2012 Deloitte Survey of U.S. Employers: Opinions about the U.S. … · 2020-06-13 · of all U.S....

2012 Deloitte Survey of U.S. Employers: Opinions about the U.S. Health Care System and Plans for Employee Health Benefits

Deloitte Center for Health Solutions & Deloitte Consulting July 2012

Executive summary

2012 Deloitte Survey of U.S. Employers 3Copyright © 2012 Deloitte Development LLC. All rights reserved.

• Employers believe that the U.S. health care system underperforms: 35% of employers grade its performance as an “A” or a “B,” while 64% give it a “C,” “D,” or “F.” Grades vary by company position with twice as many Owners/CEO/Presidents (6 in 10) judging system performance as an “A” or a “B” than do benefits management executives.

• Favorable views about system performance center on its clinical capabilities and on medical innovation. C-suite executives see system strengths in access, availability and convenience (74%) compared with executives involved in managing benefits such as Chief Human Resources Officers (48%) and benefits administrators (27%).

• Unfavorable views center on its wastefulness and high costs. Employers believe that high costs are driven by hospital costs (80%), inefficiencies (68%) and unhealthy lifestyles (67%). Views vary by company position with CFOs and CEOs blaming costs and unhealthy behaviors; HR professionals add in prescription medication costs.

• Employers believe that investments in primary care have provided higher value compared to others.

Executive summary: Employer views about the performance of the health care system


• Employers believe that they have a “good” understanding of the ACA – HR professionals more so than the C-suite. Executives from mid-sized and larger firms are more likely to feel as if they understand the ACA well.

• Understanding of delivery system changes in the ACA is low. Familiarity with the individual mandate is the highest (72%). Employer penalties for not offering benefits (66%), essential benefits (53%), and health insurance exchanges (45%) were also familiar to many employers. By contrast, bundled payments, accountable care, etc., are not understood.

• 30% view the ACA as “a good start,” 59% “a step in the wrong direction.” There was a wide range of opinions, from HR who responded more positively to C-suite respondents who think it’s a step in the wrong direction.

• Most employers say their company is “not well prepared” to implement the 2014 provisions of the ACA. 4 in 10 mid-sized and larger firms feel “well-prepared” to implement the provisions of the ACA whereas only one-fourth of the smallest firms feel this way.

Executive summary: Employer views about the Affordable Care Act (ACA)


• Employers offer health benefits to attract and retain employees and sustain job satisfaction.

• Most do not intend to drop health benefits coverage. 9% of companies representing 3% of the workforce anticipate dropping coverage in the next 1-3 years, versus 81% of companies representing 84% of the workforce which plan to continue. 10% of companies representing 13% of the workforce are not sure. Prohibitive cost is the driver that may lead employers to consider dropping coverage.

• To manage health care costs, increased cost-sharing with employees is considered the optimal strategy. Most say they will increase use of co-pays, deductibles and increased premium participation to reduce costs.

• Employers believe that health insurance exchanges may be a viable channel for employer benefits strategies. Smaller employers view exchanges more favorably than do bigger companies – particular interest is held in exchanges that offer a wide choice of plans and that operate as a non-profit entity.

• Some employers believe that direct contracting with provider organizations will be a viable cost containment strategy. CEOs and CFOs are more inclined to think direct contracting is favorable compared to HR and benefits staff. Cost, access, and customer service are important factors in direct contracting.

Executive summary: Employer views about employee health benefits


• Employers support reforms in medical liability, Medicare and Medicaid, and repeal/delay of the ACA as means of reducing the federal deficit. Across the board cuts in government spending are considered a higher priority than changes to the health care system Survey respondents were only presented with health care-related alternatives to reduce the deficit.

Executive summary: Employer views about deficit reduction


• Employer-sponsored health benefits are not likely to disappear, but changes that shift financial risk to employees are certain. Therefore, industry and policy-makers should consider the appropriate sets of tools, incentives, and precautions associated with the shift.

• Employers believe that the government should cut its spending, including entitlement reforms. Therefore, the business community should consider directly engaging in the development of strategies for retirees, populations needing assistance, and relevant policy-making at the state and federal levels.

• Employers do not understand the full scope of the ACA. Policy-makers and industry leaders should consider investing in education about and active improvement of the ACA. Popular areas where employers are directly impacted are better understood than those that are intended to improve the efficiency and quality of the delivery system.

• Employers are concerned about health costs; they are unaware of solutions that could improve the safety and quality of care, and simultaneously reduce cost. Companies should consider investing in educating their boards and management about the health care system. The difference between understanding health benefits compliance and optimal ways to extract improved value from the system is a huge gap.

Implications

Context, objectives, and methodology


• Employer-sponsored health insurance covers more than 160 million Americans.1

• According to the Kaiser Family Foundation, 60% of all U.S. firms offered health benefits in 2011. Nearly all large firms (99% of firms with 200+ workers) offered employee health benefits, small firms (3-199 workers) were less likely to do so, with 59% offering employee benefits in 2011.2

• Average wage growth for employers increased 2.1% in 2011 while average health benefits costs increased 9% over the previous year.3

• Most employers that provide insurance coverage are transferring more financial risk to employees: from defined benefits to defined contribution.

• Employers might drop coverage if state health insurance exchanges and other elements of the ACA are implemented and effective. Using Deloitte’s Health Reform Impact Model, the Center for Health Solutions examined the effects of an employer exit from benefits, as well as three other possible scenarios resulting from the likely impact of the ACA on health insurance coverage.4 Under the different scenarios, it was estimated that potentially between 23 million and 65 million individuals may join a health insurance exchange by 2020.

Context

1. The Kaiser Family Foundation & Health Research Educational Trust. Employer Health Benefits 2011 Annual Survey. Available from: http://ehbs.kff.org/?page=abstract&id=2

2. Ibid.

3. Ibid.

4. Deloitte Center for Health Solutions. The impact of health reform on insurance coverage: Projection scenarios over 10 years. Washington D.C. September, 2011. www.deloitte.com/centerforhealthsolutions

http://www.deloitte.com/centerforhealthsolutions


This study had two objectives:

• To explore employers’ opinions about the ACA

• To understand employers’ predisposition toward making changes to their health benefits strategies, including the potential that health exchanges might play a role in their strategy

Objectives


Methodology

Survey sample A web-based survey of 560 randomly selected employers with 50 or more workers offering health benefits; stratified by firm size with systematic controls for industry and location intended to represent the private workforce.

Respondents Included owners, chief executive officers (CEOs)/presidents, chief financial officers (CFOs), chief human resources officers (CHROs) and individuals responsible for health benefits program decisions. Designated participants were identified through a pre-screening telephone call followed by a web-based invitation. A financial incentive or a donation to a charity of their choosing was offered in recognition of their time.

Questionnaire The 32-item questionnaire probed opinions about the ACA and anticipated strategies for employee health benefits coverage and cost containment. Areas covered included: current and anticipated changes in employer health benefits, opinions about the performance of the health care system overall, opinions about cost drivers and value for money of health care expenditure, awareness of key features of the ACA, current and likely future employee benefits strategies, understanding and potential responses to health insurance exchanges, and their potential interest in contracting directly with local providers.

Data analytics Two sets of weights were created for the analysis. The first was a firm level weight, calibrated via a ranking method to match firm count distributions in the U.S. Census Bureau’s 2009 Statistics of U.S. Businesses by firm size, principal industry, and region. The second was a worker-level weight. The base weight is the product of the firm level weight and its total number of workers nationwide reported by the firm in the survey. The base weight was then calibrated using the raking method described above. This was further adjusted to reflect firms offering health benefits by firm size, region, and industry. All statements in this report reflect the responses of the survey participants only.


