MORE COMPANIES OFFERING CONSUMER-DIRECTED HEALTH PLANS, WATSON
WYATT/NATIONAL BUSINESS GROUP ON HEALTH SURVEY FINDS
March 15,
2007
For more information contact:
Ed Emerman
eemerman@eaglepr.com
609/452-5967
MORE COMPANIES OFFERING CONSUMER-DIRECTED HEALTH PLANS, WATSON
WYATT/NATIONAL BUSINESS GROUP ON HEALTH SURVEY FINDS
Employers With Broad Health Strategies Better Able to Control Costs
WASHINGTON, March 15, 2007 – The number of employers offering
consumer-directed health plans continues to grow. However, those companies
that are most effective at controlling health care costs are combining these
plans with other health-related tactics. Those are among the major findings in
an annual survey conducted by Watson Wyatt Worldwide and the National Business
Group on Health.
In the survey of 573 large companies, the portion of companies offering a
consumer-directed health plan (CDHP) increased from 33 percent to 38 percent
in the last year. As of five years ago, only a handful of companies offered
such plans, which generally include a high-deductible plan coupled with a
personal savings account such as a health savings or health reimbursement
account (HSA or HRA). Forty percent of employers now offer or plan to offer an
HSA, and 26 percent offer or plan to offer an HRA.
More Employers Adopt Consumer-Directed Health Plans
Year Percent
of Employers
2002 2%
2003 5%
2004 11%
2005 21%
2006 33%
2007 38%
gCurbing health care cost increases is a puzzle for employers, and
consumer-directed health plans are only one piece,h said Ted Nussbaum, Watson
Wyattfs director of group and health care consulting in North America.
gEmployers can offer these plans, but it takes more than that to get employees
to enroll. Filling in the missing pieces of quality, health management and
education will not only help employers solve the puzzle, but also make these
plans more attractive to employees.h
gThe experience of companies successfully implementing CDHPs offers hope
for improving our health care system,h said Helen Darling, president of the
National Business Group on Health. gFocusing on prevention, early
intervention, disease management and quality outcomes not only can help
employers control health care costs, it can make employees healthier and more
productive. It is truly a win-win situation.h
However, employee enrollment in CDHPs remains low at 8 percent, an increase
of only one percentage point from 2006. This comes despite the fact that CDHPs
usually involve lower health insurance premiums for employees. Nonetheless,
broader participation in CDHPs is linked to lower health care cost increases.
Employers with 10 percent or more of their covered population in a CDHP are
holding health care cost increases to a lower level — 6.5 percent average —
than other employers. Some employers are also driving enrollment by offering
CDHPs as their only option. Currently, 5 percent of employers are offering
CDHPs on a total replacement basis, and another 4 percent will do so in 2008.
In addition, employers that implement CDHPs as part of a broader health
improvement strategy have made greater inroads into controlling health cost
increases. One-fourth of respondents experienced median health care cost
increases of 2.5 percent in the last two years, compared with an 11 percent
average for the poorest performers and an overall average of 8 percent.
Companies that are best at controlling costs are more focused on adopting
approaches that involve quality, health improvement and productivity, data and
evidence, and the appropriate use of health care services. For instance, best
performers are 17 percent more likely to offer compelling financial incentives
to encourage employee education and participation and 11 percent more likely
to effectively deliver health care information.
About Watson Wyatt Worldwide
Watson Wyatt (NYSE: WW) is the trusted
business partner to the worldfs leading organizations on people and financial
issues. The firmfs global services include: managing the cost and
effectiveness of employee benefit programs; developing attraction, retention
and reward strategies; advising pension plan sponsors and other institutions
on optimal investment strategies; providing strategic and financial advice to
insurance and financial services companies; and delivering related technology,
outsourcing and data services. Watson Wyatt has 6,000 associates in 30
countries and is located on the Web at www.watsonwyatt.com.
About the National Business Group on Health
The National Business Group
on Health is the nationfs only non-profit, membership organization of large
employers devoted exclusively to finding innovative and forward-thinking
solutions to their most important health care and related benefits issues. The
Business Group identifies and shares best practices in health benefits,
disability, health and productivity, related paid time off and work/life
balance issues. Business Group members provide health coverage for more than
50 million U.S. workers, retirees and their families. For more information
about the Business Group, visit www.businessgrouphealth.org