News & Information

CCH® HR MANAGEMENT - 5/19/08

Employers shifting toward value-based benefits design, survey shows

As the U.S. economy struggles, value-based benefit designs and consumer engagement strategies are gaining in popularity, according to a nationwide survey of US employers released on May 1 at the annual conference of the Midwest Business Group on Health (MBGH), a nonprofit coalition of more than 90 private and public employers that spend more than $2.5 billion on health care benefits annually.

In its 2008 "Readiness to Change" survey, employers were asked their views on the value of health care. "We've found that employers are shifting their view of health benefits from that of a necessary expense to a critical investment in the health management of their employees," said Larry Boress, MBGH president and CEO.

According to employers, key benefit priorities for 2008 include: getting employees more engaged in maintaining their health; improving chronic disease management; reducing the cost of benefits; improving utilization of preventive services; incorporating incentive programs to increase utilization of wellness/health promotion programs; and education efforts to help employees manage their health care finances.

Highlights of the 2008 survey findings include:

• Value-based benefit designs are gaining in popularity and there is an increasing trend to provide incentives for participation in wellness, disease management and adherence programs. Employers are reducing cost share to employees—for example, 62 percent of employers will waive co-pays or reduce costs for certain drugs to get employees to participate in disease management programs. Seventy-two percent of employers agree that using drugs proven effective for a condition will reduce other services for that condition.
• Quality information is still lacking; however, it's of growing importance to employers and consumers. For example, 85 percent of employers want health plans to provide members with the cost of physician and hospital services and a majority of employers agree information is not available for employees to make informed choices on quality of physicians (64 percent), effectiveness of drugs (56 percent) and quality of safety of hospitals (54 percent). Further, 59 percent of employers believe employees would change to better-performing providers if they understood how quality varies and affects outcomes.
• Employers see value in collecting productivity data, yet few are doing so. While 66 percent of employers see value in surveying employees on how their health impacts their performance at work, only 12 percent of employers surveyed collect productivity data and 64 percent of these employers collect productivity data through a Health Risk Assessment. Company data and experience is the number one influencer (95 percent) of benefit design strategy.

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