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Business Group in the NewsU.S. employers push rising cost of healthcare onto workers
Reporting from Washington -- Strained by rising healthcare costs and the sour economy, U.S. employers are pressing workers to shoulder the added burden alone as employees pay higher insurance premiums and more out-of-pocket expenses for their medical care. The average employer-provided family health plan now costs workers nearly $4,000 a year, up 14% from last year, according to a survey by the nonprofit Kaiser Family Foundation and the Health Research and Educational Trust. That is the largest annual increase since the survey began in 1999 and a marked change from previous years when employers generally split the cost of rising premiums with their employees. Indeed, the average employer contribution to a family plan did not increase at all this year, meaning the entire increase was borne by workers. Overall, premium growth slowed slightly this year to 3%, with the average annual cost of a family health plan reaching $13,370. Workers picked up 30% of that bill. The average plan for a single individual cost $5,049. At the same time, workers also saw average copays for routine office visits rise 10% and deductibles continue their surge upward. In 2010, more than a quarter of American workers with employer-provided health coverage are in plans with deductibles of $1,000 or higher. "It's really bad news for everybody," said Helen Darling, president of the National Business Group on Health, an organization of large employers that provide coverage to about 50 million workers, retirees and dependents.
Workers more stressed than ever
Companies could end up paying the cost through more workers calling in sick, more job-related mistakes and higher turnover. For years, experts have said a little bit of stress is good, referring to the short-term jolt that comes before making a presentation, not the extreme kind prevalent in workplaces today. "We're way beyond the level of it being motivating,' says Helen Darling, president of the Washington-based National Business group on Health. "It will be hard to recover economically if we don't find better ways to help employees address stress.' By now, most employers know they have a stressed-out workforce, not all of it business related. "On top of the stress in the workplace, they are stressed about their finances, their kids, their parents. There is so much to worry about right now,' Darling says. "That won't change until the economy turns around.' Still, most employers haven't figured out what to do about it, and some have no interest in trying. In Topolski's case, she was fired the day after her panic attack. She has since sued her former law firm, Davis Wright Tremaine, for $1 million. Those employers who are attempting to address stress mostly are encouraging workers to use employee assistance programs, which provide mental health counselors. Employee-assistance programs and HR consultants report a notable uptick in calls about job stress in the past two years. Darling says any size business with a health plan should be able to make counseling available to workers. Any additional cost to the employer, she says, is worth it.
Workers more stressed than ever
Companies could end up paying the cost through more workers calling in sick, more job-related mistakes and higher turnover. For years, experts have said a little bit of stress is good, referring to the short-term jolt that comes before making a presentation, not the extreme kind prevalent in workplaces today. ``We're way beyond the level of it being motivating,' says Helen Darling, president of the Washington-based National Business group on Health. ``It will be hard to recover economically if we don't find better ways to help employees address stress.' By now, most employers know they have a stressed-out workforce, not all of it business related. ``On top of the stress in the workplace, they are stressed about their finances, their kids, their parents. There is so much to worry about right now,' Darling says. ``That won't change until the economy turns around.' Still, most employers haven't figured out what to do about it, and some have no interest in trying. In Topolski's case, she was fired the day after her panic attack. She has since sued her former law firm, Davis Wright Tremaine, for $1 million. Those employers who are attempting to address stress mostly are encouraging workers to use employee assistance programs, which provide mental health counselors. Employee-assistance programs and HR consultants report a notable uptick in calls about job stress in the past two years. Darling says any size business with a health plan should be able to make counseling available to workers. Any additional cost to the employer, she says, is worth it.
Special Report on Health Benefits: Butting In
What is the exit strategy from financial incentives? There's no easy answer, but LuAnn Heinen, a vice president at the National Business Group on Health, suggests that instead of rolling out a new financial incentive year after year, progressive employers try to motivate employees by promoting other tangible benefits, including better sleep, reduced stress and higher productivity. But it remains to be seen whether quality of life can compete with money in motivating employees to become healthier and help companies reduce medical costs.
Rules set process for claims appeals
Employers shifting more toward consumer-directed health plans
More than half of large employers plan to offer consumer-directed health plans next year, many as a means of lowering their health benefit costs. More than six in ten (61%) employers will offer a consumer-directed health plan, with a high-deductible plan combined with a health savings account favored by 64% of those respondents, according to a National Business Group on Health study of 72 large employers' plans. Among employers offering a CDHP, the number moving to a full replacement plan doubled from 10% this year to 20% in 2011. "Consumer-directed health plans are living up to their expectations as a way to help save employers money and put employees in greater control of their health care," said Helen Darling, president of the National Business Group on Health, in a statement. "In fact, offering these plans was the most often-cited tactic by employers to control costs. We fully expect that employer interest in CDHPs, and especially full-replacement plans, will continue to increase in the future."
Employers expect larger rise in plan costs
Competition needed to lower health costs
Employers Tighten Belt on Wellness Programs
The popularity of corporate wellness programs has surged in recent years as employers search for new ways to curb rising healthcare costs. While many of these initiatives have been successful in lowering employee obesity levels and improving the overall health of the workplace, the current economic recession is forcing many companies to make tough choices when it comes to the funding of such programs. LuAnn Heinen, vice president of the National Business Group on Health and director of the Institute on Innovation in Workforce Well-Being, said research has shown that employers still firmly believe in the goals of health and wellness programs, but they are also conscious of the ailing economy and its impact on corporate spending. "They remain committed, but they are looking for ways to make sure their investment is sustainable," she said. "The bar is being set higher, and they want to make sure they are acting economically responsible and only choosing the value propositions." A survey by the NBGH in conjunction with Towers Watson found that a growing number of employers are tightening their requirements for workers to receive financial incentives connected with wellness programs. Researchers found that, while more than half (53 percent) of large employers offer financial incentives to employees who enroll in health engagement activities (such as weigh management or smoking cessation programs), participation alone is no longer enough to earn an incentive. More than one-third of employers (37 percent) now only reward those workers who meet the company's requirements for completion of a health engagement activity, and many (29 percent) only reward employees who participate in multiple activities. Ted Nussbaum, senior consultant with Towers Watson, said that companies are growing frustrated by their employees' low use of expensive health improvement programs. "As employers continue to empower workers to be more health focused, they are beginning to target and reward those workers who demonstrate a real commitment to making positive lifestyle changes," he said. ENGAGEMENT AND EVALUATION Heinen said that the options for corporate wellness programs are limitless, with companies no longer only providing on-site gyms but also providing nutritionists, discounts for fitness programs in the community and a wide range of incentive programs for participating in healthy activities. "There has been an explosion in the wellness field, and there are so many programs that companies are able to layer on," she said. "Companies now have to look where they are getting participation. If you are offering a program option and no one is going, there are going to be no positive outcomes. That's why today you hear everyone talking about engagement." With skyrocketing healthcare costs, employers are realizing that simply cutting back in light of the economy isn't the answer. Heinen said that employee satisfaction surveys and health assessment questionnaires are a solid way of determining where you are getting the biggest bang for your wellness bucks. In addition, companies, she said, should be looking for inexpensive program options that can be implemented without breaking the bank. "I think, first and foremost, employers need to explore and exploit every low-cost and no-cost idea," she said. "Let's not forget what we can do without a significant financial investment." Some of these options, according to the NBGH, include providing walking maps to locations around the community; offering flexible work schedules to facilitate physical activity, stress reduction and self-care; implementing screen savers that encourage employees to take time out each day for one small health improvement task; and distributing apples with wellness brand stickers to employees as they enter the building. Helen Darling, president of the NBGH, said that, although employers face a challenging road ahead, in the end, those companies that are "most effective at empowering their workers to be engaged consumers of care will find greater success at keeping costs low" and will likely be rewarded with a healthier, more productive workforce.
More Businesses Penalize Workers for Unhealthy Living
The survey came out at roughly the same time that another survey by Hewitt and the National Business Group on Health showed how dependent employees are on employers for health insurance. Sixty-one percent of employees who responded said they relied on their employer-provided coverage to cover medical costs. The National Business Group on Health believes federal lawmakers could do more to encourage wellness. It notes that current tax code addresses expenses for disease treatment but not for prevention or for behaviors that maintain health. Among the changes it recommends is redefining "qualified medical expenses" to include expenses used to maintain health and wellness, such as exercise, weight management and nutritional counseling. The organization also advocates that employees be able to use pre-tax dollars to pay for health and wellness activities.
Healthy choices at U.P.
In the latest awards year, U.P. was one of just 16 companies nationwide to earn platinum. It was the only railroad or transportation company among 66 employers recognized, and it was the only company in Nebraska to be honored. Other reasons for the award include an overarching strategy that involves communicating with employees, support from upper management and integrating encouragement with tangible rewards, said LuAnn Heinen, vice president of the National Business Group on Health. The organization has 290 member companies, including 64 of the top 100 largest firms in the country. "These programs aren't stagnant," Heinen said. "You look at what's working and not working. What can I pull off, what do my employees want?" Austad said other health- and wellness-related programs at Union Pacific include the employment of 40 occupational health nurses stationed across the network to answer employees' questions. The company also offers $100 health savings account grants for workers who complete annual health assessments.
The Early Word: On the Road
Simultaneously, the National Business Group on Health will hold a briefing to discuss the results of a survey of large employers on changes they are making to their health care benefit programs after the new health care reform law, according to The Associated Press.
Paychecks to Shrink Because of Higher Health Premiums, U.S. Companies Say
Workers will pay more for their health care next year as U.S. companies prepare for provisions of the overhaul signed into law by President Barack Obama, according to a survey released today. About 63 percent of businesses plan to make employees pay a higher percentage of their premium costs in 2011, said the Washington-based National Business Group on Health, which surveyed 72 companies that employ more than 3.7 million people. The survey showed 46 percent plan to raise the maximum level of out-of-pocket costs that workers must bear. The companies surveyed expect their costs of health-care benefits to rise an average of 8.9 percent next year. The legislation Obama signed in March will contribute an estimated 1 percentage point to the higher expense, Helen Darling, the business group's president, said at a press conference in Washington today. Employee-paid portions may see small increases, she said. "They're usually very small increments," Darling said. "It could be as little as 1 percent."
