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Hewitt Study Outlines Key Differences Between U.S. Employees and Employers Views on Health Care

February 25, 2002


Employees Rank Health Care as Number One Benefit and Want More Control and Choice

LINCOLNSHIRE, Ill --Employees want more control and choice in health care, are interested in new consumer choice models, and rank health care as the most important benefit, according to a new consumer study from Hewitt Associates, a global outsourcing and consulting firm.

The Hewitt study of 528 U.S. employees found health care ranks as the most important benefit, outscoring compensation by a margin of two to one. More than half (55 percent) of employees currently enrolled in employer-sponsored health plans ranked it number one, while 82 percent ranked it number one or two. In addition, two-thirds of respondents consider health care coverage a primary factor in staying or choosing employment, twice the number (34 percent) of those who said it's a basic need, but secondary to pay, retirement benefits, time off and a flexible work schedule. "Employees truly value the importance of health care benefits and are making it a top priority for employers," said Jack Bruner, national practice leader for Hewitt's health management practice. "It's not surprising that health care is becoming more important to employees as both the economy and labor market are declining."

Consumers also expressed confidence in their abilities to make health care decisions. Eighty-seven percent of participating employees felt that they understood "fairly or very well" how to choose the best health plans for their needs versus 13 percent that said they have "little or no" understanding. Nearly three-fourths (70 percent) said that they understand how to navigate the health care delivery system "fairly or very well," while 30 percent admitted that they understand the navigation of the system "not well at all." When asked about their comfort level with taking more responsibility for researching, choosing and maintaining their health care coverage, 88 percent felt either "somewhat or extremely" comfortable. But, when asked whether they would want to take full responsibility for purchasing their own health care coverage, almost half (49 percent) responded "yes," while 42 percent said "no" and 9 percent said "it depends."

"These findings show that consumers are willing and ready to assume responsibility for their health care decisions, more than employers are giving them credit for," Bruner said. "While we know that some employees are prepared to do this, employers still need to lay the groundwork for consumers by providing educational data and support tools to help employees make informed health care decisions."

Employers and Employees Don't Always Agree

There were key differences between employees and employers in comparing the new consumer study with Hewitt's recent "Health Care Expectations: Future Strategy and Direction" survey of more than 700 organizations.

While only 61 percent of employers believe their employees are either "extremely or somewhat" comfortable with taking more responsibility for evaluating and selecting health plans, coverage levels, providers and health care services, 88 percent of employees are either "extremely or somewhat" comfortable. The major difference is that 39 percent of employers believe that their employees are "not at all comfortable" with additional responsibility, yet only 12 percent of employees report that they're "not at all comfortable" with taking additional responsibility for health care decisions.

Another key difference is how employees want more choice and support for health benefits. When asked to rank the priority of benefit design enhancements, employees and employers ranked the following as high priorities:

High-Priority Benefit Enhancements		Employees		Employers
Options that allow employees to reduce the cost of coverage		67%		49%
Access to experts for advice on treatment options, doctors, hospitals		63%		31%
Access to advocates to resolve disputes with health plans		61%		26%
Access to Internet data on medical conditions/treatments		49%		28%
Wider choice of health plans		35%		10%

Consumers also are more interested in customized health plan designs, which would allow employees to tailor their health insurance coverage levels by choosing among different prescription drug options, physician office copays and hospital deductible levels.

Customized Health Plan Designs		Employees		Employers
Three different prescription drug options		91%		67%
Three different physician office copays		89%		66%
Three different hospital deductible levels		84%		67%

"It's interesting to see how employers are underestimating consumers' desire for more choices, flexibility and control in making their health care decisions," said Bruner. "Employers should really listen to better understand employees' health care needs. Moving forward, we expect employees to be more involved with their health care benefits and, eventually, become better consumers of health care." Other key findings from the survey include the following:

• More than half (53 percent) of participating employees agreed that there should be no cost impact based on an individual's health decisions.
• Forty percent of respondents believe that individuals who don't manage their health should bear a higher portion of out-of-pocket costs.
• Eighty-four percent of employees feel that health plans should provide improved benefits as an incentive to those who make a reasonable effort to manage their illness.
• Nearly all (92 percent) of employees said that the doctor/treatment facility should be held responsible for problems with care received.
• Exactly two-thirds of participants said they would participate in a condition management program offered by a health plan if they had a chronic illness.
• Seventy-seven percent of consumers responded that they would participate in an health insurance exchange, which is where employees would have access to a broader choice of health plans through a third party with improved information and customer service, if it provided a 10 percent cost reduction to consumers. Sixty-seven percent were still interested as long as costs didn't increase.
  
  

About Hewitt

Hewitt Associates LLC is a global outsourcing and consulting firm delivering a complete range of human capital management services to companies including: HR and Benefits Outsourcing, HR Strategy and Technology, Health Care, Organizational Change, Retirement and Financial Management, and Talent and Reward Strategies. With 81 offices in 37 countries, Hewitt's 2001 fiscal year revenues were approximately $1.5 billion.