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An increasing number of employees would be willing to use a private exchange to shop for employer-subsidized insurance, and to travel more than two hours to a “center of excellence” if their costs would be lower than using a local provider, according to a nationwide survey of workers conducted by the National Business Group on Health (NBGH), a nonprofit association of more than 375 large U.S. employers.
A total of 1,520 employees who receive their health care benefits through their company or union responded to the survey, conducted July 30 through Aug. 8, 2013.
“Employees need to recognize that health reform brings with it additional costs for their employers and that, ultimately, they will be sharing in these costs,” said NBGH President and CEO Helen Darling, at an Oct. 22 press briefing in Washington, D.C. “At the same time, employees are gaining confidence in their ability to shop for insurance, and many are open to new and potentially cost effective ways to buy insurance,” such as through government-run public exchanges or private exchanges.
Private and Public Exchanges
Private online health insurance exchanges,recently launched by a number of HR consultancies, allow organizations to provide eligible workers withdefined contributions to purchase group policiesthat comply with the Affordable Care Act and meet the specifications of state insurance regulators.
Although 66 percent of respondents hadn’t heard of a private exchange, when given an explanation of how it works, more than half said they would be “somewhat” or “very interested” in purchasing health insurance this way if their employer offered it.
Additionally, two-thirds (66 percent) would shop for insurance through a public exchange if it were offered as a less expensive option. However, more workers would stick with their company’s plan if the costs were the same, even if there were more choices in a public exchange.
“Employees have clearly gained confidence in the last year when it comes to purchasing health care on their own,” Darling said. “This confidence probably arises from the opening of the public marketplaces. However, many employees are not confident in their ability to purchase the same or higher-quality care.” She added that if employees find their benefits have been shifted to an exchange-based model, they’ll expect their employer to provide support and guidance during the transition.
Centers of Excellence
The survey also asked employees how they view various aspects of health care delivery.
Four in 10 had heard of health care facilities called centers of excellence, generally hospitals or clinics deemed to offer high-quality, cost-effective care. Employers and insurers typically offer workers low-cost or free care if they have their surgery performed at a designated center of excellence.
Six in 10 workers reacted positively to the idea of an employer providing incentives to encourage them to seek care at such a facility. When asked if they would travel more than two hours to a center of excellence to have knee surgery, 68 percent said they “definitely would,” and another 22 percent “probably would” if the insurance covered the cost of the surgery and travel expenses.
In October 2013, Wal-mart Stores Inc., Lowe’s Companies Inc. and other large businesses announcedthe launch of a national Employers Centers of Excellence Network, which will offer no-cost knee- and hip-replacement surgeries for employees at four hospital systems in the United States. The network will serve as a model for delivering high-quality health care with transparent and predictable costs. The four designated centers of excellence are Johns Hopkins Bayview Medical Center in Baltimore; Kaiser Permanente Orange County Irvine Medical Center in Irvine, Calif.; Mercy Hospital in Springfield, Mo.; and Virginia Mason Medical Center in Seattle.
In 2010, Lowe’s beganan arrangement with the Cleveland Clinicto provide cardiac treatment to Lowe’s employees, and later expanded the program to cover other types of surgeries. Workers can elect to have surgery at their home hospital, but if they choose to go to Cleveland, the surgery is provided with no deductible and no out-of-pocket costs.
Along similar lines, insurance companies are setting up smaller or “narrow networks” of doctors/medical providers who are considered best in class, and are reducing in-network co-pays or co-insurance to encourage customers to use these networks. The survey showed that 48 percent of workers had a positive reaction to the idea.
However, when asked what they would do if their provider was not part of the “best” network, 40 percent said they would“ definitely” or “probably” continue to see their own doctor, while 44 percent would switch to one in the “best” network.
Along similar lines, a Booz & Co. survey of over 20,000 consumers showed Americans care more about having a high-quality hospital system than having their own primary care physician (PCP) in their chosen network. "In fact, having an in-network PCP is half as important as having a good hospital system in network," commented Booze & Co. partner Sanjay B. Saxena, M.D., and principal Nate Holobinko, in a recent Harvard Business Review Blog post. "Consumers don’t necessarily prefer more inclusive hospital networks," they noted. "A small network with a high-quality system was far more coveted than other networks with a broader array of choices."
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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