Benefit trends favor employee wellness
Disease management coming to the fore
Although trends in employee benefits often appear to be mostly about dollars and cents, a new reality emerging in that field will have a significant and positive impact on employee health.
That’s one of the major conclusions that can be drawn from the 14th annual National Survey of Employer-Sponsored Health Plans from the New York City-based William M. Mercer Inc.
Among the study’s findings:
• Use of chronic disease management programs is increasing sharply.
• A growing number of employers are adding coverage for alternative medicine.
• Despite rising health care costs, the trend of shifting those costs onto employees is slowing.
"In this tight labor market, many employers are reluctant to upset workers with bad news about their medical benefits," explains Blaine Bos, a consultant in Mercer’s Chicago office and one of the study’s authors. "They’d rather target cost-management efforts at trouble spots like prescription drugs, or look for win-win ways to control costs."
One of those ways is disease management (DM). The Mercer study showed that use of chronic DM programs jumped sharply in 1999, with 58% of employers’ largest health plans including one or more such programs, up from 49% in 1998.
This, according to Bos, is "a tremendous jump." Does he see the trend continuing? "I absolutely believe it will continue," he asserts. "From my practice standpoint — as a futurist’ — I see DM as being, if not the primary tool, one of the top two or three tools employers will be using over the next two or three years to manage costs."
On what factors does he base this prediction? "DM is unobtrusive, it’s voluntary, and it has a long-term impact on cost and quality of care," he explains. "The segment of the employee population that has health problems understands it needs help, and there are a vast variety [of] ways in which DM services can be delivered."
As DM grows in popularity, those options will be honed down, Bos predicts. "We will find one or two venues that will become the most preferred, like the Internet or a more hands-on approach. Whichever paths are chosen, employers have identified DM as the next silver bullet,’ much as managed care was several years ago. Rather than denying access, DM is seen as a clinical solution to health problems," he explains.
Supporting other options
The Mercer survey also showed a growing move to coverage of alternative care. For example, chiropractic care is now covered in 78% of employers’ largest plans, up from 61% in 1998, and acupuncture is covered in 21%, up from 17%.
"We track that information for acupuncture and acupressure, chiropractic, homeopathic medicine, biofeedback, and massage therapy, and [coverage for] all of them is increasing," says Bos.
The reasons for that trend are twofold, he notes. "First, the coverage is being driven very definitely by employees who essentially have educated themselves about these alternative delivery modalities and are determined to obtain the most effective care possible. Also, employers and health plans have found that the excuse they’ve used in the past for not covering alternative care — a lack of clinical proof — has disappeared because many practitioners have discovered there are appropriate protocols and evidence. For us, that is the telling reason why coverage has gained favor with employers." In fact, he adds, "we very much expect to see increased coverage of herbal medications and other alternatives to drugs not now covered by health plans."
No more pass-alongs
In another significant result of the study, only about 25% of the employers surveyed said they would increase either employee benefit contributions or cost-sharing, despite a 7.3% increase in costs in 1999.
While not directly impacting on health, Bos concedes that move by employers will improve morale and perhaps reduce stress. "Certainly, it will be seen positively by employees that employers are reticent to deliver any bad news. Part of the reason is they know that in today’s market they can walk out the door whenever they want, and if they have good skills and a reasonable personality, they will be employable."
In another Mercer survey dealing with employee preferences, Bos notes, among the prime drivers in attracting and retaining employees are a clear corporate vision and how well the employer treats his employees. It follows that in the current labor market, an increase in cost shifting becomes almost unthinkable for many employers.
[For more information, contact: Blaine Bos, William M. Mercer Inc., 10 S. Wacker, Chicago, IL 60606. Telephone: (312) 902-7664.]