CFOs don't often get asked their opinion of the health care system. However, as health care reform takes hold and companies are facing important questions about whether to continue providing employee health benefits and how much coverage to provide, CFOs are taking a key role in helping to make these decisions.
So what do CFOs think? In general, CFOs tend to have a relatively low opinion of the health care system, with 39% rating the system as excellent or good, 40% rating it as fair and 21% saying it is poor or failing, according to the 2012 Deloitte Survey of U.S. Employers: Opinions about the U.S. Health Care System and Plans for Employee Health Benefits. When it comes to finding new ways to control costs, CFOs see some promise in contracting directly with the hospitals and large physician practices that are organizing their own health insurance plans. In pursuing and evaluating these relationships, CFOs will be focusing on cost, access and customer service as their key criteria.
What do CFOs like about the current health care system? Well, they have the most favorable view of the system's ability to spur medical innovation in the form of new treatments or services and to provide convenient access to care. However, CFOs are less impressed with the system's cost of care, inability to focus on wellness rather than illness, and the difficult-to-understand insurance and payment system.
When it comes to what is driving health care costs, CFOs point to hospital and prescription drug costs, unhealthy lifestyles and behavior, and the inefficiencies in the health care system itself. As for health care reform, nearly two-thirds of CFOs see the law as a step in the wrong direction.
Despite their costs and complexity, the vast majority of CFOs see health benefits as an important tool to attract and retain the employees their organizations need most (90%), and to boost employee morale and satisfaction (87%). However, CFOs are slightly less convinced in the power of health benefits to improve employee health, reduce absenteeism and improve productivity, with only 59% of CFOs expecting this result.
Still, very few of the companies surveyed plan to drop health coverage as the key elements of health care reform take hold in 2014. Only 9% of companies surveyed, which represent 3% of the workforce, expect to drop health insurance coverage for their employees over the next three years. More than 80% of the companies surveyed, representing 84% of the workforce, plan to continue offering employee health benefits and 10% of companies, representing 13% of the workforce, are not sure what they will do. Among those companies considering dropping coverage, most cite the prohibitive cost as the driver of this decision.