Survey: Big employers expect 2011 health cost hike
Large employers expect their health care benefit costs to rise 8.9 percent next year, and more will ask their employees to make a bigger contribution, according to a survey from the National Business Group on Health. The nonprofit, which works with big companies on health care costs, said Wednesday their members tell them they expect costs to rise more than the 7 percent increase they expected on average for this year. A total of 63 percent of employers who responded said they planned to increase the percentage employees contribute to their premiums. That's up from 57 percent last year. More employers also say they plan to raise the annual maximum amount employees pay for health care costs. A total of 61 percent intend to offer a consumer-directed health plan in 2011. Those typically pair insurance that carries a high annual deductible with an account fed either by an employer or by the employee through pretax contributions to help cover costs. The National Business Group on Health said its survey was based on responses from 72 companies, each with more than 5,000 employees. These companies provide their own insurance and have a health insurer administer the coverage.
Health reform spurs change for big employers: survey
Most of the companies surveyed also plan to shift more costs to employees to encourage them to limit spending as one of several efforts to rein in rising costs, according to the report by the National Business Group on Health. The group, which represents large employers on healthcare issues, based its findings on a survey of 72 of its member companies in May and June. Members include many of the largest U.S. employers, including Wal-Mart Stores Inc and General Electric Co, but the report does not say which companies were surveyed. The debate on healthcare reform, especially over whether it will increase costs for individuals and small businesses, has become a major issue ahead of the November midterm elections in which Democrats are fighting to maintain control of Congress. The report shows companies expected their healthcare costs to grow by nearly 9 percent on average in 2011. That is about two percentage points higher than the 7 percent average increase for 2010, but just one percentage point was linked to the mandated changes under the law. "U.S. employers have long struggled with healthcare costs," Helen Darling, National Business Group on Health president, said on Wednesday. "We as large employers know we are in the middle of a transformation, a transformation of how healthcare is financed and delivered in this country." The law passed this spring includes several provisions that employer-based health insurance plans will have to abide by once the rules take effect on September 23. The survey found that 70 percent of the companies will have to eliminate lifetime dollar limits, or a cap on the amount an insurer will pay for covered expenses, while 13 percent will no longer be allowed to deny coverage for children with costly preexisting medical conditions. About a quarter will have to end annual limits on benefits. Over half of the companies surveyed planned to tinker with benefits despite the risk of losing protected grandfathered status under the law and having to follow more new rules. New plans or those that lose grandfathered status must cover preventive services such as mammograms and colonoscopies at no additional cost to patients. They also must allow access to a pediatrician or obstetrician without a referral. "They're not holding up changes they want to make to maintain or retain grandfather status," said Darling. "They actually don't think it's that important."
CMS announces modest hike in Medicare Part D premiums
Consumer advocates critical of the doughnut hole since its creation in 2003 have cheered the new benefits for seniors. But the National Business Group on Health (NBGH) this week issued a potential warning for those who thought that closing the coverage gap could mean only good news for seniors. A survey unveiled by the NBGH Wednesday found that 5 percent of the nation's largest companies plan to drop health coverage for retirees in 2011, while another 60 percent are eyeing that possibility in the future. The reason? NBGH attributes it, at least in part, to "making Medicare Part D benefits richer as the 'doughnut hole' closes."
Health Care Costs to Continue Rising for Employers, Study Finds
Employers are bracing for more health care cost increases over the next few years as the new health care law unfolds, according to a survey released today. The National Business Group on Health's annual survey on health care plans found that more than half of the U.S. employers it surveyed were planning to make changes to their plans even though they might lose their "grandfather status." "Grandfather status" applies to those insurance plans that existed on or before March 23, 2010, to which no major changes have been made. It is in keeping with President Obama's pledge that those Americans who like their plan, will be able to keep it. The NBGH estimates that more than 50 percent of health care plans will lose their "grandfather status" after the first year. But they are likely to still keep offering the older plans for employees who want to keep them, alongside new insurance plans that offer provisions and benefits mandated by the new law. U.S. employers continue to struggle with health care costs, a trend that began 20 years ago, Helen Darling, the group's president, said at a news conference today. "They're going to be paying the tab for a very long time," Darling added. To cut costs and limit spending, employers are promoting cost sharing and shifting more costs to employees, according to the survey. The survey was conducted from May to June. Even though it was right after the health care law was passed and some rules have since then changed, employers had a "pretty good sense of where this was headed," Darling said. Most of the changes are expected to come in 2012 and in 2014, when insurance exchanges -- marketplaces where eligible people can shop for coverage -- are expected to start. Cost Issue for Employers Employers included in the survey estimated that on average, their health care costs would increase by seven percent in 2010 and 8.9 percent in 2011. Employers said they are looking at controlling their costs by offering consumer-directed health plans, which emphasize health savings accounts and reimbursement arrangements to keep medical expenses low; wellness initiatives to improve employee health; and increasing employee cost sharing. Darling said the good news in this year's survey was that employers are offering more incentives to employees for participating in wellness activities. Seventy percent of employers surveyed said they will remove lifetime dollar limits on overall benefits, while 37 percent said they will make changes to annual or lifetime limits on specific benefits. Several provisions of the new law go into effect next month, but many Americans may not see those benefits until their insurance plans are renewed. Plans that are renewed after Sept. 23, 2010 will have to extend coverage to young adults under 26, who will be able to stay on their parents' plans. The law also bars insurance companies from denying coverage to children because of pre-existing conditions and cancelling coverage except in the case of fraud. Insurers will have to provide preventive services such as mammograms and colonoscopies without cost sharing or charging co-pays. Because of the new law, 63 percent of the employers surveyed said they will be increasing the employee percentage contribution to premium costs in 2011, up from 57 percent last year; while 46 percent said they will raise out-of-pocket maximums compared to 36 percent last year. Darling said the increase could be small, but the survey did not indicate by how much on average the employers planned to raise premiums. Retiree benefits are also expected to be impacted. According to the survey, 33 percent of employers are planning to eliminate coverage for future retirees to curb costs. The NBGH surveyed 72 companies, although it would not name the companies. Another report released today by private research firm Robert Wood Johnson Foundation said that while Americans' confidence in their health care plan fell when the law was passed earlier this year, it has since then gone back up to previous levels.
HHS uses webchat to trumpet benefits of healthcare reform
The HHS event was staged on the same day that the National Business Group on Health released a survey finding that many large employers plan to hike costs and cut benefits to their workers, largely as a result of new requirements in the health reform law.
Companies Help Employees Provide End-Of-Life Care
Pitney Bowes - along with General Electric, PepsiCo and IBM - is working with the National Business Group on Health to design an end-of-life toolkit for employers. This kit will help caregivers and employees who have been given a life-limiting diagnosis. Addressing the topic is a business imperative, says Stephen Kiernan, the author of Last Rights: Rescuing the End of Life from the Medical System.
Progress for people with disabilities -- but not everywhere
It's critical for employers to comply with the spirit as well as the letter of the law, said Helen Darling, president of the National Business Group on Health, which represents nearly 300 large employers. "To maintain our standard of living, we really have to have every human in the country highly productive," she said. "It's in our selfish interests to make that happen. That's what a lot of the Americans with Disabilities Act is about." In a previous job at a large company, Darling was asked by an employee with a chronic disease that compromised her balance whether her employer would cover the costs associated with walking her service dog when she was on business travel. "That wasn't a big problem," she said. "This woman was obviously doing remarkable things to continue her job, to be a success, and what she was asking was truly reasonable." Where the law gets tricky is around how much and what kind of accommodation is required for people who have mental or behavioral disabilities, she said. "It's in really hard-to-pin-down-and-respond-to disabilities that it's a challenge." "It's very hard to find jobs these days without stress," she said, citing the example of someone who might want the same job and pay but without the negatives. "You're in a complicated dilemma then. Even in a big company, you just can't take somebody and say 'We'll put you way over here' unless that kind of job is available." Still, some of the ways employers can better accommodate workers with disabilities involve common alternatives, such as telecommuting, that benefit all employees, she said. "That would help a lot of people with disabilities because some of the challenges are just getting to and from work," Darling said. "That's a challenge for everybody."
No Matter the Language, Communication Key to Successful Lifestyle Changes
Technology can be an inexpensive way of providing wellness coaching around the globe, according to Elizabeth Greenbaum, but the big challenge is language. And, that doesnt just mean translation. Its about enculturating your message, which is a much more difficult task. You have to know your audience and speak to what they understand. It has to be tailored to the population that its aiming to help, said Greenbaum, a senior manager with the Global Health Benefits Institute. For example, she noted that a nutrition program aimed at a U.S. audience might give guidelines about how many pieces of bread might be included in a diet. But in India the typical diet is very different and the nutrition coaching must reflect those differences. The term physical activity can mean different things to people in different cultures, Greenbaum said. You have to speak about health in terms they can understand. If a message doesnt speak to the intended audience they wont hear it. If you want to effect change it needs to be specific, she said.
The Mental Health Balance
A little-noticed federal law affecting mental health and substance abuse benefits kicked in on July 1, and its cost implications could dwarf those of the earliest corporate implementations of the high-profile healthcare reform legislation. The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires companies with more than 50 employees that cover mental health and substance abuse to equalize financial requirements and treatment limitations for depression, schizophrenia, drug addiction and similar conditions with those set for physical illnesses. The government's interim final rule specifies how companies are to comply. It establishes six care categories, such as inpatient in-network and inpatient out-of-network, and says medical and mental health or substance abuse coverage must be equalized in each category, with limitations on mental health benefits no more restrictive than those for medical or surgical benefits. The government could modify provisions when it publishes a final rule, but no one knows when that will be. Meanwhile, companies must comply with the interim rule. Steve Wojcik, vice president of public policy at the National Business Group on Health (NBGH), which represents large employers, says his members estimate that MHPAEA will increase health insurance costs by 1%. "With all the changes required by the new healthcare reform law, 1% for mental health comes at a bad time," he says. Companies can avoid the new law's requirements by canceling mental health plans, but Wojcik says large companies are unlikely to do so. "Large employers recognize the value of mental health coverage in terms of illnesses such as depression," he explains. "Addressing those is important to employee productivity."
