Success begets success with health costs: Survey
Posted On: March 15, 2007 12:47 PM CST
Employers that have done the best job of managing annual increases in health care costs are pulling out ahead of their peers, according to the findings of the 12th annual National Business Group on Health/Watson Wyatt Survey.
These employers also are designing benefit plans that go beyond employee cost-sharing and involve appropriate use of financial incentives, effective information delivery, quality of care initiatives, employee health and productivity management programs and data mining, the survey found.
"If you look at the spread between the poor performers and the best performers, the gap is increasing," said Ted Nussbaum, practicing director of health care consulting North America at Watson Wyatt Worldwide in Stamford, Conn.
The two-year average trend for the best performers in this year’s survey was just 2.5%, compared with 11% for poor performers, while in last year’s survey the differential was 3% for best performers vs. 11% for poor performers and in 2005 it was 5% for best performers vs. 15% for poor performers, Mr. Nussbaum pointed out.
"This suggests that the things the best performers are doing are producing better results," he said.
In particular, the best performers are not relying on employee cost-sharing as a primary cost reduction strategy, according to Mr. Nussbaum.
"One continuous finding that we’ve had for the last several years is that…substantial additional cost-sharing is not producing better results," he said. Rather, "it’s the relationship between plan design and cost-sharing that incents employees to think about their health care behaviors and become better consumers of health care."
