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Healthcare Industry Can Learn From Other Sectors

 |  By HealthLeaders Media Staff  
   October 12, 2009

The 2010 Towers Perrin annual Health Care Cost Survey of the nation's 300 largest businesses projects that the average per-employee healthcare cost in the coming year will increase by 7%, pushing that expense across the $10,000 threshold for the first time.

There weren't any hospitals in this group, but that doesn't mean we shouldn't pay attention to the findings. The healthcare sector—a notorious laggard in many worthy trends—is better protected from the risings costs of providing employee healthcare benefits than is the rest of the economy. That sometimes leads those within the healthcare sector to ignore the efforts of other industries grappling with healthcare costs.

Actually, other sectors of the economy might be leading the healthcare sector when it comes to creative healthcare costs containment measures. For example, the Towers Perrin survey found that large employers have aggressively embraced wellness programs as more and more data demonstrate their positive impact in the reduction of sick days and chronic disease, and improved productivity and morale.

"It's pretty clear that the trend is to try to build a culture of health," says Mark Olson, chief actuary for Towers Perrin Healthcare Consulting. "And as employers, especially HR executives, have crafted their plan, we see successful companies map out a strategy on what they want to do and how they want to achieve it and then begin to measure how well they're meeting those goals and tweaking things to achieve it."

The Fortune 1000 companies in the survey provide healthcare coverage to 5.2 million employees and dependents, who spend $29.4 billion on healthcare every year. Analyzing the 2010 data by coverage level, the average reported cost of medical coverage is $5,124 annually ($427 per month) for active employee-only coverage, $10,500 annually ($875 per month) for employee-plus-one-dependent coverage and $15,084 annually ($1,257 per month) for family coverage. With numbers like that, you can understand why curtailing healthcare expenditures has become a top priority for most business sectors.

With healthcare costs rising precipitously, employers are changing the measures by which they determine whether or not their healthcare program is a success. The focus of high-performing companies, for example, is expected to emphasize employee health status and risk, gaps in care through ongoing review of medical claims and employee perceptions of well-being in the workplace.

"It's not just the measurements, though. It's how you get employees engaged in their own well being and responsible for their care," Olson says. "The incentives then go along with trying to have employees buy into this and view their health as being an asset not just for now, but a longer-term asset that they can invest in by doing certain things and possibly changing behaviors."

High-performing employers that are most aggressively addressing rising healthcare costs plan to expand the use of employee health risk assessments, wellness programs, on-site biometric screening, promotion of healthy foods, and access to retail clinics.

People are uncomfortable with the idea that employers are taking a more and more aggressive role in the health of employees. How far will this go? When does the incentive turn to punishment for employees who can't meet their personal health metrics? There is an inherent friction between the rights of the individual and the legitimate concerns of the company as it tried to contain out-of-control healthcare costs.

"It is a really good point that employers have to be extremely careful with how far they go with this," Olson says. "Most employers are fairly cautious about what they do and how they structure it and they are careful that it is more inclusive than exclusive. If you got into a program and for some reason you didn't reach some goals, they encourage you to try and try again. It's about trying to change behavior and it's not easy to change behavior. To try to get people to motivated to keep trying to do the right thing."

Within five years, Olson says he expects to see more aggressive biometric screenings for data on body mass, blood pressure, blood sugar, and measures for behaviors like exercise, as electronic medical records facilitate patient connectivity, all of which will bring the privacy debate to the fore. "It's a fine line. It goes back to how intrusive are employers going to be," he says. It's clear that wellness programs are not a fad. In fact, these programs will be around as long as this nation's workforce gets older, fatter, and sicker. They will become more sophisticated and more effective with each year.

It's hard to deny that the wellness movement is motivated primarily by money. So what! In this case, the profit motive of the employer is aligned with the well-being of the employee. A successful wellness program means everybody wins. Privacy concerns are legitimate, but they can be overcome. Wellness programs are an encouraging trend born of necessity.


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