Health Care Cost Containment and Reduction Methods Vary By Region

January 9, 2008    

The Benefits USA 2007/2008 survey of more than 5,400 benefit plans found 65.8 percent of organizations nationally use wellness programs to contain costs, while 34.5 percent are increasing the employee portion of the premium.

Kansas City, Kan. -  Organizations utilize a variety of methods to contain and reduce costs, and while trends exist nationally, they often vary at the regional level. The Benefits USA 2007/2008 survey of more than 5,400 benefit plans found 65.8 percent of organizations nationally use wellness programs to contain costs, while 34.5 percent are increasing the employee portion of the premium. Although these trends are prevalent across the country, the report showed increased usage of these methods in the Midwest and decreased numbers in the West and East.

Wellness programs have garnered media attention as the majority of organizations across the country are utilizing this method to contain health care costs. Companies in the Midwest have the highest percentage implementing this method, 68.1 percent. Those in the West have the lowest, 61.8 percent. However as health care costs continue to increase, organizations are exploring new ways to enhance the effectiveness of their current programs, including the use of incentives and penalties.

While wellness programs are popular, their effects are not immediate, causing some organizations to use additional methods to alleviate growing costs. Nationally, 18.2 percent of organizations offered a choice of deductible levels. When compared to each region, the Midwest has the highest percentage, 21.7, and the West has the lowest 14.7 percent. On a national level, 64.7 percent are coordinating benefits to contain costs. This method varies largely by region, as 70.2 percent of organizations in the Midwest utilize it and 56.2 percent in the West.

Although organizations continue to pass costs onto employees, fewer companies are reducing benefits. The East has the lowest percentage of organizations utilizing this method, 5.8 percent. They are followed closely by the South at 6 percent and the West at 6.1. The Central Region had the highest percentage, 6.9 percent.

About the Survey
Benefits USA 2007/2008 analyzes national and regional data on benefits eligibility and administration policies with detailed information on benefit plans, premiums and provisions. Information was collected from more than 5,400 benefit plans covering almost 6 million employees across the country.

Compdata Surveys, www.compdatasurveys.com, is the nation’s leading compensation and benefits survey data provider. Data is collected annually from thousands of organizations across the country. Compdata Surveys has been providing accurate, reliable data at affordable prices to organizations since 1988. For further information about the compensation and benefits surveys, contact Amy Kaminski at (800) 300-9570 or akaminski@compdatasurveys.com.

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