NEW YORK, Dec. 2, 2013 /PRNewswire/ -- Deloitte has issued a report showing that employers view the health-care system as wasteful and expensive, and that their keys for improving the system are increased transparency around pricing and performance. The report also reveals that, three years into the implementation of the Affordable Care Act (ACA), many companies do not fully understand the law's features.
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Deloitte's 2013 Survey of Employers, which polled 500 randomly-selected U.S. employers with 50 or more workers offering health benefits during May and June of 2013,[1] shows that only 33 percent grade the performance of the system as "A" or "B," while 38 percent rate it a "C" and 29 percent "D" or "F." Regarding reform, only 22 percent said the ACA will reduce costs by 2019, while just 19 percent said it will improve quality of care by that time. About half of respondents said it will widen access to health insurance.
When asked what is likely to improve the system, the leading response was "increased transparency around the prices of specific medical products, services and procedures (52 percent)" followed by "clear, accessible information about the performance of care provided by doctors (46 percent)."
Bill Copeland, Deloitte Consulting LLP, and national managing principal of Deloitte's life sciences and health-care practice, said employers are frustrated over a perceived lack of value given what they pay into the system, and that they don't believe the ACA is addressing this gap. "Employers feel they lack the data and tools to manage their concerns around cost and quality," said Copeland. "I think in the coming year, they will join the front lines of the effort to improve the system by demanding more visibility and by strengthening the use of incentives and penalties to motivate employees toward healthful behaviors."
According to the survey, 80 percent of employers say their health-care costs have risen over the last three years, estimating 30-percent growth during that period. They estimate passing an average of 26 percent of the cost increase to their workers. In fact, the top strategies used by U.S. companies to manage costs are employee cost-sharing (54 percent) followed by wellness programs (36 percent), plan design changes (28 percent), reducing benefits (20 percent), managing networks (19 percent), limiting worker hours (18 percent) and using defined contribution plans (17 percent).
Rick Wald, director, Deloitte Consulting LLP, and leader of Deloitte's employer practice, said companies play a significant role in the provision and financing of health insurance, and that their opinions about reform and experiences with the health-care system matter.
"Employers are balancing on a precipice at the moment," said Wald. "On one side they are dissatisfied with the health system and feel a need to take more action. On the other side they are watching to see if the health-reform measures gain traction. One way or another, corporate America is likely to make significant moves around health care because the status quo isn't sustainable."
Other Highlights from the 2013 Deloitte Employer Survey
- Employers on average anticipate that their total health costs will be 19 percent higher in 2014 versus 2013.
- About half (49 percent) share cost and quality information with employees regarding health-care providers, common procedures and medications.
- About one quarter (26 percent) invest in rewards/penalties, technologies and coaching to motivate employees toward healthful behaviors; 39 percent of the companies which do so say they measure their return on investment.
- Employers lack trusted sources to help them make value-based purchasing decisions. Those identified as the most trusted resources include independent consultants (24 percent), physicians (22 percent) and health insurance plans and third-party benefits managers (each 21 percent).
- Twenty-three (23) percent analyze their claims data to identify providers that do unnecessary testing or procedures or to see if providers are complying with evidence-based standards. Slightly more than one third use claims data to analyze employee use and costs regarding treatments, medications and other services.
- Employers point to hospital costs (75 percent), prescription drug costs (67 percent) and waste and inefficiency in clinical/administrative/billing processes (67 percent) as the chief drivers of overall health costs. Such factors as insufficient competition in insurance market, insufficient employee awareness and responsibility for costs and new technologies and equipment rated lower.
About Deloitte's Life Sciences and Health Care Practice
Deloitte's life sciences and health care practice brings fresh insight to clients and industry stakeholders. Deloitte offers a distinctive menu of professional services delivered in an integrated approach that address all segments of the health plan, health care provider and life sciences industries. For more information, visit www.deloitte.com/us/healthsciences.
As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
Copyright © 2013 Deloitte Development LLC. All rights reserved
[1] Data were collected prior to the 2 July 2013 announcement by the U.S. Department of the Treasury of deferral of compliance with the employer shared responsibility rule ('employer mandate') by one year, until 2015.
SOURCE Deloitte