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Healthcare Industry Can Learn From Other Sectors

John Commins, for HealthLeaders Media, 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."

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