Kitsap Peninsula Business Journal
6-8-2004
SPECIAL REPORT - REAL ESTATE & INSURANCE
Fewer employers switching health
plans to save on costs

Brokers may find that their clients are not as eager to change health care vendors, despite continuing cost increases.

A new survey of 449 employers by Watson Wyatt and the National Business Group on Health (NBGH) finds that the percentage switching plan providers to curb costs has dropped drastically.

One in 10 employers surveyed changed medical vendors in 2003 to curb costs, compared to three in 10 in 2002. Additionally, less than 10 percent of employers switched pharmacy vendors in 2003, compared to 23 percent the year before.

That does not mean employers are more tolerant of health care cost hikes. According to the report, 29 percent say they were willing to absorb health cost increases in 2003, down sharply from the 52 percent who said they would do so in 2002.

Instead of simply playing musical chairs with health plans, through, employers are trying to change employee behavior by using plan designs and other mechanisms to boost price sensitivity among workers.

A quarter of employers say they significantly increased either premiums or cost provisions at the point-of-care, and more employers introduced a high deductible plan in 2003 without a reimbursement arrangement.