Employers support current health care system?!

According to the headline of a press release on Watson Wyatt’s newest survey findings about employer views, you would think it is steady as she goes: “Companies Remain Confident in Future of Health Benefits, Watson Wyatt/National Business Group on Health Survey Finds,” claims the press release.

But if you actually check the data, the data seem to say employers are ready to bail out.


Here is their description:

Despite rising health care costs and other economic worries, a majority of large U.S. employers remain confident they will continue to offer health care benefits to workers 10 years from now. However, the level of confidence has slipped from last year due to economic concerns and uncertainty over the implications of potential health care reform, according to a new survey by Watson Wyatt, a leading global consulting firm, and the National Business Group on Health (NBGH), an association of more than 300 mostly large employers.
. . .
According to the survey, 62 percent of employers are very confident they will continue to offer health care benefits 10 years from now, down from 73 percent last year. The survey also found that, despite today’s economic uncertainty, roughly four in 10 employers (41 percent) are sticking with their current health care strategy, while the remaining respondents have either revamped their strategy or expect to do so this year.

“This is the first time in the 14 years that we have conducted this survey that employer confidence has declined, and it is not related to an increase in cost trends,” said Ted Nussbaum, North America director of group and health care consulting at Watson Wyatt. “This clearly reflects the uncertainty among large employers over the impact that the fragile economy is having on their ability to stay competitive in the face of health care costs that persistently rise at double the rate of general inflation.”

So you have a group of large employers who have been consistent in believing they will continue to offer employer-based health benefits . . . until this year. If you do the math, only 85% of the employers are confident they are sticking with the tradition. Put another way, just in the past year (and perhaps just in the past few months), there has been a drop of 15%.

They may be right about the motivation, but this motivation hardly seems transient. It seems like business as usual for the foreseeable future.

The press release also suggests that employers are not buying into changes that would lead to national healthcare.

The survey found that employers do not support most of the commonly prescribed solutions to the issues that plague the health care system. More than two-thirds (68 percent) are very or somewhat supportive of reforms that advance the consumer-oriented model and emphasize greater individual responsibility. Respondents are least in favor of tax policy changes that remove tax deductibility of employer premium contributions, with only 12 percent supporting those proposals.

Now some of these are irrelevant. Tax deductions are only relevant if employers are paying for health coverage, and if they are not providing it because the system has changed, then this is irrelevant.

Only 46% support the status quo. 55% do not support it.

56% do not support private insurance.

Other data suggest that employers are increasing their support for Health Savings Accounts, but these have proven to be very unpopular with most workers. They will probably increase the number of uncovered Americans. As Americans lose their coverage and jobs, they will increasingly have some family members covered under Medicaid or SCHIP. So HSAs will do little to stem the flood of support for a national healthcare system.

I think this is a study about which we will look back and shake our heads at its naivete.

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