Employer Satisfaction with Health Insurers Declines

By Stephen Miller Jan 25, 2010

U.S. employers have become less satisfied with their health insurers, according to a study by consultancy PricewaterhouseCoopers’ Health Research Institute.

Hit hard by the recession, employers of all sizes are taking a critical look at their health benefits strategy and the value they derive from it. They are looking to their health plan providers for information, technology and strategies to help reduce waste in health care spending and better engage employees in managing their health.

The report, What Employers Want from Health Insurers in 2010, is based on a study of nearly 250 employers, ranging from large U.S.-based multinationals to privately held small companies. Survey data collected in the second quarter of 2009 looked at how employers viewed health plans in 12 key service areas across four main categories: financial, customer service and claims administration, use of technology and population health management. Major findings include:

Overall satisfaction of health insurers by large employers has decreased to 59 percent from 64 percent in 2008.

Small employers continue to be less satisfied with health insurers than large employers, with overall satisfaction remaining steady at 52 percent, but the gap between large and small employers is narrowing as large employer satisfaction erodes.

Employee cost-sharing continues to be the most prevalent strategy for employers. Sixty percent of employers surveyed said they would further increase cost sharing for health care with their employees in the year ahead.

Claims processing, administrative fees and provider discounts remain among the most important basic service offerings for large and small employers, though among large employers, wellness programs surpassed provider discounts as the more important offering.

Wellness and disease management programs are popular among employers, but companies that offer them are frustrated with the low level of employee participation. Seventy-one percent of companies surveyed now offer wellness programs and 67 percent offer disease management programs.

Employee participation in wellness programs continues to hover at around 50 percent. Many employers are finding that simple financial incentives such as cash, gift cards and annual premium savings are no longer working as a way to engage employees.

Interest in personal technology tools such as personal health records and online comparison tools is surging. Nearly half of all employers say it is important for insurers to offer these tools, but less than half are satisfied with what they are getting.

“Employers recognize that it’s better to manage the health of their workforce than to manage the cost of illness, and they want their health plan to help manage the entire health continuum,” says Paul Veronneau, principal and U.S. health care payer leader at PricewaterhouseCoopers. “There is only so much insurers can do to manage health and cost through provider discounts or on the back end of a claim. This is an opportunity for health insurers to look beyond traditional strategies and get more aggressive about health care quality and value.”

Employers recognize that it’s better to manage
the health of their workforce than to manage
the cost of illness.


What Employers Want from Health Insurers

The following are key recommendations for insurers based on PricewaterhouseCoopers’ analysis:

Be a consultative partner with employers to help improve workers’ health and advocate for employer health strategies.

Take a more active role in waste reduction.

Offer better strategies for engaging employees in wellness and disease management programs.

Provide more meaningful, actionable and higher-quality data to build workforce profiles that will help employers better understand the health of their workforce, find intervention points for better outcomes, and create targeted outreach and engagement campaigns.

Deliver consistent and transparent health benefit plan reporting.

Provide personal technology tools for employees.

Assist in the continuity and coordination of care among patients and physicians.

Provide education that will simplify health plans and benefits, engage workers in real behavior change, and translate benefit information into actions that promote wellness.

The study found that small and large employers were more closely aligned in 2009 regarding what they want from insurers than in 2008, when there were distinct gaps between what each group considered most important. However, the importance of wellness programs continues to be the area with the greatest gap between large and small employers:

Nearly 80 percent of large employers indicate that wellness programs are important to them, compared with 57 percent of small employers.

However, small employers are catching up in seeing the value of these programs. Wellness programs and personal health records are the two service areas that experienced the largest increase in importance among small employers since 2008.

Performance guarantees continue to be rated the least important financial service offering among large employers, dropping almost 20 percentage points in importance and satisfaction since 2008. This could indicate that employers are not getting clear value from existing performance guarantees. According to the study report, employers need better information on their employee population to determine how to structure performance guarantees to meet their expectations for health and financial outcomes.

Stephen Milleris an online editor/manager for SHRM.

Related Articles:

A Governance Approach to Managing HR Vendors, SHRM Online Benefits Discipline, January 2010

Strategies to Maximize Your Health Care Vendor Relationships, SHRM Online Benefits Discipline, April 2009

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