ROWE and Healthy Lifestyles
"Telecommuting reduces the time spent traveling to and from work, so it eliminates (at least on those days) a significant stressor, a waste of time and a 'vitiator' of productivity," says Helen Darling, president of the National Business Group on Health in Washington. Wilsker, who works from home, poses this question: "Do you know how much stress I had walking down to my office today? Not much." Darling does say family stressors have the potential to replace other stressors."Those with children in the home will need reliable child care," she says. "Spouses and family members will need to behave toward you just as they would if you were in your office talking with 'the boss.' "
Employers Peg Insurance Premiums To Health
The trend comes at a time when employers are turning over every possible stone to save money on escalating health-care costs, which have doubled over the last decade. Those costs are likely to rise even more as the new health-care law takes affect. So far most companies still focus on incentives, such a reward of $100 or $200 for agreeing to fill out a health assessment. But a growing number are favoring sticks over carrots. For example, some companies automatically move someone into a high-deductible plan if they do not fill out a health questionnaire or charge a higher premium for someone with an identified health risk, Tripp said. At other times, penalties come indirectly in the more subtle form of forfeited incentives. A company might raise health insurance deductibles for all employees to $2,000, for example, but offer a $500 credit to those who get screened for cholesterol, tobacco or other health risks. Business groups say such measures are necessary to help offset the high cost of insuring at-risk employees. "Companies might charge a smoker a few hundred dollars more a year in premiums than someone who doesn't smoke, but that's just a fraction of what the person is likely costing in medical claims," said Helen Darling, president of the National Business Group on Health.
Study Finds Consumers Need Education Regarding Evidence-based Care
In addition, an online survey commissioned by the National Business Group on Health surveyed 1,500 people who had company-based health insurance. According to the study authors, the study's most notable limitation is that, based on selection criteria, the study overrepresents people who were employed by large firms, who held health insurance and who identified themselves as responsible for health care decision-making. The researchers noted that the study population was biased toward a "best case" scenario and concluded that their findings "may reflect a more optimistic assessment of consumer engagement than would be found in the broader U.S. population."
Taking Same-Sex Benefits to New Level
Helen Darling, president of the National Business Group on Health in Washington, notes that, while she's unaware of any NBGH members providing such a "gross up," she knows that some are examining the issue. "Some employers are going to look at it much more carefully now," she says. "Any issue involving Google is going to get people's attention." Callan Carter, a partner with Fisher & Phillips in San Francisco, agrees. "The fact that Google, in financial times like these, is willing to take on this additional expense is significant," she says. "What Google is, in effect, doing for its employees is what the federal government isn't doing, in regard to [recognizing] same-sex marriages," Carter says. Given who it competes for talent with, notably Apple, Google is "clearly stepping up to the plate and making a statement here," she adds. What the "gross ups" will financially cost Google is unclear. But experts note it's probably not insignificant. A 2007 study by the Williams Institute for Sexual Orientation Law and Public Policy at the University of California/Los Angeles' School of Law estimates that domestic partners pay, on average, $1,069 more a year in taxes in healthcare coverage than married employees. Though Google will now have to calculate the reimbursement amount, experts don't expect it to significantly increase Google's administrative headaches. "It's a hassle that it needs to be done," says Darling, but the administrative burden was originally created when it wasn't possible for employers to treat employees the same.
Employers Face Tough Calls on Health Reform, Including Whether to Become Fully Insured
Steve Wojcik, vice president, public policy at employer coalition National Business Group on Health, says a survey has shown 75% of large employers plan to apply to participate in the fund. But employers, he tells HRW, regard this as providing temporary help for just a few high-cost cases, so it is unlikely that the fund will spur them to make major changes in their retiree benefits programs. Wojcik expresses doubt about whether any of the law's provisions will cause self-insured employers to consider going insured. The tax on health insurers, he contends, will be passed on to employers and employees in some way, so there is no "escape." It is too early, he adds, to tell what the impact of the grandfather regs will be, and the potential for rebates stemming from the MLR provisions is a factor only for small employers. Large employers made the self-funding decision "a long time ago," and that's not likely to be reversed, according to Wojcik. It also is too soon to tell whether large employers will participate in the exchanges if they're allowed to beginning in 2017, he says. States would like to have them in since it would "improve the risk pool," Wojcik notes, especially since the exchanges are likely to attract higher-cost beneficiaries at the outset, but private employers may balk. It is more likely, he contends, that states will focus on getting their own employees into the exchanges as a first step to improving the risk pool. More certain, says Wojcik, is a continued move by employers to drop retiree medical and drug benefits. The reform law provisions enriching the Medicare drug benefit by gradually filling in the "doughnut hole" coverage gap and covering more preventive care augment the impact of the loss of RDS tax deductibility in spurring employers to drop private benefits, he says. But he adds that employers now getting RDS still are, after complying with accounting standards for taking charges for loss of the tax deductibility, primarily in a "wait and see" mode regarding dropping retiree drug benefits.
Try these simple, affordable steps to shed the pounds and build the bottom line
Commit to a program and you'll be rewarded financially, says LuAnn Heinen, vice president of the national Business Group on Health based in Washington, D.C. While it's difficult to calculate how much healthy people save, Heinen says that a person with Type 2 Diabetes -- a condition caused by obesity -- will have medical bills seven times higher. If an obese person has individual health insurance, as opposed to group coverage, then premiums will be more expensive. Same goes for life insurance. Obesity is also associated with back and knee injuries that can keep you home from work as well as prevent you from achieving your full potential on the job. "There are opportunities for recognition and bonuses that are tied to productivity," Heinen says. "When you're healthy, you personally benefit."
Social media sites still emerging as benefits tools
Social media won't work for benefits information: Survey
Health insurers may soon offer contraceptives at no extra cost
At this point, it's unclear whether contraception will make the list of free covered preventive services. A few specific women's health services, such as mammograms, are required by the new law. But many others will be determined based on guidance from the federal Health Resources and Services Administration, and it could take up to a year for the agency to develop its recommendations, says Judy Waxman, vice president of health and reproductive rights for the National Women's Law Center. Many employers support covering contraception because it ultimately saves them money: Even the priciest birth control is a lot cheaper than the $8,000-to-$11,000 price tag for an employee's prenatal and maternity care. "We don't think there's any benefit to cost-sharing on contraceptives," says Helen Darling, president of the National Business Group on Health, which represents large employers. There are limits, however, to what the group will support. Employers shouldn't have to pay the full cost of a brand-name drug, Darling says, if there's a generic equivalent. Unless there's a medical reason for it, patients should pay the difference between the brand-name and generic versions. A PriceWaterhouseCoopers study commissioned by NBGH estimated that the cost to health plans of providing preventive family planning services is about $40 per member annually. A typical family policy costs about $13,000 a year.
Workers Still Prefer Mail and E-mail for Benefits Info
A press release from the National Business Group on Health, a group of nearly 300 large U.S. employers, said more than eight in 10 (82%) respondents indicated that in the last year, they received information on their health benefits (i.e. health insurance, health fairs, etc.) from their employer through mailings to their home, while 58% said they received information through e-mails. About one-half (47%) obtained information on their company's Web site. The National Business Group on Health Survey of Employees was conducted online in March 2010 and is based on responses from approximately 1,500 full and part-time employees of large U.S. employers (more than 5,000 employees). Respondents were between the ages of 22 and 64 and receive health insurance through their employer.
When the End's in Sight
More than 1.4 million Americans died in hospice care last year, yet many families of aging or dying parents don't even know such care exists. Many doctors don't mention hospice and palliative care as alternatives to aggressive treatment of terminal illness. And many companies still don't offer coverage for hospice or palliative care, even though their biggest healthcare expenses occur during the last months of an employee's life. Companies should cover hospice and palliative care for patients facing end of life, and they should cover hospice for more than just the last six months of life, says Pamela Kalen, vice president of membership and member services with the Washington-based National Business Group on Health, an organization of 286 large corporations. "Palliative care provides freedom from pain; it provides a supportive environment. ... [Patients] want to avoid a painful dying process, whether dying or just dealing with serious illness or injuries," says Kalen, who leads the NBGH's Palliative and End-of-Life work group.
Family-friendly firms have more productive workers, Watertown study says
According to the National Business Group on Health, behavioral problems such as stress and depression account for 200 million sick days a year in the US, the loss of about $105 billion in revenue.
Death Does Us Part
"Overwhelmingly, people were very supportive of our efforts in this," he says. Nor are Pawlecki and Pitney Bowes alone in pursuing this. Pawlecki heads a working group on the subject within the Washington-based National Business Group on Health. The 10 organizations involved represent more than 1 million employees. Still, Pawlecki concedes there's a long way to go. Pitney Bowes has a ton of work to do on end-of-life issues, the chief medical officer says, and unfortunately, the company is ahead of most everybody else.
Insurers' Group Skips Endorsement of Medicare Nominee
Dr. Donald M. Berwick's nomination to head Medicare and Medicaid received a lift on Tuesday when a diverse collection of about 90 employer groups, patient advocates, medical societies and others wrote to Senator Max Baucus, the Montana Democrat who helped oversee the creation of the new health care law, in favor of his selection. Among those signing the letter were the National Business Group on Health, the American Academy of Family Physicians, the A.F.L.-C.I.O. and Families USA. The letter signers urged Senator Baucus and his fellow lawmakers to confirm Dr. Berwick as quickly as possible. The nomination has come under criticism over concerns that he favors rationing and a British-style health care system, according to a recent article by my Washington, D.C., colleague Robert Pear. The letter makes the case that Dr. Berwick's views have been mischaracterized and that he is, in fact, the right person for the job.
Pressure rising on healthcare long before overhaul takes effect
Early research suggests that some of the short-term aid in the healthcare law, such as $5 billion for new high-risk pools, may be inadequate. "This is not about healthcare reform," said Helen Darling, president of the National Business Group on Health, an organization of large employers that provide coverage to about 50 million workers, retirees and dependents. "It's just existing pressures on the system. & It's business as usual."
Falling out - Will stand-alone dental plans survive new mandate to cover children?
Retailers, big-box stores squeeze vision care insurers, providers
Supplemental life can fill coverage gap
Push A Healthy Business
LuAnn Heinen, vice president of the National Business Group on Health, which advises companies from its Washington, D.C., headquarters, suggests making the most healthful offerings at company cafes the most affordable ones. Their low prices can be subsidized, if need be, by increasing prices on the least healthy items. - Make lunchrooms attractive. By keeping them and their refrigerators clean and bright, you encourage employees to bring healthier food from home rather than go out to convenient but potentially health-busting fast-food restaurants. - Get executives on board. "Communicate the CFO's participation in the Maintain Don't Gain or Biggest Loser competition; encourage leaders to walk the talk by using stairs, gym facilities or walking paths at work," Heinen said. "In business, managers set the tone." - See the big picture. CEOs should grasp that wellness is about more than physical conditioning, says Allison London Brown, vice president of Healthways (HWAY), a well-being improvement company. "An organization that is on the path to improve well-being acknowledges the combination of emotional, social, spiritual, physical and intellectual factors, which play a powerful role in an employee's outlook on life, their health and productivity," Brown said. - Utilize technology. Companies can direct Internet resources - healthy eating tips, exercise plans and support chats - to employee cell phones, Brown says. - Ask employees. Find out what would make their health goals achievable. "Simple requests like 'fewer lunch meetings; they interfere with my workouts' or 'less food in the call center; it's too tempting' can help point the way to a healthier corporate culture," Heinen said. - Be positive. "The group setting that a workplace provides can be a great starting point for creating a supportive community focused on well-being," Buettner said.
