Study: Reduced Healthcare Benefits May Lead to Higher Costs

Oakland, CA (WorkersCompensation.com) – Employers trying to save money by reducing shared healthcare costs with employees end up paying through lost productivity, suggests a new study. The Integrated Benefits Institute found that employees with cost barriers to medical care had 70 percent more sick days than employees who could afford health care.

The study analyzed information from the Centers for Disease Control and Prevention between 2007 and 2017, mainly focusing on lower-income families. They found one-in-three had experienced a barrier to affordable medical care in the past 12 months and had gone without care they needed, which increased their sick days.

"Enrollees in a high-deductible health plan ($1,100 or higher for a single plan, $2,200 or higher for a family plan) were 75 percent more likely than low-deductible enrollees to experience a cost-related barrier to care,” the authors said. “Health savings accounts did not reduce the risk of experiencing cost-related barriers for employees with high deductibles. However, flexible spending accounts and coverage for prescription medications were associated with reduced risk of experiencing cost-related barriers to care.”

Employees with family incomes above $35,000 had fewer cost barriers to medical care. However, these workers also had more sick days when they opted to forgo needed medical care. “…the association with health insurance and plan design was stronger than [what] was observed at lower income levels. But barriers to care had a similar impact on lost workdays across the income distribution,” the authors said.

The study “underscores the importance of aligning incentives between employees and their health, and employers and their businesses,” said Thomas Parry, IBI president. “Creating obstacles to good employee health serves no one’s interests and only creates sicker employees that cannot show up and perform their jobs. A bad bargain for everyone.”

Employees who do not get medical care when needed may end up in emergency rooms or take extended disability leaves. Employers are encouraged to ensure their workers can access medical care when needed.

“Strategies to improve the affordability of healthcare for employees may increase expenses in the short term but ultimately lead to higher value for employers,” the IBI said. “Where possible, consider implementing employee premium contributions, co-pays and coinsurance on a sliding scale based on income.”

Barriers to healthcare imposed by schedules and other logistical challenges should also be addressed by employers, the authors said. Among their suggestions are:·         On-site clinics and telehealth services, which can bridge gaps in access to care

• Allowing short intervals of paid time off during working hours or granting a half-day each year for an annual check-up to facilitate the scheduling of provider appointments when offices are generally open
• Transportation supports such as shuttle services or reimbursements for public transit or rideshare costs to and from healthcare appointments
• In times of severe need, providing benefits such as short-term disability (STD), long-term disability (LTD), accidental injury, hospital, or critical illness insurance, to allow employees to access necessary medical care and recover from an episode of illness or injury without incurring severe financial hardships
• Offer financial wellness education and savings support to help employees with limited resources develop manageable budgets that include savings for health-related emergencies
• Consider programs such as interest-free health care loans and reimbursements for certain non-medical health devices, which could also ease the burden of costly conditions

“We were not surprised that a lot of people put off or did without medical care because they just couldn’t afford it,” said Brian Gifford, IBI’s Research director and the study’s lead author. “More and more studies show that even people who have jobs with health benefits cut back on necessary health care services due to the out-of-pocket costs of high deductibles, copayments, and coinsurance. The finding that unaffordable care was associated with almost two additional full days of absence, even after considering health status age, sex, and race, really drives home the point that productivity losses are eating away some of employers’ savings from increased cost sharing.”

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