PEBA
Controlling Health Care Costs
July 2003
The Controlling Health Care Costs Survey was developed and analyzed by the PEBA Survey Committee. The survey data was collected through PEBA’s web based survey software. The survey was sent to PEBA’s employer companies. 66 companies participated. The information below is a question by question analysis. For more information about this or other PEBA surveys, call (215)735-9435.
Questions
Q1. What is the nature of your company's business?
| Responses | Count | Percent |
| Chemical | 2 | 3.0% |
| Consulting | 0 | 0.0% |
| Computer/Data Services | 0 | 0.0% |
| Education | 7 | 10.6% |
| Financial Services | 4 | 6.1% |
| Professional/Consultancy | 0 | 0.0% |
| Healthcare | 11 | 16.7% |
| Manufacturing | 11 | 16.7% |
| Law | 5 | 7.6% |
| Pharmaceutical | 3 | 4.5% |
| Other | 23 | 34.8% |
Q2. What is the total number of employees at all locations?
| Responses | Count | Percent |
| Fewer than 100 | 3 | 4.5% |
| 100-499 | 16 | 24.2% |
| 500-999 | 5 | 7.6% |
| 1000-2499 | 13 | 19.7% |
| 2500-4999 | 12 | 18.2% |
| 5000 or more | 17 | 25.8% |
Q3. How many employees does your company have in the Delaware
Valley?
| Responses | Count | Percent |
| Fewer than 100 | 10 | 15.4% |
| 100-499 | 24 | 36.9% |
| 500-999 | 10 | 15.4% |
| 1000-2499 | 11 | 16.9% |
| 2500-4999 | 4 | 6.2% |
| 5000 or more | 6 | 9.2% |
Q4. Are your plans:
| Responses | Count | Percent |
| fully-insured | 25 | 38.5% |
| self-insured | 10 | 15.4% |
| combination | 30 | 46.2% |
Q5. Please indicate type(s) of medical plans currently offered to
your active employees.
| Responses | Count | Percent |
| 1. POS | 32 | 49.2% |
| 2. HMO | 50 | 76.9% |
| 3. PPO | 57 | 87.7% |
| 4. Indemnity/Traditional | 21 | 32.3% |
| 5. Other | 3 | 4.6% |
| 6. NA | 0 | 0.0% |
Q6. Is your Rx program part of the medical plan or is it a separate plan?
| Responses | Count | Percent |
| Part of the medical plan | 39 | 59.1% |
| Separate plan | 27 | 40.9% |
| No Rx offered | 0 | 0.0% |
Q7. What is the employee contribution for your medical plans:
| Responses | Count | Percent |
| Employee pays fixed percentage of premium | 34 | 51.5% |
| Employee pays fixed dollar amount | 23 | 34.8% |
| Employee pays difference between core plan and more expensive plan | 11 | 16.7% |
| Dependent/family coverage is a higher fixed premium than the employee only contribution | 18 | 27.3% |
| Employees are not charged for plans but dependent/family is | 5 | 7.6% |
| No cost for employee or dependent coverage | 5 | 7.6% |
Q8. What fixed percentage or dollar amount for employee only
premium does an employee pay for the medical plan, (indicated as
a percentage):
| Responses | Count | Percent |
| 0 - no costs | 9 | 13.6% |
| 1-10% | 12 | 18.2% |
| 11-20% | 31 | 47.0% |
| 21-30% | 10 | 15.2% |
| 31-40% | 2 | 3.0% |
| greater than 40% | 0 | 0.0% |
| NA | 2 | 3.0% |
Q9. What fixed percentage or dollar amount for dependent/family
premium does an employee pay for the medical plan, (indicated as
a percentage):
| Responses | Count | Percent |
| 0 - no costs | 4 | 6.1% |
| 1-10% | 12 | 18.2% |
| 11-20% | 22 | 33.3% |
| 21-30% | 15 | 22.7% |
| 31-40% | 6 | 9.1% |
| greater than 40% | 5 | 7.6% |
| NA | 2 | 3.0% |
Q10. What was your average medical plan premium increase for the
current contract year?
