News & Trends

Integrated Benefits Institute study on unnecessary surgery for low back pain; National Business Group on Health/Watson Wyatt study on reducing health care costs by getting employees more informed; University of Michigan Depression Center study on costs of depression at the workplace





Talk about pain. Unnecessary medical treatment for the lowest-severity, low-back pain cost six employers nearly $19 million over a one-year period, according to a new study by the Integrated Benefits Institute. Conducted in partnership with Medstat, the study "Are Medical Guidelines Effective Tools? — It Depends on the Goal," compared full costs (direct treatment costs and both the direct and hidden costs of disability and absence) when doctors provided medical treatment that complied with treatment guidelines compared to full-cost results when they did not.

Providing medical treatment according to evidence-based guidelines maintained by the federal Agency for Healthcare Research and Quality can result in huge benefits for employers and employees alike. By managing the timing and extent of medical treatment and monitoring, such guidelines can help maximize an employee's health and minimize unnecessary costs, says the study.

Specifically, cases where treatment did not comply with guidelines cost an average 3.67 times more than cases with compliant treatment. In fact, unnecessary surgery alone accounted for $5.5 million in excess costs, mainly attributed to medical and absence-related costs.


Heart disease among employees will triple in the next decade, according to new research from MetLife. What's more, as the baby boomer generation ages over the next 15 years, disability and health care claims related to arthritis and cancer are expected to double.



More companies are asking employees to take responsibility for health care decisions, and the results are promising, reveals the latest annual health cost study from the National Business Group on Health and Watson Wyatt. Companies that get employees more involved in health care decisions are expected to see a median seven percent increase in health care costs this year, as opposed to a 17 percent increase for companies that do less to engage workers in making these cost-effective decisions.

Other findings in the study include: Less than one in three employers said they were willing to absorb increases in 2003, compared to half of them in 2000. The number of employers trying to contain costs through plan or vendor changes dropped sharply as well. Just 10 percent of employers changed medical vendors in 2003 (compared to 30 percent in 2002), and less than 10 percent switched pharmacy vendors last year (compared to 23 percent in 2002).

So how are these companies cutting overall costs and increasing employee responsibility? One method is to increase financial tension to their health care plans, such as using plan designs that increase employees' price sensitivity to health care decisions. Twenty-five percent of employers said they significantly increased either premiums or cost provisions at the point-of-care.

Meanwhile, in a separate study from NBGH and Watson Wyatt, enrollment in consumer-driven health plans has seen significant increases for 2004. The number of employees in these plans clock in at 478,000 this year, more than double the 169,000 enrolled in 2003. Almost one in three large firms said they'll offer a consumer-driven health plan in 2005, compared to 21 percent that currently offer one.

Fifty-seven percent of Americans say health reform will play a "very important" role in determining their vote for November's presidential election, according to a new study by the Commonwealth Fund. The study also revealed that 62 percent would be willing to give up recent federal tax cuts in exchange for guaranteeing health insurance security.



Each year, depression costs employers $52 billion in absenteeism and lost productivity. And despite the number of mental health benefits in place, employees with depression view their illness as a major stumbling block to furthering their career.

Nearly 90 percent of employees report having some form of mental health coverage, yet 75 percent delay seeking help and 36 percent remain only partially treated, according to a recent study by the University of Michigan Depression Center. What's more, while 65 percent of employees with depression admit to having access to an employee assistance program, only 14 percent have ever actually accessed one.

The biggest problem seems to be between company perception and employee reality. Eighty-three percent of benefit managers feel their companies have taken steps to ensure employees with depression are supported by coworkers, yet only 37 percent conduct proactive depression education programs. What's more, despite 78 percent of benefit managers believing that depression-based loss in productivity is costlier to companies than treating it, only 11 percent facilitate employee screenings.


A new Health Care Initiative of $24.4 million hopes to address critical worker shortages in the health industry. Part of the President's High Growth Job Training Initiative, grants issued so far include $3 million to The Johns Hopkins Health System, $1.5 million to the State of Maryland, $4 million to fund nurse-training programs in Florida and Texas, and $1.4 million to Florida International University.


More than six in 10 employers want to offer Health Savings Accounts to their employees, reveals a new study by Hewitt Associates. Yet only one-third currently offer high-deductible plans, which must be in place first before HSAs can even be introduced.



News & Trends.

Business and Health

Apr. 15, 2004;22.