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Hospitals slow to manage employee health care costs.

February 23, 2012
KEYWORDS care / health / hospitals / wellness
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health care workersMany hospitals pay more for employee health care, mainly because the health care industry has not effectively managed costs, according to a new report from Towers Watson.

"For a variety of reasons, the industry has not moved as quickly as others to manage health care costs and trends," notes the article, entitled: Wellness Programs and In-House Care: How Hospitals Can Lower Employee Health Coverage Costs. "As a result, many hospitals provide more services and pay a greater share of per-employee cost for benefits than other organizations. And, in a somewhat ironic twist, they also tend to have less healthy workforces, so employee use of health plan services (often at competing facilities) is frequently higher as well."

With the cost of employee health care benefits rising faster than in most other industries, hospitals are studying ways to control their escalating budgets. Adding to the pressure: health care reform legislation that will likely reduce hospital revenues at the same time it affects employee health care costs.

This article suggests three core strategies hospitals can use to lower employee health coverage costs.

• Increase emphasis on employee health and wellness by designing and promoting wellness and disease management programs tailored to the organization’s unique situation and employee segments.
• Customize employee benefi ts to require or encourage the use of the hospital’s or system’s facilities, including physicians, pharmacies and other affi liated resources (often referred to as “domestic resources”).
• Revisit the design of current employee benefi t plans, and adopt some of the effective tactics other organizations are embracing, including consumer-driven and high-deductible plans, often backed up by health spending accounts.

The article cites a recent Thomson Reuters' study that found the cost of treating health care workers at least 10% higher than average.

"Not only are industry workers regularly exposed to illness, as well as long and off-hour work shifts, but they shoulder enormous (and genuinely life-and-death) job stress that can lead to many unhealthy behaviors. Nurses, in particular, take more sick days and disability leave than the average worker as a result of chronic illnesses and stress, which exacerbates talent shortage, stress on other nurses (extra shifts, for example) and overtime costs."

Compounding the problem: health care professionals are less open to wellness education than employees in other industries because they think they know more about health care than anyone can teach them. Additionally, "the very traits that attracted them to a helping profession often cause them to pay less attention to their own medical needs than to the needs of others."

Click here for the complete article: www.towerswatson.com/assets/pdf/6419/Towers-Watson-Hospital-Emp-Wellness.pdf

About Towers Watson

Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management.

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