U.S. warns firms on health care costs
"It's a big unknown," said Steve Wojcik, vice president of the National Business Group on Health, which represents human resources managers at major companies. "It definitely sets boundaries where plans have been used to considering all kinds of changes to both improve quality and control costs."
Wellness Programs: Worth it or a Waste of Time?
Another study, the 2009/2010 Staying@Work report by Watson Wyatt (now New York-based Towers Watson) and the National Business Group on Health, found that organizations with the most effective health programs had total returns to shareholders over a five-year period of 15 percent, compared with low-effectiveness companies, that reported negatives returns of 10 percent. There were a list of 10 items used to gauge the effectiveness of health programs, including encouraging employees to participate in healthy lifestyle programs and reducing lifestyle-related health risks in the employee population. Many companies that participate in wellness programs stand behind their results. "We see evidence that wellness programs do work," says LuAnn Heinen of the Washington-based NBGH. She works with NBGH members on their wellness programs and oversees the annual Best Employers for Healthy Lifestyle Awards. "Almost 80 percent of the Fortune 500 companies have some kind of wellness program; the large companies have reached the tipping point on this," she says, noting that the next area of opportunities are the small and medium-sized companies. Heinen admits, though, that incentives by themselves aren't the answer -- and that a focus on weight loss alone is challenging even for the medical industry. "Sustained weight loss is hard to show in any setting, including medical-office practices," she says. And, in fact, the MetLife study indicates that just half of the employees who participate in these programs do so because of the incentives; seven in 10 participate because they "greatly value the offering" or because they desire good health.
What if contraception were always covered?
In the private sector, offering comprehensive coverage of family planning in insurance plans would at most cost just a fraction of a percent of overall premiums -- even without factoring in any cost-savings. One analysis by the National Business Group on Health estimates it costs employers 15 to 17 percent more when they fail to include contraceptive coverage in employee health plans.
Podcast: Expert roundtable sounds off on health care reform
We've packed a lot of health care expertise into one podcast: Jim Klein, president of the American Benefits Council; Tom Lerche, health care practice leader for Aon Consulting U.S.; Susan Nash, a partner at McDermott Will & Emery; Ken Sperling, global health care practice leader at Hewitt Associates; Daniel Sutton, a partner with Harrison & Ford LLP and Steve Wojcik, vice president of public policy at the National Business Group on Health. In a special, extended roundtable podcast, the group talks to Associate Editor Kathleen Koster about the most significant considerations for employers for this seasons open enrollment, and what provisions of health care reform will have the farthest-reaching impact on benefit plans.
Companies Crack Down on Defining Dependents in Benefit Plans
Dependent audits have been around for a more than a decade. But they have become popular in the last few years, as employers desperately sought ways to trim their health care budgets. This year 69 percent of large companies plan to conduct a dependent audit, up from the 55 percent that planned to do so in 2008, according to a March survey by Towers Watson and the National Business Group on Health, a nonprofit organization of large employers.
Despite Evidence, Patients Want More Health Care
The study's authors have developed a communication toolkit to help employers and unions better explain the concepts behind health care quality and cost-effectiveness to patients. It's available on the National Business Group on Health's website.
Heartbreak at Work
Reform law brings changes, challenges for employers
Retiree health is the big PPACA component that employers will have to address in 2013, as the 28% retiree medical subsidy that under previous law was deductible will no longer be deductible. "The fact that it is taxable is dramatic," says Helen Darling, president of the National Business Group on Health. In fact, Caterpillar estimates that this new tax will cost them $100 million.
Health-care law faces test as regulators settle which plans must do what
The unanswered questions about grandfathering are another reminder that the nation's health-care overhaul did not end when Obama signed the historic legislation. Now, government officials must translate the law into detailed regulations. Big employers want the freedom to continue making routine changes in their plans from year to year without subjecting themselves to the legislation's full requirements. "I think employers want maximum flexibility in order to do the kinds of things they have to do to manage costs," said Helen Darling, president of the National Business Group on Health, which represents large employers. For example, if corporate health plans lose grandfathered status, their coverage of preventive services could be dictated by the federal government and thereby politicized, as a battle over breast cancer screenings last year illustrated, said Steven Wojcik, vice president of the National Business Group on Health.
More Than 60% Of Large Employers Face Health-Care Tax-Consultant
Change is in the air for companies that offer health benefits to workers. As a result of the new health-care overhaul legislation, effective Jan. 1, they must insure employees' adult dependents until they reach age 26 instead of age 19 or 24, if the employee wants that coverage. Some young people stay on their parents' insurance because they're unemployed, work for a company that doesn't offer them health benefits -- or they have health issues. That's the biggest health-care change ahead for employers, said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington. It raises a lot of questions, such as what are the estimated new costs and how to re-price plan benefits by the next open-enrollment period, he said. On Thursday, at the Willow Oaks Country Club in Richmond, Wojcik will explain what is in the legislation and how to strategically prepare your business for health-care changes. Richmond SHRM is host of the event. The topic is "Understanding Health Care and Its Impact on the Future of Business and You."
Want to put your adult child on your insurance? Here's how
Q:Can insurance companies charge a higher premium to cover an adult child? A: No. The regulations are very clear on this point, says Randy Abbott, health care consultant for Towers Watson. If you add an adult child to your policy, your insurer has to charge the same amount it would charge for any children covered by the plan, he says. That doesn't mean, though, that insurers can't raise their overall premiums to pay for the additional cost of covering more people. The government has estimated that extending coverage to adult children will increase family premiums by 0.7% in 2011. That would come on top of increases in premiums to reflect rising health care costs, says Helen Darling, president of the National Business Group on Health, which represents large employers. Employers estimate that health care costs will rise 6.5% this year, according to a survey by Towers Watson and the National Business Group on Health.
Health reform already helps grad's family
A survey by the National Business Group on Health and benefits consultant Towers Watson said the premium increase will come on top of 7 percent increases that employers already expect for next year.
Delay sought for mental parity rules
Guidance on Dependent-Children Coverage May Boost Enrollment, Administrative Work
Employers that now cover full-time students and dependents up to age 19 could see the most substantial impact, says Helen Darling, president of the National Business Group on Health. Allowing coverage for dependents who are not full-time students was probably the most significant change, she says. The new rules, she tells HPW, will mean more administrative costs for health insurers, which are likely to be passed down to their employer clients in the form of rate increases. One of three models released by HHS estimates that adding a newly eligible dependent will cost about $3,380 in 2011, which would boost the plans overall premiums by less than 1%. But Darling warns that HHSs calculation represents an average increase, and says some self-insured employers could see substantial cost increases as a result. While young adults typically are a healthy group, their medical costs can be high when they do seek services (e.g., car and and motorcycle accidents, pregnancies), she adds.
Health-care overhaul focus of talk
Change is in the air for companies that offer health benefits to workers. As a result of the new health-care overhaul legislation, effective Jan. 1, they must insure employees' adult dependents until they reach age 26 instead of age 19 or 24, if the employee wants that coverage. Some young people stay on their parents' insurance because they're unemployed, work for a company that doesn't offer them health benefits -- or they have health issues. That's the biggest health-care change ahead for employers, said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington. It raises a lot of questions, such as what are the estimated new costs and how to re-price plan benefits by the next open-enrollment period, he said. On Thursday, at the Willow Oaks Country Club in Richmond, Wojcik will explain what is in the legislation and how to strategically prepare your business for health-care changes.
Get Healthy or Else...
Helen Darling, president of the National Business Group on Health, a nonprofit association of large employers, says one reason for the change is that there's growing recognition that the majority of health-care expenses are because of bad habits such as smoking and lack of exercise as well as obesity.
EAPs unite to combat alcohol problems
The BIG Initiative involves all of the major national EAPs, most of the leading regional EAPs, more than 16 internal EAPs run by Fortune 500 companies, business groups (e.g., the National Business Group on Health, the Partnership for Workplace Mental Health), EAP professionals associations (EAPA, EASNA, Center for Clinical Social Work), and leading EAP consultants and researchers.
Companies discover benefits in employee wellness programs
Last year, 72 percent of large companies reported that they would expand the scope and number of wellness programs, according to a survey by the National Business Group on Health, a business association, and Towers Watson, a human resources consulting firm. Wellness programs can include weight-loss help and smoking cessation, along with those that cover mental health issues, such as stress management and counseling. "There's lots and lots of data points that suggest companies will have fewer sick days and higher levels of productivity if these health risks are reduced," said LuAnn Heinen, vice president of the Business Group on Health.
Employers Seen As Unlikely To Drop Dependent Coverage Despite Costs Of Wider Eligibility
Helen Darling, president of the National Business Group on Health, which represents large employers, said the cost of allowing dependents to stay on their parents' plans through age 26 has been under-appreciated. She also noted that employees will likely be adding thousands of dollars to the value of their coverage at the same time the excise tax on high-cost plans begins to take effect, and she said she is still troubled by the fact that the law does not require a child to be working or enrolled in college in order to remain on a parent's plan. ----- Darling said she did not believe HHS' estimates are too low, but rather that "there tends to be a downplaying of cost" in discussions about the provision. She also noted that employers are not required to provide coverage for adult children who have access to insurance through their own employers, but that exception expires in 2014. Still, she said, almost all large employers provide coverage for dependents, and they're not likely to stop. "They're not about to backpedal on that," Darling said. ----- Darling said HHS deserves credit for moving quickly on regulations and guidance to answer lingering questions about employers' responsibilities under the new law.
Health coverage extensions for young not universal
Details of the law have yet to be written, said Steve Wojcik, vice president of public policy for the National Business Group on Health. He believes it intends for all dependents to be treated equally. "It implies you should provide dependent (child) coverage in the same way you're currently providing it and not have two separate classes," he said. Q: Can my employer decline to offer this extension even if my insurer announces plans to provide it? A: Yes. Companies that self-insure, or pay their own medical claims and have an insurer administer the policies, can wait until on or after Sept. 23 to start the coverage extensions. Also, the law says that if your dependent has a job, and that employer offers coverage, then your insurer or employer doesn't have to cover him or her, Wojcik said.
