Contents
Healthcare Cost Shifting
Quick Poll–Review
October Quick Poll–Vote
Further Reading
Contact Information
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HEALTHCARE COST SHIFTING
—Where Do You Stand?
As you are well aware, healthcare costs continue to go up. Thankfully, the year 2005 showed the slowest growth for employers in eight years…just over 6% in general, according to Mercer’s 2005 National Survey of Employer-Sponsored Health Plans. One reason for this slowdown? Cost shifting — the practice of transferring costs to employees — primarily through plan design changes, health management improvements, and prescription strategies.
Cost shifting may be perceived by some as an “easy fix,” especially if only the most obvious strategies are implemented. However, increasing employees’ out-of-pocket expenses is anything but a simple decision: nearly two-thirds of employers fear that increasing deductibles could cause employees to defer needed care. Clearly, any shifting must be carefully evaluated and non-traditional approaches should be considered.
In addition to asking employees to pay a greater share of premiums, top cost-shifting strategies include:
- Care management approaches, which require employees who exhibit unhealthy behavior to pay a larger share of their health benefit costs (often with cost incentives for those who make an effort to manage chronic conditions)
- Consumerism tactics that help employees make better decisions,
educating them about healthcare prices and quality (including drugs,
doctors, and hospitals)
- Focusing on prescription drug strategies that lower costs without
compromising care
The need for cost-shift restraint and hard data is especially true if employee retention is critical to your success. Benefits packages are often the “carrot” that keeps employees loyal to your business or lures top new performers to your company. To make sure you’re not jumping too enthusiastically on the cost-shifting bandwagon, be sure to keep an eye on the marketplace and stay abreast of what competitors are doing in your field and geographic area.
A Quick Review of Last Issue's "Quick Poll"
To give you an idea of how area employers are currently divvying up healthcare costs, take a look at the results of our last quick poll survey:
If you’d like a personalized, in-depth discussion about cost-shifting, call NIHP. Our professional consultants understand the latest trends and strategies, and can help you make your healthcare plan a win-win for you and your employees.
October Quick Poll–Vote
What cost-shifting strategy is most appealing to you?
(Click a response to vote. Answers are strictly anonymous.)
Then, visit the NIHP website to view this issue's quick poll results.
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Further Reading
- Employers shift health insurance costs onto workers
Snapshot, August 16, 2006.
- Fewer employees receive health insurance through their employers now
than in the past, and many of those who still receive employer-provided
coverage are now paying a larger share of those insurance costs.
- Cost-shifting continues even as value is questioned
Employee Benefit News, September 15, 2005
- While most employers seek to pass more of their healthcare costs on to workers, just one in five executives says that move would greatly shrink their
healthcare payouts. Instead, the biggest promise for curbing healthcare spending lies in providing financial incentives for healthier behavior.
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