Same Health Benefits, Different Results
Employers should tailor the benefits design of their health plans to employee salary levels if they want to keep their workers as healthy as possible and on the job.
That’s the lesson from a new study that looked at how employees with the same employer-sponsored health benefits but with different salaries use the health care system. The study, which was conducted by researchers from four health care consulting firms, appeared in the journal Health Affairs.
The researched analyzed the 2014 health care claims of about 43,000 employees working at four large, national companies. Each employee worked at least 30 hours per week and had health benefits for all 12 months in 2014. They had chosen one of five different high-deductible health plans or PPO plans made available to them by their employer through a private health insurance exchange.
They separated the employees up into five wage levels: $24,000 or less; $24,001 to $30,000; $30,001 to $44,000; $44,001 to $70,000; and $70,001 or more. The average annual salary within each wage level was: $19,030; $26,974; $36,388; $54,739; and $111,555, respectively.
The researchers then compared how employees at each of the five wage levels used the health care system. They found wide disparities in use and costs even after controlling for the type of health plan and benefits they had. For example:
- At the highest wage level, 38 percent of the employees had at least one preventive care office visit with a doctor compared with 19 percent of the employees at the lowest wage level
- At the highest wage level, the emergency room visit rate was 117 for every 1,000 employees compared with 376 for every 1,000 employees at the lowest wage level
- At the highest wage level, the hospital admission rate was 17 for every 1,000 employees compared with 31 for every 1,000 employees at the lowest wage level
Yet, at the same time, higher wage earners submitted more medical claims and more prescription drug claims and incurred higher medical costs than lower wage earners.
- Some 86 percent of the highest wage earners submitted at least one inpatient or outpatient medical claim in 2014 compared with 74 percent of the lowest wage earners
- Some 73 percent of the highest wage earners submitted at least one filled prescription drug claim in 2014 compared with 61 percent of the lowest wage earners
- The average annual amount of health care claims paid for the highest wage earners was $4,283 per employee in 2014 compared with $3,768 for the lowest wage earners
When taken together, the findings suggest employees with the same health benefits use health care services differently based on how much they earn. Lower-wage earners use services only when they need them. Higher-wage earners use services because they can afford them.
The study results provide “direct evidence that the health care delivery system is used differently by subpopulations along the continuum of wage categories, particularly at the extremes,” the researchers said, adding, “Based on our analysis, current benefit design strategies do not appear to be effective in engaging lower-wage workers in their own health care and might actually be creating access barriers to high-value services.”