Employers find wellness programs can cut overall health care costs

As employers nationwide struggle with rising health care costs, many have implemented a variety of cost saving initiatives. A recent health care survey found the majority of public sector employers are working to control costs by implementing disease management and wellness programs, instead of introducing consumer-driven health plans (CDHPs).

Over half of the public employers who responded to the survey indicate they have implemented a disease management (69%) or a wellness program (65%). A much smaller percentage, only 17%, have a consumer-driven health plan in place.

“Although CDHPs have become common in the corporate environment, many public sector plans do not see CDHPs as a good fit for their organization – perhaps because the greater out-of-pocket costs associated with CDHPs could result in employees delaying needed care,” said Sally Natchek, Senior Director of Research at the International Foundation of Employee Benefit Plans. “Instead, public employers are working to control costs by implementing wellness and disease management programs and building a foundation for individual responsibility.”

Conducted by the International Foundation of Employee Benefit Plans, the study titled Health Care Cost Control: Industry Approaches and Attitudes, reports responses from 1,054 U.S. benefit plans sponsors, trustees, and others who serve in the employee benefits industry. Survey results break down respondents answers based on four unique employee benefit sectors: corporate plans, public/governmental plans, multiemployer benefit plans, and professional service firms serving the employee benefits industry.

The survey found that 64 percent of public employers are taking an incremental approach to overall cost-management, with only a small minority, 5 percent, indicating they are making significant, dramatic changes. Public employers identified promoting individual responsibility for health as the major factor shaping their health care strategies.

In comparison to the other employment sectors, public employers were significantly less likely to offer CDHPs. Corporate respondents stated they offer CDHPs at more than double the rate of the public sector (39%), while professional service firms are more than three times as likely to have a consumer-driven plan in place (59%).

The main reasons stated by public employers for not offering a CDHP include: poor fit for organization (35%), don’t favor shifting costs to employers (20%), waiting until CDHPs are proven effective (18%), and expect low participation (18%). In addition, nearly three-quarters, 74 percent, believe that there is a lack of good data about the cost-effectiveness of CDHPs and 79 percent stated that wide acceptance of CDHPs is unlikely until they become simpler to navigate.

“Public sector respondents are implementing disease management programs not only to improve health care costs, but also to improve the quality of health care,” said Natchek. “A majority, 81 percent, believe offering a disease management programs improves the quality of health care for their plan participants.”

Public employer respondents were the most likely to state that helping workers enjoy better overall physical health was a reason they offered a wellness program. The most common wellness initiatives they offer include health screenings, health risk assessments/appraisals, flu shots, smoking cessation programs, health fairs, and wellness education.

Interestingly, public employers appear to be among the first to offer disease management and wellness programs with 26 percent stating they had had a disease management program in place for more than five years and 39 percent stating their wellness program has been in place five or more years.