2004-08-31 00:00:00

Employer Healthcare Costs Continue To Rise

Employers are facing continued double-digit increases in health care costs in 2005 and likely will require their workers to pay an even greater share of the bill, according to a new survey of more than 900 firms.

The survey, released August 26 by Mercer Human Resource Consulting, found that employers expect health care costs to rise 12.9 percent on average next year if they leave benefits unchanged.

Meawhile, payor are continuing to look at a number of strategies to control these costs and improve quality, such as disease management, consumer driven healthcare, pay for performance programs.

These strategies are being met with resistance from employees. The 2004 Health Care Consumerism Survey: Aligning Employer and Employee Interests shows a widening gap between employers and employees in terms of attitudes about health care, creating even greater challenges for employers who want and need to enlist employees as consumer allies in the fight against rising costs.

The gaps that need to be closed include:

Issue: Goals
Employers View: Employers tend to focus on the company’s interest in dealing with changes to health programs and to underscore financial concerns, both financial and emotional.
Employee View: Employees focus on their own self-interest when it comes to health care.
Solution: Successful employee outreach must include both elements.

Issue: Healthcare Consumerism:
Employers View: Employers generally don’t feel employees are strong health care consumers, making thoughtful decisions about when to seek care, the choice of provider, etc.
Employee View: Employees overwhelmingly feel they are already good consumers.
Solution: This split may reflect differences in important areas such as how to explore alternative treatments and whether the financial consideration is based on the total cost or the employee’s out-of-pocket cost.

Issue: Controlling Healthcare Costs
Employer View: Employers have typically tried to control health care costs through higher premiums, copayments and other cost-shifting measures.
Employee View: Employees, however, are increasingly resistant to such increases and even doubt they are necessary for business reasons.
Solution: This difference, which ties back to the need to appeal to employees on
more than a pure financial basis, has been fueling increased resistance to health care program changes and impeding the success of employer efforts.

Filed under: — @ 2004-08-31 00:00:00