Getting Schooled on CLASS
Employers recently breathed a sigh of relief when lawmakers decided not to make the Community Living Assistance Services and Support Act mandatory, but while that decision was clearly good news for companies, experts say HR leaders would still be well-served to brush up on the CLASS Act's various provisions, whether they plan to add the benefit or not. Steve Wojcik, vice president of public policy for the National Business Group on Health in Washington, says members of his association haven't shown much interest in the program. "I can't think of anyone who said they were going to offer it, and I would think our members, who tend to be larger companies, would be the most likely to do so," he says. Very few employers offer LTC because most of the products simply aren't very good, Wojcik says. "It's not attractive to younger employees and by the time it's needed, it's very expensive," he says. A recent report from the Centers for Medicare and Medicaid Services actuary estimates that premiums deducted from an employee's paycheck would need to be roughly $240 per month to sustain the program. Were that the case, Wojcik says, "that would make it difficult for most employees to participate."
Slimming Down Employees to Cut Costs
U.S. companies' medical costs rose an average of 7 percent in 2009, after rising 6 percent in 2008, according to a February report from the National Business Group on Health, a nonprofit association, and consulting firm Towers Watson (TW). Many employers say they expect costs to keep escalating because of recent federal health-care legislation. In March, after the Patient Protection & Affordable Care Act was signed into law, Deere & Co. (DE) said that its expenses would increase by $150 million in 2010. Employee wellness programs have suffered from low participation rates, which Forbes says often come in at about 5 percent to 7 percent. LuAnn Heinen, vice-president of the National Business Group on Health, an association of large companies, says employees often don't participate in wellness efforts because they require changes in behavior. "Participation is always the Achilles' heel for these programs," she says.
Another Option to Influence Healthy Habits
Biometric screening is one of the hottest trends in worksite wellness. And for good reason -- more attention is being paid to employee health behavior and its effects on health. Heath-assessment questionnaires often ask employees for the "big three" metrics: blood pressure, total cholesterol and weight/height for calculating body mass index. Increasingly, even more detailed lab findings may be sought, including blood glucose and HDL and LDL cholesterol -- values that go beyond most employees' ability to self report. Currently only about 14 percent of large-employer wellness programs include financial incentives for health-outcome measures such as healthy weight, normal cholesterol and normal blood pressure. Companies using financial rewards in this way may seek biometric results, to ensure fairness in the administration of incentive programs. The cost of a biometric screening varies according to level of service provided by the supplier and the total number of employees to be screened, but is typically $40 to $50 per employee or dependent. Such a screening can account for 70 percent to 90 percent of the costs of a health assessment, which can be an obstacle for employers, particularly those just starting to offer assessments to employees and dependents. But what are the alternatives? It Is Possible to Get Useful Data without a Finger Stick The cost of biometrics should not deter an employer from offering a health assessment. Some vendors recommend more detailed questions on diet and physical-activity habits for employers not able to go the biometric route, using behavioral risk as a proxy. Alternatively, employees can be asked to directly input their "numbers" into the questionnaire portion of the assessment, but this can result in inaccurate or omitted information. Some additional creative approaches include: * Use this as an opportunity to promote annual physicals with a primary-care physician. Tell employees to see their doctor to get this key information (or ask the employee to call the doctor's office to request the most recent data). * If the employee does not have the information, use it as a teachable moment and communicate that by not knowing their numbers, they put themselves at greater risk of undetected disease. * Choose to focus on measuring behavior, not biometrics, since this is the key factor to influence (and modify). Changes in health habits may not always equate to hard-outcomes data, but this is a reasonable approach for behavioral interventions. * Report numbers to health coaches; if self-reported data is the only option, employees should report to a person, such as a health coach, instead of a data field. The employee may feel more accountable to a person (versus a computer screen). Employees without a primary-care provider and those who do not routinely obtain physicals will benefit more from a biometric screening than any other group. Employers in retail, banking and some manufacturing sectors should strongly consider offering biometric screenings with their health assessments. These are valuable not just from the "accurate measuring" standpoint, but as a significant starting point for employees to see meaningful data and begin to improve their health. In all cases, employers must abide by the rules for confidentiality of personal health information as set out in the Health Insurance Portability and Accountability Act of 1996.
Getting Tough
The NBGH's Darling acknowledges that some turned-off employees may end up hunting for jobs elsewhere. But, she maintains, they will quickly discover companies everywhere are examining ways to shrink healthcare costs, including exploring or offering mandated wellness programs. "We just can't afford to continue having free-wheeling, life-harming lifestyles," says Darling. "Employers really don't have a choice."
Health insurers adopt some new rules early
Officials at two organizations for large employers, the National Business Group on Health and the ERISA Industry Committee, said Thursday that they did not know of any member companies offering to expand coverage for young adults ahead of schedule. "Every employer I know is still trying to figure out what to do with this provision," said Steven Wojcik, vice president for public policy at the National Business Group on Health. "They're waiting, not sure how to react."
Is putting older kids on your health plan the best option?
If you're a parent of a young adult who doesn't have insurance, here's what you need to do: "Make sure there aren't any gaps in your child's coverage. Ask your plan administrator when extended coverage will be available. If it won't be added until next year, and your child is graduating from college this spring, you'll need to consider other alternatives, says Tracy Watts, a partner in Mercer's health and benefits business practice. Your child may be able to get a short-term health insurance plan that will cover her until your insurance is available. College graduates can also take advantage of the federal law known as COBRA, which requires companies to allow employees to maintain insurance coverage for up to 36 months if they or a dependent on their policy becomes ineligible for the group plan. However, COBRA is expensive: You'll pay 100% of the child's premium, plus administrative costs. "Find out how much it will cost to cover your child. Some employer-provided plans charge a flat family premium, while others base premiums on the number of dependents covered, says Helen Darling, president of the National Business Group on Health, which represents large employers. If your plan uses the latter approach, adding an adult child could increase your cost. In addition, there's nothing in the law that prevents employers from charging a higher premium to cover an adult child, says Randy Abbott, health care consultant for Towers Watson. "Compare the cost of extending your own coverage to the cost of a high-deductible individual insurance policy for your child. A young, healthy person can buy an individual insurance policy with a $5,000 deductible for less than $100 a month, according to the eHealthInsurance website. For a young adult, "It's not that difficult to find an individual policy," Watts says. "Depending on the price that the employer charges for adding back in this dependent, they (parents) might be well-served to shop around." In general, though, group insurance costs less than an individual plan and provides more coverage, Darling says. And if your child has medical problems, he may not be able to get an individual plan. Group plans are prohibited from denying coverage to eligible members who have pre-existing medical conditions.
Doctors Work To Reduce Costly Patient No-Shows
Most employers don't help workers remember their specialist appointments, said Helen Darling, president of the National Business Group on Health, a nonprofit whose membership includes many of the country's largest employers. "Most employers pay so much for specialty care that they don't feel there's underuse of specialty care," she said. Indeed, 24% of employers perceive that their employees overuse services by seeking inappropriate care, according to 2009 results of an annual survey conducted by the National Business Group on Health and Towers Watson. However, some employers may provide general reminders for preventive screenings or give financial incentives to employees who engage in a disease-prevention program, which could include specialty services, Darling said.
Healthcare perks may be harder to come by
But a new survey reports that a small but growing group of firms will be imposing tougher requirements to get the incentives, such as actually losing weight or quitting smoking.
"As companies struggle to deal with low levels of employee engagement and face limited budgets for financial incentives, employers are demonstrating a growing interest in requiring results from those health engagement activities before handing over financial incentives," says report coauthor Ted Nussbaum, a senior consultant for the benefits consulting firm Towers Watson, which wrote the report along with the
Consumer-Driven Health Surging, Study Finds
As it becomes increasingly clear that health-care reform alone will not slow the steady annual increase in the cost of medical services and insurance, the allure of consumer-directed health plans seems to be brightening.
More than 50% of employers now offer them, mostly as one of several options, and that number looks likely to top 60% in the coming year, according to a recent report by Towers Watson and the National Business Group on Health (NBGH). CDHPs now cover 15.4% of employees, according to a survey of some 12,300 employers by United Benefits Advisors, an industry group for insurance brokers. That's more than HMO plans cover.
Could Health Overhaul Incentives Hurt Some?
Businesses are increasingly pointing to unhealthy habits, including tobacco use, poor diet and sedentary lifestyles, as the main reasons for rising health care costs, saying that people who dont engage in those behaviors should not be paying the price for those who do.
Right now, the employees who are healthy and living a healthy lifestyle are paying for those who are not, said Helen Darling, president of the National Business Group on Health. They are overpaying almost twice as much for the unhealthy: the obese, the smokers, people like that. You, an employee who is healthy and doesnt smoke, are subsidizing the medical claims, with your premiums going up every month, to pay for someone who smokes, for someone who is obese.
IRS Chief: Insurers Track Individuals on Reform Mandate
As the health reform debate was unfolding last year, insurers demanded that everyone be required to buy insurance if they were going to drop controversial underwriting practices, including denial of coverage for people with pre-existing conditions.
Big employer associations, including the National Business Group on Health, supported the mandate because companies say they end up footing the bill for uninsured people by paying for higher overall medical costs. Everyone should pay into an insurance pool to avoid cost shifting, they argue.
New Health Initiatives Put Spotlight on Prevention
The new law also allows employers to give stronger incentives to employees who participate in programs to lose weight, stop smoking or improve their health in other ways.
Employers can offer rewards equal to 30 percent of the cost of coverage -- up from 20 percent under prior law -- to employees who participate in such programs.
"This is exciting," said Helen Darling, president of the National Business Group on Health, which represents 300 large employers. "It puts the emphasis on health improvement, not just paying for illness and injuries."
Double Dippers vs. Healthcare Reform: Attack of the Corporate Welfare Queens
The corporate lobby, in contrast, presents a mass of contradictions. On one hand, big corporations claim that reform will raise their costs, and the U.S. Chamber of Commerce is readying an all-out assault on the law's regulatory language and on the Democrats who voted for it. On the other hand, the Business Roundtable -- which represents the largest corporations -- says that health costs represent the number one challenge for its members and that the reform law is a step in the right direction. Similarly, while the National Business Group on Health opposed reform, an article coauthored by Helen Darling, president of the NBGH, embraces many of the ideas that are embodied by the legislation, as well as the health IT provisions of the stimulus package that Congress passed last year.