Survey sample

Number

All respondents 560

Company Size 50-100 employees 108

101-999 employees 183

1,000-2,499 employees 1302,500+ employees 139

Industry Mining/Construction 20*

Manufacturing 106

Tran/Util/Comm 44

Wholesale 35

Retail 32

Finance 40

Service 187

Health Care 96

Firm Region Northeast 136

Midwest 159

South 183West 82

Company Role Owner/CEO/President 66

CFO 63

CHRO – Chief Human Resources Officer 85

Executive responsible for health benefits programs 177

Office manager or benefits administrator 93

Other 76

*Not sufficient data

Health Benefits Offered All respondents

Offer health benefits to dependents of employees 95%

Currently provide retiree health benefits to any former employees* 15%

Offer part-time employees health benefits 26%

*3% indicated they offer retiree benefits but don’t currently have any retirees

Companies where the majority of employees are in plans where coverage is underwritten by an insurer 79%

Companies where the majority of employees are in plans that are self-insured 21%

Employer views about the performance of the U.S. health care system


Using a typical report card scale with grades of A, B, C, D, and F, with A being excellent and F being failing, how would you grade the overall performance of the U.S. health care system?

Title of respondent

Perc

ent

A – Excellent B – Good C – Fair D – Poor F – Failing

0

20

40

60

80

100

Owner/CEO/President

4%

15%

22%

55%

4%

1%

20%

40%

26%

13%

3%

25%

47%

19%

2%

2%

27%

40%

25%

2%

10%

32%

42%

12%

2%

8%

17%

37%

31%

4%

CFO CHRO Benefits Executive

BenefitsAdministrator

Other

Most employers believe that the U.S. health care system underperformsGrades vary by company position with 59% of Owners/CEOs/Presidents judging system performance as an “A” or a “B” compared with 27% of benefits management executives.


Most employers believe that the U.S. health care system underperformsGrades vary by company position with 59% of Owners/CEOs/Presidents judging system performance as an “A” or a “B” compared with 27% of benefits management executives.

A Excellent

B Good

C Fair

D Poor

F Failing

Total employers 5% 30% 37% 22% 5%

50-100 employees 4% 35% 30% 23% 5%

101-999 employees 6% 24% 43% 20% 5%

1,000-2,499 employees 4% 21% 46% 26% 2%

2,500+ employees 1% 19% 49% 26% 4%

Manufacturing 13% 24% 38% 24% 1%

Tran/Util/Comm - 35% 19% 40% 6%

Wholesale 0% 26% 41% 30% 3%

Retail 10% 31% 37% 22% 0%

Finance - 31% 42% 20% 6%

Service 5% 32% 37% 20% 3%

Health Care 6% 29% 42% 13% 6%

Northeast 1% 29% 43% 23% 3%

Midwest 4% 29% 39% 22% 3%

South 8% 35% 33% 20% 3%

West 7% 25% 33% 23% 11%

Owner, CEO, or President 4% 55% 22% 15% 4%

CFO 13% 26% 40% 20% 1%

CHRO – Chief HR Officer 2% 19% 47% 25% 3%

Benefits Executive 2% 25% 40% 27% 2%

Benefits Administrator 2% 12% 42% 32% 10%

Other 4% 31% 37% 17% 8%

Using a typical report card scale with grades of A, B, C, D, and F, with A being excellent and F being failing, how would you grade the overall performance of the U.S. health care system?


On a scale of A to F, with A being excellent and F being failing, how would you grade the U.S. health care system on each of the following dimensions?

0 10 20 30 40 50 60 70 80

Medical innovation

Access to services

Percent

Focus on wellness

Understand payment,insurance system

Elem

ents

of h

ealth

car

e sy

stem

per

form

ance

Costs of care

69%

53%

29%

23%

14%

6%

Ease navigating system

Favorable grade “A” or “B”

Employers hold favorable views of the health care system’s ability to innovate, but costs are a universal concern


Employers hold favorable views of the health care system’s ability to innovate, but costs are a universal concern

On a scale of A to F, with A being excellent and F being failing, how would you grade the U.S. health care system on each of the following dimensions?

Medical innovation such as new

treatments or services

Focusing on wellness rather

than illness

Access to services, such as availability and convenience

Costs of care

Ease of navigating the system on behalf of your employees

Ease of understanding

the insurance and payment system

Total employers 69% 23% 53% 6% 29% 14%

50-100 employees 66% 28% 53% 7% 29% 16%

101-999 employees 71% 19% 52% 5% 29% 13%

1,000-2,499 employees 68% 12% 53% 3% 21% 7%

2,500+ employees 72% 12% 58% 4% 20% 7%

Manufacturing 65% 31% 54% 10% 28% 22%

Tran/Util/Comm 58% 20% 38% 9% 14% 0%

Wholesale 81% 30% 58% 0% 23% 26%

Retail 57% 43% 37% 10% 29% 4%

Finance 84% 20% 53% 16% 40% 10%

Service 71% 22% 56% 2% 29% 14%

Health Care 72% 18% 55% 11% 37% 17%

Northeast 61% 21% 47% 1% 23% 20%

Midwest 71% 23% 63% 6% 30% 13%

South 68% 26% 55% 9% 34% 14%

West 75% 22% 41% 5% 25% 11%

Owner, CEO, or President 77% 19% 74% 8% 35% 15%

CFO 73% 21% 58% 1% 25% 16%

CHRO – Chief HR Officer 69% 15% 48% 5% 23% 10%

Benefits Executive 69% 19% 51% 7% 30% 14%

Benefits Administrator 53% 29% 27% 7% 17% 17%

Other 69% 34% 49% 9% 38% 11%

Favorable grade “A” or “B”


0 10 20 30 40 50 60 70 80

The total costs of the health care system have increased at more than 6% annually in the last few years. Many factors drive those costs. In your view, does each of the following have a MAJOR influence, MINOR influence, or NO INFLUENCE on overall health care system costs?

Hospital costs

Inefficiencies in the system

Percent

Prescription drugs

Insurance company costs

Cos

t D

river

s in

Hea

lth C

are

Syst

em

Government regulation

New technologies & equipment

Fraud in the system

Over-use of testing & surgical procedures

Insufficient competition in health insurance market

Payments reward volume not performance

Defensive medicine

Heroic measures to extend life

80%

Unhealthy lifestyles, consumer behavior

68%

66%

62%

60%

59%

50%

50%

45%

45%

34%

31%

67%

Major influences on health care costs

Employers believe that costs are driven most by hospital costs, followed by inefficiencies, unhealthy lifestyles, prescription drug costs, insurance company costs, and government regulation (essentially everyone else!)


Views vary by role: CFOs and CEOs blame hospital costs and unhealthy behaviors; HR professionals add prescription drugs and system inefficiencies

Prescription drugs

Hospital cost

Defensive medicine

Gov’t regulation

Insurance company

costs

Unhealthy lifestyles & consumer behavior

Fraud in the system

Inefficiencies in the system

New technologies

and equipment

Payment incentives that reward

volume instead of performance

Over-utilization of testing

and surgical procedures

Heroic measures to extend life

Insufficient competition in the health

insurance market

Total employers 66% 80% 34% 60% 62% 67% 50% 68% 59% 45% 50% 31% 45%

50-100 employees 61% 80% 34% 60% 59% 59% 49% 66% 60% 40% 51% 28% 47%

101-999 employees 71% 81% 34% 61% 65% 76% 52% 70% 57% 49% 47% 35% 43%

1,000-2,499 employees 83% 78% 45% 62% 67% 88% 47% 71% 63% 56% 64% 38% 40%

2,500+ employees 78% 81% 45% 61% 54% 80% 51% 77% 70% 47% 64% 42% 37%

Manufacturing 55% 75% 36% 65% 52% 65% 55% 56% 61% 35% 48% 30% 36%

Tran/Util/Comm 70% 88% 29% 54% 59% 89% 53% 65% 61% 36% 42% 39% 25%

Wholesale 59% 95% 33% 68% 53% 62% 46% 73% 53% 38% 47% 20% 38%

Retail 77% 78% 32% 50% 55% 59% 44% 71% 38% 43% 50% 33% 32%

Finance 60% 63% 42% 62% 66% 73% 53% 70% 42% 36% 43% 39% 38%

Service 62% 80% 34% 57% 64% 64% 50% 63% 62% 48% 53% 32% 56%

Health Care 90% 84% 38% 64% 80% 88% 39% 74% 59% 39% 51% 36% 47%

Northeast 69% 75% 24% 47% 67% 70% 39% 79% 57% 45% 55% 29% 51%

Midwest 69% 85% 43% 64% 67% 74% 46% 64% 60% 51% 58% 33% 39%

South 68% 81% 37% 67% 59% 70% 56% 62% 59% 44% 48% 35% 45%

West 57% 78% 29% 59% 55% 52% 58% 70% 59% 38% 39% 26% 45%

Owner, CEO, or President 57% 75% 45% 77% 48% 65% 50% 55% 66% 46% 47% 38% 41%

CFO 57% 80% 30% 57% 58% 60% 39% 70% 55% 36% 52% 29% 51%

CHRO – Chief HR Officer 71% 91% 41% 51% 68% 72% 48% 75% 68% 55% 61% 35% 42%

Benefits Executive 77% 83% 39% 49% 56% 78% 39% 60% 48% 50% 46% 25% 49%

Benefits Administrator 72% 77% 25% 59% 79% 61% 60% 75% 55% 44% 46% 22% 47%

Other 70% 85% 26% 58% 70% 74% 67% 78% 63% 46% 56% 40% 38%

Factors considered by employers to be a MAJOR influence on overall health care system costs.

