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Area survey identifies rising health care costs as biggest obstacle to business growth

More than one in five employers in Minnesota and western Wisconsin cite rising health care costs as their greatest impediment to business expansion, and fully 72 percent cited poor employee health habits as the greatest contributing factor to cost increases, according to a survey (PDF) of 178 employers released this week by Health Partners.

In the debate over containing health care costs, insurers and health care providers have come in for their share of the blame. But with tobacco and alcohol consumption, diet and exercise all indentified as individual health choices, the survey takes a page from the old “Pogo” cartoon and concludes: “We have met the enemy and he is us.”

The relationship between health care costs and issues of personal health habits is getting increasing attention. On Tuesday, President Obama created a task force to tackle “the growing epidemic of childhood obesity.” That move coincided with first lady Michelle Obama’s launch of  “Let’s Move,” a campaign to address childhood obesity within a generation.

More than 60 percent of employers in the survey reported health care cost increases of 10 percent or more between 2007 and 2009, while nearly one in five reported cost increases of less than 5 percent, compared with the national average of nearly 11 percent.

Companies with lower cost increases, it found, are more likely to provide programs to promote health improvement, emotional health and health assessments for employees.

“Health improvement presents an opportunity for significant cost savings because unhealthy lifestyle choices raise health care costs by at least 25 percent and perhaps as much as 50 percent,” said Andrea Walsh, HealthPartners executive vice president and chief marketing officer in a statement. “Being tobacco free, exercising, eating a healthy diet and maintaining a healthy weight are the key to more affordable health care long term,” she added.

While the rapid rise in health care costs was the most often mentioned factor at 21 percent, respondents also cited government regulations (12 percent), the poor economy (11 percent), weak investment funding (9 percent) and taxes (7 percent) as barriers to business expansion.

Source: HealthPartners

Additional factors identified for driving health care cost growth were poor understanding of services covered (66 percent), an aging workforce (65 percent), lack of information about cost of services (60 percent), use of medically unnecessary services (58 percent), and lack of information about quality of services (39 percent).

Employers clearly plan to place a greater cost-sharing burden on employees with 60 percent planning on increasing premiums, co-pays or deductibles and 35 percent increasing the employee cost for prescription drugs. One in four employers offers or will offer only a high-deductible plan.

Unlike most national health care surveys, which include mostly large national companies, the Minnesota/western Wisconsin one includes companies ranging from those with 50 or fewer employees to ones with 1,000 or more employees.

The survey was conducted by CJ Olson Market Research, an independent firm, on behalf of HealthPartners. The November survey represents responses from 178 private and public employers in Minnesota and western Wisconsin, including:

  • 18 percent large companies
  • 31 percent midsize companies
  • 51 percent small companies
  • 146 private and 32 public organizations
  • 145 Minnesota employers and 33 in western Wisconsin.

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Comments (1)

  1. Submitted by Joel Jensen on 02/10/2010 - 02:43 pm.

    HealthPartners might want to take another look at that graph and revise their pdf.

    No sense having a bad graphic confuse an important message.

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