Upfront: Is Consumer-Driven Health Care Bearing Fruit?

A recent study suggests businesses which push employee consumerism are doing a better job of controlling health-care costs.

Companies' efforts to lower their health benefit costs by encouraging employees to take more responsibility for health-care decisions may be bearing fruit, according to research conducted by Watson Wyatt Worldwide and the National Business Group on Health (NBGH), a Washington, D.C., nonprofit that represents large employers' perspective on health-care issues.

The study examined health-care benefit cost increases incurred by some 450 companies in 2003 and those businesses' expected increases for 2004. High performers -- those with the lowest costs -- expect a median increase of 7 percent this year. Low performers expect costs to jump 17 percent.

Much of the difference in these projections can be explained by the high performers' emphasis on individual accountability and responsibility in their health-care programs. The study revealed that companies with lower costs are more likely to encourage employee health-care consumerism -- implementing increased point-of-care cost sharing, disease management programs and high-deductible plans, for example.

"A difference of 10 percentage points is hard to ignore," says Ted Chien, Watson Wyatt's global director of group and health care consulting in Washington, D.C. "The results of this study strongly suggest that employers with programs that encourage employees to be more responsible for their health-care decisions are beginning to reap the rewards."