U.S. employers encouraging healthier habits to lower health-care costs: Survey

Some imposing penalties for inaction, lack of results
|hrreporter.com|Last Updated: 06/02/2011

Employers in the United States are beginning to rely more on employees to stem the tide of rising health-care costs, but the inability to motivate and change habits has prompted concern, according to a survey by Aon Hewitt.

The top health-care outcomes organizations would like to achieve this year are improving employee health habits (56 per cent), lowering the health-care cost trend (49 per cent), decreasing worker health risk (44 per cent), increasing participant awareness of health issues (37 per cent) and enhancing participation in health improvement or disease management programs (37 per cent), according to the 1,028 employers that responded to Aon Hewitt's 2011 Health Care Survey.  

Success may be difficult because 56 per cent of respondents said motivating participants to change unhealthy behaviours is the most significant challenge to accomplishing health-care program goals. This was followed by issues involving reluctance to change (26 per cent), unpredictability of costs (23 per cent), government regulations or compliance (22 per cent) and managing the health of an aging workforce (21 per cent).

Many companies offer disease management (70 per cent), health and wellness improvement (64 per cent) and behavioural health (60 per cent) as key components to health-care strategies. Many organizations are looking to expand efforts during the next three to five years and implement strategies that focus on total well-being to improve physical and mental health (60 per cent), absence management (53 per cent) and integrated safety and health improvement efforts (50 per cent).

"Despite reform, organizations still face rising costs and worsening population health," said John Zern, health and benefits practice leader at Aon Hewitt. "It's clear that traditional annual trend mitigation tactics alone won't work. As a result, leading employers are implementing a 'house money, house rules' environment, using a mix of incentives, penalties and targeted messaging to reward healthy behaviours."

While some companies are budgeting for a medical trend increase during the next four years, many do not have a long-term increase built into their budgets as of yet. Nearly one-third of respondents (30 per cent) have budgeted an annual medical trend increase between four per cent and seven per cent from 2011 to 2015, and 22 per cent have budgeted an increase of more than eight per cent during that time. Meanwhile, 42 per cent have not built an annual long-term increase into their budget.

"Employers are spending millions of dollars annually on health care and yet many report they do not have a specific plan for how best to manage that investment," said Jim Winkler, large employer segment leader in the health and benefits practice at Aon Hewitt. "Given the risks and opportunities presented by health-care reform, it is imperative that employers develop a written strategy for controlling cost and improving health."

Rewarding and penalizing participants

Twenty-two per cent of survey respondents will have programs in place by the end of 2011 to reward participants for achieving specific health outcomes and 10 per cent will have similar programs to penalize participants for exhibiting unhealthy behaviour, found the survey. However, by 2016, 64 per cent of respondents said they will add programs that reward for good health, while 46 per cent said they will add programs that penalize for unhealthy outcomes.

Employers offer incentives to employees for participation in key initiatives, such as biometric screenings (33 per cent), health-risk assessments (33 per cent), wellness programs (31 per cent) and tobacco cessation programs (27 per cent). Conversely, some employers are imposing a penalty for non-participation in biometric screenings (five per cent), health-risk assessments (five percent), wellness programs (two per cent) and tobacco cessation programs (six per cent).

"In a challenging economy, organizations are using financial incentives as a mix of rewards and penalties to motivate behaviour change," said Jennifer Boehm, a principal in the Aon Hewitt health and benefits practice and a project leader for the survey. "However, leading employers also recognize that success requires more than just dollars; those organizations also focus on marketing health improvement services, eliminating barriers to needed care and measuring the impact of specific interventions."

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