Can an Employer Sidestep the Negative Impact of a Transition to a High-Deductible Health Plan? New Study Shows It’s Possible

Madison Agee

Over the 5-year period of the study, healthcare costs decreased 21.5% as well-being improved 13.5%.

Perhaps spurred by a desire to avoid the looming 40 percent excise tax on so-called “Cadillac health plans” that’s set to come into effect in 2018, more employers are offering or considering offering consumer-driven health plans (CDHP)—also known as high deductible health plans. According to 2014 research by Aon Hewitt, 60 percent of organizations currently offer a CDHP to their employees—a 4 percent increase from the previous year. Maybe even more telling of this industry-wide shift to CDHPs is that 42 percent of employers are considering offering one as its sole benefit option within the next three to five years, entirely phasing out alternate options such as preferred provider organizations (PPO).

Both employers and employees are unsure about the potential pitfalls of the higher employee cost-share that is the hallmark of a CDHP—which may include employees feeling less engaged at work, being more apt to leave for other organizations where their cost-share would be lower, and delaying or avoiding necessary healthcare such as office visits, testing or medication. A new study authored by the Healthways Center for Health Research, which was published last month in the Journal of Occupational and Environmental Medicine, provides a case study in which an employer was able to sidestep these negative consequences and actually experience significant positive outcomes, even when executing an organization-wide transition to a CDHP.

The study, “The Value of a Well-Being Improvement Strategy: Longitudinal Success across Subjective and Objective Measures Observed in a Firm Adopting a Consumer-Driven Health Plan” makes a significant scientific contribution, as it’s one of the first longitudinal studies of the effect of a well-being improvement strategy on outcomes over an extended period of time—five years, in this case.

The linchpin of the employer’s strategy was twofold: 1) implement a robust well-being improvement program and 2) support the program by creating and sustaining a pervasive culture of well-being throughout the organization. The employer’s program included such rich offerings as company-sanctioned fitness activities, weight loss and tobacco cessation programs, online well-being improvement plans and resources, free membership at a national network of gyms, and health coaching. All of these offerings were underscored by a visible and purposeful organizational culture of well-being.

The study measured five key outcomes: healthcare costs (as measured by allowed amount per member per month and includes both the employee and the employer cost-share), smoking rates, obesity prevalence, job performance and absenteeism. Study outcomes include:

  • Average individual well-being statistically significantly trended upward by 9.8 points (or 13.5%) between 2009 and 2013 and remained stable in the last three years
  • Healthcare costs declined 21.5 percent, at an average annual rate of 5.2 percent, an important result given that inflation alone would have yielded an expected positive trend over the five-year period
  • Compared with 2009 when the CDHP was initiated, smoking and obesity prevalence rates in 2013 were 36 percent and 18 percent lower, respectively
  • Average self-reported job performance increased 2 percent (2010-2013)
  • Absence on average declined by 4 percent, or approximately six-tenths of one day per person per year (2010-2013)

This new study shows that a comprehensive, multi-year well-being improvement program can reduce healthcare costs and create a workforce that is healthier, has higher well-being, and is more productive. It also builds on earlier Healthways research that demonstrated the important role culture plays in supporting the success of a well-being improvement program.

Employers interested in better understanding how to create a roadmap for creating a strong culture of well-being (similar to the employer studied in this paper) will want to see our infographic, “Creating a Culture of Well-being: Five Steps to an Action Plan.” In it, we’ve collected five top characteristics of organizations that have achieved a culture of well-being. We’ve also identified key questions your planning team should ask to help benchmark your organization’s current position and help create a roadmap to your ultimate goal.

Topics: Well-Being Science and Research