Employers show little faith in ACA cutting health care costs

While the verdict is still out on whether or not the Affordable Care Act can get its various technology issues corrected and forgotten, ongoing negative press hasn’t helped convince employers of the other long-term, cost-saving virtues of the ACA.

The 2013 Deloitte Employer Survey finds that many employers see the entire health care system as being expensive and wasteful, and indicate that they don’t believe the ACA will do much to help to change the situation.

Of the 500 employers surveyed, each with 50 or more employers, just a third said they would give the current U.S. health care system an “A” or “B” grade – 38% said a “C” was more appropriate and 29% felt the system was only worth a “D” or even an “F.”

On the issue of predicting the future impact of reform, only 19% said they believed the ACA would improve the quality of care by the year 2019, and only 22% said they anticipated it might be able to reduce costs.

Better fixes, according to respondents, included the notions of increased transparency around the prices of medical products, services and procedures, as well as “clear, accessible information about the performance of care provided by doctors,” the latter being favored by 46% of respondents.

“Employers feel they lack the data and tools to manage their concerns around cost and quality,” notes Bill Copeland, national managing principal of Deloitte’s life sciences and health care practice. “I think in the coming year, they will join the front lines of the effort to improve the system by demanding more visibility and by strengthening the use of incentives and penalties to motivate employees toward healthful behaviors.”

Employers, on the whole, report seeing their health care costs continuing to rise – most suggest that costs will jump 19% between 2013 and 2014 alone – that on top of a 30% jump in costs over the last three years.

The result has seen costs passed directly to employees: On average, employees have been responsible for 26% higher health care insurance premiums, and more than half of the companies surveyed have implemented stronger employee cost-sharing measures.

Other cost containment strategies for employers have included wellness programs (36%), plan design changes (28%), managing networks (19%), limiting worker hours (18%)  and using defined contribution plans (17%) – or simply reducing benefits overall, as has been done by 20% of employers surveyed.

“Employers are balancing on a precipice at the moment,” said Rick Wald, director of Deloitte Consulting LLP and leader of the company’s employer practice. “On one side they are dissatisfied with the health system and feel a need to take more action. On the other side, they are watching to see if the health reform measures gain traction. One way or the other, corporate America is likely to make significant moves because the status quo isn’t sustainable.”

In other findings from the survey, about half of employers said they actively share cost and quality information with employees regarding health care providers, procedures and medications; a quarter are investing in coaching, technology and various rewards and penalties to help motivate employees toward healthful behaviors.

Employers do suggest they lack trusted resources to help make better value-based purchasing decisions, turning to independent consultants, physicians and third-party benefits managers to try to find the answers; approximately one quarter analyze their claims data directly to try to find providers who are doing unnecessary testing or procedures.