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Survey: Employers eye changes to health benefits to control costs, improve workers' health habits (2/24)

February 24, 2010
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The continuing sluggish economy is forcing a growing number of large U.S. employers to take more aggressive measures to control rising health care costs and motivate workers to take charge of improving their own health, according to a survey conducted by Towers Watson, a global professional services company, and the National Business Group on Health (NBGH), a non-profit association of large U.S. employers.

The NBGH/Towers Watson survey found that 83% of companies have already revamped or expect to revamp their health care strategy within the next two years, up from 59% in 2009. These moves come at a time when median health cost increases continue at more than twice the rate of inflation. Costs are expected to increase 6.5% this year, down slightly from 7% in 2009.

"The downturn has amplified the pressure on companies to find ways to support effective health management programs under budget constraints," said Ron Fontanetta, senior consultant at Towers Watson. "For employers, the current environment is a clarion call to adjust their health plan strategy, reassess vendor relationships and aggressively address the challenge to encourage workers to become better advocates for their own health."

Employers continue to be concerned about their workers' poor health habits. A full two-thirds (67%) of employers identify employees' poor health habits as a top challenge to maintaining affordable benefit coverage. More than half (58%) of employers indicate the biggest obstacle to changing employees' health-related behavior is the lack of employee engagement, followed by lack of sufficient financial incentives to encourage participation (31%) and lack of an adequate health management program budget (30%). Employees who are not engaged are those not interested or unwilling to participate in programs designed to change health behaviors.

To address this, the survey found that employers are increasingly adopting programs to help employees change their behavior and become more informed health care consumers. This year, more employers (66%) plan to offer incentives for employees to complete a health risk appraisal, up from 61% in 2009. Also, 56% of employers now offer health coaches, and more than one-quarter (26%) now offer onsite health centers.

"Even in tight times, employers will continue to encourage healthy behaviors with financial incentives and other initiatives," said Ted Nussbaum, senior consultant at Towers Watson. "However, there are challenges to changing employee behavior that extend beyond budget constraints and employer-sponsored programs. Inspiring workers to be actively involved in their own health remains an uphill battle for most companies."

Employers also recognize there is considerable room for improvement with regard to medical vendor program delivery. Specifically, two-thirds (67%) of companies feel that vendors fall short with programs designed to change member behavior to drive more efficient use of health care services. And, almost two-thirds (66%) identify vendor programs designed to change member behavior related to making healthy 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.

"As companies and their workers recover from the great recession and have to cope with the reset economy, a strategic shift in their health strategies is underway," said Helen Darling, president, National Business Group on Health. "Employers frustrated with high costs and limited employee interest in personal health management will be forced to take more aggressive steps to drive down cost increases while keeping workers healthy and productive. Building a healthy workforce has to be a team effort with both employers and their workers actively involved."

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