Even if the Supreme Court upholds the Affordable Care Act, an
overwhelming majority of employers want to keep providing health
benefits for their employees. But most feel the cost is unsustainable,
and they display great interest in alternatives to traditional health
insurance schemes. This was the key finding of a new survey of more than
1,300 employers and 700 employees conducted by the Health & Life
Sciences practice of Oliver Wyman.
“Previous surveys focused on whether employers intend to drop coverage
or not,” says Mindy Kairey, a partner at Oliver Wyman and leader of the
project. “But the question is more complicated than that. We wanted to
understand why employers make the choices they do and to understand
which types of new solutions will satisfy their needs.” To accomplish
that, the survey used scenario-based questions asking respondents to
choose among multiple alternatives—including two alternatives to
traditional insurance that are gaining currency in the marketplace:
private healthcare exchanges and value-based networks.
Some key findings:
Employers want to provide healthcare insurance to their employees.
Only 8 percent are likely to drop employer-sponsored coverage. Fifty
percent said they will continue to offer insurance but with major
changes. The remaining 42 percent want to maintain the status quo.
They realize that they may not be able to. Two-thirds of
employers believe that the cost of providing health coverage is
unsustainable at current rates of medical inflation. More than half
would find it unsustainable even if medical inflation were cut by five
Employers are hungry for new solutions. When offered a private
exchange alternative, 20 percent selected it even if no savings were
involved, and an additional 60 percent said they would switch to save
10 percent on healthcare costs. When offered a value-based network
alternative, 20 percent would switch even without savings and more
than half would switch for 10 percent savings. Only 10 percent of
employers said they would not consider either alternative. “Employers
are very interested in alternatives to traditional insurance,” says
Kairey. “And their demand will only increase given their desire to
continue to provide coverage to their employees. Private-sector
insurance could still be a major part of the U.S. healthcare system—if
health plans can quickly start demonstrating real improvements in
Employees are willing to change. In a related study, we
surveyed more than 700 individuals who currently receive their health
coverage through employers. Almost two-thirds were less than satisfied
with their current insurance arrangement and 90 percent said they were
prepared to accept major changes if it saved them money.
“To me, our survey findings suggest that we’re on the verge of a massive
shift in how healthcare coverage works,” says Kairey. “That’s important,
because more than 70 percent of the Americans who have health insurance
receive it through their employers. If employers start to move toward
models that promote efficiency and value, we could start seeing a
profound level of real reform.”
The Oliver Wyman survey is available at www.oliverwyman.com/5144.htm.
For further information or to arrange an interview with Mindy Kairey,
contact Patrick Clinton at firstname.lastname@example.org.
About Oliver Wyman
Oliver Wyman's Health & Life Sciences practice serves clients in the
pharmaceutical, biotechnology, medical devices, provider, and payer
sectors with strategic, operational, and organizational advice. Deep
healthcare knowledge and capabilities allow the practice to deliver
fact-based solutions. For more information, visit www.oliverwyman.com/health.htm.
Oliver Wyman is a global leader in management consulting. With offices
in 50+ cities across 25 countries, Oliver Wyman combines deep industry
knowledge with specialized expertise in strategy, operations, risk
management, organizational transformation, and leadership development.
The firm's 3,000 professionals help clients optimize their business,
improve their operations and risk profile, and accelerate their
organizational performance to seize the most attractive opportunities.
Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies
[NYSE: MMC]. Follow Oliver Wyman on Twitter @OliverWyman.