LINCOLNSHIRE, Ill. - (Business Wire) The number of employers who say they will get more directly involved in managing the individual health of their employees jumped 25 percentage points from last year, reflecting a nationwide trend to find more ways to save money in a tightening economy, according to new research by Hewitt Associates, a global human resources services company. But while companies believe they need to get more involved in keeping their workforce healthy, employees are less convinced.
Hewitt’s survey of more than 500 U.S. companies revealed a fundamental shift in how they view health care. While cost is still a big concern, for the first time, keeping employees healthy was also named as one of their top business and workforce issues this year. In fact, 88 percent plan to make investments in longer-term solutions aimed at improving the health and productivity of their workforce over the next three to five years, up from 63 percent last year.
But employees may be slow to accept the role that employers intend to play. According to a separate Hewitt survey of 30,000 employees, while almost three quarters (74 percent) think employers are responsible for helping them understand how to use their health plan, just 12 percent believe companies have a role in helping them understand how to stay healthy.
“With complex global economics, legislative uncertainty, and increasing health care cost and health care risk, health and productivity has gone from being viewed by employers as a cost that needs to be managed to a critical business investment,” said Jim Winkler, leader of Hewitt’s Health Management Consulting practice. “As a result, companies are moving beyond their traditional role as a provider of health care benefits to develop holistic programs that pinpoint the specific health needs of their employee populations, drive employee behavior change and eliminate barriers to health care.
“But to ensure these steps translate into strategic business advantage, employers need to overcome employees’ skepticism about their intended role. Their messages need to shift from a cost management focus to one that helps employees understand how improving their health can benefit them, as well as the company.”
People Making Cost-Based Decisions, But Some Conflict With Healthy Outcomes
According to Hewitt’s research, employees see a direct link between health and financial well being. Almost all (95 percent) believe that taking care of their health today will have a direct impact on what they pay out-of-pocket for health care in the future. Similarly, 96 percent agree that catching health problems at an early stage or preventing them before they happen can save them money.
However, while employees said they know healthy behaviors can save them money in the long run, many take actions that compromise their health outcomes. According to Hewitt’s research, 88 percent claim they engage in healthy behaviors. But when asked about specific actions they take toward living a healthy lifestyle, less than one-half said they eat right or exercise regularly (47 percent and 40 percent respectively), and only four out of ten (40 percent) said they do a good job at asking for advice on how to stay healthy.
In addition, a number of employees admit that cost plays a role in influencing their health behaviors. Nearly one-third (30 percent) said they did not go to the doctor when they were sick because of cost, and 27 percent didn’t fill a prescription given by a doctor. Almost one in five (19 percent) stopped taking medications before their prescription ran out, and of those, 18 percent did so due to finances.
Like employees, cost is also a concern for the majority of companies, with 82 percent focusing on cost mitigation in 2008. However, the more traditional strategies that companies have used in the past to help lower costs—such as cost shifting to employees or consumer-driven health care—have slowed or virtually stalled. According to Hewitt’s research, while 64 percent of companies say cost shifting to employees is currently a part of their primary health care strategy, just 17 percent plan to make it a priority over the next three to five years. In addition, just 20 percent currently offer an HRA and/or HSA, and less than 6 percent plan to adopt one in 2008.
“While employees have good intentions, they aren’t taking action—whether it’s because of costs, lack of time, or because of the complexities in accessing and navigating a fragmented employer-provided health care system,” said Tim Stentiford, a principal in the Communications practice at Hewitt Associates. “To drive behaviors that deliver meaningful ROI to employers and families alike, companies need to stop ‘communicating’ and start motivating. People don’t like to be told what to do, and with a mind-numbing array of web sites and brochures from their employer, they often just tune out.
“But when employers—through consumer research and marketing techniques—really understand what it takes to motivate people, they’re often surprised that it looks nothing like what they do today. Yes, people are motivated by incentives—but they’re also motivated by habits, social norms, feelings of control, family and fear. When employers get that, then they can really start to close the gap between what people think or say they do, and what they actually do based on the numbers,” he added.
Encouraging Healthy Behaviors: A Double-Edged Sword
To more effectively address rising health care costs, Hewitt’s research reveals that companies are taking more aggressive steps to drive behavior change and encourage people to take more responsibility for their personal health and health care. Almost half (47 percent) believe that effective treatment of behavioral health conditions is critical to controlling health care costs, maintaining high levels of productivity and mitigating absences.
As a result, more than 85 percent of companies say they invest or plan to invest significant resources in long-term health and productivity initiatives over the next three-to-five years. In addition, almost two-thirds (63 percent) plan to offer incentives to motivate sustained health care behavior change, and 67 percent will utilize health care data and measurements to drive their organization’s health care strategy.
