When it comes to health care cost increases, the gap between the best-performing employers and the poor performers is growing, a study shows.
The median two-year health care cost increase among the best-performing employers was 1.0%, while the poor-performing companies saw their health care costs grow by 10.0% for the same period, a survey has found. The median increase for all surveyed employers was 6.2%.
By comparison, the median two-year trend for the best performers in last year's survey was 2.5%, compared with 11.0% for poor performers, according to the "13th Annual National Business Group on Health/Watson Wyatt Employer Survey on Purchasing Value in Health Care."
The differential between the best performers and their poor-performing counterparts also has grown considerably in recent years, according to Ted Nussbaum, director of group and health care consulting North America at Watson Wyatt Worldwide in Stamford, Conn., who presented the survey results Thursday at the National Business Group on Health's 2008 Business Health Agenda in Washington.
The survey defines the best-performing employers as those whose median two-year health care cost increase put them in the top quartile of all surveyed employers. Poor performers are in the bottom quartile.
Median figures are calculated using an average of each respondent's cost increase in each of the past two years.
While poor performers experienced cost trends three times that of the best performers in 2003/2004, today the gap has grown to 10 times, Mr. Nussbaum said.
The survey found that the best-performing employers achieved their lower trend rates by incorporating programs and initiatives in five key areas: appropriate financial incentives, effective information delivery, the use of metrics and evidence to drive decisions, quality of care initiatives, and maximizing health and productivity.
For example, the best-performing employers are 21% more likely to use financial incentives to drive plan member behavior than their poor-performing counterparts, Mr. Nussbaum said.
Best-performing employers also had higher enrollment in consumer-driven health plans than their poor-performing peers, he noted.
They also are less likely to rely on return-on-investment figures provided by their vendors and instead are conducting independent research to measure the success of their programs, he said.
This year's survey, which was conducted between November 2007 and January 2008, included responses from 453 large employers that collectively spend more than $60 billion on health care annually. The responses reflect their 2007 and 2008 decisions and, in some cases, 2009 strategies.
The study is available at www.watsonwyatt.com/purchasingvalueinhc.
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