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New Kaiser Survey on Employer Health Coverage Released

November 16, 2021 By

The Kaiser Family Foundation (KFF) released its 2021 Employer Health Benefits Survey on November 10. The results provide an important glimpse into what is happening to employer-sponsored health insurance around the U.S.  Overall, Kaiser surveyed 1,686 non-federal public and private organizations with three or more employees, and from this number, 523 employers were located in 12 Midwestern states (an average of 44 employers per state). The Kaiser study does not break out the results by each state, only by region.

Unlike the results found in the 2020 survey, this year’s survey provides a much better representation of how employer-sponsored health insurance has changed since the COVID-19 pandemic began in March 2020. Additionally, KFF revised the 2021 survey to reflect changes employers and health plans made to address potential issues and uncertainties arising from the pandemic. The survey took place from mid-January through July of this year.

Key Findings by Kaiser

The Kaiser survey is very helpful because it documents national health trends for employer-sponsored plans. Some of the key findings in 2021 include the following:

  • About 59 percent of employers offer health benefits, a percentage much like the previous year. Similar to Iowa, the larger the employer, the more likely health benefits are offered. About half (49 percent) of U.S. organizations with 3 – 9 employees offer health coverage, and nearly all (99 percent) of the organizations surveyed by Kaiser with at least 200 employees offer health coverage.
  • The average single and family premiums increased by four percent over the past year, while worker’s wages increased by 5 percent and inflation increased by 1.9 percent.
  • The average annual premium for single health coverage is now $7,739 ($7,470 last year), while the average family health premium is at $22,221 ($21,342). Over the last five years, the family premium has increased over 22 percent, and over the last 10 years, it has increased 47 percent.
  • On average, covered workers contribute 17 percent of the total single coverage premium ($1,299 annual) and 28 percent of the premium for family coverage ($5,969 annual). In our 2019 Iowa study, we found that covered workers contributed 18.6 percent for single coverage while workers for family coverage contributed 30 percent of the premium.
  • The average single deductible found by Kaiser now stands at $1,669, which is remarkably similar to last year’s $1,644 average. In 2021, 85 percent of covered workers have a deductible in their plan, similar to last year (83 percent).
  • Fifty-eight percent of small firms and 83 percent of large organizations address health risks and unhealthy behaviors by offering a wellness or health promotion program in at least one of these areas: smoking cessation, weight management, and behavioral or lifestyle coaching.
  • Telemedicine, which includes video chats and remote monitoring, continues to be very popular. In 2021, 95 percent of organizations with 50 or more employees that offer health insurance cover some healthcare services through telemedicine in their largest health plan, up from 67 percent three years ago.
  • Organizations with at least 50 employees were asked about changes they made to their health plans (after COVID-19 began) regarding mental health coverage for their employees. The results:
    • 31 percent expanded ways through which enrollees could get mental health or substance abuse services – such as telemedicine.
    • 16 percent developed new resources, such as employee assistance programs.
    • Six percent expanded the number of mental health or substance abuse providers in their plans’ networks.
    • Four percent waived or reduced cost-sharing for mental health or substance abuse services.
  • Health Care Price Transparency – Health insurance plans, including self-funded employers, will be required to make information available to enrollees about the estimated cost of services and cost sharing on a “real-time” basis. Twenty-six percent of large employers believe that providing employees with additional information about the cost of services will help their healthcare decision-making “a great deal” and an additional 50 percent responded that it will help their decision-making “somewhat.” Only three percent of large employers say the new transparency rules will reduce health spending “a great deal,” while 15 percent said they will reduce health spending “not at all.” Thirty-eight percent believe the new rules will reduce spending “somewhat” and 40 percent responded that spending will reduce by “very little.”

The Kaiser study was published in the peer-reviewed journal Health Affairs.

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Filed Under: David P. Lind, Lindex Tagged With: , , ,

Mandating COVID Shots – Part II

August 25, 2021 By

There is a major new development that may impact the number of employers mandating COVID-19 vaccinations. Just this Monday (August 23), the Food and Drug Administration (FDA) granted full approval to the Pfizer/BioNTech COVID-19 vaccine for individuals, ages 16 years and older. Prior to this, the vaccine was available under emergency use only, which is still the case for individuals, ages 12 through 15, and for “the administration of a third dose in certain immunocompromised individuals.”

