Waning confidence in the health insurance status quo

Among hundreds of executives surveyed, the economy and the prospect of reform may have raised doubts about the future of employer-sponsored health benefits.

By Emily Berry — Posted March 30, 2009

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Fewer employers than a year ago said they are very confident that big companies will continue to provide health benefits for the next 10 years. In the meantime, employees said they are tweaking insurance offerings to try to cut costs and boost quality.

In the latest survey by the human resources consulting firm Watson Wyatt Worldwide and the National Business Group on Health, 62% of respondents were "very confident" in the future of the current system, but that was down from 73% from the prior year.

The 489 respondents were surveyed between November 2008 and January 2009.

Bruce Kelley, national leader for data services at Watson Wyatt, said the survey didn't ask for reasoning behind the answers. But he speculated that the declining economy and the possibility of a national overhaul of health care probably affected the respondents' confidence levels.

"Starting in October [2008], they were laying off a lot of employees," he said. "Probably their confidence was shaken about their ability to continue to offer those benefits."

While health benefits offered 10 years from now might be tough to predict, employers continue to adjust benefit offerings to try to squeeze value out of money they are spending now. Among those is the new wave of managed care, Kelley said, renamed the "patient-centered medical home."

Despite the effectiveness of primary care coordination, because of the backlash against managed care over the last decade, employers are hesitant to push their employees too hard into a specific care setting, he said.

Ted Epperly, MD, a family physician from Boise, Idaho who is also president of the American Academy of Family Physicians, said employers should view primary care as an investment.

"It's like that old Fram oil filter commercial, 'Pay me now or pay me later,' " he said. "Just allowing reactive sick care to be what insurance pays for isn't going to keep the work force healthy."

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Pushing primary care

Many employers try to encourage employees to see primary care physicians, but fewer than half do anything other than "provide general education material."

Methods for promoting primary care In place now Planned for 2010
Provide general education material to employees and dependents 56% 6%
Designate primary care in the network provider directory 40% 1%
Waive or reduce co-pays for primary care office visits 24% 2%
Offer incentives to select or use primary care physicians 16% 3%
Provide online messages to support primary care linked to Web-based decisions 9% 5%
Steer to health management programs 21% 4%
Participate in community-based pilot program 4% 2%

Source: "The Keys to Continued Success: Lessons Learned from Consistent Performers," Watson Wyatt, National Business Group on Health, March

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Future of job-based coverage

Employers are less sure now than they were a year ago that employer-sponsored health care benefits will be maintained over the next 10 years. Here's how many said they were "very confident" that such a model still will be offered by employers in a decade.

2003 43%
2005 59%
2007 73%
2008 62%

Source: "The Keys to Continued Success: Lessons Learned from Consistent Performers," Watson Wyatt, National Business Group on Health, March

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High quality, low cost

Employers used different benefits strategies to keep health care costs under control while trying to improve the quality of care for employees. Companies were labeled on the basis of how costs were kept under control during the last two years. "Consistent performers" kept health care cost increases at a median of 2.4%. "Best performers" kept cost increases in the lowest quartile of all respondents, with a median trend of 0.5%. "Poor performers," those in the lowest quartile, have seen health care costs rise at a median increase of 10.5%. Survey respondents chose all strategies that applied.

Strategy Consistent Best Poor
Improve case management for serious conditions 58% 57% 41%
Provide employees with information on provider and/or hospital quality 62% 55% 46%
Use centers of excellence for treatments other than transplants 53% 49% 32%
Offer provider quality comparison tools 41% 37% 35%
Offer high-performance networks 23% 24% 14%
Use provider quality metrics 30% 24% 22%
Steer to PCP at times of interaction with health management programs 23% 22% 19%

Source: "The Keys to Continued Success: Lessons Learned from Consistent Performers," Watson Wyatt, National Business Group on Health, March

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