TowersWatson Employer Survey: Employees and Vendors aren’t getting it done

by Clive Riddle, February 24, 2010

Employers hold employee health habits and lack of engagement largely to blame for cost increases, and feel vendors are ineffective at getting this behavior to change.

TowersWatson just released results from their 15th Annual National Business Group on Health/Towers Watson Employer Survey on Purchasing Value in Health Care. The study finds that employer health plan costs are projected to increase 6.5% for 2010, down from 7.0% in 2009, but still more than double the inflation rate. The study also found that in response, 83% of companies have already revamped or expect to revamp their health care strategy within the next two years, up from 59% in 2009.

Ron Fontanetta, a senior consultant at Towers Watson tells us, “the downturn has amplified the pressure on companies to find ways to support effective health management programs under budget constraints. 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.”

Perhaps most interesting was employer listings of the top three challenges to maintaining affordable benefit coverage. Of eleven responses summarized in the survey report, the three responses listed the most were: Employees Poor Health Habits (67%); followed by a tie between High Cost Catastrophic Cases and End of Life Care (41%) and Underuse of Preventive Services (41%.)

So then Employers where asked, what were the top three obstacles to changing these poor employee health habits: of thirteen responses summarized in the survey report, the three responses listed the most were: lack of employee engagement (58%); lack of financial incentives to encourage participation in programs (31%); and lack of adequate budget to support health management programs (30%).

Other findings from the survey include:

• Regarding Consumer Driven Health Plan adoption: 44% said they had already done so with no further action needed; another 9% have adopted but plan to take additional action; 14% plan to adopt in the next two years; and 34% don’t intend to adopt.

• 23% have already consolidated health and productivity programs with a single vendor or health plan with no further action needed; another 8% have done so but plan to take additional action; 13% plan to do so in the next two years; and 57% have no plans to do so.

• 93% had no intention of reducing or eliminating health promotion programs; and 78% had no intention of reducing staff dedicated to health benefit programs.

• 57% had confidence in the future of employers as health benefit sponsors, compared to 62% in 2009 and 73% in 2010.

• 69% are auditing or reviewing health plan eligibility; 66% are using incentives to encourage completion of health risk appraisals; 57% are using claims analysis of data in a warehouse; 56% offer health coaching; and only 19% are reducing pharmacy copays for those with chronic conditions (a value based purchasing initiative)

• Employers feel vendors aren’t that effective in changing member behavior: 67% said they were not at all or just slightly effective in driving more efficient member use of services; and 66% said they were not at all or just slightly effective in changing member behavior to make more health lifestyle decisions.