Em­ploy­ers say ben­e­fit changes on way as health­care ex­pen­di­tures con­tinue to soar

Modern Healthcare - - Front Page - Re­becca Ve­sely

More costs con­tinue to be shifted to work­ers, sur­vey shows

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Ma­jor em­ploy­ers con­tinue to pass more of the costs of health­care onto their work­ers, even as they seek to im­prove their em­ploy­ees’ over­all well­ness, ac­cord­ing to Mod­ern Health

care’s third an­nual Health­care Pur­chas­ing Power sur­vey.

A to­tal of 35 em­ploy­ers par­tic­i­pated in the 2010 sur­vey. To qual­ify, em­ploy­ers must have a min­i­mum of $1 bil­lion in an­nual rev­enue. The sur­vey was co-spon­sored by the Leapfrog Group and the Na­tional Busi­ness Coali­tion on Health.

The sur­vey re­sults in­di­cate that em­ploy­ers are still grap­pling with ris­ing health­care costs. The sur­vey cov­ered fis­cal 2009, so changes man­dated in the fed­eral health­care re­form law had not yet come into play. Still, in in­ter­views, par­tic­i­pants said they are gear­ing up for such changes in var­i­ous ways.

Gen­eral Mo­tors Co. topped the list, with health­care ex­pen­di­tures of $4 bil­lion in 2009. Gen­eral Mo­tors cov­ered 850,000 peo­ple last year, at a cost of $4,700 a per­son. Gen­eral Elec­tric Co. fell to the sec­ond slot, af­ter com­ing in at No. 1 in the sur­vey last year. GE re­ported health­care ex­pen­di­tures of $2.2 bil­lion in 2009, up from $2 bil­lion in 2008. GE had 537,000 to­tal cov­ered lives in 2009, down from 566,000 cov­ered lives the year prior.

Catholic Health Ini­tia­tives took the No. 3 spot, up from fourth in last year’s sur­vey. The Den­ver-based hos­pi­tal sys­tem re­ported $355 mil­lion in health­care ex­pen­di­tures for 2009, an in­crease of nearly 11% over 2008, when it spent $320 mil­lion. For 2010, the sys­tem ex­pected to spend $349 mil­lion, a de­crease of 1.7%, but for 2011, it ex­pected health­care ex­pen­di­tures to grow once again, to $371 mil­lion, ac­cord­ing to the sur­vey.

This is the first year GM par­tic­i­pated in the sur­vey, and it will most likely be the last time it is on top. GM filed for bank­ruptcy pro­tec­tion in 2009 and was res­cued by the fed­eral govern­ment, which then went on to ini­ti­ate a mas­sive re­struc­tur­ing. Un­der an agree­ment made in 2008, GM agreed to shift its re­tiree health­care ben­e­fits to the United Auto Work­ers Re­tiree Med­i­cal Ben­e­fits Trust at the end of last year. As a re­sult of this change, GM this year pro­vided health ben­e­fits to only 210,000 peo­ple, a 75% de­crease in cov­ered lives in one year.

GM made sub­stan­tial changes to its plan of­fer­ings as well amid the re­struc­tur­ing. It can­celed cov­er­age for Medi­care-el­i­gi­ble re­tirees and re­duced plan of­fer­ings for salaried work­ers to two health sav­ings ac­count-qual­i­fied high-de­ductible health plans. The au­tomaker also can­celed vi­sion cov­er­age for salaried em­ploy­ees, ac­cord­ing to the com­pany. About 66% of the com­pany’s work­ers are un­der a union con­tract.

Af­ter a turn­around, GM an­nounced on

Gen­eral Mo­tors, which has un­der­gone bank­ruptcy and re­struc­tur­ing, made big changes to its plan of­fer­ings and saw a 75% de­crease in cov­ered lives.

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