Despite Years of Education, Employees Continue to Buy Health Coverage With Their Hearts, Not Heads

When employees make decisions about theirhealth care options, they are strongly influenced by fear and insecurity,according to new research from Towers Perrin, a global professionalservices firm.  The new study clearly demonstrates that health caredecisions are fueled by emotion to a far greater extent than by rationalevaluation and decision making.  The study also shows that employees arefar more negative than positive about both their current coverage and theircurrent experience in obtaining health care.

The study involved more than 1,400 employees of large and midsizeorganizations across the U.S., and used a technique that measures people’semotions on a topic  in this case, views on health care coverage, care andhealth in general.

According to the study, more than half of the survey respondents (52%) arenegative about their current health coverage and most of those areintensely negative.  Specifically, they worry that their current healthplan doesn’t provide adequate financial protection, cover the services theyneed (or may need) or deliver enough value for the cost.

Interestingly, feelings about getting care (i.e., the health careexperience itself) are even more striking  fully 60% of survey participantsexpress negative feelings.  Fear is again the most prevalent reason forthis, with concerns about quality and ability to make good decisionslooming large.

“This study offers a glimpse into the psyche of the U.S. health careconsumer, revealing high levels of insecurity and skepticism,” said DaveGuilmette, Managing Director, Towers Perrin and leader of the firm’s HRServices business health and welfare consulting practice.  “People areafraid, first of all, that their insurance won’t protect them againstfinancial hardship in the event of unforeseen medical needs.  They alsohave serious concerns about navigating the provider system  not finding theright doctor, not knowing which tests to take, what treatments are best orwhich hospitals would provide the best care.

“Fear causes people to want to spend more than they need to,” continuedGuilmette. “People tend to think that by paying more for coverage, theywill receive better value.  They assume that more care is better care andthat higher-priced providers are better.  They are conscious of the risk oflack of care but not the risk of unnecessary care.  And they tend toover-insure to minimize the risk of unbudgetable out-of-pocket cost.

“In reality, however, health care quality does not correlate directly withcost, and most company-sponsored health plans provide ample financialprotection when viewed over the span of a year.  Even more important, thementality that compels people to ‘throw money at the problem’ runs counterto employer efforts to control costs by encouraging employees to becomemore effective health care consumers.  Our data indicate that, if they want‘consumerism’ strategies to have an impact on costs, employers must findnew ways to help employees understand their coverage alternatives and gainconfidence in navigating the system,” said Guilmette.

In keeping with employees’ desire for predictable expenses, the surveyparticipants rank covered services highest in importance when selecting ahealth plan.  Premium contributions and coinsurance also rank high on thelist of decision factors.  In other words, employees seem willing tocontribute more up front if that investment limits their exposure toout-of-pocket costs.  Along these same lines, more employees (55%) arewilling to take on a portion of the increases in the predictable componentsof cost (premium) than are willing to face the risks of reduced benefits(23%).

“Companies want employees to choose coverage carefully and use itappropriately.  They want employees to understand care options, choosecorrect treatment and, most important, to live healthy lifestyles,” notesMartha Terry, Principal, Towers Perrin.  “Employees, on the other hand,want security, value and quality  and they want to feel confident in theirchoices.  Our study shows this confidence comes in part from believingtheir employer has a genuine concern for their health and demonstrates thatconcern through supportive programs and actions.  Today, however, partlydue to the legacy of managed care, most employers focus only on the companyperspective  costs, limitations, what to do and not to do.  As a result,the fear factor  created in part by employers themselves  createsskepticism among employees about company motives and intolerance forcompany actions.”

To counter the fear factor, the survey suggests that companies mustconsider their employees’ emotional response when formulating andimplementing their health care strategies.  That will allow them toeffectively align their interests with those of employees and create morepositive employee health care decision making and behavior.  “Companiesneed to start engaging employees in a dialogue that focuses on employees ashealth care consumers, and demonstrates the value and quality of theirhealth care choices and the value of managing risks over time,” said Terry.”That focus should also address employees’ fears and highlight how theemployer and coverage options can meet their needs effectively.”

When companies demonstrate commitment, and support their employees’ healthcare decision-making process, more positive behaviors emerge.  In thissurvey, for example, among employees who said their company makes effortsto support affordable, quality care and good health for employees, overhalf (54%) qualified as relatively good health care consumers based on aset of 11 behavioral factors, such as carefully evaluating coverageoptions, having regular check ups and following doctors’ recommendations.Of those who regarded their company as not being committed to employeehealth, only 36% reported behaviors that would qualify them as goodconsumers.

Similarly, employees who have access to and use employer-provided healthcare resources and decision support tools  such as online access to healthcare information, tools to support coverage decisions and care managementprograms  are significantly more likely to report good consumer behaviorsthan those who do not have or use such resources (56% versus 30% ofrespondents).

About the Towers Perrin Study

The new Towers Perrin survey is part of a multiyear, multidimensional studyon the drivers of employee behavior in health care decisionmaking and howemployers can influence behavior as a way to reduce costs, enhance the workexperience, and increase workforce productivity and engagement.

This year’s survey combined a traditional questionnaire with a techniquemost commonly used for marketing and product research. The technique,called ResonanceTM, was pioneered by Gang and Gang, Inc., and is designedto identify the level and nature of emotions that drive consumer decisionmaking.  The survey asked participants about four aspects of health-relatedexperience: their health care coverage, their care, their overall healthand, specifically, their employer’s support for good health.  The surveyalso gathered data on actual consumer behaviors and health status asreported by the respondents themselves.  The more than 1,400 respondentsall work for midsize and large U.S. companies and participate in a companyhealth plan.

About Towers Perrin and HR Services

Towers Perrin is a global professional services firm that helpsorganizations improve their performance through effective people, risk andfinancial management.  Through its HR Services business, Towers Perrinprovides global human resource consulting that helps organizationseffectively manage their investment in people.  Areas of focus includeemployee benefits, compensation, communication, change management, employeeresearch and the delivery of HR services.  The firm’s other businesses areReinsurance, which provides reinsurance intermediary services, andTillinghast, which provides management and actuarial consulting to thefinancial services industry.  Together, these businesses have offices in 24countries.  More information about HR Services is available atwww.towersperrin.com/hrservices.