|U.S. Companies Still Lacking Formal Healthcare Policy To Match Business Objectives
While 95 percent of companies say managing healthcare
costs is a top business issue, less than half (42 percent) of employers
have a formal policy or strategic healthcare plan in place, according
to the annual healthcare trends survey conducted by Hewitt Associates.
"Healthcare is one of the biggest expenditures for a
company, yet most organizations don’t have a formal plan that
outlines their program’s goals and ties them to business
objectives," said Ken Sperling, leader of Hewitt’s Global Health
In a survey of nearly 600 large U.S. companies
representing more than 10 million employees, the findings indicate that
even though 65 percent of respondents said they currently invest in
long-term solutions to improve overall health and productivity of their
workforce, most companies (80 percent) still planned to focus on
improving health and productivity in the next three to five years.
More than half (53 percent) of companies currently have
a disease management/health improvement strategy in place, and of those
who don’t, 11 percent plan to implement one this year, while
another 75 percent plan to implement one in the next three to five
Where there is an apparent lack in areas of a health and
productivity strategy – such as mental health and absence
management programs – there is also the response to make changes.
While just over a third (35 percent) of companies have
behavioral health programs (such as an EAP), more than half (58
percent) are planning to do so over the next three to five years.
Although less than 1 in 5 (19 percent) consider absence
management part of their current strategy, 56 percent plan to
incorporate it over the next three to five years.
Nearly 60 percent of employers said they take the
diversity of their workforce into account when they design and
communicate their health plans, according to survey results. Which
allows them to "change their approach to employee communication, how
they provide access to on-site services and how they offer family
versus individual incentive programs to drive positive behavior
change," said Sperling.
Interest In Lasting Behavior Change
On the topic of behavior change, the Hewitt survey found
that only 19 percent of companies surveyed measured employee behavior
change as a measure of success of their health and productivity
Most companies (58 percent and 57 percent, respectively)
measured program success by how well they managed medical costs or by
how well the programs are being utilized. But 53 percent of employers
are expected to reverse this emphasis within the next three to five
years by planning to measure employee behavior change and/or behavior
"The way employers intend to measure these programs ...
are encouraging and shows they are thinking about moving beyond
short-term financial tactics," said Sperling. "Measuring clinical
changes in health risk, for example, can help employers gauge whether
these programs are actually changing employee behaviors and ultimately
leading to longer-term cost mitigation and improved employee health."
To encourage employees to participate in the actual
healthcare programs being offered, 58 percent of companies surveyed
offer incentives to employees and 24 percent even extend these
incentives to spouses and family members.
Majority Now Offer Cash Incentives For HRAs
The number of companies offering cash incentives for
completing a health risk questionnaire has almost doubled – 35
percent in 2009 to 63 percent this year.
Almost 1 in 5 (18 percent) of employers responded that
they already use penalties such as higher benefit premiums or
deductibles, and another 29 percent said they will be using penalties
in the next three to five years.
"Smoking and failure to participate in disease
management programs are the most common behaviors where penalties are
deployed," reported Hewitt.
"The harsh reality is that with or without comprehensive
healthcare reform, employers remain on course for having the same or
greater cost and employee health problems over the next few years as
they have in recent years," said Jim Winkler, leader of Hewitt’s
U.S. Health Care practice.
Total healthcare costs have more than doubled in a
decade — from $4,793 in 2001 to $11,058 in 2010 — and are
only expected to increase over the next decade, according to Hewitt
"Employers know they aren’t getting results using
traditional approaches and are taking steps to reverse that trend,"
Winkler continued. "However, they still have a lot of work to do to get
on a path where they’ll see positive, sustainable changes that
really move the needle."
Address: Hewitt Associates, 100 Half Day Road, Lincolnshire, IL 60069-3342; (847) 295-5000, www.hewittassociates.com.