Most employers grade health care system 'C' or worseNews added by Benefits Pro on December 4, 2013

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Joined: September 07, 2011

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By Dan Cook

Ask a randomly selected group of employers to describe today’s healthcare system, and they don’t namby-pamby around.

The system is broken, they say, “wasteful and expensive,” and the way to fix it is to have “increased transparency around pricing and performance.”

Those are the facts from a Deloitte survey of 500 employers with 50 or more workers offering health benefits.

The survey produced one staggering response: Fully two-thirds of responding employer representatives cited “waste and inefficiency in clinical/administrative/billing processes” as a “chief drivers of overall health costs.”

And nearly a third gave the industry an “F” when asked to grade the system.

Here are the employer report card responses:
  • 33 percent grade the performance of the system as “A” or “B”;
  • 38 percent rate it a “C”;
  • 29 percent “D” or “F.”
The respondents were asked how they would improve the system.

More than half (52 percent) pointed to “increased transparency around the prices of specific medical products, services and procedures.” Another 46 percent chose “clear, accessible information about the performance of care provided by doctors.”

Deloitte found that more employers are digging into the numbers to try to get a better handle on health care costs and which providers are either underperforming or outperforming the rest.

“Twenty-three percent analyze their claims data to identify providers that do unnecessary testing or procedures or to see if providers are complying with evidence-based standards. Slightly more than one-third use claims data to analyze employee use and costs regarding treatments, medications and other services,” Deloitte reported.

When asked to cite their top strategies to manage ever-increasing healthcare costs, here’s what employers said:
  • 54 percent cited employee cost-sharing;
  • 36 percent cited wellness programs;
  • 28 percent cited plan design changes;
  • 20 percent cited reducing benefits;
  • 19 percent cited managing networks;
  • 18 percent cited limiting worker hours;
  • 17 percent cited using defined contribution plans.
“Employers feel they lack the data and tools to manage their concerns around cost and quality,” said Bill Copeland, Deloitte Consulting LLP, and national managing principal of Deloitte's life sciences and health-care practice. “I think in the coming year, they will join the front lines of the effort to improve the system by demanding more visibility and by strengthening the use of incentives and penalties to motivate employees toward healthful behaviors.”

Other intelligence extracted from the survey included the general belief that employer health care costs will be 19 percent higher in 2014 than this year; about half share cost and quality information with employees regarding health-care providers, common procedures and medications; 26 percent have used a variety of methods to try to get employees to live healthier lives (including rewards and penalties, technologies and coaching); and 39 percent of the companies that make such an effort say they’ve gotten a return on their investment.

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