Healthcare Soundoff. Tracking Today's Vital Issues.

Health Benefit Trends (11/13/2007)

Most employer health benefit plans cost about $4,000 per employee.  Healthcare benefit costs are rising at a rate of 10% per year.  This means that by 2010 health benefit costs will increase to $5,300 per employee.

Chances are your employer’s health insurance will change as a result of rising costs.  Two trends are dominant.    The first is that employers are shifting more expenses to employees.  The second is that employers are trying to find ways to keep their employees healthier.

The shift of healthcare costs to employees usually involves either more expensive premiums for the employee or lower benefits.  It is inevitable that premium costs will rise for employees.  Even if employers keep their share of monthly premiums at the same percentage as last year, if total premium costs rise, the employee share will go up too. 

On the coverage front there are a variety of plans being instituted by employers.  A recent study by SHPS, Inc. surveyed 115 large and midsize employers representing 3.7 million members.  The purpose of the study was to determine what practices by employers were effective in lowering healthcare costs.  The study showed that:

1.      Clinically based care management programs that were customized to the needs of the employee population lowered costs.

2.      Cash incentives that reward healthy behaviors lowered costs.

3.      Higher deductible consumer directed health plans did not lower costs.

4.      Wellness promotion and education increased costs when web portals or telephonic coaching methods were used.

5.      Using deductibles and co-pays to influence employee behavior increased costs.

The entire study can be found at www.shps.com/2007healthstudy.

Healthcare Soundoff is not surprised that wellness promotion and education using web portals or telephonic coaching increased costs.  For the most part in order for health behavior to change clinicians need to be able to regularly communicate in person with patients.  An article called the “The Bell Curve” in the book Better by Atul Gawande proved this point some years ago.

Using higher deductibles and co-pays also has been surveyed by the Commonwealth Fund.  They found that people would go without care because of higher costs.  Better yet, 42% of those with chronic conditions said higher healthcare costs kept them from taking prescription drugs.  Our recent commentary on “Other People’s Money” supports these findings as well.

So what does Healthcare Soundoff expect employers to do to hold down rising healthcare costs?

• Expect employers to implement health risk assessments.  You can read more about them in our archives.  You will be asked to answer a questionnaire about your health habits and family health history and get some lab tests to determine your health risks.
• Expect employers to examine employee health claims to determine who is at risk for an expensive health event.  This is called “predictive modeling.”  Every time you go to the doctor or other healthcare provider a claim for payment is filed.  The claim contains codes for the services you received.  By looking at your previous claims and those codes, computer programs are able to predict whether you may have a future health problem.
• On the basis of the health risk assessments and health claims examination, expect employers to develop clinically based programs to address the health risks revealed by the assessments and computer programs.  This means engaging employees and their doctors to address health problems by improving the relationship you have with your doctor and helping the doctor direct your care.
• Expect employers to invite clinicians to regularly appear at the worksite to address healthcare risks.
• Expect employers to institute financial rewards for good health behavior (like stopping smoking) or penalties for poor health behavior (like higher costs for health insurance).

Big changes will occur at your workplace in the near future.  Healthcare Soundoff has noted a few that are already in place.  Knowing what to expect is part your employee responsibilities regarding the costs of healthcare.  If your company is doing something not mentioned we would like to know about it.  Post a comment or send us an email at info@healthcaresoundoff.com.