employees’ taking greater responsibility for making
health care choices is growing…
Employers Look to the Government for Help
While the overwhelming majority of employers do not support national health
care, an increasing number feel that the government should play a limited
role in helping control skyrocketing costs and in making legislative changes to help drive consumerism, such as mandating quality reporting by hospitals and physicians (85 percent), requiring providers to disclose prices publicly (70 percent), mandating uniform provider data and payment reporting if long-term savings outweigh costs (64 percent) and allowing U.S.consumers to purchase prescription drugs from foreign countries (47 percent). More than half of all respondents (58 percent) indicated that they feel the federal government should make Medicare available to retirees ages 55-64 at their own cost.
http://was4.hewitt.com/hewitt/resource/newsroom/pressrel/2003/12-02-03.htm
The Hartford Courant
December 3, 2003
Employers Shift Health Care Costs In New Ways
By Diane Levick
… Hewitt survey …
Though still in the minority, 21 percent of large employers think the government should develop a universal health care system, compared with 17 percent in last year’s survey, according to Hewitt. Half the employers this year oppose a universal system, and the rest weren’t sure.
http://www.ctnow.com/business/hc-healthsurvey1203.artdec03,1,5493792.story?coll=hc-headlines-business
Comment: Pro-market, MBA-type responses would be expected from this survey
of health program managers of large, mostly self-insured employers. So it is
no surprise that support for a universal health care system remains quite
modest, though growing. It is also no surprise that marketplace advocates are willing to compromise their purity by advocating for government solutions that distort or even nullify markets when it is to their benefit.
This pro-market, anti-government bias leaves the thinking of the MBA health
managers confined within their traditional boxes. Their rigid thinking is
leading to conclusions that costs need to be shifted from employers to employees through consumer-driven strategies. But by accepting the market as
being less fallible than the government, it leaves in place market mechanisms that are continuing to drive costs up well in excess of inflation, and that are shifting more costs to the payers as a result of the highly inequitable method that the marketplace uses to fund health care. The MBA health managers need to move their thinking out of the marketplace box, and look also at other solutions that would control costs and ensure equitable funding.
A government-run, taxpayer-financed program of national health insurance
would contain costs and would establish an equitable method of funding
care. And it would do so without the necessity of establishing consumer-driven
financial barriers to beneficial care. And who more than MBAs would understand the benefits of the well-documented administrative efficiency of public insurance when contrasted to private plans?
MBAs instinctively should support a system that would finally contain health
care costs and would do so equitably. The business community would greatly
benefit from a universal program of social insurance. Business leaders
and their MBA advisors need to expand their list of reform options under
consideration. It is our task to be certain that they are more thoroughly
informed on the universal, publicly-funded and publicly-administered
model.
When ideology is set aside, and all options are assessed objectively, employer support of a government insurance system should be an inevitability. In fact, a majority already support expansion of eligibility for Medicare, a government insurance system. We’re part way there.