Employers say they will shift more health costs to workers
■ Surveys have found that higher out-of-pocket spending can translate to fewer visits to physicians and fewer filled prescriptions.
Many executives at large companies said they will continue to push more health insurance costs onto their employees in 2012 -- and that could mean even more patients delaying visits to their physicians.
The reliance of large companies on employee cost-sharing isn't new, but its precise weight was quantified in a survey commissioned by the National Business Group on Health that was released Aug. 18.
Of the 83 company executives surveyed by the NBGH, 77 responded to a question about "the most effective way to control health care costs." Of those respondents, 25% said "increased employee cost-sharing" is the best way to control costs. Executives estimated that those costs would go up 7.2% in 2012, slightly less than their estimated 7.4% 2011 increase. Half of the respondents ranked an increase in employee cost-sharing in their top three tactics. (See correction)
In the survey, 63% of employers said they will increase the employee percentage contribution to premium costs in 2012, and 39% will increase in-network deductibles. (Executives weren't limited in the survey to mentioning one strategy for handling costs.) Most employers said they will increase employees' share of costs by less than 10%.
The second-most popular response for fighting costs was adopting a consumer-directed health plan, which typically includes a high deductible plan joined with a health savings account -- an arrangement usually marked by high levels of cost-sharing that are meant to encourage comparison shopping for care.
In the survey, 73% of employers said they will offer such an option, and 17% said that will be the only option offered to employees.
NBGH President and CEO Helen Darling said employers still pay on average 80% of the cost of insurance premiums for their employees.
"They're increasing the cost-sharing because the costs are going up," she said.
Quality not seen as the answer
Despite much public discussion about controlling costs by focusing on quality of care, only 1% of respondents said they believed that quality-focused tiered networks were the most effective way to control costs.
Darling said companies are not turning in larger numbers to cost-savings efforts like quality-based networks to save money in part because physicians have fought their use.
The consequences of increased cost-sharing vary, but it can translate to fewer visits to physicians and fewer filled prescriptions.
There is some evidence that high levels of cost-sharing can accomplish the value-seeking that is supposed to happen under consumer-directed care when it is used strategically. But when it is not targeted or combined with effective education about quality and price, cost-sharing is what policy experts call a "blunt instrument" -- it pushes down all health care utilization and spending.
For example, a study by the RAND Corp. released in March found that health care spending by enrollees in high-deductible plans was about 14% less than by those in traditional plans, but that the drop in spending coincided with a decline in spending on preventive care -- services that often are covered without a co-pay in consumer-directed health plans.
In another example, a report released Aug. 25 by the Center for Studying Health System Change found that although the number of Americans who reported that they either skipped or delayed needed care in 2010 was lower than in 2007 -- 17% versus 20% -- over the same period, cost had become more of a barrier to care for the insured. Among those with insurance who said they had access problems in 2010, 65.9% cited cost as the problem compared with 60.7 % in 2007.
The tendency to forgo care has shown up in insurers' bottom lines. Large, publicly traded health plans have reported lower-than-expected spending on medical care for their members during the last year.
As unemployment remained high, more Americans had to pay for care out of pocket or struggled to afford $20 co-payments.
Some insurers say they believe their efforts to reduce spending on unnecessary care have helped control their spending, but all acknowledge that the downturn in the economy is the main reason they have been able to hang on to more of every premium dollar.
The employers surveyed for the NBGH about their cost-saving strategies said increasing the employee percentage contribution to their health insurance premium was the most common way to raise cost-sharing, but most respondents said they planned to raise the share of premiums employees pay by less than 10%.
Paul Fronstin, PhD, director of the health research and education program at the Employee Benefits Research Institute, said employers have leaned toward asking employees to pay more for care in the form of deductibles and co-payments, rather than pay more for health insurance.
"For many years, we didn't see any movement in the share of premiums they were paying," he said. "It wasn't until last year we saw that change. We're not sure how far it's going to go."
Despite the rise in the out-of-pocket share of health care spending for the insured, health insurance remains an important financial protection, as demonstrated by reported struggles of the newly unemployed who lost coverage when they lost their jobs.
The plight of the 9 million people who became uninsured between 2008 and 2010 was the subject of a study by the Commonwealth Fund released on Aug. 24. The report found that 72%of those who lost their jobs and health insurance had skipped or delayed care because of concern about the cost of care.
The same percentage reported struggling with medical bills and medical debt. Of those who were unemployed but kept their health insurance, only 49% reported problems with medical bills and debt.