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By Sheryl Nance-Nash
Concern about potential mandates from Washington is pushing companies to take new steps restrain rising health insurance premiums, according to the just released survey conducted by Towers Watson and the National Business Group on Health.
Employers are stepping up efforts to motivate workers to improve their health and pressuring medical vendors to drive more efficient use of health care services.
The survey found that 83 percent of companies have revamped or expect to revamp their health care plans within the next two years, up from 59 percent in 2009. These moves come at a time when median health care premiums continue at more than twice the rate of inflation. Premiums are expected to increase 6.5 percent this year, down only slightly from 7 percent in 2009.
"For employers, the current environment is a clarion call to adjust their health plan strategy, reassess vendor relationships and aggressively address the challenge to encourager workers to become better advocates for their own health," Ron Fontanetta, senior consultant at Towers Watson, said in a prepared statement.
Two-thirds of employers said employees' poor health habits are a top challenge to maintaining affordable benefit coverage. Many employees need to be encouraged to participate in programs designed to change health behaviors. But experts say improved access to information can help.
"The first crucial step for engaging patients in their own health is giving them access to records. It needs to be a simple, fast, easy process," says Ryan Howard, CEO of Practice Fusion, an electronic health record company. "Personal health record systems give patients, real-time online access to their medical records. PHR systems have the potential to be a cost-saving, life-saving innovation," he adds.
Beyond that, companies may need to offer financial incentives to employees to do that. In fact, an increasing proportion seems to be embracing the theory that that will yield dividends down the road. Sixty-six percent of employers surveyed, plan to offer incentives for employees to complete a health risk appraisal, up from 61 percent in 2009. Also, 56 percent of employers now offer health coaches, and more than one-quarter, now offer onsite health centers.
Companies such as Deere and GM as well as smaller ones are also using Health Savings Accounts to reduce costs. Because participants to contribute funds on a pre-tax basis to such accounts and can save unused funds, participants tend to use less health care than with other types of plans. As a result, premiums on such plans are on average of 17 percent lower in most states.
One user, a college in the northwest has not had a premium increase in three years. "Since employees keep money that's not used, they are learning to better manage their health issues," says Donald Mazzella, COO of Information Strategies, a consulting firm. More than 2 million Americans were added to the HAS rolls in 2009, he adds.
Other sponsors of health care plans are focusing on wellness programs. Lexington Medical Center, for example, has an eight-week, Great Weight Challenge, a team-based weight loss program that includes lessons about healthy nutrition, exercise, strategies for busy lives and stress management. In 2009, 221 people on 30 teams lost a total of 1,966 pounds, with an average of nine pounds.
The next task for many companies is getting more from medical vendor programs. Almost two-thirds of employers surveyed said vendor programs designed to encourage employees to make healthier lifestyle decisions as not at all, or only slightly, effective. Fifty-seven percent of employers also consider vendors not at all or only slightly effective at driving care to high-quality providers.
To one degree anoher, stepped up corporate efforts may reflect concerns over the impact of the health-care legislation being debated in Washington. Polachi, Inc. an executive search firm, earlier this month surveyed tech CEOs, 72 percent of whom said that they expect the pending health care legislation reform bill to increase overall health care costs at their businesses and have a negative impact. One provision of the proposal that President Obama released earlier this week would require companies to help subsidize employees who cannot afford health-care premiums.
"There is no denying that the pending health care legislation and expected rise in costs will directly impact CEO's decisions with respect to budgets and headcount plans," says Peter Polachi, a principal in the firm.
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I agree with all you said and have been looking at PHR as a key motivator in the frame of my platform.