Survey: Changes ahead
Employees to pick up more of the cost
Large employers are moving forward with plans to significantly alter their health benefits even though such revisions subject companies to new requirements under the health reform law. And although some cost-control efforts empower consumers, some providers worry that the trend toward more cost-sharing means hospitals will continue to get stuck with the tab and patients will be discouraged from getting care they need.
A survey of 72 large employers released last week by the National Business Group on Health found 53% of the survey’s respondents planned on making changes to their benefit plans, despite the potential of losing their grandfathered status under the new health reform law.
“While the health reform law has forced employers to evaluate their healthcare benefit strategies and decide whether to comply with the law or lose grandfathered status, they haven’t lost sight of the fact that controlling rising costs remains one of, if not, their highest priority,” NBGH President Helen Darling said during a news conference to release the survey findings. “They have to foot the bill, not the government.”
Survey respondents estimate that their healthcare benefit costs will increase an average of 8.9% next year, compared with 7% this year. To pay for those increases, which in part come from provider rate increases, employers plan to use a wider variety of cost-sharing strategies, Darling said.
Sixty-three percent of employers plan to increase the percentage employees contribute to premiums in 2011, up from 57% who raised their employees’ share in 2010. Additionally, 46% plan to raise out-ofpocket maximums next year, compared with just 32% in 2009.
To hospitals in particular, increased cost-sharing poses concerns. About a quarter of hospital bad debt and charity care relates to underinsured patients who can’t afford their copays and deductibles, American Hospital Association spokeswoman Elizabeth Lietz said. “While this may lower costs for one insurer or employer, these costs get passed along to others.”(Aug. 9, p. 28)
Cost-sharing, however, isn’t the only strategy that employers are using to control healthcare costs next year, and it’s not the most popular, either. Consumer-directed health plans ranked first among strategies to bring down costs, with wellness initiatives and increased employee cost-sharing ranking second and third, respectively.
More than 60% of employers said they will be shifting to consumerdirected plans in 2011, which, as a Government Accountability Office report pointed out last week, attract healthier patients who spend less and generally use fewer health services.
An increased emphasis on consumer-directed care and wellness initiatives means that patients will be paying more attention to the care they’re receiving, NBGH officials said.
Atul Grover, chief advocacy officer with the Association of American Medical Colleges, sees the silver lining—and potential consequences—from these expected changes. “Anything that helps to engage the patient in their own care is potentially positive,” Grover said. “Many times, patients have expectations that are driven by what they have seen advertised or what test they feel is necessary to rule out the most lethal condition—no matter how rare. If patients think about costs, it may help to facilitate the kind of conversations that patients will” ultimately benefit from.
On the downside, increased cost-sharing can discourage patients from receiving needed care, Grover continued. “This is one reason that public health advocates pushed so hard to get rid of cost-sharing” for preventive and screening services, he said. “Higher cost-sharing can lead to what we call ‘errors of omission’—when aspects of care that are important are left out because the patient is more concerned about cost than the risk to their health,” he said.