The Myth of Consumer-Directed Health Plans
The survey, conducted jointly by Towers Watson and the National Business Group on Health, found median healthcare costs are expected to increase by 6.5 percent this year, down slightly from 7 percent in 2009. The survey queried 507 U.S. employers with at least 1,000 employees.
Companies Begin Work to Make Plans Comply With Landmark Health Care Reform Law
Benefit managers eye impact of reforms
Kiplinger's Personal Finance: Firms are still on their own until health overhaul takes effect
Employers are taking matters into their own hands as they get ready for the 2011 benefit plan year. There's a growing recognition that the health-care bill passed by Congress won't help lower costs in the short term, forcing firms to act on their own if they want to survive. In fact, many employers say the legislation will add to their problems. "Health reform will result in not only increased costs for employers, but less-generous benefits for employees," says Helen Darling, president of the National Business Group on Health.
Also growing: Consumer-directed health plans (CDHPs), combining high-deductible plans with a tax-advantaged savings account. About 60 percent of companies will make them an option in 2011, up from 54 percent this year; and 12 percent will make them the only option, up from 8 percent in 2010, according to a recent employer survey by Towers Watson and the National Business Group on Health.
Better-educated health consumers are a key goal, with insurers helping firms provide information to employees on cost-effective treatments and comparative pricing. Employers will also provide incentives such as lower copays or no deductibles to push workers toward top plans.
Provision in health care bill protects nursing mothers
State health insurance proposal would swap gift cards for premium discounts
Incentives for wellness program participation have been changing over the last five years, said LuAnn Heinen, vice-president for the National Business Group on Health.
When companies first started promoting wellness programs, she said, most -- like the Kansas state insurance plan -- provided incentives for workers who completed health assessments.
"The trend is now towards tying incentives more toward ongoing participation -- completing certain weight management and tobacco programs, and using a health coach," Heinen said. "The next step is tying these incentives to outcomes, for those who are actually changing their health status."
Though gift cards are typically popular incentives, it's not clear if they are effective in actually changing workers' behaviors, Heinen said.
"The theory is that if you tie an incentive like a premium discount to a health plan, it reinforces the fact that the reason they're doing it isn't some kind of random reward but that everyone benefits from lower costs," she said.
Uncertainty Reigns on Healthcare Reform
New health care law likely to raise benefits costs
Early this month, Helen Darling, president of National Business Group on Health, told a group of HR/benefits professionals and corporate leaders that health care reform will bring increased costs to employers. "The cost of administrating your health plan will go up. We are constantly talking to lawmakers about how expensive the administrative burden will be on some of their ideas about reforming health care," Darling observed.
Employer impact of reforms weighed
Grocery chain stocks health plan services
Some Hospitals Turn Profit by Shifting Medicare Losses to Commercial Payers, Says Study
Cities where health systems appear to offer high value at low cost based on Medicare ratings may actually be taking a loss, and shifting cost to private insurers and employers to maintain financial viability, according to a new National Business Group on Health study.
Conversely, cities with healthcare systems that appear more expensive, and seem to deliver lower value, may be giving employers and private health insurers a break. And some healthcare regions appear to do all things: profitable, while delivering high value healthcare at low cost.
The nonprofit group consists of large employer members who seek solutions to employer challenges, such as providing healthcare and related benefits to their employees.
"We just wanted to ask the question analytically, to see which hospitals are high value for everybody, or do they just look high value because they're charging others the difference?" says Helen Darling, the National Business Group's president.
Release of Medicare data could help reform health-care system
Others that support releasing these data include AARP, Consumers Union, the AFL-CIO, the National Business Group on Health, Pacific Business Group on Health and the Business Roundtable.
NBGH study examines hospital cost-shifting
NBGH: Beware Of Hospital Cost-Shifting
Healthcare Reform Remains a Special-Interest Game As Vote Nears
Employers large and small are worried about the same thing. The National Business Group on Health points to a survey it did with benefits firm Towers Watson. The survey shows that nearly three-fourths of big employers believe health reform will increase the overall cost of health care services, while 69 percent believe it will increase the cost of their benefit programs. Thirty-five percent say reform will lead to fewer employers offering subsidized benefits. The Chamber of Commerce and the National Federation of Independent Business also oppose the reform bill, partly because of the employer mandate to provide insurance to workers. The President's version follows the Senate blueprint in that it fines only firms whose workers are getting government subsidies to buy their own insurance and exempts small employers. But the business lobby is dedicated to fighting any requirement to offer coverage.
More Advisors Weighing in on Health, Diet
The average couple in retirement will need about a quarter-million dollars just to cover medical costs, according to Helen Darling, president of the National Business Group on Health, a Washington nonprofit.
The subject is important to address before retirement because someone's health can affect the cost of life insurance and the ability to even get long-term care insurance, says financial advisor Eve Kaplan. She has clients trying to lose weight and improve their cholesterol levels to get better insurance rates.
"I think we're going to be talking more and more about this because the population is aging," she says. If you don't discuss it, "it can blow up a financial plan."
HHS chief pleads health reform case to HR/benefits pros
Secretary of Health and Human Services Kathleen Sebelius told a group of benefits executives and corporate leaders that their companies' agenda for health care reform is a high priority within her department and the Obama administration.
Speaking at the "2010 Business Health Agenda" conference on Friday, Sebelius observed that the public and private sectors will have to work together by "looking at ways that we can begin to reform what is really an antiquated health care system, which is not only expensive, but ineffective." Sebelius realizes that larger employers are not insulated from the cost drivers "we are seeing through out our health care system."
The conference, sponsored by the National Business Group on Health and held in Washington, D.C., gathers HR/benefits professionals and corporate leaders from major U.S. companies to examine initiatives that the private sector can adopt to cut health care spending.
Web Exclusive: Value-based model can apply across benefit plans
Health care value rests on design
Employers plan to shift more health-care costs to workers, survey reports
Most big employers plan to shift a larger share of health-care costs to their workers next year, according to a survey released Thursday.
Many say they may charge more to cover spouses, tighten eligibility standards for their health plans and dispense financial rewards or penalties based on the results of certain lab tests. At some companies, overweight employees could be excluded from the most desirable plans.
Meanwhile, employees at many companies can expect significantly higher premiums, deductibles and co-payments, according to the annual survey by the National Business Group on Health, a coalition of big employers, and Towers Watson, a consulting firm that advises companies on employee benefits.
"This shows that the constant, unrelenting increases in health-care costs are going to cost employees and their families more and more," said Helen Darling, president of the business group. Faced with rapidly rising medical expenses, "employers are going to have to do something," she said.
People who work for large corporations have some of the most stable and comprehensive medical coverage in the nation. They are insulated from insurance industry practices at the heart of the Washington health-care debate, such as having their policies rescinded after getting sick or being denied coverage based on preexisting conditions. However, the new survey is a reminder that even people who are satisfied with their insurance plans cannot count on a continuation of the status quo.
With or without reform, coverage at big corporations is likely to become less affordable, and it could become more restrictive.
The survey, which involved 507 employers with at least 1,000 employees each, was conducted in November, December and January.
It found anxiety among employers about the government's plans to revamp the health-care system. Although the substance of the pending legislation has been a moving target, more than two-thirds of those surveyed said they expected it to make their plans more costly; 2 percent said the opposite. Twenty-seven percent of firms predicted it would prompt them to make coverage less generous, while 14 percent said it would make them more generous.
Darling's view of the legislation, though, is that it would do "very little" to affect large employers and that it should do more to help control the cost of corporate health benefits.
Lowe's-Cleveland Clinic deal could be a model for health-care reform through competition: a Medical Checkup column
"One of the costs in health care is waste based on something not being done right the first time," said Helen Darling of the National Business Group on Health, which represents large employers.
"This will help take true waste out of the system," she said. "It is in Lowe's interest to buy the highest quality because if they get the highest quality they aren't paying the cost of low quality."
Employees Who Are Sedentary or Take Long Trips May Be at Risk for Blood Clot Disorder
Strategies to Prevent DVT. Cynthia Tuttle, vice president of the National Business Group on Health's Center for Prevention and Health Services in Washington, D.C., told BNA that "[e]mployers are utilizing a number of strategies to address prevention of potential risk factors for DVT, including promoting physical activity and weight management programs."
To prevent DVT or pulmonary embolisms, the National Heart, Lung, and Blood Institute recommends that travelers exercise lower leg muscles during long trips, and also periodically walk in the aisles of buses, trains, or airplanes. It noted that the risk of developing DVT climbs if the travel time exceeds four hours.
Will employers offer health care in future?
Democrats renew health reform push
Five Health Leaders Respond to Obama Proposal
Four days before his health reform summit, President Obama released an 11-page sketch of the most important provisions he hopes to retain.
HealthLeaders Media asked several health officials representing a variety of interests to express their views of his $950 billion plan. Here's what they had to say.
Steve Wojcik Vice President Public Policy National Business Group on Health "Unfortunately the President's proposal, while not fully detailed, appears to have few if any provisions that would deal with employers' number one healthcare issue-controlling costs to keep coverage affordable.
"At the same time, the plan lists a number of taxes that will raise costs for employers and people with employer-sponsored coverage.
"The proposal makes no mention of the Medicare payment and delivery changes, promotion of primary care, use of cost effectiveness research to determine the value of medical technologies and interventions.
"Each of these, if widely adopted in Medicare, would also have a spillover effect in the private sector and improve the efficiency and effectiveness of care.
"On the contrary, the section labeled 'policies to contain costs' lists a host of taxes that will directly or indirectly fall on employer plans and the people covered by them. They include the so-called 'Cadillac' tax (modified by a deal with unions and some further modifications of the President's own) that would tax health benefits valued above $10,200 for individuals and $27,500 for families beginning in 2018 . . .
"Finally, the plan also includes the Senate employer free rider provision.
"Employer plans deemed not comprehensive enough to meet government standards would pay $3,000 for each employee qualifying for federal tax credits for exchange coverage and $2,000 for all their employees if they do not offer any coverage at all. At a time when we are struggling economically, we should not be imposing more costs on companies that will jeopardize jobs and raise unemployment."
More employers want health-conscious workers
On the heels of President Obama's efforts to renew health care reform, a new survey shows that employers refuse to let up on finding their own ways to reduce health care costs.
