Are Employers Ready to Compete With the Health Care System?

In October, the Kaiser Family Foundation (KFF), released its Annual Employer Health Benefits Survey. While most of the findings were expected, reflecting employers’ willingness to maintain benefits or possibly add some expanded mental health services, the survey did uncover a surprising increase in premiums. KFF’s findings indicate that the average annual single and family premium each increased by more than 7% in the last year.

While inflation is expected in the current financial climate, last year the average single premium grew by just 2% and the average family premium only 1%. KFF also reported that over the last five years, the average premium for family coverage has increased by 22% compared to a 27% increase in workers’ wages and 21% inflation.

This year’s survey findings indicate that most employers are slow to adopt alternative payment models for health benefits, but the drastic increase in health insurance premiums and overall care is untenable.

In his review of the survey, Paul Keckley, Executive Director, Vanderbilt Center for Evidence-based Medicine, noted that large self-insured employers recognize themselves as a source of profits for insurers, hospitals, physicians and drug companies. They are preparing to tap into those profits by developing multi-year direct contracts, value-based arrangements, alternative care models and other methods to leverage their clout. It seems that next year, large self-insured employers could be ready to engage the industry head-on.