The total costs of the health care system have increased at more than 6% annually in the last few years. Many factors drive those costs. In your view, does each of the following have a MAJOR influence, MINOR influence, or NO INFLUENCE on overall health care system costs?


On a scale of one to ten, where one indicates “low value” and ten indicates “high value,” how much value does each of the following organizations, products or services provide to the overall health care system for every dollar that is spent on them?

0 10 20 30 40 50 60 70

Primary care

Prescription drugs

Percent

Specialty care

Wellness programs

Health insurance plans

Cos

t D

river

s in

Hea

lth C

are

Syst

em

Retail clinics

Hospitals

61%

50%

46%

43%

39%

31%

47%

Provides value to health care system (rating of 8, 9, or 10)

Employers believe that investments in primary care provide the highest level of value to the health care systemNotably, wellness programs and retail clinics were not valued as highly as traditional primary care, and prescription drugs were given a high-value rating above hospitals.


Employers believe that investments in primary care provide the highest level of value to the health care systemNotably, wellness programs and retail clinics were not valued as highly as traditional primary care, and prescription drugs were given a high-value rating above hospitals.

Hospitals Primary care medicine

Specialty care medicine

Health insurance plans

Prescription drugs

Wellness programs

Retail clinics

Total employers 47% 61% 46% 39% 50% 43% 31%

50-100 employees 45% 62% 41% 36% 46% 44% 30%

101-999 employees 50% 59% 50% 43% 54% 41% 33%

1,000-2,499 employees 48% 65% 55% 46% 53% 46% 36%

2,500+ employees 52% 81% 43% 47% 51% 43% 33%

Manufacturing 48% 69% 51% 47% 51% 49% 39%

Tran/Util/Comm 29% 33% 31% 33% 53% 36% 42%

Wholesale 40% 54% 41% 46% 44% 41% 28%

Retail 34% 69% 29% 34% 45% 35% 26%

Finance 51% 69% 38% 32% 42% 34% 33%

Service 48% 59% 44% 44% 56% 39% 34%

Health Care 70% 81% 72% 39% 50% 56% 24%

Northeast 43% 65% 39% 42% 52% 53% 29%

Midwest 46% 65% 53% 40% 49% 42% 33%

South 47% 59% 46% 40% 52% 36% 34%

West 51% 55% 42% 36% 47% 45% 27%

Owner, CEO, or President 40% 64% 48% 44% 41% 44% 27%

CFO 41% 59% 36% 39% 49% 48% 28%

CHRO – Chief HR Officer 56% 69% 52% 55% 67% 34% 36%

Benefits Executive 57% 66% 54% 45% 52% 41% 27%

Benefits Administrator 50% 52% 39% 36% 48% 30% 41%

Other 49% 60% 50% 25% 54% 56% 32%

Percent responding 8, 9, or 10 on a 10-point scale

On a scale of one to ten, where one indicates “low value” and ten indicates “high value,” how much value does each of the following organizations, products or services provide to the overall health care system for every dollar that is spent on them?

Employer views about the ACA and health reform


76%

18%

6%

2%

73%

26%

8%

58%

34%

19%

39%

42%

How well do you understand the health reform law and its requirements for health insurance coverage for employees?

Perc

ent

Limited understanding or don’t understand at allSome understandingExcellent or good understanding

2,500+employees

1,000-2,499 employees

101-999 employees

50-100 employees

Data are rounded

Owner, CEO,or President

CHRO –Chief Human

ResourcesOfficer

CFO ExecutiveResponsiblefor HealthBenefits Program

OfficeManager or

Benefits Administrator

0

20

40

60

80

20%

31%

50%

4%

44%

52%

60%

15%

0%

25%28%

30%

43%

75%

25%

Employers surveyed believe that they have a “good” understanding of the ACA, with HR professionals more confident than CEOs and CFOs


Employers surveyed believe that they have a “good” understanding of the ACA, with HR professionals more confident than CEOs and CFOs

Excellent Understanding

Good Some Limited Don’t understand at all


50-100 employees 5% 34% 42% 16% 3%

101-999 employees 6% 52% 34% 5% 2%

1,000-2,499 employees 15% 58% 26% 2% 0%

2,500+ employees 25% 52% 18% 6% 0%


Tran/Util/Comm 4% 49% 29% 11% 7%

Wholesale 0% 47% 39% 11% 2%

Retail 11% 43% 23% 16% 7%

Finance 20% 49% 21% 10% 0%

Service 3% 43% 41% 10% 3%

Health Care 15% 44% 32% 8% 0%

Northeast 11% 44% 36% 9% 1%

Midwest 8% 41% 38% 9% 3%

South 2% 45% 42% 8% 3%

West 5% 38% 33% 20% 3%


CFO 4% 48% 44% 4% 0%




Other 0% 33% 53% 14% 0%

How well do you understand the health reform law and its requirements for health insurance coverage for employees?


On a scale of one to ten, with one being not at all familiar and ten being the most familiar, how familiar are you with the following elements of the health reform law that relate to health insurance?

The health reform law includes an individual mandate requiring most people to buy health insurance or pay a penalty

72%

66%

53%

50%

45%

23%

22%

20%

The health reform law will include penalties for most employers who do not offer health benefits to their workers

The health reform law requires coverage of “essential benefits” by most employers offering coverage

In the exchanges insurers will be prohibited from refusingto cover patients due to poor health or to charge higher

premiums due to the health status of patient(s)

The health reform law will set up health insurance exchanges that will offer a choice of health insurance plans to buyers

The health reform law attempts to increase research-based information on the comparative effectiveness of different

medical treatments

The health reform law encourages creation of accountable careorganizations and medical homes

The health reform law introduces bundled payments/episode-based payments for hospitals and physicians

Elem

ents

of t

he A

ffor

dabl

e C

are

Act

0 10 20 30 40

Percent

50 60 70 80

“Familiar” (a rating of 8, 9, or 10)

Employers are most familiar with the individual mandate and employer penalties; less familiar with payment and delivery system reforms


Employers, regardless of size, region, or industry, are more aware of benefits-related ACA elements than delivery system changes

The health reform law requires coverage of “essential benefits” by most employers offering coverage

The health reform law includes an individual

mandate requiring most people to buy

health insurance or pay a penalty

The health reform law will set up health insurance exchanges

that will offer a choice of health insurance

plans to buyers

In the exchanges insurers will be prohibited from refusing to cover

patients due to poor health or to charge

higher premiums due to the health status of

patient(s)