This full approval cannot come soon enough. According to the Iowa Capital Dispatch, about 2,200 new COVID-19 cases are occurring each day in Iowa. A recent study published in Health Affairs found that COVID-19 vaccines prevented nearly 140,000 deaths during the first five months of the vaccine campaign. This number is approximately the size of Cedar Rapids. Finally, a Kaiser Family Foundation research brief published last week reveals that about 113,000 Americans could have avoided being hospitalized in June and July if they had received the COVID vaccine – which amounted to an estimated cost of $2.3 billion.

For individuals and employers on the fence about whether to obtain (or mandate) vaccinations, this latest move by the FDA signals that the (Pfizer) vaccine was determined to be both safe and effective – far outweighing the potential risks. The two shots together were found to be 91 percent effective at preventing COVID-19 and potentially serious outcomes, including hospitalization and death. The full approval by the FDA provides a stronger, fortified reason for employers to consider implementing – if desired – a vaccine mandate at the workplace.

New Reports that may Help Employers

I must give a big thanks to the May 20 podcast of Tradeoffs that addressed the employer mandate issue. This particular episode provides much of the background information that I am about to share on WHY employers might seriously consider mandating vaccine shots to their employees.

  1. Requiring Vaccines Actually Works

    Many studies show that, by mandating vaccinations at work – such as the flu shot – more people get vaccinated. Nursing homes and other healthcare settings (hospitals included) spell this out. For employers in other sectors, having more workers vaccinated will translate to having a safer work environment that results in fewer sick days and a smaller probability of new virus strains developing.

  2. Vaccines Reduce Community Spread

    According to a new study in The Journal of Human Resources by Corey White, a Cal Poly, San Luis Obispo health economist, California hospitals and counties that implemented influenza vaccine mandates for their employees found there was an uptick of flu shots by about 10 percentage points. But just as importantly, there was a 40 percent drop in the number of patients who caught the flu at the hospital, in addition to a 20 percent drop in people coming into the hospital with the flu. White calls this a ‘positive externality’ benefit, as it benefits not only the person getting the vaccine, but also reduces the risk of spreading the disease to others. It must be noted this may not be a perfect generalized finding for non-medical employers, but it does suggest that any employer, regardless of size and industry, may greatly impact their own community with such a mandate. This is especially true if many customers visit popular businesses throughout the community – such as restaurants and grocery stores.

    We also know that because COVID has become more politicized than the flu, mandating COVID shots may elicit a stronger response from employees than a simple flu mandate.

  1. Provide Exemptions, But Stay Vigilant About Asking Employees

    Brandyn Churchill, a Vanderbilt PhD candidate, released a study that found an 11 percent increase in the number of Washington D.C. school girls receiving the HPV vaccine by allowing parents to make the decision once a year, rather than only asking one time. The study suggests that employers, who may be concerned with employee backlash, can provide ‘generous exemptions’ to their mandates – such as for medical reasons or religious objections – but still increase vaccination rates if they repeatedly approach their employees about getting vaccinated. According to Churchill, how opt-outs are designed can actually lead more employees to getting vaccinated. From his study, it is unknown whether the uptick resulted from the HPV vaccine becoming more normalized during a period of time and therefore more accepted by parents, or because parents were asked more frequently to vaccinate their daughters. Churchill believes both reasons helped push the vaccination rate upwards. The takeaway from this study is that vaccine-hesitant people should be given plenty of opportunities and have options that are based on credible and relevant information. Over time, the vaccination rates will rise.

Final Thoughts…

It is true that in the new world in which we live, COVID is a wild-card on how employees will accept a workplace vaccination mandate. Will our ‘liberties’ be lost, or will we finally gain our freedom from this pandemic? Because the information on COVID-19 is so imperfect and ever-evolving, the delicate balance of providing caveats and caution must be used by employers to ensure that trust is built and maintained for a more informed workforce. The full approval by the FDA for the Pfizer vaccine is a good step toward increasing the vaccination rate. Hopefully, when thorough and appropriate analysis has been completed on the other two vaccines, additional approvals will be forthcoming.

From this, we can all benefit.

NOTE: For additional background on this topic, please see my August 4 blog, “Can Employers Mandate COVID Shots?”

