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Poll Results Show Employers Make Health Benefit Choices Based on Cost

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Surveys of employer community conducted on behalf of Boston Children’s Hospital show limited understanding of impact of tiered or limited plans on access

June 20, 2012

Boston, Mass. - Cost of premiums and employee out of pocket costs are the top two major factors in choosing a health plan, but quality of a health plan’s network physicians and hospitals follows closely, according to a poll of the employer community released today.  A survey of 225 Massachusetts-based companies (with more than 150 employees) conducted by MassINC Polling on behalf of Boston Children’s Hospital, also showed that employers are currently relying on high deductible and co-insurance plans to lower costs (with 44 percent currently offering each) and beginning to explore limited (26 percent currently offering) and tiered products (36 percent currently offering).

Though survey data says that nearly 90 percent of benefits decision makers are very or somewhat familiar with tiered plans and 55 percent are very or somewhat familiar with limited networks, they lack a detailed understanding of how those plans work, based on companion focus groups conducted by Plan-It Marketing.  They also lack specific knowledge of tiering methodology and the tier levels of most area providers. Some benefits decision makers are concerned that tiered plans or limited networks would be confusing to employees and could limit access for lower income employees who may be unable to afford the costs assigned to select higher tiered providers. 

“We share the concerns of the employer community on cost – and have been aggressive in taking cost out of the health care system through a combination of rate and price reductions and improving care delivery,” said Sandra Fenwick, President and Chief Operating Officer of Boston Children’s Hospital. “At the same time, quality care remains paramount; providers and insurers must work together to be certain families receive the care they need.” Visit value.childrenshospital.org/ to learn about how Boston Children’s is working to improve care and make it more affordable.

Public sector employers have been more focused on tiered (currently offered by 54 percent) and limited networks (currently offered by 48 percent), compared to private sector employers (32 percent offer tiered and 28 percent offer limited networks).  Both options have been slow to gain acceptance among employees, with only 7-13 percent choosing either option.

The survey also showed that few benefits decision makers had knowledge of pediatric specific healthcare dynamics, with 45 percent not knowing what percentage of their health costs were attributable to pediatric claims. Locally, pediatrics accounts for approximately five to eight percent of an employer’s healthcare expenses.

“As new insurance products come into the market, we need to be sure employers and parents understand what they are buying,” said Fenwick.  “Based on the data, it appears employers may be overestimating the impact of pediatric care on their overall health care costs and inadvertently limiting access as a result.”

The results of the survey and focus group were presented at a leadership forum and panel discussion today.  Moderated by R.D. Sahl, the panel included Ms. Fenwick, James Roosevelt, President and CEO of Tufts Health Plan and Philip Edmundson, Chairman and CEO of William Gallagher Associates. 

Contact:
Rob Graham
617-919-3110
rob.graham@childrens.harvard.edu

Founded in 1869 as a 20-bed hospital for children, Boston Children’s Hospital has been ranked as one of the nation’s best pediatric hospitals by U.S.News & World Report for the past 21 years. Boston Children’s is the primary pediatric teaching hospital of Harvard Medical School and the largest provider of health care to Massachusetts children. In addition to 395 pediatric and adolescent inpatient beds and 228 outpatient programs, Boston Children’s houses the world’s largest research enterprise based at a pediatric medical center, where its discoveries benefit both children and adults.More than 1,100 scientists, including nine members of the National Academy of Sciences, 11 members of the Institute of Medicine and nine members of the Howard Hughes Medical Institute comprise Boston Children’s research community. For more information about the hospital visit:

The future of pediatrics will be forged by thinking differently, breaking paradigms and joining together in a shared vision of tackling the toughest challenges before us.”
- Sandra L. Fenwick, President and CEO
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