The health reform law will include penalties for most employers who do not offer

health benefits to their workers

The health reform law encourages creation of accountable care organizations and

medical homes

The health reform law attempts to

increase research-based information on the comparative

effectiveness of different medical

treatments

The health reform law introduces bundled payments/episode-

based payments for hospitals and

physicians

Total employers 53% 72% 45% 50% 66% 22% 23% 20%

50-100 employees 45% 68% 34% 42% 58% 17% 19% 16%

101-999 employees 61% 74% 57% 59% 75% 27% 28% 25%

1,000-2,499 employees 74% 81% 72% 68% 83% 30% 25% 24%

2,500+ employees 81% 80% 73% 67% 81% 40% 35% 33%

Manufacturing 61% 76% 53% 61% 76% 19% 40% 12%

Tran/Util/Comm 33% 71% 32% 41% 62% 14% 9% 13%

Wholesale 53% 63% 41% 41% 52% 9% 24% 15%

Retail 61% 74% 29% 45% 67% 20% 17% 25%

Finance 45% 74% 49% 45% 58% 25% 27% 22%

Service 51% 69% 43% 47% 66% 16% 16% 11%

Health Care 66% 80% 53% 61% 69% 55% 31% 58%

Northeast 59% 65% 44% 48% 67% 19% 26% 19%

Midwest 50% 73% 49% 54% 64% 23% 24% 19%

South 52% 76% 42% 47% 64% 24% 24% 22%

West 53% 69% 46% 54% 72% 21% 19% 20%

Owner, CEO, or President 48% 73% 41% 56% 58% 25% 23% 23%

CFO 51% 75% 48% 58% 74% 21% 18% 12%

CHRO – Chief HR Officer 52% 67% 62% 52% 68% 24% 23% 22%

Benefits Executive 72% 80% 59% 68% 80% 33% 34% 26%

Benefits Administrator 55% 58% 35% 32% 53% 15% 27% 16%

Other 45% 73% 36% 35% 68% 17% 18% 25%


On a scale of one to ten, with one being not at all familiar and ten being the most familiar, how familiar are you with the following elements of the health reform law that relate to health insurance?


7%

38%

26%

3%

45%

55%

19%31%

64%

19%

72%

11%

41%

59%

54%

50%

17%

5%

21%

30%

32%

0 20 40 60 80 100

Based on what you know or have heard about the health reform law, is it a good start or a step in the wrong direction?

Percent

Posi

tion

in C

ompa

ny

A good start A step in the wrong direction Don't know/no opinion

Owner/CEO/President

CFO

CHRO

Benefits Executive

Benefits Administrator

Other

All Respondents

The majority of employers who responded view the ACA as a “step in the wrong direction…”Benefits Executives (41%) and Chief HR Officers (38%) feel reform is a “good start” compared with Owners/CEOs/Presidents (21%). 54% of employers in the health care industry view the ACA favorably; less than 1% of retail firms see the ACA as “a good start.”

Due to rounding, some totals are not exactly 100%.


The majority of employers who responded view the ACA as a “step in the wrong direction…”Benefits Executives (41%) and Chief HR Officers (38%) feel reform is a “good start” compared with Owners/CEOs/Presidents (21%). 54% of employers in the health care industry view the ACA favorably; less than 1% of retail firms see the ACA as “a good start.”

A good start A step in the wrong direction

Don’t know/ no opinion

Total employers 30% 59% 11%

50-100 employees 25% 66% 9%

101-999 employees 37% 50% 14%

1,000-2,499 employees 39% 54% 7%

2,500+ employees 35% 57% 8%

Manufacturing 21% 69% 9%

Tran/Util/Comm 17% 82% 1%

Wholesale 8% 74% 18%

Retail 1% 87% 13%

Finance 32% 56% 12%

Service 37% 50% 13%

Health Care 54% 43% 3%

Northeast 43% 51% 6%

Midwest 33% 51% 17%

South 24% 70% 6%

West 25% 59% 16%

Owner, CEO, or President 21% 72% 7%

CFO 32% 64% 3%

CHRO – Chief HR Officer 38% 45% 17%

Benefits Executive 41% 54% 5%

Benefits Administrator 31% 50% 19%

Other 26% 55% 19%

Due to rounding, some totals are not exactly 100%.

Based on what you know or have heard about the health reform law, is it a good start or a step in the wrong direction?


Totalemployers

28%

50%

22%

2,500+employees

10%

51%

39%

1,000-2,499employees

57%

5%

38%

101-999employees

32%

50%

18%

50-100employees

26%

50%

24%

On a scale of one to ten, with one being not at all prepared and ten being fully prepared, how well-prepared is your company to implement or respond to the 2014 provisions of health reform law?

Perc

ent

Not prepared (Rating of 1, 2, or 3)

Somewhat Prepared (Rating of 4, 5, 6, or 7)Prepared (Rating of 8, 9, or 10)

0

20

40

60

80

100

Smaller employers report being less prepared to implement provisions of the ACA


Smaller employers report being less prepared to implement provisions of the ACA

Prepared (Rating of 8, 9, or 10)

Somewhat prepared (Rating of 4, 5, 6, or 7)

Not prepared (Rating of 1, 2, or 3)


50-100 employees 24% 50% 26%

101-999 employees 32% 50% 18%

1,000-2,499 employees 38% 57% 5%

2,500+ employees 39% 51% 10%




Retail 12% 53% 35%

Finance 33% 45% 22%

Service 25% 51% 24%


Northeast 27% 61% 12%

Midwest 35% 43% 22%

South 27% 48% 25%

West 22% 51% 27%


CFO 30% 49% 21%




Other 18% 48% 34%

On a scale of one to ten, with one being not at all prepared and ten being fully prepared, how well-prepared is your company to implement or respond to the 2014 provisions of health reform law?

Employer health benefits strategies: looking back, looking ahead


On a scale of one to ten, with one meaning not at all important and ten meaning very important, how important is each of the following reasons as to why your company offers health benefits?

Reasons for offering employee health benefits

Perc

ent

Important to employers (rating 8, 9, or 10 on 10-point scale)

Retain goodemployees

87%83%

80%

67%

56%

23%

Attractdesired/effective

employees

Improvemorale &

satisfaction

Improvehealth &

productivity,reduce

absenteeism

Match mycompetition

No betteralternative

0

20

40

60

80

100

Employers consider health benefits necessary to attract/retain talent…Most employers offer health benefits to retain and attract talent (87% and 83% respectively), improve morale and job satisfaction (80%).


Employers consider health benefits necessary to attract/retain talent…Most employers offer health benefits to retain and attract talent (87% and 83% respectively), improve morale and job satisfaction (80%).

On a scale of one to ten, with one meaning not at all important and ten meaning very important, how important is each of the following reasons as to why your company offers health benefits?

Retain good employees

Attract the most desired/effective

employees

Improve employee

morale and satisfaction

Improve employee health, reduce

absenteeism and improve productivity

Match my competition

No other existing alternative in marketplace

to meet needs of our employees

Total employers 87% 83% 80% 67% 56% 23%

50-100 employees 85% 81% 80% 61% 51% 19%

101-999 employees 90% 85% 79% 73% 59% 26%

1,000-2,499 employees 94% 91% 88% 82% 77% 34%

2,500+ employees 88% 90% 78% 76% 77% 33%

Manufacturing 86% 82% 77% 73% 48% 11%

Tran/Util/Comm 94% 90% 88% 78% 43% 33%

Wholesale 72% 70% 86% 61% 56% 27%

Retail 88% 90% 65% 69% 60% 7%

Finance 83% 84% 65% 60% 61% 28%

Service 90% 84% 81% 62% 57% 27%

Health Care 96% 93% 94% 72% 62% 21%

Northeast 95% 91% 84% 68% 53% 25%

Midwest 89% 84% 82% 66% 71% 26%

South 84% 76% 79% 70% 41% 20%

West 80% 85% 75% 63% 61% 22%


CFO 90% 79% 87% 59% 52% 21%




Other 76% 73% 74% 69% 54% 18%

Rating of 8, 9, or 10 on a 10-point scale


8%

5% 82%

7%

4%

81%

79%

1%

2%

95%

91%

13%

10%

13%

9%

Given what you know or have heard, do you agree or disagree with the following statement: “My company is anticipating dropping health insurance coverage in the next one to three years?”

