While the stock market and companies’ profitability improves, much of that has been done on the backs of employees: through reductions in force and job cuts, and re-working of benefits.
Health benefits are a prime target for cost management as companies try to survive through the long recovery. Combined with insurance companies’ cost increases (most notably and recently Anthem’s announcement of up-to-39% increases in premium costs), employers who choose to continue to provide health insurance to employers are in a bind.
They’re blaming much of their eroding ability to provide health insurance on employees themselves — that is, employees’ poor health habits. The second chart shows that 2 in 3 employers rank employees’ poor health habits as the #1 reason they’re having trouble managing costs.
The rate of employers who are confident that they can continue to offer health benefits fell 5 percentage points between 2008 and 2009, from 62% to 57%.
The top-line for employers is that 83% have already or expect to revamp their health strategies in 2010.
What strategies will they implement? The chart gives some indication as to where employers’ collective minds are relative to addressing health plan costs and design. In 2010, 3 of the top 4 most popular strategies are benchmarking, auditing eligibility, and claims analysis. Incenting the completion of health appraisals is a fourth common approach.
Health Populi’s Hot Points: Employees’ poor health habits rank as the #1 reason employers believe affordable health plan coverage is out-of-reach. This challenge ranked in employers’ top 3 challenges to coverage in 2009, as well.
In another survey question, employers rank the lack of employee engagement to be the biggest obstacle to changing health habits and behaviors, with 58% of employers agreeing with this. The second most formidable obstacle to changing health behaviors is seen as the lack of sufficient financial incentives to encourage participation in programs, cited by 31% of employers.
Think design and action-orientation here: it’s not actuarial calculations and eligibility checks that engage employees into better health habits. Those are largely cost-cutting tools. It’s the well-designed nudge, the well-designed copayment plan (where we learn a lot from the Asheville Project and Pitney-Bowes), innovatively-designed tools (think: mobile phone), and designing fun programs that will engage employees to think, act, and sustain healthy lifestyles.