WASHINGTON, DC, July 10, 2001 – As the number of working Americans with chronic conditions continues to rise, the largest corporations in the United States are offering many critical health care benefits, although significant coverage gaps remain, according to a survey of Fortune 100 companies to be presented this week by Partnership for Solutions, Better Lives for People with Chronic Conditions.
The survey, presented to the Washington Business Group on Health, found that employer-sponsored health plans, which cover 94% of non-elderly individuals with private insurance, are covering a wide number of services for employees and their dependents, including prescription drugs, home health care, durable medical equipment, and skilled nursing care. However, despite the fact that almost half of workers have at least one chronic condition, these plans do not always cover other services important to people with chronic conditions, such as respite care, nonemergency transportation, and home modifications. Nonetheless, the authors of the survey found that the health care plans are more generous than the coverage that Medicare provides its beneficiaries who are older and even more likely to have chronic conditions.
“The nature of illness is changing in this country, and millions of Baby Boomers in an aging workforce will be grappling with the burden of diabetes, cancer, heart disease and other chronic medical conditions in the near future,” says Gerard F. Anderson, PhD, national program director of Partnership for Solutions and professor at the Johns Hopkins Bloomberg School of Public Health and School of Medicine. “While there is much to be done to improve the care we provide people with chronic conditions, these corporate plans are well-positioned to serve people with chronic conditions. We hope that in the future they will serve as industry models.” Anderson was one of four authors of an analysis of the survey being published today in the July/August 2001 issue of Health Affairs.
Over the past 20 years, major employers have helped transform the nation’s health care system by restructuring their benefits packages to respond to the needs of employees. In addition to benefits, large companies have used their power in the marketplace to improve quality and health outcomes. Smaller companies and government health plans have adopted many of those features in their own plans.
While efforts by employers to improve benefits packages have mostly focused on care for acute medical illnesses and injuries, the Partnership for Solutions study found that large companies are now taking the lead in the area of chronic care, too. In comparing the corporate benefits packages to Medicare, the report found that private coverage for chronic care was superior to government coverage for seniors. In addition to innovative benefits offered by some of these large companies, they offer less restrictive coverage than Medicare for durable medical equipment, home health care, and skilled nursing care, according to the researchers. Medicare also required patients to assume more of the cost burden themselves.
By offering extensive coverage for chronic conditions, large employers are setting the standard in addressing a looming health care challenge. Over the next three decades, the number of persons with conditions that require ongoing medical attention is expected to rise dramatically. Currently, 125 million Americans, nearly half of the population, have at least one chronic condition, which includes everything from asthma to Alzheimer’s disease to HIV/AIDS. By 2030, the number is expected to increase to 171 million.
Moreover, a significant number of working-age adults suffer from long-term chronic illnesses. According to the authors’ analysis of data from the 1996 Medical Expenditure Panel Survey, 47% of adults between 21 and 65 had one or more chronic conditions. Their treatments were costly, consuming more than three-quarters of health care spending in their age group. Chronically ill patients often need to see several physicians and therapists over extended periods of time, take a variety of medicines, and learn a difficult regimen of self-management techniques.
The survey found that a large number of Fortune 100 companies offer benefits that are specifically designed to help chronically ill patients. They include medical social workers who coordinate the labyrinth of services needed by people with more than one chronic disease and nutritional counseling to encourage disease self- management. These are the types of benefits, along with more traditional services covered by large employers, which can help workers with chronic conditions maintain their active participation in the workforce.
“Large companies use comprehensive benefit packages to attract and retain qualified employees in a competitive labor market,” said Kathleen M. King, interim president of the Washington Business Group on Health, a health policy group of 160 large employers. “Large employers understand that people with chronic conditions constitute a growing proportion of the workforce and that providing these benefits helps employees remain in the workforce.”
"There is clearly a compelling business case for providing benefits that help employees with chronic conditions," said Ms. Barbara A. Brickmeier, director of benefits for IBM. "IBM understands that providing a wide breadth of benefits for all of our employees, including those with chronic conditions, not only makes them healthier and improves the quality of their lives, but also increases their productivity and performance on the job."
Medical costs to treat chronic conditions are expected to double by 2020, to $1 trillion, according to the Partnership. Much of it will be borne by the patient. The authors of the report found that privately insured persons with chronic conditions spend more than twice as much out of pocket than persons without chronic illnesses.
In an effort to control their costs, many of the large employers surveyed by the Partnership had imposed some restrictions on their benefits. They required employees to share some of the expenses or limited the amount of services that employees could use. For instance, 46% of the companies limited the number of occupational therapy visits allowed each year. Forty-one percent of the companies restricted the number of covered days an employee could spend in a skilled nursing facility each year, while 46% imposed some cost-sharing for home health care. According to the authors, as the number of working age Americans with chronic conditions rise, more employers should look to modifying their benefit package to provide the scope of services that allows people to remain productive members of the workforce.
In conducting the survey, the researchers used Fortune magazine’s list of 100 companies with the highest revenues in 1999. Companies were asked to submit their health care plan summaries that were available to employees in 2000. Seventy-six corporations responded to the survey. Researchers then reviewed the plans against a list of medical benefits that were considered the most important for persons with chronic conditions. The authors also convened focus groups of a cross-section of Americans, including groups with various chronic conditions and reviewed the benefits offered by state Medicaid programs and other organizations that offered services to chronically ill persons.
The survey found that all or nearly all of the 76 companies offered more than half of the benefits that persons with chronic conditions considered important. Those benefits paid for prescription drugs, mental health inpatient and outpatient services, home health care, durable medical equipment, skilled nursing facilities, and chiropractor care.
All or nearly all also provided physical, occupational, and speech therapies, though their use was usually restricted to treat acute illnesses. In addition, many of the companies provided family counseling (50%), dietitian-nutritionist services (45%), and medical social workers (37%).
Partnership for Solutions: Better Lives for People with Chronic Conditions is supported by the Robert Wood Johnson Foundation and Johns Hopkins University. This study is part of the Partnership’s goal to raise awareness of the challenges faced by people with chronic conditions and to identify possible financing and health care delivery solutions.