Survey Shows Employer Views on Healthcare System

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.

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.”