Magazine article Personnel Journal

Companies Get a Handle on Health Care

Magazine article Personnel Journal

Companies Get a Handle on Health Care

Article excerpt

U.S. COMPANIES SUCCESSfully drove down their overall health-care benefit costs last year, according to a survey of more than 2,000 employers. The survey, conducted by Foster Higgins, found that total health-benefit cost averaged $3,741 per employee in 1994, a decrease of 1.1% from 1993. This marks the end of two decades of health-benefit cost increases that consistently outpaced inflation.

Last year, U.S. companies also saw the biggest increase in employee enrollment in managed-care plans--such as preferred provider organizations, health maintenance organizations and point-of-service plans--in the nine-year history of the survey. The number jumped from 52% of all covered employees in 1993 to 63% in 1994.

The survey also found that larger companies (those with more than 500 employees) had the greatest success in controlling costs. They reported an average 1.9% decrease in total benefit cost, while smaller employers experienced a 6.5% increase. Nearly a third of these large employers reported making significant changes to their health benefit program in 1994, such as adding a managed-care plan or changing health-plan vendors.

"Employers clearly did not sit back during the health reform debate and wait for the government to solve their cost problems," says Dave Rahill, a principal at Foster Higgins. …

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