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March 16, 2009
Employers' Confidence in Future of Health Benefits Dips

The share of employers that are very confident they will continue to offer healthcare benefits 10 years from now dropped from 73 percent last year to 62 percent this year, according to Watson Wyatt and the National Business Group on Health.

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The researchers said economic concerns and uncertainty over the implications of potential healthcare reform were the reasons behind the dip in confidence.

“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 healthcare 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 healthcare costs that persistently rise at double the rate of general inflation.”

Despite the current economic uncertainty, 41 percent of employers are sticking with their current healthcare strategy, while the remaining respondents have either revamped their strategy or expect to do so this year.

The survey of 489 large U.S. employers also identified a group of “consistent employers” that have maintained a long track record of lower healthcare cost increases over the past four years. These employers have outperformed other employers in five key areas: appropriate financial incentives, effective information delivery, quality care, metrics and evidence, and maximizing health and productivity.

“The track record of these performers clearly demonstrates that by taking a specific course of action it is possible to successfully control healt care costs,” said Helen Darling, president of the National Business Group on Health. ”By building employee accountability for health care now, employers will be better positioned to weather the financial storm and to address potential health care reform on the horizon.”

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