Com

pany

Siz

e

Agree: My company anticipates dropping health insurance coverage in the next 1-3 years

Disagree: My company does not anticipate dropping health insurance coverage in the next 1-3 years

Don't know

50-100 employees

101-999 employees


Percent

2,500+ employees

Total employers

0 20 40 60 80 100

*Source: worker weighted data (not shown in table)

…and few employers anticipate dropping health care insurance coverage9% of companies representing 3% of the workforce* anticipate dropping coverage in the next 1-3 years; 81% of companies representing 84% of the workforce* plan to continue; 10% of companies representing 13% of the workforce* aren’t sure


Agree: My company anticipates dropping health insurance coverage

in the next 1-3 years

Disagree: My company does not anticipate dropping health insurance

coverage in the next 1-3 years

Don’t know


50-100 employees 13% 79% 8%

101-999 employees 5% 82% 13%

1,000-2,499 employees 1% 95% 4%

2,500+ employees 2% 91% 7%




Retail 22% 64% 13%

Finance 11% 85% 4%

Service 7% 81% 12%


Northeast 5% 93% 2%

Midwest 9% 80% 11%

South 7% 78% 14%

West 15% 75% 10%


CFO 8% 83% 9%




Other 11% 73% 17%

…and few employers anticipate dropping health care insurance coverage9% of companies representing 3% of the workforce* anticipate dropping coverage in the next 1-3 years; 81% of companies representing 84% of the workforce* plan to continue; 10% of companies representing 13% of the workforce* aren’t sure

Given what you know or have heard, do you agree or disagree with the following statement: “My company is anticipating dropping health insurance coverage in the next one to three years?”

*Source: Worker weighted data (not shown in table)


Benefits in the “essential benefits package” are more generous than those you currently provide

34%

34%

33%

32%

29%

28%

16%

The introduction of a 40% tax on premium amounts in excess of$27,500 for family coverage in 2018 (the so-called “Cadillac tax”)

If the penalty imposed for not offering coverageis less than the cost of offering benefits

Premium costs continue to rise faster than inflation

Health insurance exchanges provide a community-rated,comprehensive benefit option to employees & families

Low-income employees who are not offered employer health benefits could obtain government

subsidies to buy health insurance through an exchange

Your company’s competitors drop coverage

Empl

oyer

s’ in

tent

ions

nex

t 3-

5 ye

ars

Percent“Likely” (rating of 8, 9, or 10)

0 5 10 15 20 25 30 35

Given what you know or have heard, on a scale of one to ten, with one being not at all likely and ten being the most likely, how likely would your company be to drop coverage as a result of the following factors?

Refer to Appendix

Some employers will consider dropping health insurance benefits if costs are prohibitive


How likely would your company be to drop coverage if each of the following were to occur?

Org

aniz

atio

n Si

ze

Scenario 1 Scenario 2 Scenario 3

Percent

0 2 4 6 8 1210 14 16

50-100 employees

101-999 employees

13%

10%

8%

7%

7%

5%

4%

6%

6%

5%

9%

13%


2,500+ employees

% responding “very likely”

If exchanges were delayed to 2016 and the individual & employer penalties tripled, most of those surveyed would maintain coverageIrrespective of scenario, few say they will likely drop coverage under any of three scenarios (refer overleaf).


If exchanges were delayed to 2016 and the individual & employer penalties tripled, most of those surveyed would maintain coverageIrrespective of scenario, few say they will likely drop coverage under any of three scenarios.

Scenario 1 Health reform is implemented as passed (exchanges launch in 2014, there is an individual mandate/penalty of up to a maximum of 1% of income, employers with more than 50 employees face a penalty of $2,000 per employee if any of their employees obtain subsidized coverage through an exchange).

Scenario 2 The individual mandate/penalty is repealed or invalidated, but no other changes are made (exchanges launch in 2014 and employers with more than 50 employees face a penalty of $2,000 per employee if any of their employees obtain subsidized coverage through an exchange).

Scenario 3 Exchanges are delayed to 2016, the individual mandate is sustained and the individual penalty is tripled up to a maximum of 3% of income, and is phased in more quickly (2 years instead of 3); and the employer penalty is tripled to $6,000 per employee if any of the company’s employees obtain subsidized coverage through an exchange.

How likely would your company be to drop coverage if each of the following were to occur?

Scenario 1 (refer to the right)




50-100 employees 13% 10% 13%

101-999 employees 8% 7% 7%

1,000-2,499 employees 5% 4% 6%

2,500+ employees 6% 5% 9%



Wholesale 9% 7% 13%

Retail 41% 19% 19%

Finance 12% 11% 12%

Service 8% 9% 9%


Northeast 5% 4% 6%

Midwest 10% 7% 15%

South 11% 10% 12%

West 18% 13% 8%


CFO 9% 3% 11%




Other 12% 12% 12%

Percent responding “very likely”


Which of the following is your company currently using as a core strategy to reduce or manage health care costs?

49%

52%53%

43%

17%

29%37%

20%

16%

Discouraging unhealthy behavior by charging higher premiums or penalties

Increasing incentives & disease management encouraging healthy behaviors

Reducing covered benefits

Increasing employee premium contributions

Introducing high-deductible health plans

Transparency on costs & outcomes for local physicians & hospitals

Shifting to a defined benefits contribution

Increasing cost sharing deductibles and co-payments

Empl

oyer

s cu

rren

t st

rate

gies

to

man

age/

redu

ce c

ost

of h

ealth

car

e

Percent0 10 20 30 40 50 60 70 80

50-100 employees 101-999 employees 1,000-2,499 employees 2,500+ employees

20%

15%20%

15%

9%

27%43%

20%

32%

16%16%

35%

32%

68%73%

48%

58%

76%77%

70%

76%

74%69%

80%

Refer to Appendix

Employee cost-sharing strategies are used widely by employers to reduce or manage health care costsIncreasing cost contributions, incentivizing healthy behaviors, and introducing high-deductible health plans are currently used to manage health care costs.


What changes do you anticipate making to your benefits strategy in the next 3-5 years?

Introduce high-deductible health plans/consumer-driven health plans

Reduce covered benefits

Shift to a defined contribution

Narrow networks of hospitals and physicians

Increase employee cost-sharing (deductibles and co-payments) 69%

68%

62%

52%

34%

28%

18%

11%

5%

Increase employee premium contributions

Increase wellness, preventive health programs

Purchase health insurance from a non-traditional company (e.g., a retailer)

Terminate company subsidy for full-time employee coverage

Empl

oyer

s an

ticip

ated

cha

nges

in b

enefi

ts s

trat

egie

s ne

xt 3

-5 y

ears

Percent responding “Yes”

0 10 20 30 40 50 60 70 80

Percent

Refer to appendix

Most employers plan to increase employee cost-sharing and the use of preventive health programs in the next 3-5 years


To the best of your knowledge, is your company likely to start, increase, maintain, or decrease investments in employee health and wellness in the next 1-3 years?

Com

pany

siz

e

Start to invest in wellness Increase investment Maintain investment

Decrease investment Don’t know

0 10 20 30 40 50 60

Percent

2%

5%0%

6%

10%

6%

9%

13%

36%

47%

50%

47%

50%

42%

27%

21%

6%

6%

8%

9%

2,500+ employees


101-999 employees

50-100 employees

Large employers expect to maintain current levels of investment in wellness efforts; larger companies are more inclined to increase investments compared to others


Large employers expect to maintain current levels of investment in wellness efforts; larger companies are more inclined to increase investments compared to others

Start to invest

Increase investment

Maintain investment

Decrease investment

Don’t know


50-100 employees 9% 21% 47% 13% 10%

101-999 employees 8% 27% 50% 9% 6%

1,000-2,499 employees 6% 42% 47% 0% 5%

2,500+ employees 6% 50% 36% 6% 2%


Tran/Util/Comm 3% 24% 67% 0% 6%

Wholesale 14% 19% 44% 6% 17%

Retail 17% 15% 51% 17% 0%

Finance 8% 21% 44% 27% 1%

Service 7% 25% 48% 10% 10%

Health Care 6% 29% 49% 12% 4%

Northeast 4% 31% 48% 12% 5%

Midwest 5% 29% 51% 8% 6%

South 9% 21% 50% 9% 11%

West 14% 21% 42% 15% 9%


CFO 20% 22% 40% 11% 8%




Other 0% 17% 48% 19% 15%

To the best of your knowledge, is your company likely to start, increase, maintain, or decrease investments in employee health and wellness in the next 1-3 years?


