Neither U.S. companies nor employees believe that current benefit programs are fully meeting their needs, according to a new Towers Perrin survey conducted among both company executives and employees. Only 25% of the executive respondents agreed their programs are very effective at meeting cost control objectives, and fewer than half said their programs are very effective at meeting recruiting and retention objectives (42% and 46%, respectively).
OK, we have spent the last 20 years trying to control the rising cost of healthcare by:
- Restricting consumption (HMO’s)
- Restricting access (PPO’s)
- Increasing employee contributions
- Increasing out-of-pocket maximums
- At the same time going from DB (we promise) to DC (good luck)
So where is the surprise that employees feel that benefit programs don’t meet their needs? As for the executives surveyed, well costs are still going up, and employees aren’t any happier – so the benefit programs don’t meet their needs either.
We need a long-term focus on improving employee health and productivity for lo competitive advantage (yes this will require an investment) over time to change this equation. Switching vendors and increasing employee contributions each year just won’t get it done any more.
Now it is time for a new approach with a long-term focus on employee health and productivity for competitive advantage. (Yes, this will require investment.) Things to think about:
- Wellness & disease management (focus on the $$$$$)
- Communication, communication, communication (personalized)
- Plan design – incentives for desired behavior + consumerism
- Vendor management – are they with you or not??
The turning point has arrived – are we up for the challenge??