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MBGH Annual Employer Benefit Survey Reveals Growing Shift to Value-Based Benefit Design

Employers increasingly focused on prevention and wellness

CHICAGO, May 1 /PRNewswire/ -- As the U.S. economy struggles, value-based benefit designs and consumer engagement strategies are gaining in popularity. These are among the findings in a nationwide survey of U.S. employers' views on the value of health released today by the nonprofit Midwest Business Group on Health (MBGH) at its 28th Annual Conference being held May 1-2.

Addressing more than 200 employers and health care stakeholders at the Midwest's leading employer-focused health benefits conference, MBGH announced the results of the Midwest Business Group on Health's 2008 Readiness to Change Survey. The presentation of select results is available on MBGH's website: er_Survey_May2008.pdf

"We've found that employers are shifting their view of health benefits from that of a necessary expense to a critical investment in the health management of their employees," said Larry Boress, president and CEO of MBGH. "There is a growing trend toward the use of value-based benefit strategies -- providing financial incentives to motivate healthy behavior changes and improving access to proven, clinically beneficial care. Additionally employers are focusing on preventive care and the use of incentives to get people engaged, as opposed to the cost shifting we've seen in recent years."

Employer priorities for 2008

According to employers, key benefit priorities for 2008 include: getting employees more engaged in maintaining their health; improving chronic disease management; reducing the cost of benefits; improving utilization of preventive services; incorporating incentive programs to increase utilization of wellness/health promotion programs; and education efforts to help employees manage their health care finances.

Key findings

Highlights of the Midwest Business Group on Health's 2008 Readiness to Change Survey include:

-- Value-based benefit designs are gaining in popularity and there is an increasing trend to provide incentives for participation in wellness, disease management and adherence programs. Employers are reducing cost share to employees -- for example 62% of employers will waive co-pays or reduce costs for certain drugs to get employees to participate in disease management programs. Seventy-two percent of employers agree that using drugs proven effective for a condition will reduce other services for that condition.

-- Quality information is still lacking, however, it's of growing importance to employers and consumers. For example, 85% of employers want health plans to provide members with the cost of physician and hospital services and a majority of employers agree information is not available for employees to make informed choices on quality of physicians (64%), effectiveness of drugs (56%) and quality of safety of hospitals (54%). Further, 59% of employers believe employees would change to better performing providers if they understood how quality varies and affects outcomes.

-- Employers see value in collecting productivity data, yet few are doing so. While 66% of employers see value in surveying employees on how their health impacts their performance at work, only 12% of employers surveyed collect productivity data and 64% of these employers collect productivity data through a Health Risk Assessment. Company data and experience is the number one influencer (95%) of benefit design strategy.

Benefit design philosophy

Employers were asked to rate their organizations' self-perception of benefit design philosophy as leading edge (18%), careful watcher (63%) or conservative (19%). The employers that defined themselves as leading edge shrunk from 21% in 2007, while companies that considered themselves careful watchers and conservative grew by nine and six percent respectively.

Next steps - consumer focus groups

To assist employers in developing and communicating benefit programs, MBGH will study how employees view and react to various value-based health benefits. MBGH will conduct a series of focus groups to gain insight into consumers' understanding and perception of value-based health programs. Results of this effort will be announced later this year.

About the MBGH Employers' Readiness to Change Survey

The annual survey was developed to determine employer understanding, use of and readiness to adopt value-based benefit design (VBBD) strategies and to identify which strategies and experiences are currently being promoted or utilized by employers. Key survey components included employer demographics, positions on benefit philosophies and data activities.

MBGH developed the survey questions based on analysis of current VBBD strategies and programs. Survey questions were reviewed by a Project Advisory Council composed of leading employers, coalitions, researchers, health plans and consultants. The survey was disseminated to more than 60 business coalitions to distribute to their employer members throughout the country. Surveys were received from 114 employers representing a wide variety of industries, with a majority, 33 percent, in manufacturing. Of the responding companies 72% had greater than 1,000 employees and most were based in the Eastern and Midwestern portions of the U.S. Cost trends among the companies were consistent with national trends between 2005 and 2007, and a growing number of companies realized a decreasing trend. Data analysis was conducted by MBGH staff with funding and research support provided by GlaxoSmithKline.

About the Midwest Business Group on Health

The Midwest Business Group on Health (MBGH) is one of the nation's leading coalitions of private and public employers. MBGH's 90+ members employ over 2 million lives, spending more than $2.5 billion on health care benefits on an annual basis. Organized as a nonprofit, tax-exempt corporation, MBGH offers employers a variety of health benefit educational seminars, networking opportunities, quality and community initiatives, demonstration projects and group purchasing programs. MBGH is a member of the National Business Coalition on Health.

SOURCE Midwest Business Group on Health
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