Health care costs continue to spiral upwards out of sight.
The sad reality is that experts are estimating that health care costs will just keep on climbing at a rate of 8-9% or more per year unless Americans as a nation positively change their health related behaviors.
The population health of Americans overall continues to decline. Current health care reform legislation does NOT address a way to actually lower health care costs overall.
Employers looking at employee benefits & risks and reviewing current health currency statistics are concerned and with good reason. Consulting firms such as Towers Watson estimate per employee health care costs incurred by corporate employers and came up with a figure over 12K for this year of 2013 alone.
Dollar sign image courtesy of ba1969 at rgbstock.com.
Faced with tough financial decisions, some employers are now deciding to mandate the imposition of penalties along with increasing other aspects of health care cost-sharing paid by employees who don’t participate in health-risk assessments, don’t report health measurement parameters, and don’t take steps to reduce health-risk when given the opportunity. Employees will have to ask for more input when it comes to matters of certain types of elective surgeries or else pay a penalty for deciding to have such surgery without having considered the other options that might have been available to them.
Employees have been urged or mandated to stop smoking, and now employers are looking at concerns of physical inactivity, quality of dietary choices being poor, and even a lack of participation in health screening as negative behaviors and risk factors contributing to the amount of money the employer spends for medical related matters for employees. It has been noted that 15 of the most common chronic conditions not only account for 80% of global health care costs, but actually are accountable for more than 65% of what employers spend directly for medical costs for all employees. These conditions are concerns for both Women’s Health & Men’s Health.
No Smoking image courtesy of TACLUDA at rgbstock.com
The Wall Street Journal Online on April 6, 2013 pointed to a Gallup® Wellbeing survey of employers from year 2011 which showed that some 86% of full-time workers are above normal weight or have at least one chronic health condition that is then estimated to affect their ability to be at work. Gallup® estimated that 450 million days of work are being missed each year by such workers, many who are either overweight or obese. That translates into likely more than 153,000,000,000 USD in lost productivity in 2011 dollars. Yes, that’s really over 153 Billion bucks. The findings are based on Gallup-Healthways Well-Being Index data collected between 2JAN2011 – 2OCT2011 of 109,875 employees working at least 30 hours/week.
In recent decades, employers asked employees to more actively manage their health care by offering positive “carrots” for those who sought to help themselves by voluntarily engaging in wellness program activities, using lower cost health care interventions such as working with a Registered Dietitian aka Registered Dietitian Nutritionist to address issues of overweight or obesity, etc. Not enough employees across the board have voluntarily taking charge of their heath status and that is simply costing employers too many big bucks.
More and more employers have decided the time has come for some “tough love” so-to-speak.
Those employers have decided to abandon a cajoling strategy that merely encourages employees to voluntarily seek out more wellness. Instead, now some employers are deciding to impose penalties if workers don’t engage in a legitimate effort to be healthier.
Just as Samoa Air, an airline in Asia, is now charging passengers not only for the weight of their travel baggage, but also for their own passenger weight, employers are now deciding that employees need to take more active responsibility for their own controllable health situations. Employees need to consciously choose wellness over illness when that is possible and then follow through, or else most likely face ongoing penalties from their employer.
When “carrots” don’t work, employers feel as if they have few options left. They turn instead to the use of “sticks” to see if those will finally provide the needed healthier employee motivation.
If incentives fail, penalties may in fact then become the norm. Some employers are already taking that action. The Wall Street Journal reported on April 6, 2013 that a survey by a consulting firm (Aon Hewitt) specializing in Human Resources noted that 6 out of 10 respondents (from some total of 2,000 mid-size to large-size firms) plan to impose a penalty program for employees who need to take action to reduce their health care costs to their employer and then don’t take that action & follow through voluntarily.
Those employers who function as not only the health care provider, plan manager, and also the plan subsidizer, are looking for a “pay-for-performance” response from employees. That type of employer’s new mindset is: “house money/house rules” aka HMHR.
Employers want to see more than just job results. They want employees to set health goals and reach them.
Despite current legal restrictions, there are concerns being expressed that in the future, health status may in fact become a required piece of information for job seekers to provide potential employers or else employers might find other ways of obtaining that information and it will affect their hiring and promotion decisions.
Health care research firms are suggesting that employees need to face a reality that engaging in positive behavior change must become “automatic” as one executive director, Paul Keckley, of Deloitte’s LLP health-care research arm (the Center for Health Solutions) said when interviewed by the Wall Street Journal staff.
In other words, employees today and in the future need to engage in some positive health habits or be prepared to face economic consequences affecting their ability to find and keep a job as well as their payroll deduction & other out-of-pocket costs for health care. (We’ve covered the idea of developing positive health behaviors through habits which are “automatic” this year. Check out our 3-part series from January 2013 on Behavior Change, and our earlier in April 2013 Habit blog post).
Paul Keckley sums up on the Deloitte website what he feels is currently going on when it comes to the health care system in America:
“The 2010 Survey of U.S. health consumers is the third year in a row we have surveyed 4,000 adults in the U.S. This year, we also surveyed adults in five other countries. The key takeaways were:
- [First], that most people do not understand the U.S. health system;
- [Second], there is a value gap in the system. Most people see it needs to make major improvements in quality, in price, and in service delivery, and
- Third, most people and this is substantial majorities, are not engaged in their own care.”
Wellness or Illness–engaging in your own health care–in some instances it actually is your choice.
There’s a need to “transition into the new normal” as Paul Keckley aptly notes.
Each person needs to come to a decision about their own personal health behaviors and identify opportunities for and follow through with positive behavior change when feasible and support others among their family and friends to do the same. If not, there will potentially be a number of consequences and people may feel more than just a penalty deduction in their paychecks.
As 2013 continues to unfold, what will be YOUR new normal when it comes to health behaviors? Will you voluntarily go for the “carrots” or would you rather see if an employer implements any stick(s)?
As always, we respect your right of choice. Choose wisely!