The American healthcare system today is a more debated, contested public issue than it has been at any other time in history.  Continuing cost escalation has been exacerbated by a deep recession, increasingly affecting companies’ employee benefits strategies.  See what CFOs and financial executives are doing to control healthcare costs and improve their company’s bottom line.

Healthcare costs continue to grow at a rapid pace. In the current economic climate, it has become imperative for employers to make their investment in employees’ health plans as efficient and effective as possible. The 2009 J.H. Cohn Health Benefits Survey report provides information on
healthcare trends, and also identifies actions taken by employers to help contain the skyrocketing costs of healthcare.

In this survey, financial executives at New Jersey-based employers were asked questions about two critical areas of employee healthcare plans: How much is your organization paying for healthcare and what are you doing to contain healthcare costs?

 

Not surprisingly, the survey found that employers who were most aggressive in implementing a variety of cost containment programs also had the lowest premiums or premium equivalents. Many employers of all sizes still have additional cost containment strategies available to put in place in order to help them manage their healthcare costs. In addition, smaller companies, in particular, defined for our purposes as those with less than 200 employees, paid substantially more in premiums (approximately 25 percent) not just due to economies of scale, but also because they had fewer cost controls in place.

Other key findings of the 2009 J.H. Cohn Health Benefits Survey include:

• Healthcare costs continue to rise at an alarming rate on a year to year basis. Thirty-six percent of respondents reported double digit increases.
  
  
• Employers are increasingly offering employees High Deductible Health Plans. Overall, 37 percent of respondents offer a High Deductible Health Plan, compared to only 11 percent
  in our 2007 survey.
  
  
• A disproportionate number of small employers continue to offer employees only one health plan option. Approximately 80 percent of firms with greater than 200 employees offer a choice of plans while only about half of the companies with 200 or fewer employees do.
  
  
• Only 37 percent of respondents require generic substitutions for prescription drugs and 35 percent require the use of mail order prescription drug services for maintenance drugs. This is a cost control measure that would be a win-win for both the employer and the employees.
  
  
• One-third of all large employers surveyed have implemented a wellness program and they are four times more likely to have a wellness program than smaller companies.

These findings confirm that there is much that employers can still do to contain healthcare costs, and that these efforts pay off in reduced premiums. Cost savings initiatives are available to all employers, regardless of their size, but smaller companies need to become more proactive in controlling costs.