2007_02 | News: Companies Complain About Costs

MANAGED CARE February 2007. ©MediMedia USA

News and Commentary

Companies Complain About Costs

A survey of 12,000 top-level benefit and human resource managers, owners, and CEOs of small to mid-size businesses conducted by Kaiser Permanente reports that if the financial hardship of providing health care coverage were to be rated on a medical pain scale from 1 to 10, with 10 being extreme pain, the average would be 7.7. If you think that's painful, consider the 20 percent of the managers who were surveyed who ranked their financial pain level at 10.

When they were asked about the impact of high health care costs on their company, the results were sobering:

73 percent feel increases in health care costs have strongly or moderately reduced profit margins,
63 percent feel increases in health care costs have strongly or moderately suppressed wage increases for existing employees,
48 percent say these costs have reduced their capacity to expand the business, and
44 percent strongly or somewhat agree that reductions in benefits have made it difficult to recruit new employees.

"The cost increases associated with preserving benefits are causing these businesses to miss growth opportunities and forcing their employees to forego salary increases and other benefits," says Tom Carter, vice president for sales at Kaiser Permanente. "That's something that we, as health care providers, must be aware of and work hard to reduce."