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Filed Under: David P. Lind, Lindex Tagged With: , , , , , , ,

Tackling Healthcare Spending – One Percent at a Time

April 21, 2021 By

One Percent Steps Adding Up to Something BIG?In healthcare, there is plenty of waste…and this waste is enormously costly to those who pay. This unnecessary spending is baked into the outrageous health insurance premiums we pay. In 2019, I estimated that ANNUAL waste baked into Iowa premiums for single and family coverage averaged $2,400 and $6,600 respectively. This translates into nearly 34 percent of all healthcare costs as non-value-added. 

Now, to be fair, there are those who make a living from this waste. Waste becomes a paycheck. Removing this unnecessary payroll, however, will most likely erupt into anguished rebellion. Justifications can always be made by various healthcare stakeholders about the necessity of their ‘value’ in a highly-convoluted and dysfunctional system. Admittedly, some may have a point. 

Six Domains of Waste

In the broadest sense, waste is found in six ‘domains’ of healthcare – as identified by Donald Berwick and Andrew Hackbarth in a 2012 study:

  1. Overtreatment (low value care)
  2. Failures of care coordination
  3. Failures in execution of care processes
  4. Administrative complexity
  5. Pricing failures
  6. Fraud and abuse

Using each of these six broad buckets of waste, my aforementioned 2019 blog provided the estimated impact of waste to health insurance premiums. Eliminating too much unnecessary spending at one time, however, will most likely create a backlash of stakeholder opposition. This may result in missed opportunities to actually fix the expensive leaks in our healthcare ‘system’.

How can costs be incrementally reduced to make a sizeable impact to payers?

One Percent Steps for Health Care Reform Project

According to a February article in Health Affairs, authors Zack Cooper and Fiona Scott Morton discuss implementing a series of one percent solutions that could collectively lower healthcare costs by hundreds of billions of dollars. If you are an employer that offers health coverage, this should grab your attention.

The authors explain their reasoning on using the one percent solutions:

“Rather than speaking about health spending via abstractions, we should view high U.S. health care costs as the result of a series of discrete problems that each incrementally raises health spending by a percent or two — so-called ‘one percent problems’. While each problem is unremarkable in isolation, the collective impact of a series of one percent problems can help explain why the U.S. spends more than other nations.“

The vastness of healthcare issues require new approaches that disrupt the status quo from being replayed into the future. Doing so begins with smaller steps that make sense. Cooper and Morton prescribe 16 steps that economists and policymakers can take to reframe healthcare spending as a series of one percent problems. These problems, they argue, can be used as a road map for cost reduction. 

If implemented, the following 16 steps would decrease overall annual healthcare spending by nearly nine percent. This amount of savings may not sound impressive, but when nearly nine percent can be lopped off from the health system that absorbs $3.8 trillion of costs, it is an impressive beginning. Each step does not serve as a silver bullet, but rather, an incremental solution that makes sense.

These 16 evidence-based steps are ranked by their projected annual savings as a share of national health spending:

  1. Regulating healthcare provider prices: 1.89 percent
  2. Addressing surprise medical bills: 1.67 percent
  3. Increasing the efficiency of claims adjudication: 1.25 percent
  4. Addressing vertical integration of hospitals and physicians: 0.91 percent
  5. Introducing smart provider networks: 0.83 percent
  6. Addressing hospital consolidation: 0.69 percent
  7. Improving health insurance plan choice: 0.63 percent
  8. Improving plan auto-assignment in Medicaid managed care: 0.24 percent
  9. Reforming how Medicare reimburses biosimilars: 0.21 percent
  10. Addressing orphan drugs: 0.15 percent
  11. Reducing fraud in home health: 0.12 percent
  12. Reforming the payments for long-term care hospitals: 0.11 percent
  13. Decrease cost barriers for living kidney donations: 0.08 percent
  14. Expanding preferred pharmacy networks: 0.04 percent
  15. Eliminating prescription copay coupons: 0.03 percent
  16. Expanding kidney exchanges: 0.02 percent

Zack Cooper, Associate Professor at the School of Public Health and the Department of Economics (Yale), discusses the ‘one percent’ approach in a ‘Creating a New Healthcare’ podcast. He can also be found on Freakonomics Radio, “How to Fix the Hot Mess of U.S. Healthcare.”

As we fight the daily battles of the Covid-19 pandemic, we are reminded that many inherent problems continue to persist in our costly healthcare system. Without action, these problems will not go away. Will market solutions be able to fix many of these issues? The clock continues to tick – and healthcare costs continue upward.

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Filed Under: Lindex Tagged With: , , , , ,