Where Health Care Benefits Are Going: Some Insights – and Challenges

There’s been a lot of coverage of Aon Hewitt’s 2011 Health Care Survey. You can find great summaries and analyses by TLNT and Jane Sarasohn-Kahn at Health Populi. Here are my thoughts on some of the report’s key findings and challenges.

We’ll see more high-deductible health plans

PPOs are still the most prevalent plan type, but high-deductible health plans are on the rise. Employers offering PPOs dropped by 11 percent over two years, while those offering HDHPs rose by the same — in one year. Aon Hewitt reports that the number of employers offering only HDHPs could reach 47 percent by 2015 if all employers follow through on their stated plans.

Challenge: in tight economic times, these plans seem attractive initially because of the lower premium payment. But employees may be missing or misunderstanding the fine print. Some research on HDHPs shows lower utilization of benefits by members, something that could lead to worrisome health situations. Employers will need to invest in personalized, “plain English” communications to ensure that there’s no buyer’s remorse — for anyone.

Employers may say, “play by our rules or pay up”

The report outlines four paths employers can consider when it comes to health care reform post-2014. Two involve companies no longer providing health care benefits and two involve those that do.

Of the latter, one path is the “house money, house rules” path, which loosely translates to “play by our rules or pay up.” With this option, employers continue to cover the bulk of health costs and in exchange they require greater use of preventive care benefits, case management for chronic conditions and wellness services.

Challenge: motivating employees to use programs and services meant to keep or get them healthier has been the biggest obstacle for most employers. This approach may be a logical extension of my wedding analogy: when mom and dad pay, they get to add to the guest list. Here, instead of a guest list, they get to tell employees what actions to take.

In the report, Aon Hewitt foretells of a system that’s even more “complex, expensive, and unwelcoming” for those who don’t follow them. Will this approach elicit the intended response? And if employees opt out and are unable to cover even more expensive health care, will it benefit anyone long term when you consider the ramifications?

Incentives and penalties for all

Aon Hewitt confirms what we’ve heard elsewhere: in the coming years, we’ll see more employers evaluating the use of incentives and penalties for employees and their families. The report finds that 49 percent may add incentives for employees, spouses and domestic partners in the next three to five years, and 57 percent report they may include the entire family.

A nearly equal amount are considering penalties: 40 percent for employees, spouses and domestic partners and 39 percent for the entire family. one form these health plans may take is the outcomes-based wellness approach where individuals receive an incentive or penalty for reaching (or missing) certain biometric targets.

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Challenge: in a conversation with Paul Hebert following a #co_health chat on incentive design for wellness, he raised a cautionary note about outcomes-based wellness approaches. As he put it, “outcomes are not always behaviorally based.” With outcomes-based approaches and more penalties in general, employees may feel pressure to achieve the outcome, and they may not do it in the best possible or most sustainable way.

Employers need more employee input to guide decisions

Aon Hewitt’s a little more generous than I’d be in saying that the “use of company-specific data to drive health strategy and employee engagement in managing health is gaining momentum.” There’s still staggeringly little use of data to guide decisions. the majority (24 percent) report significant use of employee input to guide benefit design features such as copays and deductibles. The numbers fall from there, all the way down to 7 percent who report significant use for designing their change management approach.

Challenge: if employers move to the “house money, house rules” approach and start to employ more penalties, they’ll have a major change effort on their hands. They’ll need to pull out all the stops to understand employees’ potential reactions to design, messaging and much more.

This is a limited slice and analysis from a very rich, detailed report. You can download the full Aon Hewitt 2011 Health Care Survey here.

This was originally published on Fran Melmed’s Free-Range Communication blog.

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