Employers can't afford benefit plans; technology can be key

November 4, 2008

More than one-third of small employers don't offer benefit plans because it is too expensive, according to Mercer. Technology can be the key to making healthcare affordable for all by reducing the cost of delivering care.

Many employers believe, that at its current price, employee medical coverage is far beyond their means, according to a new survey by Mercer.

More than one-third of U.S. employers-almost exclusively small employers, with fewer than 500 workers-do not sponsor an employee health plan.

When asked their primary reason for not offering health coverage, 43% of all employers without employee plans said they couldn’t afford it. Other reasons included employees being covered under other plans (20%), high workforce turnover (9%) and the perception that employees would rather have more pay than health coverage (9%).

This further emphasizes the need for technology to provide both a means to enable better care for the population combined with a tangible means to reduce the cost of delivering care, believes Gary Zegiestowsky, chief executive officer at Informatics Corporation of America (ICA), a Nashville, Tenn.-based healthcare IT company.

“Improving care can ultimately reduce the cost of healthcare, which could be the stimulus to more closely align all stakeholders in a community,” Zegiestowsky says. “Technology can be an enabler, but cannot have an impact without a model for community-based care that centers on complete information about a patient across all treatment settings.”

He believes that while improved automation for hospitals and clinics is a key piece in this equation and has progressed in the industry, a large gap still remains in making sure that patients receive the most efficient and effective care.

“A critical component to address this gaps is to have complete integration of patient information across all treatment settings,” Zegiestowsky says. “This will enable clinicians to track and measure key aspects of each patient’s health-such as track progress of a diabetes patient-as well as communicate across treatment settings regarding a patient, such as communication between the emergency department and clinic.”

Combining complete information with a focus on key disease states, such as diabetes, could improve patient care across a community by enabling clinicians to make informed decisions on each patient. Potential sources for cost reduction range from reducing duplicate tests to more proactively treating key disease states.

“Given the 80/20 rule and assuming that key disease states are a large percentage of healthcare costs today, addressing these could have a significant impact on reducing both short-term and long-term costs for this segment of the population,” he says.

The Mercer survey was completed by 545 employers that do not offer employee health coverage, and nearly 2,900 employers that do.