| Responses | Count | Percent |
| 0 | 1 | 1.5% |
| 1-10% | 12 | 18.2% |
| 11-15% | 29 | 43.9% |
| 16-20% | 20 | 30.3% |
| 21-25% | 2 | 3.0% |
| 26-30% | 0 | 0.0% |
| over 30% | 2 | 3.0% |
Q11. What was your average Rx increase for the current contract
year?
| Responses | Count | Percent |
| 0 | 2 | 3.0% |
| 1-10% | 6 | 9.1% |
| 11-15% | 15 | 22.7% |
| 16-20% | 18 | 27.3% |
| 21-25% | 2 | 3.0% |
| 26-30% | 3 | 4.5% |
| over 30% | 1 | 1.5% |
| Drug plan is part of the medical plan and not priced separately | 19 | 28.8% |
| No Rx offered | 0 | 0.0% |
Q12. What was the increase to employee contribution for the
current contract year for your medical and Rx Plans?
| Responses | Count | Percent |
| 100% of the plan premium increase | 5 | 7.6% |
| 75-99% | 4 | 6.1% |
| 50-74% | 2 | 3.0% |
| 25-49% | 10 | 15.2% |
| less than 25% | 30 | 45.5% |
| No increase | 15 | 22.7% |
Q13. For the current contract year, in an effort to contain cost
for your medical plan(s), did you:
| Responses | Count | Percent |
| Change carriers | 4 | 6.1% |
| Consolidate carriers | 8 | 12.1% |
| Eliminate medical plan choices | 7 | 10.6% |
| Add lower option plan choices | 10 | 15.2% |
| Introduce Medical Flexible Spending Accounts | 6 | 9.1% |
| Responses for Q. 13 continued | Count | Percent |
| Reduce covered benefits | 4 | 6.1% |
| Increase co-payments | 28 | 42.4% |
| Increase deductibles | 17 | 25.8% |
| Decrease co-insurance levels | 3 | 4.5% |
| Increase employee contributions towards premium | 36 | 54.5% |
| Charge additional amount for spouse electing employee plan where a plan is available to the spouse | 0 | 0.0% |
| Change from fully-insured to self-insured | 3 | 4.5% |
| Change from self-insured to fully-insured | 0 | 0.0% |
| No changes | 14 | 21.2% |
Q14. For the current contract year, in an effort to contain cost
for your Rx plan, did you:
| Responses | Count | Percent |
| Introduce a formulary or add additional tiers to your formulary | 13 | 19.7% |
| Increase employee co-pays | 24 | 36.4% |
| Introduce mail order | 2 | 3.0% |
| Implement mandatory mail order for maintenance drugs | 1 | 1.5% |
| Create more incentive for mail order use | 7 | 10.6% |
| Eliminate certain drugs from formulary | 1 | 1.5% |
| Change carriers/TPA's | 1 | 1.5% |
| Change from fully-insured to self-insured | 1 | 1.5% |
| Change from self-insured to fully-insured | 0 | 0.0% |
| No changes | 31 | 47.0% |
Q15. If you have retiree medical plans, in order to contain cost
for the current contract year, did you:
| Responses | Count | Percent |
| Introduce retiree contributions towards premium | 3 | 4.5% |
| Increase retiree contributions | 17 | 25.8% |
| Introduce low option medical plans | 5 | 7.6% |
| Reduce medical plan provisions | 5 | 7.6% |
| Eliminate medical plan choices | 2 | 3.0% |
| Implement a cap for employer contributions | 3 | 4.5% |
| Introduce HMO | 0 | 0.0% |
| Do not have retiree medical plans | 29 | 43.9% |
| No changes | 15 | 22.7% |
Q16. If you have retiree Rx coverage, in order to contain costs
for the current contract year, did you:
| Responses | Count | Percent |
| Change plan design, i.e., introduce formulary or additional tiers | 7 | 10.6% |
| Increase co-pays | 10 | 15.2% |
| Introduce mail order | 0 | 0.0% |
| Change coverage to annual allowance | 0 | 0.0% |
| Implement mandatory mail order for maintenance drugs | 2 | 3.0% |
| Create more incentive for mail order use | 3 | 4.5% |
| Tighten up formulary, i.e., eliminate certain drugs from coverage | 1 | 1.5% |
| Change carriers/TPA's | 3 | 4.5% |
| Rx plan is part of the retiree medical plan | 5 | 7.6% |
| Do not provide for retiree Rx coverage | 29 | 43.9% |
| No changes | 18 | 27.3% |
Q17. For the next contract year, please check all the strategies listed below that you will explore or use to contain cost for your existing medical plan(s)
| Responses | Count | Percent |
| 1. Change carriers | 17 | 25.8% |
| 2. Consolidate carriers | 10 | 15.2% |
| 3. Eliminate medical plan choices | 5 | 7.6% |
| 4. Add lower option plan choices | 11 | 16.7% |
| 5. Introduce Medical Flexible Spending Accounts | 1 | 1.5% |
| 6. Reduce covered benefits | 7 | 10.6% |
| 7. Increase co-payments | 32 | 48.5% |
| 8. Increase deductibles | 24 | 36.4% |
| 9. Decrease co-insurance levels | 10 | 15.2% |
| 10. Increase employee contributions towards premium | 43 | 65.2% |
| 11. Charge additional amount for spouse electing employee plan where a plan is available to the spouse | 14 | 21.2% |
| 12. No changes | 10 | 15.2% |
Q18. As a cost containment strategy, will you implement any of the following measures for your Rx plan?
