Employer-Sponsored Healthcare: What Happens Now?
How will employers react as healthcare reform moves forward? That is perhaps the most significant question facing the healthcare industry—and the American public. To find out, Oliver Wyman surveyed over 1,300 employers, exploring their opinions, plans, and attitudes, but also presenting them with realistic healthcare choice scenarios. (For a description of our methodology, click here.) The results paint a nuanced, compelling picture of a major public institution on the verge sweeping change.
Some key findings:
Employers want to continue covering their employees, but know they probably can’t in the long term. Only eight percent of employers said they planned to discontinue coverage, and 42 percent said they planned to maintain the status quo. But two-thirds said healthcare costs were unsustainable at current rates of medical inflation—and more than half would find them unsustainable even if medical trend fell by five percentage point.
Employers are interested in new alternatives. We probed on the two alternative models that are gaining the most traction in the marketplace: private healthcare exchanges and value-based networks. Twenty percent of employers were willing to try them even if they saved no money, and an additional 50 percent were interested if they saved money. What is more, employers were willing to turn to new partners for healthcare—they expressed interest in working with benefits consultants on private exchanges or contracting directly with healthcare providers on value-based networks.
Motivations and attitudes count. Employers are traditionally segmented by size and employee compensation. We discovered that in today’s healthcare market, it is more important than ever to pay attention to employer attitudes and motivations. Our analysis identified four segments of employers with four distinct approaches to employee benefits—and pointed to the products and marketing messages most likely to engage them.
Who’s staying, who’s going, and who’s ready for a new solution
One of four distinct strategies will be pursued by different employer segments. Only 8 percent of employers plan to stop offering health coverage, while 50 percent are likely to make real change. Click on chart segments below for details.