Below are outlined some specific scenarios that may arise under health reform law. How likely is your company to pursue each? (refer overleaf)

0 10 20 30 40 50 60

Scenario 5

Scenario 4

Percent

Scenario 2

Scenario 1

Scen

ario

Scenario 3

“Very” or “Somewhat” likely

25%

25%

41%

53%

54%

Health insurance exchanges are viewed by employers as a viable channel for their benefits strategies…


Health insurance exchanges are viewed by employers as a viable channel for their benefits strategies…

Scenario 1 Families and individuals whose employer does not offer coverage and who earn between 133 and 400% of the Federal poverty level (between $14,485 and $43,560 per year) will be eligible for a subsidy to buy coverage through the exchanges. With the availability of government subsidies for low income workers to acquire health insurance, how likely is your company to drop coverage entirely for all of your workers?

Scenario 2 If a company drops coverage for its workers, the company and its employees would lose the tax benefits of employer-based coverage. It is likely that the average annual cost for family coverage may reach $18,000 by 2014, and only those with a household income of less than $89,400 will be eligible to buy subsidized health insurance through an exchange. Bearing this in mind, how likely would your company be to drop coverage entirely for all of your workers?

Scenario 3 An employer using a “defined contribution” approach on an exchange would provide a fixed dollar contribution toward a specific level of coverage available through a health insurance exchange. Employees may then select from any plan offered at that coverage level. How likely is your company to move to this type of a defined contribution approach to purchasing employee health benefits through an exchange?

Scenario 4 Suppose employers that drop dependent coverage could still receive tax benefits for offering health insurance to their workers. If this were the case, how likely is your company to offer employee-only coverage?

Scenario 5 Some states may allow employees to “buy up” in the defined contribution model for exchanges. Employees could buy any level of coverage in the exchange beyond that designated by their employer and would pay the price difference. If this option became a reality, how likely is your company to buy health insurance through an exchange?

Below are outlined some specific scenarios that may arise under health reform law. How likely is your company to pursue each?

Note: Data table not provided


71%62%

54%49%

50%49%

36%31%

49%41%

31%31%

44%38%

26%28%

40%42%

38%33%

18%17%

7%7%

How likely is your company to use the exchanges if the following statements were true?

Stat

emen

t

Percent

0 10 20 30 40 50 60 70 80

50-100 employees 101-999 employees 1,000-2,499 employees 2,500+ employees

A large choice of plans is available at your company’stargeted benefit level (bronze, silver, gold, or platinum)

The exchange is operated as a private non-profit entity

The exchange is operated as a public-private partnership

The exchange actively screens and restricts the number of plans that may participate on the

exchange according to price and quality

The exchange is government-run (either federal or state)

% responding “very” or “somewhat” likely

The exchange allows any plan that meets the exchange’s minimum standards to participate on the exchange

…especially among smaller employersPreference is for exchanges to be operated as non-profit or public-private partnership rather than government agency or the federal government. Small employers (50-100 workers) look for a large choice in plans (71%).


Employers believe privately run/public-private partnerships offer the highest potential value to their coverage strategies; an exchange that offers a wide range of plan options is preferred, most especially among smaller employersHow likely is your company to use the exchanges if the following statements were true?




The exchange actively screens and restricts the number of

plans that may participate on the exchange according to price

and quality

The exchange allows any plan that meets the exchange’s

minimum standards to participate on the exchange

A large choice of plans is available at your company’s

targeted benefit level (bronze, silver, gold, or platinum)

Total employers 17% 41% 49% 41% 45% 66%

50-100 employees 18% 44% 50% 40% 49% 71%

101-999 employees 17% 38% 49% 42% 41% 62%

1,000-2,499 employees 7% 26% 36% 38% 31% 54%

2,500+ employees 7% 28% 31% 33% 31% 49%

Manufacturing 16% 37% 54% 37% 43% 64%

Tran/Util/Comm 22% 57% 57% 41% 66% 75%

Wholesale 16% 44% 60% 54% 70% 69%

Retail 14% 48% 58% 26% 57% 65%

Finance 19% 33% 56% 39% 36% 56%

Service 17% 41% 48% 38% 40% 68%

Health Care 12% 35% 36% 43% 41% 64%

Northeast 22% 41% 49% 39% 38% 65%

Midwest 26% 37% 43% 43% 50% 65%

South 12% 43% 55% 46% 49% 70%

West 9% 43% 47% 32% 40% 63%


CFO 17% 49% 56% 48% 57% 76%




Other 17% 39% 50% 32% 50% 59%

Percent responding “very” or “somewhat “likely


Some hospitals and large physician practices have organized their own health insurance plans and licensed them in the state. To the best of your knowledge, on a scale of one to ten,with one being not at all interested and ten being the most interested, how interested is yourcompany in contracting directly with such a provider-sponsored health plan?

0 10 20 30 40 50 60

50-100 employees

101-999 employees

Percent

2,500+ employees

Org

aniz

atio

n si

ze

Total


High Interest (rating 8, 9, or 10) Low Interest (rating 1, 2, or 3)

34%

45%

50%

33%

33%

25%

14%

10%

25%

26%

Direct contracting with provider organizations is of interest to 1 in 4 respondents – higher for CEOs and CFOs than HR, and higher in the Western region


Direct contracting with provider organizations is of interest to 1 in 4 respondents – higher for CEOs and CFOs than HR, and higher in the Western region

High interest (rating 8, 9, or 10) Low interest (rating 1, 2, or 3)

Total employers 25% 34%

50-100 employees 26% 33%

101-999 employees 25% 33%

1,000-2,499 employees 10% 50%

2,500+ employees 14% 45%

Manufacturing 23% 54%

Tran/Util/Comm 31% 58%

Wholesale 29% 31%

Retail 28% 37%

Finance 23% 45%

Service 16% 28%

Health Care 41% 28%

Northeast 23% 37%

Midwest 23% 33%

South 19% 45%

West 39% 15%

Owner, CEO, or President 40% 21%

CFO 22% 42%

CHRO – Chief HR Officer 20% 43%

Benefits Executive 14% 43%

Benefits Administrator 18% 37%

Other 28% 25%

Some hospitals and large physician practices have organized their own health insurance plans and licensed them in the state. To the best of your knowledge, on a scale of one to ten, with one being not at all interested and ten being the most interested, how interested is your company in contracting directly with such a provider-sponsored health plan?


If your company was to contract directly with a hospital and/or physician-sponsored health plan, which of the following factors would be important in making the decision to do so?

Fact

ors

impo

rtan

t in

dec

isio

n-m

akin

g

Percent0 20 40 60 80 100

Respondents answering “Yes”

Size/depth of hospital and physician network 98%

97%

97%

96%

90%

89%

85%

65%

Overall customer service performance

Lower price

Quality of network

Geographic coverage/reach of network

Improved coordination of care

Improved access to hospitals/physicians

Existing employee relationships

Costs, access, and customer service are important factors in direct contracting by employersIrrespective of organizational size, if employers were to direct contract with a hospital or physician-sponsored health plan key factors influencing their decision are price, depth & quality of network, geographic reach, customer service, and better care coordination.

Employer thoughts about U.S. deficit reduction strategies


Fact

ors

impo

rtan

t in

dec

isio

n-m

akin

g

Favor

Create a new medical liability system that reduces defensive medicine andadjudicates claims against physicians and hospitals more objectively

Create a new “pre-Medicare program” to manage chronic conditions more aggressively before people get older and sicker

80%

80%

79%

72%

67%

66%

65%

64%

59%

58%

56%

51%

35%

8%

Turn over the Medicare program to private contractors (privatize Medicare)

Require Medicare enrollees to pay higher premiums based on their income

Repeal the ACA

Allow employers to charge employees more for their health benefits if they live unhealthy lifestyles

Delay implementation of the ACA

Allow states more flexibility in managing their Medicaid programs

Gradually adjust Social Security benefits so that over time, it provides less generous benefits to higher-income workers

Restrict Medicaid eligibility

Cut other areas of Federal spending – leave health care programs alone

Raise the eligibility age for Medicare (from 65 to 67)

Reduce reimbursements to physicians and hospitals

Terminate the tax-deductibility of health insurance for employers

Survey respondents were only presented with health care-related alternatives to reduce the deficit.

