Get 100 or so people in a room and ask them for their opinion on an issue. You're likely to get 100 different opinions. After all, we're human and all have our own ways of looking at things. But when it comes to the U.S. healthcare system, various studies indicate there's general agreement on one major point: The system needs fixing (Harris Interactive, 2008; Hewitt Associates, 2009; U.S. Department of Health and Human Services [USDHHS], 2009).
Part of what needs fixing is high costs. Even though the rate of health spending has slowed, it's still going up, and, especially with the economic downturn, companies continue to be worried about costs and ways to hold the line (Centers for Medicare & Medicaid Services, 2009; Hewitt Associates, 2009; Watson Wyatt, 2009). In fact, healthcare costs are one of the most important workforce-related issues companies are facing today. Of 580 HR professionals surveyed by i4cp in 2008, virtually all - 95% - agreed that healthcare costs were an extremely important or important issue then and would continue to be in the future (i4cp, 2008a).
Of course, if you listen to or read news reports, Washington appears ready to ride to the rescue.
Barack Obama won the presidency by promising to fix, among other things, the healthcare system. His transition team held more than 9,000 community meetings in all 50 states and the District of Columbia at the beginning of this year. Thousands participated. The discussions focused on "concerns about a ‘broken' health system, access to health insurance and services, rising premiums and drug costs, ‘being uninsurable,' medical mistakes, and the system not being for them." The results of those discussions were said to weigh heavily in the way Obama crafted his proposed reforms (USDHHS, 2009, p. 5). And the U.S. Senate Finance Committee has opened hearings to look into public plan options (Vanden Heuvel, 2009).
But the road ahead is going to be rough and long. Already activists have disrupted the hearings, and members of both political parties, insurers, doctors and others have begun fighting for the reforms they think are best (Alonso-Zaldivar, 2009; Bellantoni & LoBianco, 2009; Condon, 2009; Pear, 2009; Yoest, 2009).
That's no surprise to anyone who knows the long history of U.S. healthcare reform. It has been on the agenda for decades, and little has come of it.
Of course, that leaves consumers and the employers who pay a significant portion of the cost burden (USDHHS, 2009) left wondering what to do. Wait for reform that might never come? Make decisions that could be overruled by reform if and when it does come? Or even fight reform efforts? (An i4cp study conducted last December found that 38% of responding business professionals believed the Obama administration would wind up causing higher healthcare costs for companies.)
Some companies have simply decided to get out of the healthcare benefit business. A 2009 survey by Hewitt Associates found that 19% of respondents intended to eliminate the benefit in the next five years. That was almost five times more than the 4% who said in Hewitt's 2008 survey that they planned to drop their healthcare benefits. "In today's environment, employers are under pressure to cut healthcare expenses, but they realize that short-term management tactics do not address the underlying drivers of healthcare cost," said Jim Winkler, head of Hewitt's North America health management consulting practice. "This leaves them with two options: making a firm commitment to improving the health of employees and their families, or exiting healthcare altogether" (Wojcik, 2009).
A 2009 Watson Wyatt survey found that 62% of respondents said they thought they'd be able to provide the benefits 10 years from now, an 11-percentage-point drop from the 73% who said in 2008 that they thought they'd be able to continue providing healthcare benefits to employees (Watson Wyatt, 2009).
Of course, many business professionals still espouse the advantages of offering healthcare programs. The argument is that providing healthcare and wellness benefits improves productivity, recruitment and retention while reducing absenteeism and "presenteeism," the phenomenon of sick people coming to work because they can't afford to stay home (Bestwick, 2009; Matisonn, 2008).
Given that, companies are trying various strategies to hold down costs while still providing a worthwhile benefit. The strategies range from passing on costs to employees to making employees more responsible for their health and spending (Gerencher, 2008; i4cp, 2008b).
But the biggest focus these days might be on wellness issues. The logic is that if people don't get sick, they don't use the benefit, which drives the cost down as the demand drops. And, if some conditions are caught early, then the cost of curing them can sometimes be minimal compared with the price of treating a disease that's gone untreated (Gallagher, 2009).
Grinnell Mutual Reinsurance Co., for example, has a 21-year-old initiative that has concentrated on basic wellness services that include programs that promote health and those that change behavior. As part of that general thrust, Grinnell has created a pilot program that aims at the personal goals of its 730 employees. Workers set goals, such as attending Weight Watchers classes, going to the gym, or losing 10 pounds. The company provides credits to employees who try to reach their goals. The credits, which are capped at $300 per year, are applied to a worker's health insurance or medical spending account (Eller, 2008).
Jay Packaging of Warwick, RI, has developed a wellness program that has become a part of its corporate culture. The culture and program encourage individual responsibility for health care at all levels of the company through many initiatives, including two safety and wellness committees (one of which is headed by the firm's president), the employment of a full-time wellness coordinator, the establishment of wellness programming, and quarterly reports on the results of the wellness program at company meetings. The corporate vision statement, displayed throughout the workplace, mentions wellness as a component. "We all take responsibility for wellness at Jay, and we seek to continually improve our approach by incorporating employee feedback and experience into our wellness initiatives," said Dick Kelly, president of Jay (Gallagher, 2009).
Although wellness programs have been proven successful at many levels, the ultimate goal of an improved bottom line can take time to show up (Gallagher, 2009). But faced with a long, bumpy road to a national solution, employers are left to fend for themselves for the time being. In this environment, one of the best approaches may be to create stronger ties between the concept of wellness and the corporate culture. Documents used in the preparation of this TrendWatcher include the following:
- Alonso-Zaldivar, R. (2009, May 5). Health insurers try to head off public plan. Associated Press.
- Bellantoni, C., & LoBianco, T. (2009, May 6). Fractured majority ties up Obama's agenda. Washington Times.
- Bestwick, A. (2009, January 15). Healthy competition will be crucial. Employee Benefits.
- Centers for Medicare & Medicaid Services. (2009, January 6). CMS reports lowest rate of overall growth in national health spending since 1998.
- Condon, S. (2009, May 4). Doctors' group backs Baucus' health care strategy. CBS News.
- Eller, D. (2008, August 31). Firms consider switches to find which health plans work best. Des Moines Register.
- Gallagher, A. (2009, January 1). Building the budget for wellness. Employee Benefit News.
- Gerencher, K. (2008, August 14). Hammering out health-care benefits. MarketWatch.
- Harris Interactive. (2008, July 2). Health care systems in ten developed countries: The U.S. system is most unpopular and Dutch system the most popular.
- Hewitt Associates. (2009). Challenges for health care in uncertain times 2009.
- Institute for Corporate Productivity. (2008a, April). Major issues survey 2008.
- Institute for Corporate Productivity. (2008b, September). Taking the Pulse: Healthcare.
- Matisonn, S. (2008, January 2). Partial cure for absence. Employee Benefits.
- Pear, R. (2009, May 5). Schumer offers middle ground on health care. New York Times.
- U.S. Department of Health and Human Services. (2009, March). Americans speak: Report on health care community discussions.
- Vanden Heuvel, K. (2009, May 5). The battle for healthcare begins. The Nation.
- Watson Wyatt. (2009, February 19). Health care benefit cost increases to remain at 6 percent in 2009.
- Wojcik, J. (2009, March 6). Survey finds nearly 20 percent of employers plan to drop health benefits. Workforce Management.
- Yoest, P. (2009, May 5). Single-payer health-care advocates disrupt Senate hearing. Dow Jones Newswires.