According to Towers Watson and the National Business Group on Health, more employers are instituting a health plan strategy that encourages workers to take better care of their health. For example, 66% of employers plan to provide incentives for workers to fill out a health risk appraisal, up from 61% in 2009. In addition, 56% of employers now offer health coaches and 26% provide onsite health centers.
"Employers frustrated with high costs and limited employee interest in personal health management will be forced to take more aggressive steps to drive down cost increases while keeping workers healthy and productive. Building a healthy workforce has to be a team effort with both employers and their workers actively involved," says Helen Darling, president, National Business Group on Health.
Employers rethinking health care offerings: Survey
Survey: Employers Fret Over Workers' Poor Health Habits
As Washington dissects President Obama's health-care plan and both parties prepare to grapple with health woes at Thursday's summit, employers are saying their biggest cost problem lies at home.
Workers' poor health habits were cited by 67% of companies as a top challenge to maintaining affordable benefit coverage in a new survey by Towers Watson and the National Business Group on Health. The next highest challenge, cited by 41%, was a tie between "high-cost catastrophic cases and end-of-life care" and "under use of preventive services." And 58% of the companies said the biggest obstacle to changing employee behavior related to health is the lack of engagement by workers.
More Employers Make Health Program Changes to Control Costs
A growing number of large U.S. employers are taking more aggressive measures to control rising health care costs and motivate workers to take charge of their own health, according to a survey conducted by Towers Watson and the National Business Group on Health (NBGH).
Decode your medical bills
Don't hesitate to call your insurer about a charge you think should have been paid, or paid at a higher rate. For example, many insurers now charge a large share of an emergency room bill if there was no actual emergency -- sometimes a hard thing to determine at the time.
"If you think you had medical care that was justified but your insurer turns you down, call customer service, but then also ask for a supervisor if you think you're not being well served," says Helen Darling, head of the National Business Group on Health, an association that helps large corporations tame high healthcare costs. Other encounters worth an appeal to customer service include an appointment with an out-of-network specialist if the plan's network did not have someone with the same specialty or an emergency room visit for chest pains that turned out to be gas if the patient had a family history of heart disease.
No satisfaction from customer service? Insurers allow appeals, usually within 90 to 180 days of the date of payment for a denied claim. Check the manual or customer service number to find out how to file an appeal.
Some insured workers still rely on state programs for assistance
Diversity affects costs
Employers target racial, ethnic health disparities
President seeks bipartisan health care reform summit
Gable and Darling: The slimming of America good for economy as well as health
First lady Michelle Obama's announcement last week of creating a national movement to tackle the epidemic of childhood obesity has raised an issue that is crucial to our economic future.
Aside from being a major health problem and a personal tragedy for tens of millions of Americans, including 12 million children, obesity is having an effect on the U.S. economy that is the equivalent of a recession a year, every year, unless and until we get the problem under control. In fact, the United States spends 1 percent of its gross domestic product $147 billion a year treating obesity-related ailments, according to a July article in Health Affairs. The first 12 months of the recession, on the other hand, caused our economy to contract by 1.9 percent. But recessions end as part of the business cycle. The economic cost of obesity just keeps going and growing. Obesity's cost to the U.S. economy has doubled in the past 10 years. That's four times the rate of inflation.
The economic consequences of obesity show up every day in American offices, factories and other places of work. Over the course of a year, obesity-related disorders are responsible for nearly 40 million lost workdays, 239 million restricted activity days, and 63 million doctor visits by employees across the country, the Department of Health and Human Services reports.
Though obesity is rampant in the workplace, it shows up first in the classroom. Today, nearly one-third of American children are overweight or even obese. The problem is starting earlier than ever: The obesity rate for children 6 to 11 years old has more than quadrupled in the past four decades. And it is showing signs of getting even worse: Two-thirds of children and teens do not meet daily exercise guidelines, and 80 percent fail to meet daily fruit and vegetable consumption guidelines. One can measure the cost of childhood obesity in dollars about $14 billion a year in direct health expenses. And one can measure it in the growth of such ailments as type 2 diabetes, asthma and even cardiovascular disease among children. It is hard to believe that we now see children developing high blood pressure.
This is not only a mounting health problem. It is a looming economic challenge. There is a 70 percent chance that an obese teenager will become an obese adult, saddling U.S. businesses with rising insurance costs, increasing sick leave, and decreasing productivity.
But though the problems' costs are high, so are the potential benefits of solving it. When it comes to increasing productivity, improving the health of employees is one of the best investments a company can make. A recent meta-analysis of studies in Health Affairs found that for every dollar companies spend on employee wellness, medical costs fall an average of $3.27. No wonder many employers are trying to make the work environment health-promotion zones, through healthier cafeteria and vending choices, renovated stairwells, and pedometer programs. Many businesses are providing a range of incentives financial and non-financial for healthy lifestyle behaviors. Many are sharing information with employees to foster greater awareness of health risks, and ways to shed pounds and become fit. There is also a growing commitment in corporate America to "energy balance" a science-based approach to balancing the calories we consume (through a healthy diet) with the calories we expend through physical activity.
Meanwhile, more employers are realizing that when it comes to worker wellness, home is even more important than work. Healthy living loves healthy company; few things encourage an employee to follow a healthy diet more than a family that is doing the same. That's why many companies are not just focusing on the employee, but also the employee's spouse and children. Employers aren't just offering incentives to encourage employees to participate in wellness programs; they are upping the inducements to get employees' family members into the plan as well.
Here, government can provide support, through tax credits or tax-favored treatment of wellness programs and employers' financial incentives.
Obama's voice will add momentum to the effort to curb obesity.
It comes none too soon for the health of the American people and the American economy.
Gable is executive director of the Healthy Weight Commitment Foundation, a partnership of retailers, nonprofit organizations, food and beverage manufacturers, and trade associations to reduce obesity. Darling is president of the National Business Group on Health, a nonprofit organization representing large employers' perspective on national health policy issues.
Government to Pay for More Than Half of U.S. Health Care Costs
Helen Darling, president of the National Business Group on Health, which represents Fortune 500 companies and large public-sector employers that provide health coverage for more than 50 million workers, retirees and family members, said the impact of the recession on the number of unemployed who lost their health coverage "is especially disturbing."
She said there is a pressing need to control health care costs and grow the economy.
"It is a great concern that health care spending continued to rise so sharply when the GDP declined," Darling said. "The nation cannot afford the very expensive health care system we have."
The report also finds that:
-Public health spending will accelerate in the latter years of the projection period as aging baby boomers move from private coverage into Medicare.
-Partly due to the increase in public enrollment, spending on hospital and physician services is up. Hospital spending increased 5.9 percent to $760.6 billion in 2009, up from 4.5 percent the prior year. Spending on physician and clinical services spiked 6.3 percent to $527.6 billion, up from 5 percent in 2008.
-Spending on prescription drugs rose 5.2 percent, a gain of 2 percentage points, in 2009, reflecting an increase in per-person use of drugs, an increase in the use of antiviral drugs to treat H1N1 (swine flu), and faster price growth in brand-name drugs. "Higher price growth among brand names is likely due to new brand drugs launched with higher prices," Darling said. She added that employers, health plans and pharmacy benefit managers have noticed significant price increases, "possibly in anticipation of health care reform and concerns about higher industry taxes."
What Will Companies Do?
As health-care reform starts and stops, CFOs face difficult decisions about where to invest now.
As health-care reform moves forward, many CFOs face a dilemma: should they continue to invest in programs that might rein in costs over the long term, or stop providing insurance altogether, given the disincentives contained in current versions of the legislation?
"Providing health-care benefits is a critical competitive factor today," says Helen Darling, president of the National Business Group on Health. "But if the industry dynamics change, companies will certainly be open to making changes."
Survey: Employers say health reform will not control costs
While health care reform enters a cooling-off period, employers insist that reform must make cost containment a central theme in order to lower health care costs, reports the National Business Group on Health and Towers Watson.
From November 2009 through January 2010, the HR consulting firm and the business advocacy group conducted a survey of 507 employers with 1,000 or more workers.
"These survey data confirm quantitatively what many people--employers, employees and policy pundits--have been talking about for the past four months. That is, whatever else a health care reform plan might do, it is unlikely to control health care costs, which has everyone worried," says Helen Darling, president of the NBGH.
States Revolt Over Insurance Mandate
There's an effort afoot in statehouses across the country to make it unconstitutional to require people to buy health insurance.
In fact, legislators in 34 states filed or proposed amendments to their state constitutions to thwart the federal government from mandating insurance as part of any health reform passed out of Washington, the Associated Press reports.
This anger over mandates is misguided. This is a play by lawmakers to assert states' rights but the idea of mandatory health insurance is strictly an economic necessity to change insurance practices.
Let's forget for a moment that President Obama's health reform is barely breathing after Scott Brown's win in Massachusetts. The insurance industry is criticized for denying coverage to people based on pre-existing conditions but that practice isn't going to be eliminated unless there's a bigger pool of insured people to spread the risk. That's one thing the insurance companies like Aetna Inc., UnitedHealth Group Inc. and WellPoint Inc. and the White House can agree on. Organizations like the National Business Group on Health, which represents self-insured employers, say people who don't buy health insurance drive up the costs for everyone else.
Employers, Employees Concerned Health Reform Would Lead to Higher Overall Costs
A significant majority of employers believe that the current healthcare reform proposals in Congress would lead to higher costs for both employer-sponsored benefit programs and healthcare services overall, according to the survey conducted by Towers Watson and the National Business Group. The survey focused on 507 employers nationwide that employ a total of 11.5 million workers.
A separate survey of 1,000 employees at midsize and large U.S. companies found that a majority of workers also believe health reform leads to higher costs and would decrease the quality of care and benefits available to them, according to Towers Watson, a global professional services company.
"These survey data confirm quantitatively what many peopleemployers, employees and policy punditshave been talking about for the past four months," said Helen Darling, president of the National Business Group. "That is, whatever else a healthcare reform plan might do, it is unlikely to control health care cost, which has everyone worried."
Wellness programs get a checkup
Employers are in love with their wellness programs, spending nearly 2% of their health claim dollars on the programs. Yet many companies fail to put the programs through a reality check by measuring their return on investment.
Fidelity Investments and the National Business Group on Health recently released data showing that most mid- to large-size employers offer, on average, 21 health promotion programs. The research, however, reveals that six out of 10 companies with the programs are in the dark on the ROI associated with their wellness programs.
