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Employers seek more control, better outcomes

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Employers are getting smarter about holding down their health care costs and are taking steps to make sure they — and their workers — get the biggest bang for the buck.

That’s the big take-away from an Aon Hewitt study that indicates employers expect to have greater control over the cost of health care coverage and will be demanding better outcomes from their insurance providers.

Aon’s survey sought input from 800 mid-to-large sized U.S. companies. In response to a general query about the ideal type of coverage they would like to offer employees, 53 percent said that “moving toward provider payment models that promote cost effective, high quality health care results will be a part of their future health care strategy.” One in five said this was among their three highest priorities.

Other results of the survey that support the conclusion that employers are getting smarter — and more aggressive — about purchasing coverage:

  • Thirty-one percent said they currently decrease or increase health care vendor compensation based on specific performance targets. Another 44 percent are considering doing so in the next three to five years.  
  • Only 8 percent reported limiting plan reimbursements to a set dollar amount for certain medical services where wide cost variation exists. (Example: requiring participants to pay the full cost difference between a brand-name drug and its generic substitute.) But 62 percent “are considering adopting this type of reference-based pricing model in the future.” 
  • 59 percent said they intend to “steer participants — through plan design or lower cost — to high-quality hospitals or physicians for specific procedures or conditions.” 
  • 21 percent said they now engage in coalition-based pricing, or “cooperative purchasing efforts with other employers or groups,” and 38 percent intend to do so in the near term.

“As health care costs continue to rise, a growing number of employers want to ensure that the health care services they are paying for are actually leading to improved patient outcomes,” said Jim Winkler, chief innovation officer for Health at Aon Hewitt.

“Employers are increasingly gaining comfort with the notion that they do not need to pay for the wide cost and quality variations that exist in today’s health care system. Their efforts to reduce inefficiency and shift the payment focus toward services and providers that produce higher quality outcomes is only just getting started. It is a shift that our health care system certainly needs.”