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Caregiving Crisis – Employers Beware

Iowa is fortunate to have many jobs available for applicants, but unfortunately, there are not enough bodies to fill those positions. According to a 2017 Wall Street Journal article, Iowa, and 11 other Midwestern states have experienced a net outflow of 1.3 million people between 2010 and July 2017. In fact, if every unemployed person in 12 Midwestern states was placed into an open job, there would still be 180,000+ unfilled positions. The Iowa Workforce Development recently announced the number of unemployed Iowans in December (2018) is 40,600, an historic low of 2.4 percent. Iowa has THE lowest unemployment rate in the U.S.  (The U.S. unemployment rate in December moved up to 3.9 percent.)

To combat low unemployment, Iowa along with other states have developed plenty of free programs to train low-skilled workers for higher-skilled positions. For the second consecutive year, Iowa was named by Site Selection magazine as the Midwest’s top state for workforce training and development.  Another 2018 Wall Street Journal article indicated that Iowa’s extremely low unemployment rate has drawn “thousands of workers off the sidelines…with the share of Iowa adults working or seeking work at 67.9 percent in February (2018), nearly five percentage points more than the national average.” Rural Iowa employers have it more challenging, as the pool of local talent is just not there to fill positions.

Caregiver Responsibilities at Home

Now comes yet another challenge, but not just for Iowa employers. A new national survey by a pair of Harvard Business School researchers found that employers are likely to underestimate the struggle their employees have when balancing their professional and caregiving responsibilities. Caregiver responsibilities include providing for children and elderly parents. In fact, about three-quarters of U.S. employees face caregiving responsibilities, of which, 32 percent have left their job because they were unable to balance work and family duties. If employers fail to provide support for caregiving responsibilities, they will pay the hidden costs of presenteeism, absenteeism, turnover and rehiring.

This study was based on surveys of both employers and employees. A key finding was that despite more than 80 percent of employees saying their responsibilities at home kept them from doing their best at work, only 24 percent of employers believed that caregiving was affecting their employees’ performance. This enormous divide is troubling, yet it can also help nudge employers to understand what they can do to retain employees, especially during a very tight labor market.

Other study highlights include:

  • Younger employees, ages 26 to 35, were more likely to leave a job because of caregiving responsibilities.
  • Hard-to-replace higher-paid employees and those in managerial or executive positions were also most likely to quit.
  • More men than women said they left a job because of family needs.
  • As the nation ages, caregiving responsibilities are expected to grow. The Census Bureau projects that for every 100 working-age Americans, aged 18 to 64, there will be 72 people outside that range by 2030, an increase from 59 in 2010.
  • With an increasing share of jobs expected to require a college degree or beyond, the loss of many women could exacerbate labor shortages in the future.

This study caught my interest because, for the first time since we began in our employer benefits study in 1999, we will ask a series of work-life and convenience questions in our 20th Iowa Employer Benefits Study©. Among asking many work-life benefit questions, we will learn about the prevalence of the following caregiver benefits offered by Iowa employers, such as:

  • Personal days
  • Sabbatical leave
  • Adoption leave
  • Foster child leave
  • Leave to attend a child’s activities
  • Maternity leave
  • Paternity leave
  • Child-care subsidies
  • Elder-care subsidies
  • On-site or near-site child and/or elder care
  • And more…

As we learned from surveying both Iowa employers and their employees in our 2007 Iowa Employment Values Study©, there can be a great disconnect between what employees’ desire at the workplace versus what their employers think is important to employees. The aging of the Iowa workforce, in addition to the challenges faced by young families can cause caregiver ‘tension’ that adversely impacts both employees and the unsuspecting employer. To address these challenges, Iowa employers must search for new ways to further accommodate the changing workforce environment pressures that are vital to employee well-being and, consequently, their productivity.

Sometime this summer, our 2019 survey will reveal new results about the prevalence of caregiver programs offered by Iowa employers. Such benefits, I suspect, will vary greatly by industry and by employer-size categories.

To stay abreast of employee benefits and healthcare issues, we invite you to subscribe to our blog.

Healthcare Patients Want ‘Good Value’ for the Money

Cost +Quality = Value

…we are now entering into a new era in healthcare that appears to alter our behaviors toward the care we are receiving…

Similar to national data, Iowa spending on healthcare and insurance premiums has risen at historically lower rates in the last three years. However, according to the Kaiser Family Foundation, only three percent of Americans said health costs are “going up slower than usual,” and 52 percent said costs are “growing faster than usual.”  The other 35 percent say costs are about the same.

The amount that Iowans with employer-based health insurance pay for premiums has risen 167% in the last 14 years, while Iowa weekly wages have risen about 40%* and general inflation 43 percent. As we know, our incomes are suppressed by increasing health premiums, which certainly impact take-home pay and, ultimately, our capability of making consumption trade-offs for other priorities, such as food, shelter, education and retirement savings.

In addition to the premium cost, Americans are asked to pay increasingly more of the medical care they seek, through higher deductibles, copayments and out-of-pocket maximums. With lower-relative income, finding the financial resources to pay is problematic for many employees, causing them to put off receiving care or incur more medical debt.

