Yes, there are ways for employers to keep health care inflation under control. And yes, some insurers are better positioned to help manage expense over the long term. Some employers have been able to hold health care cost increases under 3% for two years or more. That is an amazing result, especially in a period where many employers have seen double-digit premium jumps. How do they do it? Do they fire sick employees? Only hire Olympic athletes? Are they the early adopters of consumer-directed health plans (CDHPs)?
No no and no. Rather, these employers are not the ones relying largely on CDHPs, engaging in significant cost-shifting to employees, slashing benefits or limiting eligibility. According to one of the sponsors of a study on high-performing employee health plans:
“merely increasing employee accountability or sharing costs with employees does not reduce overall cost increases. In fact, the degree to which organizations have adopted programs that share more costs and financial risks with employees was found to be almost completely unrelated to performance.
“Employers should not focus on employee accountability alone,” said (Helen) Darling. “When used in combination with promoting quality care, health management, use of data and appropriate use of care, companies are able to achieve significantly lower cost trends.”
Of all the health plans, managed care firms, and insurers out there, Aetna looks to be the best positioned to provide employers with the tools they need to identify the right docs, pay them fairly (although this is, at best, a work in progress), and educate consumers about appropriate health benefit, and health care, decisions.
The study I’m referencing was done by employee benefits consulting firm WatsonWyatt in partnership with the National Business Group on Health (Darling is the executive director of the NBGH). According to the report, these top-performing health plans focus on four areas: “quality, health improvement and productivity, data/evidence and appropriate use of health care services.
Best performers are 32 percent more likely to focus on quality of care (e.g., paying a differential to higher-quality providers) and 24 percent more likely to have programs that assist employees in managing their own health than their poor-performing counterparts. They are also 23 percent more likely to use data and hard evidence and 16 percent more likely to provide incentives and information to use health care services appropriately.”
Employers that are doing the right thing by employees, their families and providers are enjoying trend rates that are 8 points less than employers who don’t do these things. And since their cost structures are lower, they can generate more profits and outcompete their erstwhile competitors for additional business.
I don’t own stock in nor consult with Aetna, but continue to be impressed with their intelligent, thoughtful approach to managing care. That said, before I worked for UnitedHealthCare I thought they were a great company too…
I’ll close with a great quote from one of the study authors:
“Health care consumerism is about more than high-deductible plans,” said Ted Nussbaum, Watson Wyatt’s director of group and health care consulting in North America. “The best-performing companies are using various tactics to engage employees and lower cost trends because they recognize that all employees may not be driven by financial incentives alone.”