Percent

0 20 40 60 80 100

Refer to Appendix

Medical liability reform, entitlement reforms to better manage Medicare and Medicaid programs, and repeal/delay of the ACA are popular among employers seeking to reduce the federal deficitAs you may know, the Joint Select Committee on Deficit Reduction was tasked with recommending $1.2 trillion in additional budget savings by the end of November 2011 but failed to reach agreement. If the Committee were to have its time over again or were to re-convene, to what extent would you FAVOR or OPPOSE the following as part of the Committee’s recommendations?

Appendix: Reference tables


Employer likelihood of dropping coverage in response to certain factors

The introduction of a 40% tax on premium amounts in excess of $27,500 for family coverage starting

in 2018 (the so-called “Cadillac tax”)

If the penalty imposed for not offering coverage

is less than the cost of offering benefits

Premium costs continue to rise faster than inflation

Health insurance exchanges provide a community-rated,

comprehensive benefit option to employees and

their families

Your company’s competitors drop coverage

Benefits in the “essential benefits package” are more

generous than those you currently provide

Low-income employees who are not offered

employer health benefits could obtain government subsidies to buy health insurance through an

exchange

Total employers 34% 33% 32% 29% 16% 34% 28%

50-100 employees 36% 34% 34% 29% 15% 35% 29%

101-999 employees 33% 31% 30% 29% 15% 33% 26%

1,000-2,499 employees 24% 28% 20% 31% 27% 23% 23%

2,500+ employees 16% 26% 21% 26% 30% 24% 21%

Manufacturing 29% 47% 29% 34% 23% 38% 31%

Tran/Util/Comm 55% 26% 12% 35% 19% 21% 20%

Wholesale 33% 31% 29% 33% 12% 22% 27%

Retail 38% 55% 22% 46% 16% 31% 30%

Finance 39% 23% 30% 22% 16% 39% 20%

Service 32% 34% 35% 26% 15% 39% 28%

Health Care 35% 27% 32% 30% 12% 28% 33%

Northeast 26% 23% 30% 22% 18% 33% 25%

Midwest 39% 37% 26% 33% 16% 26% 24%

South 37% 36% 37% 30% 13% 39% 31%

West 31% 33% 31% 29% 17% 36% 28%


CFO 31% 35% 23% 35% 12% 38% 26%




Other 39% 34% 43% 22% 13% 42% 28%


Given what you know or have heard, on a scale of one to ten, with one being not at all likely and ten being the most likely, how likely would your company be to drop coverage as a result of the following factors?


Cost containment strategies

Increasing cost-sharing (deductibles and

co-payments)

Increasing employee premium contributions

Reducing covered benefits

Increasing the use of incentives and disease management programs to encourage healthy

behaviors

Discouraging unhealthy behavior by charging higher premiums or

penalties

Shifting to a defined contribution for health

benefits

Providing transparency around costs and

outcomes for local physicians and

hospitals

Introducing high-deductible health plans

(HDHP)/consumer-driven health plans

Total employers 77% 64% 32% 40% 14% 18% 19% 47%

50-100 employees 76% 58% 32% 32% 9% 20% 17% 49%

101-999 employees 80% 70% 35% 48% 20% 15% 20% 43%

1,000-2,499 employees 74% 76% 16% 68% 27% 15% 29% 52%

2,500+ employees 69% 77% 16% 73% 43% 20% 37% 53%

Manufacturing 73% 64% 27% 48% 17% 13% 19% 44%

Tran/Util/Comm 92% 76% 39% 46% 5% 15% 11% 60%

Wholesale 99% 78% 51% 51% 17% 25% 25% 49%

Retail 86% 86% 27% 14% 6% 14% 1% 32%

Finance 84% 48% 4% 53% 29% 23% 10% 48%

Service 80% 63% 37% 35% 12% 14% 19% 52%

Health Care 61% 51% 37% 33% 18% 21% 23% 40%

Northeast 82% 64% 26% 50% 9% 17% 25% 55%

Midwest 76% 60% 25% 45% 16% 12% 14% 44%

South 76% 68% 38% 34% 19% 20% 19% 42%

West 77% 62% 39% 34% 10% 22% 19% 48%


CFO 86% 74% 37% 40% 9% 17% 16% 53%




Other 82% 68% 42% 42% 16% 24% 21% 49%

Percent responding “Yes” the strategy is currently used to reduce or manage health care costs

Which of the following is your company currently using as a core strategy to reduce or manage health care costs?


Anticipated changes to benefits strategies: next 3-5 years

Increase employee cost-sharing

(deductibles and co-payments)

Increase employee premium

contributions

Introduce high-deductible health

plans/consumer-driven health plans

Reduce covered benefits

Narrow/limit choice of hospital and

physicians (narrow networks)

Increase programs that help employees live healthier lives

(wellness, preventive health)

Purchase health insurance from a non-traditional

company (e.g., a retailer)

Shift to a defined contribution where

the employer provides a set dollar contribution towards

the purchase of health insurance

Terminate company subsidy

for full-time employee coverage

Total employers 69% 68% 52% 34% 18% 62% 11% 28% 5%

50-100 employees 67% 61% 51% 35% 15% 52% 11% 31% 6%

101-999 employees 71% 76% 53% 34% 21% 72% 11% 25% 4%

1,000-2,499 employees 79% 83% 59% 20% 25% 84% 2% 23% 2%

2,500+ employees 75% 80% 54% 24% 35% 89% 2% 18% 3%

Manufacturing 62% 61% 47% 24% 18% 67% 9% 28% 3%

Tran/Util/Comm. 82% 75% 51% 36% 24% 84% 15% 27% 10%

Wholesale 83% 88% 72% 56% 21% 66% 6% 36% 0%

Retail 72% 76% 42% 30% 24% 40% 32% 29% 6%

Finance 70% 72% 44% 8% 13% 80% 6% 24% 0%

Service 72% 65% 58% 36% 17% 58% 12% 25% 7%

Health Care 50% 65% 40% 44% 20% 60% 5% 31% 4%

Northeast 76% 71% 53% 29% 16% 75% 8% 28% 4%

Midwest 69% 68% 48% 28% 16% 61% 9% 24% 11%

South 70% 75% 56% 44% 18% 59% 11% 32% 5%

West 62% 54% 50% 30% 23% 56% 16% 24% 0%

Owner, CEO, or President 72% 71% 47% 47% 23% 65% 19% 37% 5%

CFO 82% 70% 65% 41% 23% 70% 11% 24% 4%

CHRO – Chief HR Officer 85% 86% 62% 28% 23% 69% 11% 25% 5%

Benefits Executive 62% 70% 53% 27% 12% 73% 6% 23% 5%

Benefits Administrator 57% 61% 44% 22% 10% 46% 11% 31% 4%

Other 61% 58% 46% 28% 18% 54% 4% 22% 8%

Percent responding “Yes”, an anticipated change in benefit strategy

What changes do you anticipate making to your benefits strategy in the next 3-5 years?


Employer likelihood of using Health Insurance Exchanges




The exchange actively screens and restricts the number of

plans that may participate on the exchange according to price

and quality

The exchange allows any plan that meets the exchange’s

minimum standards to participate in the exchange

A large choice of plans is available at your company’s

targeted benefit level (bronze, silver, gold, or platinum)

Total employers 17% 41% 49% 41% 45% 66%

50-100 employees 18% 44% 50% 40% 49% 71%

101-999 employees 17% 38% 49% 42% 41% 62%

1,000-2,499 employees 7% 26% 36% 38% 31% 54%

2,500+ employees 7% 28% 31% 33% 31% 49%

Manufacturing 16% 37% 54% 37% 43% 64%

Tran/Util/Comm 22% 57% 57% 41% 66% 75%

Wholesale 16% 44% 60% 54% 70% 69%

Retail 14% 48% 58% 26% 57% 65%

Finance 19% 33% 56% 39% 36% 56%

Service 17% 41% 48% 38% 40% 68%

Health Care 12% 35% 36% 43% 41% 64%

Northeast 22% 41% 49% 39% 38% 65%

Midwest 26% 37% 43% 43% 50% 65%

South 12% 43% 55% 46% 49% 70%

West 9% 43% 47% 32% 40% 63%


CFO 17% 49% 56% 48% 57% 76%




Other 17% 39% 50% 32% 50% 59%

Percent responding “very” or “somewhat“ likely

How likely is your company to use the exchanges if the following statements were true?


