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Employees Wrongly Think 'You Get What You Pay For' in Health Care

Findings of employee focus groups fly in the face of value-based benefits approach

WASHINGTON, Nov. 10 /PRNewswire/ -- The premise of value-based benefit design programs for health care - higher quality care at a lower cost - is counterintuitive to employees' perception of the consumer marketplace. Employees perceive higher quality health care equals higher cost. This is one of the findings of employee focus group research announced today by the Midwest Business Group on Health, a non-profit coalition of almost 100 large, self-insured employers. Presented at the National Business Coalition on Health's annual conference in Washington, the results pose clear challenges for employers to educate and communicate the benefits of a value-based approach to health care.

"What this tells us is that employers need to better educate employees about differences in quality health care and prepare employees to make quality choices and improve their health," said Larry Boress, president and CEO of MBGH. "Great care must be taken in communicating value-based benefits programs or employers will not only find a lack of participation, but also mistrust in their intentions to improve the health of their employees."

For the last two years, MBGH has conducted annual surveys of employers to gauge their readiness to adopt value-based benefit design strategies, use data for decision-making, change employee behaviors using incentives, measure productivity and create a culture of health. In mid-2008, nine focus groups of more than 50 employees from three employer hosts were conducted to determine their understanding and reaction to value-based benefit designs and programs that are a growing trend among employers.

Employee focus group key findings

-- Employers need to reframe employees' perceptions of the health care

marketplace to create an understanding that higher quality can equal

lower cost.

-- Employees want choices in employer-sponsored benefit and wellness

programs and are skeptical of employer efforts to steer them either

toward or away from a particular program or provider.

-- Monetary incentives alone won't get employees to participate in

VBBD programs. Programs need to be combined with peer persuasion and

management support to encourage both initial and ongoing participation.

-- Employee awareness and understanding of existing benefit programs is

generally low and misinformation from the "grapevine" adds to

this confusion.

-- Employees want to play an active role in managing their health, but

motivation to act is hindered by work/life balance, money and

understanding or awareness.

-- Employees need to see that incentives are in place because employers

really do care about their health. They also want to see that the

incentives make sense.

Value-Based Benefit Design

Value-Based Benefit Design entails reducing the cost of effective health care providers, services, procedures, treatments or drugs. For example, employers may lower the cost of diabetes medications to encourage diabetic employees to regularly take their prescribed medications, as not taking prescribed medications can lead to critical events and costly hospitalizations. A lower employee cost for effective drugs yields higher quality of care and a wise investment for employees and employers. The same can be done for doctors and hospitals. Lowering employee co-pays for doctors and hospitals that have obtained higher quality outcomes encourages visits to those better performing, more efficient providers. The payoff comes in the form of healthier employees, with fewer tests, fewer complications from surgery and fewer hospital readmissions. To offset the lowered employee costs, employers can raise costs for lower quality, less effective providers, services, procedures, treatments or drugs.

"This important research shows we clearly have a long way to go in gaining peoples' understanding of the relationship of cost and quality in health care," observed Jack Mahoney, MD, former medical director of Pitney Bowes.

MBGH also released today a white paper on the focus group research, The Employees Readiness to Adopt Value-Based Benefit Design Strategies. The paper is publicly available and can be accessed on MBGH's website:

About the research

The Readiness to Change project was funded by GlaxoSmithKline. The ROC Group, a Chicago-based benefits communication firm, assisted in developing and conducting focus groups.

About the Midwest Business Group on Health (

The non-profit Midwest Business Group on Health (MBGH) is one of the nation's leading business groups of private and public employers. MBGH's 96 members represent over 2 million lives, spending more than $2.5 billion on health care benefits on an annual basis. MBGH offers employers a variety of health benefit educational seminars, networking opportunities, quality and community initiatives. MBGH is a member of the National Business Coalition on Health.

SOURCE Midwest Business Group on Health
Copyright©2008 PR Newswire.
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