| Responses | Count | Percent |
| Change plan design, i.e., introduce formulary or additional tiers | 18 | 27.3% |
| Increase employee co-pays | 26 | 39.4% |
| Introduce mail order | 1 | 1.5% |
| Implement mandatory mail order for maintenance drugs | 7 | 10.6% |
| Create more incentive for mail order use | 14 | 21.2% |
| Tighten up formulary, i.e., eliminate certain drugs from coverage | 6 | 9.1% |
| Change carriers/TPA's | 8 | 12.1% |
| No changes | 26 | 39.4% |
Q19. As a cost containment strategy, will you implement any of
the following concepts either as a new plan or alongside more
traditional plans?
| Responses | Count | Percent |
| Introduce a Health Reimbursement Account (employer funded contribution whereby funds can be carried over year to year as a medical spending account) as a stand alone plan, replacing other plans | 1 | 1.5% |
| Introduce a Health Reimbursement Account offered alongside other plans | 2 | 3.0% |
| Not considering implementing a Health Reimbursement Account | 19 | 28.8% |
| Introduce a Consumer Driven Health Plan (high deductible plan combined with an employer-funded medical spending/reimbursement account) as a stand along plan, replacing flexible spending account | 2 | 3.0% |
| Introduce a Consumer Driven Health Plan offered alongside a flexible spending account | 4 | 6.1% |
| Not considering implementing a Consumer Driven Health Plan | 25 | 37.9% |
| No changes | 35 | 53.0% |
Q20. Will you offer medical care education for employees and
their families to become better consumers of health care?
| Responses | Count | Percent |
| Yes | 26 | 39.4% |
| No | 29 | 43.9% |
| Currently offer | 11 | 16.7% |
Q21. If you answered YES or CURRENTLY OFFER to question 20, how
will you offer health care consumer education?
| Responses | Count | Percent |
| Employee Lunch and Learns | 15 | 40.5% |
| Newsletters/written materials | 27 | 73.0% |
| In-house seminars and workshops | 22 | 59.5% |
| Web-based training | 12 | 32.4% |
| Other | 9 | 24.3% |
Q22. Will you consider Disease Management as a cost containment
tool for 2004?
| Responses | Count | Percent |
| Yes | 19 | 28.8% |
| No | 31 | 47.0% |
| In use now | 16 | 24.2% |
Q23. Will you consider the use of a Behavioral Health Manager as a cost containment tool for 2004?
| Responses | Count | Percent |
| Yes | 9 | 13.6% |
| No | 43 | 65.2% |
| In use now | 14 | 21.2% |
Q24. Will you consider the use of a Pharmacy Benefit Manager as a
cost containment tool for 2004?
| Responses | Count | Percent |
| Yes | 15 | 22.7% |
| No | 22 | 33.3% |
| In use now | 29 | 43.9% |
Q25. Will you consider Wellness Programs in 2004, in an effort to ultimately reduce medical costs through behavior modification?
| Responses | Count | Percent |
| Yes | 18 | 27.3% |
| No | 14 | 21.2% |
| In use now | 34 | 51.5% |