Lower price Size/depth of hospital and physician network

Quality of network Geographic coverage/reach of network

Existing employee relationships

Overall customer service performance

Improved coordination of care

Improved or preferential access to hospitals and

physicians

Total 97% 98% 96% 90% 65% 97% 89% 85%

50-100 employees 96% 98% 97% 89% 65% 98% 90% 86%

101-999 employees 97% 97% 95% 90% 64% 96% 87% 84%

1,000-2,499 employees 100% 98% 97% 97% 75% 100% 97% 89%

2,500+ employees 92% 99% 99% 97% 64% 95% 93% 85%

Manufacturing 100% 100% 97% 63% 63% 96% 100% 85%

Tran/Util/Comm 100% 100% 100% 100% 78% 100% 100% 91%

Wholesale 100% 100% 92% 96% 49% 95% 92% 82%

Retail 88% 100% 100% 100% 65% 100% 73% 82%

Finance 74% 100% 91% 100% 26% 75% 74% 75%

Service 98% 96% 96% 89% 70% 97% 87% 82%

Health Care 97% 100% 94% 90% 84% 100% 90% 93%

Northeast 93% 100% 98% 84% 56% 93% 90% 89%

Midwest 95% 94% 90% 91% 65% 100% 85% 83%

South 100% 100% 99% 89% 70% 97% 97% 90%

West 97% 97% 97% 93% 64% 97% 82% 78%


CFO 98% 100% 97% 85% 62% 98% 97% 95%




Other 96% 96% 96% 88% 63% 96% 82% 83%

Percent responding “Yes”, factor would be important in making a decision

Factors employers consider important in making a decision to direct contract

If your company was to contract directly with a hospital and/or physician-sponsored health plan, which of the following factors would be important in making the decision to do so?


Deficit reduction alternatives

Terminate the tax-deductibility of health

insurance for employers

Raise the eligibility age for Medicare (from 65 to 67)

Reduce reimbursements to physicians and hospitals

Turn over the Medicare program to private

contractors (privatize Medicare)

Require Medicare enrollees to pay higher premiums based on their income

Restrict Medicaid eligibility

Allow states more flexibility in managing

their Medicaid programs

Favor Favor Favor Favor Favor Favor Favor

Total 8% 51% 35% 64% 65% 58% 79%

50-100 employees 8% 51% 30% 64% 61% 55% 80%

101-999 employees 8% 51% 40% 65% 71% 63% 78%

1,000-2,499 employees 7% 46% 38% 63% 68% 56% 79%

2,500+ employees 7% 55% 38% 66% 70% 61% 86%

Manufacturing 11% 61% 34% 80% 65% 65% 90%

Tran/Util/Comm 7% 35% 27% 71% 54% 61% 87%

Wholesale 7% 34% 46% 83% 58% 66% 77%

Retail 1% 65% 11% 85% 45% 62% 94%

Finance 9% 58% 42% 74% 69% 37% 76%

Service 5% 51% 36% 63% 71% 56% 76%

Health Care 16% 42% 22% 26% 49% 61% 75%

Northeast 11% 45% 40% 53% 70% 43% 69%

Midwest 4% 50% 32% 68% 57% 54% 75%

South 11% 51% 27% 64% 66% 69% 86%

West 5% 59% 44% 72% 71% 63% 83%


CFO 8% 39% 36% 66% 70% 60% 82%




Other 4% 59% 31% 64% 55% 62% 72%

Table continued overleaf …Survey respondents were only presented with health care-related alternatives to reduce the deficit.

As you may know, the Joint Select Committee on Deficit Reduction was tasked with recommending $1.2 trillion in additional budget savings by the end of November 2011 but failed to reach agreement. If the Committee were to have its time over again or were to re-convene, to what extent would you FAVOR or OPPOSE the following as part of the Committee’s recommendations?


Deficit reduction alternatives

Delay implementation of the ACA

Repeal the ACA Create a new “pre-Medicare program” to

manage chronic conditions more aggressively before

people get older and sicker

Gradually adjust Social Security benefits so that

over time, it provides less generous benefits to higher-income workers

Allow employers to charge employees more for their health benefits if they live

unhealthy lifestyles

Create a new medical liability system that

reduces defensive medicine and adjudicates claims against physicians and

hospitals more objectively

Cut other areas of federal spending – leave health

care programs alone

Favor Favor Favor Favor Favor Favor Favor

Total 72% 66% 80% 59% 67% 80% 56%

50-100 employees 79% 69% 77% 59% 63% 80% 55%

101-999 employees 63% 61% 83% 60% 71% 79% 56%

1,000-2,499 employees 76% 62% 88% 57% 84% 88% 77%

2,500+ employees 80% 65% 93% 64% 85% 92% 56%

Manufacturing 86% 79% 74% 68% 77% 83% 60%

Tran/Util/Comm 74% 64% 81% 63% 73% 83% 67%

Wholesale 89% 93% 80% 49% 70% 69% 54%

Retail 99% 73% 69% 31% 71% 73% 60%

Finance 69% 65% 77% 52% 71% 71% 68%

Service 66% 58% 82% 64% 66% 83% 47%

Health Care 59% 57% 91% 43% 62% 82% 71%

Northeast 55% 43% 89% 63% 66% 82% 54%

Midwest 70% 66% 75% 62% 72% 86% 58%

South 81% 78% 79% 60% 80% 73% 62%

West 76% 68% 78% 51% 44% 82% 47%


CFO 68% 61% 82% 64% 78% 83% 47%




Other 72% 67% 77% 57% 69% 74% 58%

Survey respondents were only presented with health care-related alternatives to reduce the deficit.

As you may know, the Joint Select Committee on Deficit Reduction was tasked with recommending $1.2 trillion in additional budget savings by the end of November 2011 but failed to reach agreement. If the Committee were to have its time over again or were to re-convene, to what extent would you FAVOR or OPPOSE the following as part of the Committee’s recommendations?


Authors and contributors

Authors

Paul H. Keckley, PhD

Deloitte LLP

Deloitte Center for Health Solutions

Executive Director

[email protected]

Sheryl Coughlin, PhD, MHA

Deloitte LLP


Head of Research

[email protected]

Sarah Wiley

Deloitte Consulting, LLP

Director

[email protected]

Jason Girzadas


Principal

[email protected]

Bill Copeland


Principal

[email protected]

Erin Reuss-Hannafin


Principal

[email protected]

Contributors

Jon Gabel, Senior Fellow, NORC at the

University of Chicago

Heidi Whitmore, Senior Research Scientist,

Health Care, NORC at the University of Chicago

Jeremy Pickreign, Senior Research Scientist,

Health Care, NORC at the University of Chicago

Acknowledgements

We wish to thank Jennifer Bohn, Elizabeth Stanley,

Leslie Korenda, Claire Boozer, Jennifer Satorius,

Ethan Levi-Forsythe, Petry Urbi, Katrina Drake

Hudson, Amy Coffey, and the many others who

contributed their ideas and insights to this project.

Contact information

To learn more about the Deloitte Center for

Health Solutions, its projects and events, please

visit: www.deloitte.com/centerforhealthsolutions.


1001 G Street N.W.

Suite 1200

Washington, DC 20001

Phone 202-220-2177

Fax 202-220-2178

Toll free 888-233-6169

Email [email protected]

Web www.deloitte.com/centerforhealthsolutions

http://www.deloitte.com/centerforhealthsolutions

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting,

business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such

professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before

making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.


About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network

of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed

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About the Center

The Deloitte Center for Health Solutions (DCHS) is the health services research arm of Deloitte LLP. Our goal is to inform all

stakeholders in the health care system about emerging trends, challenges and opportunities using rigorous research. Through our

research, roundtables and other forms of engagement, we seek to be a trusted source for relevant, timely and reliable insights.

To learn more about the DCHS, its research projects and events, please visit: www.deloitte.com/centerforhealthsolutions.

Copyright © 2012 Deloitte Development LLC. All rights reserved.

Member of Deloitte Touche Tohmatsu Limited

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