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Hewitt Associates is a global provider of human resources outsourcing and consulting services. The company consults with more than 2,300 organizations and administers human resources, health care, payroll, and retirement programs on behalf of more than 340 companies to millions of employees and retirees worldwide. Located in 35 countries, Hewitt employs approximately 24,000 associates.
The number of employers who say they will get more directly involved in managing the individual health of their employees jumped 25 percentage points from last year, reflecting a nationwide trend to find more ways to save money in a tightening economy. But while companies believe they need to get more involved in keeping their workforce healthy, employees are less convinced.
Hewitt's 2008 survey of more than 500 U.S. companies revealed a fundamental shift in how they view health care. While cost is still a big concern, for the first time, keeping employees healthy was also named as one of their top business and workforce issues this year. In fact, 88% plan to make investments in longer-term solutions aimed at improving the health and productivity of their workforce over the next three to five years, up from 63% last year.
But employees may be slow to accept the role that employers intend to play. According to a separate Hewitt survey of 30,000 employees, while almost three quarters (74%) think employers are responsible for helping them understand how to use their health plan, just 12% believe companies have a role in helping them understand how to stay healthy.
"With complex global economics, legislative uncertainty, and increasing health care cost and health care risk, health and productivity has gone from being viewed by employers as a cost that needs to be managed to a critical business investment," said Jim Winkler, leader of Hewitt's Health Management Consulting practice. "As a result, companies are moving beyond their traditional role as a provider of health care benefits to develop holistic programs that pinpoint the specific health needs of their employee populations, drive employee behavior change and eliminate barriers to health care.
"But to ensure these steps translate into strategic business advantage, employers need to overcome employees' skepticism about their intended role. Their messages need to shift from a cost management focus to one that helps employees understand how improving their health can benefit them, as well as the company."
People Making Cost-Based Decisions
But Some Conflict With Healthy Outcomes
According to Hewitt's research, employees see a direct link between health and financial well being. Almost all (95%) believe that taking care of their health today will have a direct impact on what they pay out-of-pocket for health care in the future. Similarly, 96% agree that catching health problems at an early stage or preventing them before they happen can save them money.
However, while employees said they know healthy behaviors can save them money in the long run, many take actions that compromise their health outcomes. According to Hewitt's research, 88% claim they engage in healthy behaviors. But when asked about specific actions they take toward living a healthy lifestyle, less than one-half said they eat right or exercise regularly (47% and 40% respectively), and only four out of 10 (40%) said they do a good job at asking for advice on how to stay healthy.
In addition, a number of employees admit that cost plays a role in influencing their health behaviors. Nearly one-third (30%) said they did not go to the doctor when they were sick because of cost, and 27% didn't fill a prescription given by a doctor. Almost one in five (19%) stopped taking medications before their prescription ran out, and of those, 18% did so due to finances.
Like employees, cost is also a concern for the majority of companies, with 82% focusing on cost mitigation in 2008. However, the more traditional strategies that companies have used in the past to help lower costs -- such as cost shifting to employees or consumer-driven health care -- have slowed or virtually stalled. According to Hewitt's research, while 64% of companies say cost shifting to employees is currently a part of their primary health care strategy, just 17% plan to make it a priority over the next three to five years. In addition, just 20% currently offer an HRA and/or HSA, and less than 6% plan to adopt one in 2008.
"While employees have good intentions, they aren't taking action -- whether it's because of costs, lack of time or because of the complexities in accessing and navigating a fragmented employer-provided health care system," said Tim Stentiford, a principal in the communications practice at Hewitt Associates. "To drive behaviors that deliver meaningful ROI to employers and families alike, companies need to stop 'communicating' and start motivating. People don't like to be told what to do, and with a mind-numbing array of Web sites and brochures from their employer, they often just tune out.
"But when employers -- through consumer research and marketing techniques -- really understand what it takes to motivate people, they're often surprised that it looks nothing like what they do today. Yes, people are motivated by incentives -- but they're also motivated by habits, social norms, feelings of control, family and fear. When employers get that, then they can really start to close the gap between what people think or say they do, and what they actually do based on the numbers," he added.
Encouraging Healthy Behaviors: A Double-Edged Sword
More than 85% of companies say they invest or plan to invest significant resources in long-term health and productivity initiatives over the next three-to-five years. In addition, almost two-thirds (63%) plan to offer incentives to motivate sustained health care behavior change, and 67% will utilize health care data and measurements to drive their organization's health care strategy.
But employees have mixed opinions on whether they support increased employer involvement in these areas. Seventy percent of employees support lower premiums for practicing healthy behaviors, such as maintaining one's weight or exercising regularly. In addition, almost all (99%) agree that it is important to know personal risks to take steps for prevention or treatment, and in general, are willing to share information on a confidential basis to learn more about them. But while eight out of 10 people said they took a health risk questionnaire (HRQ) when given the opportunity, many employers actually see significantly lower participation rates, even when they offer incentives. For those employees that claim they take an HRQ, 40% did not take any actions based on specific recommendations provided by the report.
While employees generally said they valued the information gleaned from HRQs, many had mixed feelings about any associated incentives or penalties tied to these questionnaires. Hewitt's research shows that only 36% of employees believe that companies should require the completion of an HRQ for health care coverage, and less than half (46%) believe companies should provide lower health care premiums in exchange for completing a HRQ. But in Hewitt's experience, when employers do not offer an incentive tied to the HRQ, the percentage of employees who actually complete the questionnaire falls dramatically.
"It's important for companies to understand the sensitivities, specific needs and preferred approaches of their unique population and then find the right mix of motivators that will be most effective in encouraging participation. Even more important, companies need to be open and honest about their intentions behind these programs, and address any confidentiality concerns up front," said Stentiford.
Understanding Health Risks and Targeting Specific Populations
According to Hewitt's research, more than half (51%) of employees or their dependents have a chronic health condition that requires ongoing care. As a result, an increasing number of companies are taking a closer look at the health risks and needs of their employee population and offering programs designed to drive participation, encourage positive behaviors and provide employees with additional education and support for managing their chronic conditions.
Ninety-three percent of companies have identified the chronic health conditions that are most pressing for their employee populations and plan to target these conditions over the next three to five years. Half (50%) either provide or plan to provide health and productivity management programs tailored to member risk levels, and another half (50%) offer enhanced medical and/or prescription drug benefits for at least one or more chronic condition.
Companies are also showing an increased interest in value-based design (VBD) programs, which reduce or remove financial barriers for health care services proven to be effective to treat certain conditions, while potentially increasing cost sharing for those services that have not been proven to be as effective. While just 12% use value-based design programs today, more than half (52%) said they were considering them for a future date. In addition, companies are looking at biometric screening, health/clinical advocacy and on-site health sources as other potential initiatives to implement over the next three to five years.
This summary was adapted from a Hewitt synopsis of its report. To read all of the survey results, click here. Free, one-time registration is required.
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