But employees have mixed opinions on whether they support increased employer involvement in these areas. According to Hewitt, 70 percent of employees support lower premiums for practicing healthy behaviors, such as maintaining one’s weight or exercising regularly. In addition, almost all (99 percent) agree that it is important to know personal risks to take steps for prevention or treatment, and in general, are willing to share information on a confidential basis to learn more about them. But while eight out of ten people said they took a health risk questionnaire (HRQ) when given the opportunity, many employers actually see significantly lower participation rates, even when they offer incentives. For those employees that claim they take an HRQ, 40 percent did not take any actions based on specific recommendations provided by the report.
While employees generally said they valued the information gleaned from HRQs, many had mixed feelings about any associated incentives or penalties tied to these questionnaires. Hewitt’s research shows that only 36 percent of employees believe that companies should require the completion of an HRQ for health care coverage, and less than half (46 percent) believe companies should provide lower health care premiums in exchange for completing a HRQ. But in Hewitt’s experience, when employers do not offer an incentive tied to the HRQ, the percentage of employees who actually complete the questionnaire falls dramatically.
“Encouraging participants to take action through incentives is a double-edged sword. On the one side, employees and their spouses and partners won’t want to participate in programs like HRQs if there isn’t an incentive. On the other side, when they are offered incentives in exchange for their participation, many employees are likely to question the company’s intentions and how they plan to use their personal health information,” said Stentiford. “It’s important for companies to understand the sensitivities, specific needs and preferred approaches of their unique population and then find the right mix of motivators that will be most effective in encouraging participation. Even more important, companies need to be open and honest about their intentions behind these programs, and address any confidentiality concerns up front.”
Understanding Health Risks and Targeting Specific Populations
According to Hewitt’s research, more than half (51 percent) of employees or their dependents have a chronic health condition that requires ongoing care. As a result, an increasing number of companies are taking a closer look at the health risks and needs of their employee population and offering programs designed to drive participation, encourage positive behaviors and provide employees with additional education and support for managing their chronic conditions.
Ninety three percent of companies have identified the chronic health conditions that are most pressing for their employee populations and plan to target these conditions over the next three to five years. Half (50 percent) either provide or plan to provide health and productivity management programs tailored to member risk levels, and another half (50 percent) offer enhanced medical and/or prescription drug benefits for at least one or more chronic condition.
Companies are also showing an increased interested in value-based design (VBD) programs, which reduce or remove financial barriers for health care services proven to be effective to treat certain conditions, while potentially increasing cost sharing for those services that have not been proven to be as effective. While just 12 percent use value-based design programs today, more than half (52 percent) said they were considering them for a future date. In addition, companies are looking at biometric screening, health/clinical advocacy and on-site health sources as other potential initiatives to implement over the next three to five years.
“Companies are beginning to roll up their sleeves and identify the health care needs of increasingly narrow segments of their populations,” said Jeff Munn, leader of design and development for Hewitt’s Health Management practice. “Incentives for at-risk individuals, mandatory health risk assessments, the use of risk predictive modeling and aggressive consumer marketing tactics are all gaining traction as effective solutions. Over the next few years, we’ll continue to see employers move away from broad-stroke fixes to health care programs to focus more on customized solutions that target behavior change for specific segments.
“Employers who recognize that it’s not just about employees, but about all covered participants, will be far more successful. Since covered dependents account—on average—for more than half of the cost a company spends on health care, employers who continue to emphasize ‘employee’ strategies instead of ‘family’ or ‘participant’ strategies will leave half of the cost savings through behavior change on the table untouched,” he added.
About Hewitt Associates
For more than 65 years, Hewitt Associates (NYSE:HEW) has provided clients with best-in-class human resources consulting and outsourcing services. Hewitt consults with more than 3,000 large and mid-size companies around the globe to develop and implement HR business strategies covering retirement, financial and health management; compensation and total rewards; and performance, talent and change management. As a market leader in benefits administration, Hewitt delivers health care and retirement programs to millions of participants and retirees, on behalf of more than 300 organizations worldwide. In addition, more than 30 clients rely on Hewitt to provide a broader range of human resources business process outsourcing services to nearly a million client employees. Located in 33 countries, Hewitt employs approximately 23,000 associates. For more information, please visit www.hewitt.com.
Hewitt Associates
Maurissa Kanter, 847-442-7664, maurissa.kanter@hewitt.com
MacKenzie Lucas, 847-442-7662, Mackenzie.lucas@hewitt.com