In a recent Wall Street Journal article, Drew Altman, president and CEO of the Kaiser Family Foundation, wrote that Americans with health coverage care about:

  • Their premium costs, or the share of premiums they pay if they have employer coverage;
  • Their deductibles and other forms of cost-sharing, especially when deductibles have been rising steadily;
  • Their drug costs;
  • Whether they can go to the doctor or hospital they want without having to pay more;
  • The hassle and red tape in healthcare and health insurance. People care about getting information to be informed about their health and make smarter insurance and healthcare decisions;
  • Seniors care a lot about Medicare and sometimes vote on this issue.

Most people would agree to this list.

However, Mr. Altman then mentioned that “Americans don’t care as much as experts do about improving quality and eliminating unnecessary care. In general, people think that quality is good and they want more care not less.”

Perhaps this was true in the past, but we are now entering into a new era in healthcare that appears to alter our behaviors toward the care we are receiving. One prime example is a recent study that says cost is not the most important determinant of the care we seek – it is quality. From this report, when patients are provided hospital safety score grades and cost information together, they will choose safer hospitals 97 percent of the time, REGARDLESS OF COST.

Of course, this may also depend on WHO pays…the patient or a third party.

Making sure that such report cards reflect the most relevant performance measurements will be extremely important – if not critical – to the patient. Unfortunately, we don’t have this luxury at the present time. A March article on the Johns Hopkins Medicine website reports that national rating systems on the quality and safety of hospitals are too confusing because each will stress different measures from each other – sometimes providing a wide variation of grades on the same hospital (study source: Health Affairs).

In my blog last August, I wrote that the Urology Department at Cleveland Clinic received a top score by the U.S. News & World Report, yet received the lowest possible score by Healthgrades for prostatectomy outcomes. This type of reporting will only serve to confuse the general public before seeking care.

As healthcare delivery and payment initiatives continue to morph, look for quality and safety measurements to emerge with the cost component. The convergence of reliable safety and quality information with ‘real-time’ cost information can eventually catapult the healthcare industry into the 21st century.

Until then, many hurdles must be successfully cleared in order to achieve the desired value we all want.

To stay abreast of employee benefits and healthcare issues, we invite you to subscribe to our blog.

*2014 data from the Iowa Workforce Development is not yet available, and therefore, excluded.

2014 Study Results: Iowa Employers Report 6.8% Increase in Health Premiums

David P. Lind BenchmarkToday, we issued our Press Release on the results from our 16th annual Iowa Employer Benefits Study©. As you might imagine, there is a wealth of data coming from this year’s survey, but as always, one of the most newsworthy finding is the headline number – 6.8 percent.
Average 2014 Rate Adjustments
It is important to distinguish how this increase is determined each year. The 6.8 percent increase is an average that factors in employers receiving no rate change, an increase or decrease in their premiums. This number represents the average increase in premiums employers received PRIOR to making design changes to their medical insurance plans – such as increasing cost-sharing arrangements with employees. After altering the plan design, the net increase over the past year was 6.7 percent for single premiums and 5.3 percent for family premiums.

We have been surveying employers since 1999 (2001 was the first year we began asking questions on premium adjustments). With this relatively “tame” increase (compared to prior double-digit increases between 2001 and 2010), Iowa employers reported making the following changes during the past 12 months:

  • Passed some or all of the increased costs to employees (58 percent)
  • Absorbed the entire cost increase (26 percent)
  • Increased deductibles (19 percent)
  • Raised out-of-pocket maximums (15 percent)
  • Changed insurance companies (11 percent)
  • Increased office visit co-payments (8 percent)
  • Reduced pay raises or bonuses (7 percent)
  • Increased prescription drug co-payments (7 percent)
  • Began wellness program initiatives (6 percent)
  • Hired fewer employees (6 percent)
  • Offered Consumer-Driven Health Plans (4 percent)
  • Discontinued offering health insurance coverage (.5 percent)

Since 1999, the annual Iowa single premium has increased 189 percent, while the family premium has increased 172 percent.
Average Annual Premiums in Iowa Since 1999
Over the course of 16 years, employee contributions have increased 96 percent for single coverage and 120 percent for family coverage. These numbers are more staggering when compared to the average weekly wage (for all industries), which increased only 39.3 percent between 2001 and 2013 (Source: Iowa Workforce Development).

The overall percentage of Iowa employers offering health coverage increased to 81 percent from 77 percent in the 2013 study. This four percent increase is considered statistically meaningful. A greater percentage of smaller employers with fewer than 20 employees reported offering health coverage in the 2014 survey.

Employer Attitudes on Health Coverage
A number of questions relating to the Affordable Care Act (ACA) were directed to employers during this year’s survey. One key finding is that over 69 percent of Iowa employers feel it is ‘very important’ to offer health insurance for recruitment and retention purposes, while another 17.6 percent indicated that it was at least ‘somewhat important.’ Less than seven percent felt that offering health coverage was ‘not at all important,’ with most of these employers having fewer than 10 employees. About two percent of employers anticipate discontinuing health coverage in 2015.

Importance of Offering Health Insurance in Iowa

Grading Healthcare in Iowa
When asked to grade the overall healthcare in Iowa based on the cost-of-care that is paid by employer and employees, employers mostly graded the state with ‘Bs’ and ‘Cs.’ Only 15.4 percent of employers graded Iowa’s healthcare delivery an ‘A.’ Such grading is a reflection of how Iowa employers perceive health providers on 12 performance indicators, as documented in our white paper, ‘Voices for Value.’

The complete 2014 Iowa Employer Benefits Study© will be available for purchase and download very soon.

The above information is just a small fraction of our survey results. To learn more, we invite you to subscribe to our blog.