|Employers Want Help From Health Insurers To Manage Benefits
The nation’s employers are looking for health
insurers to help them better manage their health benefit programs,
according to a report from PricewaterhouseCoopers (PWC).
The report, "What Employers Want From Health Insurers
Now," released by PwC’s Health Research Institute finds mixed
satisfaction ratings with insurer-sponsored services and meaningful
differences between what small and large companies want.
According to a PwC’s survey of 250 small employers
(those with fewer than 250 employees) and 100 of the large
multi-national companies (with an average of 8,000 employees), small
employers are less satisfied with their insurer-provided health
services than larger employers.
Small businesses with less than 500 employees represent
99.9 percent of all employers in the United States, according to the
Small Business Association.
Small business respondents reported greater
dissatisfaction than big companies in 12 critical areas of service
studied by PwC’s including claims accuracy/timeliness,
administration fees, provider discounts, wellness programs and online
tools such as personal health records.
The disparity may reflect that larger employers
typically receive a wider array of customized plan designs from
insurers, and the cost of administering small groups is usually more
expensive on a per employee basis.
"Small employers could be the canaries in the coal mine
for the employer-based model," said Michael J. Thompson, principal of
PwC’s human resources services group. "Given that the majority of
American workers are employed by small business and that the erosion of
insurance coverage is among small employers, insurers are keenly
interested in understanding what all employers want and how they can
adapt plan designs and service offerings to better meet their needs."
While both large and small employers rate the basic
functions of timeliness and accuracy of claims administration as the
most important service offered by health insurers, large employers
place almost as much importance on wellness services.
Nearly 80 percent of large employers, but only 50 percent of small businesses, say wellness programs are important to them.
According to the report, the silver lining for American
workers is that their employers are increasingly looking to manage
costs through wellness and disease management programs rather than
further shifting costs.
Interestingly, while employers and policy makers are
relying heavily on wellness programs as a way to reduce costs, wellness
service offerings was an area that both small and large businesses were
mostdissatisfied with, indicating an opportunity area for health
insurers to improve on and differentiate themselves.
PwC found that only one-half of the employers surveyed
are satisfied with wellness programs they are getting from health
insurers. Employers stated that only 15 percent of employees
participate in wellness programs currently being offered and that they
need better education tools and incentives.
PwC found that workers are two to four times more likely
to enroll in wellness programs if they receive incentives such as gift
cards or premium reductions.
Other key findings in the PwC report include:
- Both big and small companies ranked the basic
accuracy and timeliness of claims processing as the most important
service offering from health plans. Yet, approximately one in four
employers is unsatisfied in this area.
- Employers view provider discounts as the most
important financial service offering from their health plans, but small
employers are far less satisfied than large employers in this area.
Nearly one-quarter of small employers are not satisfied with the
discounts they receive, compared to 11 percent of large employers.
- Employers placed the least importance on technology
services provided by insurers. Less than half of employers said that
personal health records and debit card interfaces are important service
offerings, and a little more than half said consumer online tools are
Employers Willing To Accept Less Customization For Reduction in Administrative Fees
Two thirds of all employers surveyed said they would be
willing to forgo customized health benefits, such as a wide choice of
plan designs, for a significant reduction in administrative fees.
Customization of healthcare plans adds to administrative costs, particularly to providers.
The majority of large employers said they would accept
less customization for a 3 percent to 10 percent reduction in fees. One
way large companies reduce customization is by reducing the number of
health plans offered to employees to only one or two instead of a dozen
or more. Smaller employers said they would accept less customization
but only if they saw a reduction of at least 10 percent.
The report includes recommendations for health insurers
to better meet the needs of the nation’s employers. The report
states they should, for example, evaluate and prioritize services to
meet client needs; develop a "best practices model" for health plans;
focus on technology to lessen resources needed for claims
administration and to collaborate better with employers to reduce
unnecessary customization that adds administrative costs.
Address: Pricewaterhouse Coopers LLC, 300 Madison Ave., 24th Fl., New York, NY 10017; (646) 471-4000, www.pwc.com.