For employers, measuring the ROI on a health promotion program can be difficult and expensive, considering that an employer is trying to calculate how much the company will save from a health event that has not occurred. Still, employers are willing to make substantial investments to the programs with the expectation that the results will come later.
Health Care: Human Resources Targets Your Family
HR has yanked the junk food and badgered you to get healthy. Now it's eyeing your spouse and children.
The health nags in human resources have exhausted every possible idea to goad you into good health. At several large corporations, they've realized it's no use turning employees into vegan hardbodies if their dependents--also on the company health insurance plan--are gorging on trans fats and becoming regulars at doctors' offices.
That's why the next front in the Wellness Wars is not about you. It's about your husband, your wife, and your kids. While most big companies already have employee wellness programs, the newest trend is expanding those efforts to include dependents, says LuAnn Heinen, director of the National Business Group on Health, a Washington-based health-care think tank. If you can get your family on its corporate wellness program, Aetna (AET) will give you a $1,200 reward. JPMorgan Chase (JPM) offers health coaches to family members in its plan. This month IBM (IBM) started sending out cartoon-adorned plates to teach kids about portion control. At Dell (DELL), spouses get discounts on medical premiums.
Despite Political Shift in Congress, Employers Insist They Want Health Care Reform
When employers refer to the status quo in health care as unacceptable and economically unsustainable, what they are referring to is how health care premiums have grown 131 percent in the past decade while median wages have actually shrunk.
If health care reform is shot down nationally because of the Massachusetts election, it will be for similar reasons that reform has begun to fail the people of Massachusetts, said Steve Wojcik, vice president of public policy for the National Business Group on Health.
The state changed its insurance laws and required everyone to purchase insurance. In its effort to help people afford insurance, it began to offer subsidies that have since been scaled back because the state did not reduce the cost of health care before expanding coverage.
To expand coverage at the federal level without reducing costs "creates more complexities down the road," Wojcik said.
"Sooner or later legislators have to deal with the real issue," Wojcik said. "They need to go face to face with doctors, hospitals and the associations that represent them and say we need to fundamentally revamp the way we pay you guys. Not just Medicaid and Medicare, but the private sector cant afford this anymore. Thats what they really need to do."
Rethinking health care
Obama, labor agree to tax on benefits
Do Wellness Programs Make Cents?
While employee health improvement programs have become more and more popular as a way to contain firms' healthcare costs in recent years, very few companies actually know how much their investments in such programs as on-site flu shots and free annual check-ups are yielding, according to a recent survey of large employers by Fidelity Investments and the National Business Group on Health.
Virtually all companies now offer some element of health improvement programs, with such items as employee assistance programs and onsite flu shots nearly standard items. Other popular programs include nurse hotlines, fitness and nutrition counseling, disease management programs, and health fairs or other onsite education. Even the least-popular program included in the survey, on-site health clinics, are being used by a sizable number of firms - 32% - and several experts believe the number will grow soon.
However, less than half - around 40% - aggregate return on investment across all programs. Furthermore, only 19% of companies are accurately capturing the costs of such programs, while 62% are underestimating the amount they spend, according to independent estimates calculated by Fidelity.
Rather than a stunning lack of discipline, the results indicate the inherent difficulty of trying to measure health care outcomes, says Helen Darling, president of NBGH, an advocacy group for large employers. "It's really hard to quantify the success of these programs in a rigorous way," she said.
A big complicating factor is that most companies have multiple programs with multiple vendors, and not all vendors are likely to translate outcomes into the common denominator of dollars. According to the survey, 58% have 2 to 5 vendors for health improvement programs, and 30% have 6 or more. On top of that, the best outcome in many cases is a cost-avoidance, like prescriptions not needed, which in itself can be hard to track and define.
Data storage giant EMC, for example, has several key initiatives underway to improve employee health, including personal electronic health records, a dietary program to stop hypertension, and opportunities for people with chronic diseases to be remotely monitored. Each program is being developed with different partners, and not all can produce crisp data since much of the savings is in cost-avoidance. "You might be able to choose a lower-cost drug or avoid a lab test with a new doctor by virtue of having your health record so easily accessible," but employees wouldn't necessarily report such savings in a systematic way, said Delia Vetter, EMC's senior director of benefits and programs.
That's not to say there's no effort to measure savings. A pilot of the dietary program showed that the company avoided nearly $1000 in medical and drug costs per participant, and EMC is hoping to eventually get a measure of the productivity gains that go along with that. In general, though, "it's just intuitive - if employees aren't at the doctor's office and they're feeling good, they're more productive," she said.
Even the numbers that companies get from their vendors should produce some skepticism, Darling says, because much depends on timing. Many smokers, for example, attempt to quit many times before they give up for good, just as many people trying to lose weight often have trouble maintaining the loss. "Multiple quits and failures are very common, so whether a program is considered a success or a failure depends on how you do the cut and when you track the data," she notes.
Of the 40% of companies that did track ROI across all programs, about half said they saw a two-to-one return on their investment. About one-quarter saw greater returns, while the other quarter said they were just breaking even or even losing money.
In fact, some programs can raise costs in the short-term. Snyder's of Hanover, for example, managed to keep health costs per employee month flat for 5 years between 2003 and 2008, in part due to sophisticated data analyses and efforts to steer employees toward annual physicals and top experts in any given field. Last year, however, several health-screening fairs at the Pennsylvania-based pretzel-maker's various manufacturing facilities turned up employees with serious illnesses, saving at least one employee's life, according to Penny Opalka, manager of benefits and compensation. Those discoveries, in combination with the acquisition of a company that did not take such proactive steps, drove up 2009 healthcare costs for 2009 by 15% - "but once they have those illnesses under control, those levels will start to come down," Opalka predicts.
Despite the complexities of measuring progress, few companies plan to back away from such programs. At this point, at least, health care reform doesn't seem to be an inhibiting factor, either. Ninety-one percent of survey respondents said it would have no impact on their interest in the programs. "Even if tomorrow the financing part of coverage were done by someone else, employers would still have to be concerned about the health and productivity of their employees," said Darling.
What CFOs can do, short of obtaining precise dollar-denominated ROIs, is to take an inventory of all the programs they currently have, and consider the current cost and benefits they carry. "The most useful thing would be to make sure the company fully understands what they are paying for, what difference it is making, and what the results are," years beyond the initial intervention, Darling advised.
Not to mention it doesn't hurt for a CFO to join a fitness challenge or submit to a cholesterol test at a health fair. Executives like the CFO "are both role models and champions. They can drive a lot in the company if they choose to and there are very real benefits to that," said Darling, often including a decreased need to provide monetary incentives to employees to participate in the programs.
Include Children In Your Existing Programs
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Of course, this may not be the time to introduce a whole new program, considering that many companies are just trying to maintain a tenuous grip on their business. LuAnn Heinen of the National Business Group on Health acknowledges that.
"No employer wants to hear right now about 15 new things they ought to be doing," she says. "They have cut back staff, and they're feeling a lot of economic pressure." But downloading the Childhood Obesity Toolkit is free, and you will likely be able to implement some of the suggestions it contains without a lot of fuss or expense.
"In the toolkit we suggest using things you already have available, programs you've already developed," says Heinen. "These arent things that require staff or a lot of effort. Leverage things you are already doing, using them to include children.
"For example, if you have a childcare facility on-site, why don't you increase the standard set by your state in terms of physical activity and nutritious food? If you have (or bring in) a registered dietician for employee consultations, why not allow spouses and kids to come in and consult with the dietician, too? We're suggesting cross-pollinating a bit."
Childhood Obesity Affects Present and Future Employees
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Given today's trends, employees you will hire in 10 or 15 years are likely to be obese and unhealthy, worries the National Business Group on Health. Their recently released Toolkit on Childhood Obesity: It's Everyone's Business reviews the benefits to business of reviewing and considering the recommendations. "There's a small added cost for the healthcare of kids who are obese," Heinen says. "But since kids are only about 15 percent of the total benefits cost for an average employer, and it is a minority of children who have weight problems, the impact isn't great. There are two other, more important reasons to pay attention to this. One is the fact that families are affected by having kids who need more doctor visits, so there is a productivity impact on the parents who are employees. But the even more important reason is that kids are the future workforce."
Health Outlays Slow - Recession Curbs Spending, but It Still Outpaces GDP Growth
U.S. health-care spending grew 4.4% in 2008, the smallest increase in nearly 50 years, as the recession caused consumers and employers to pare medical expenses.
Employers still point to rising health-care costs as a significant drag on the bottom line. Helen Darling, who runs a coalition of large employers called the National Business Group on Health, said her members have seen cost increases start to plateau in recent years. Some, however, are still seeing double-digit rises.
Companies have used the recession to drive home messages about the importance of choosing in-network providers and ordering medicines from mail-order pharmacies, she said, and have found their employees receptive.
"Americans have really changed their buying behavior, and health care is a part of that, since a lot of health care is really a consumer good," Ms. Darling said. However, she added, "it is still costing them a lot."
The federal government hasn't released national health-spending data for 2009 yet. Private surveys found employers were continuing to pay more last year and will do so again this year. A study by consulting firm Mercer LLC found that employers saw health-cost increases of 5.5% in 2009, the lowest increase in a decade. For 2010, Mercer estimates costs will grow 6%, and Ms. Darling's group estimates medical costs will rise 8%.
Cornstarch replacing hopscotch
Childhood obesity takes a bite out of business.
Cornstarch has replaced hopscotch in many a child's daily life, with countless sedentary youths pigging out on fast food instead of burning off a square meal on the playground.
"There is a great deal at stake for U.S. employers," says Helen Darling, president of the National Business Group on Health, whose members include 280 large U.S. employers. "An obese teenager has a 70% chance of [becoming] an obese adult. And with health care for obesity-related illnesses costing employers at least $45 billion annually, the price tag of this childhood epidemic could become unaffordable if we don't change course."
NBGH has developed a toolkit to help U.S. employers address the growing problem of overweight and obese children with the support of the Department of Health and Human Services, Health Resources Services Administration's Maternal and Child Health Bureau.
"Childhood Obesity: It's Everyone's Business," recommends that employers build on the infrastructure and resources that many large employers already have in place.
"As overweight and obesity increases among children, employers are clearly going to be affected in many ways," LuAnn Heinen, a vice president and director of the Institute on the Costs and Health Effects of Obesity.
"Schools, child care facilities, communities and families have begun to respond, but more focused efforts are urgently needed," she says. "Employers and health care providers also have roles to play as part of a comprehensive solution. Clearly, childhood obesity is everyone's business."
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