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Hewitt Study Shows Companies Plan to Invest More in the Health of Their Employees

Posted on: Thursday, 19 April 2007, 09:00 CDT

While escalating health care costs continue to be a concern for employers, the majority of large employers in the U.S. are looking beyond cost shifting and plan to invest more in the health and welfare of their employees, according to Hewitt Associates, a global human resources services company.

Hewitt's survey of approximately 450 major U.S. employers covering more than 8 million employees revealed that almost two-thirds (63 percent) plan to take more aggressive, multiyear steps to help employees improve their health by increasing education efforts, implementing condition management programs, and using data analysis and other cutting-edge programs to improve health and productivity while holding participants accountable for their behaviors. Fewer than 40 percent plan to maintain their current focus on health care benefits--primarily concentrating on annual cost mitigation.

"Employers continue to be concerned about the cost of health care benefits, but realize that in order to fundamentally improve outcomes--and effectively lower costs--they need to begin targeting the root of the issue by directly influencing the interactions between providers and patients," said Jim Winkler, practice leader of Hewitt's Health Management Consulting practice.

"We're working with an increasing number of companies that are moving beyond current-year cost sharing and passive condition management programs. Instead, they are developing multiyear, holistic health care programs that drive behavior change by targeting the health and health risk needs of their diverse workforce, recognizing the distinct differences among consumers, patients and providers, and eliminating barriers to effective understanding, prevention and treatment."

Rewarding Employee Behavior Through Condition Management and Wellness Programs

According to Hewitt's survey, most companies are not confident that employees have the appropriate skills and knowledge to make educated health care decisions. To address this issue, almost 70 percent of companies offer or plan to offer tools, resources and/or programs to help employees better manage their health, including health risk questionnaires, decision support and nurse lines.

"These tools are designed to help employees make better decisions when they are healthy consumers, and at the same time, provide them with the advocacy and support they need when they are less healthy patients in a fragmented and complex health care system," said Winkler.

An increasing number of companies are also taking a closer look at the health risks and needs of their employee population, and offering condition management and wellness programs designed to drive participation, trigger positive changes in consumer behavior, and provide patients with additional support and guidance. More than three-quarters (77 percent) of responding companies are profiling the chronic health conditions prevalent in their workforce in 2007, compared with just 43 percent in 2006, and between 65 percent and 79 percent of companies gave employees--or planned to give them in 2007--access to targeted condition management or wellness programs through health plans or focused programs. Almost half (48 percent) also offered or planned to offer incentives to employees who participate in wellness or other health-related initiatives, compared with just 38 percent in 2006.

"Employers are applying a risk management mind-set to the asset that is employee health," said Winkler. "By obtaining insight into the health risks and chronic conditions of at-risk populations in their workforce, employers can pinpoint portions of the employee population that are the most costly and make changes to their plan designs that will drive employees to make better, more consistent decisions about their health. These types of programs not only influence healthy employee behaviors through integrated health management, but they provide companies with significant opportunities for short- and long-term cost savings."

Influencing the Patient-Provider Relationship Through Consumer-Centric Strategies

Consumer-centric plan designs and programs--such as account-based designs, pay-for-performance programs and evidence-based medicine--are still new and emerging concepts for most employers. However, Hewitt's survey shows a significant number of companies plan to look toward these initiatives in the future, as they explore leading-edge approaches that control near-term costs while influencing the patient-provider relationship for longer-term outcomes.

"We believe that health care happens between a patient and a provider," Winkler said. "Employers have to influence both if they are to have any hope of managing the health of their populations."

According to Hewitt's survey, companies are exploring several different options to help influence the patient-provider relationship:

Account-Based Plan Designs: More than 20 percent of companies offer or plan to offer a high-deductible health plan with a health savings account (HSA) by the end of 2007, and almost half are considering offering one at a future date. And while just 3 percent of employees elected these plans last year, most companies anticipate that enrollment will grow to 20 percent in five years. When health reimbursement arrangements (HRAs) are considered, companies anticipate enrollment in either an HSA or HRA to grow to 31 percent.

Quality Performance Information: While only 11 percent of employers currently require health plans and providers to disclose quality performance information to employees today, more than 75 percent of companies plan to do so in the future. "Employers intuitively want to share quality information to enhance the consumer experience; however, the lack of consistency and clarity of quality measurement is cause for hesitation," said Winkler.

Evidence-Based Medicine: Almost one in five (19 percent) companies include or plan to include, by the end of the year, benefit designs based on evidence-based medicine and appropriate care protocols, such as waiving copayments for prescription drugs that are proved to be effective and appropriate to treat certain diseases. Another 60 percent are considering implementing them at a future date.

"Effective benefit programs provide all of the care that consumers need, but only the care that they need, and evidence-based medicine helps establish the framework for achieving that balance," Winkler added.

Pay-for-Performance Programs: Almost one-tenth (9 percent) of companies require or plan to require health plans to have pay-for-performance programs in place by the end of the year, and another 56 percent are considering it at a future date.

"There are still barriers to effective pay-for-performance strategies, including the cost of the 'rewards' to higher-performing providers, as well as the measurement that defines 'performance,'" said Winkler. "That's why we see only a small number of companies that have actually implemented them to date. However, we are working with more companies that are taking an interest in these programs, as they have the potential to influence provider behavior and--when paired with effective communication and incentive strategies--change patient choices."

Growing Employer Interest in Quality Data and Health IT Initiatives

According to Hewitt's survey, companies that plan to take a more active role in the health of their employees report being more focused on health care quality than other employers and are more likely to select plans based on accreditation by organizations such as the National Committee for Quality Assurance (NCQA). They also tend to participate in initiatives such as Leapfrog and Bridges to Excellence, and use high-performance networks.

This enthusiasm also generated interest in a number of other initiatives driven by data and health IT. While almost three-quarters (72 percent) of companies do not anticipate investing time or resources in implementing health IT programs this year, most plan to consider adopting programs such as computerized order entry and computerized clinical decision support tools in the future. In addition, 43 percent believe health plans should provide employees and dependents with portable electronic health records as part of their standard services.

Copies of the Hewitt survey findings, "The Road Ahead: Emerging Health Trends 2007," are available by contacting the Information Desk at Hewitt Associates, (847) 295-5000 or infodesk@hewitt.com.

About Hewitt Associates

With more than 65 years of experience, Hewitt Associates (NYSE: HEW) is the world's foremost provider of human resources outsourcing and consulting services. The company consults with more than 2,300 organizations and administers human resources, health care, payroll and retirement programs on behalf of more than 340 companies to millions of employees and retirees worldwide. Located in 35 countries, Hewitt employs approximately 24,000 associates. For more information, please visit www.hewitt.com.

Source: Business Wire

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