With the economic slowdown in full swing, companies are under intense pressure to contain costs. While some companies are making short-term moves to increase employee cost sharing, a group of best-performing employers are achieving success by keeping their health care cost trend almost flat over a two-year period. In addition, another group of companies is building an even longer track record of consistently low health care cost increases. Their keys to effective cost management lie primarily in five areas: appropriate financial incentives, effective information delivery, quality care, metrics and evidence, and maximizing health and productivity. The consistent performers have made even greater strides, especially in their use of financial incentives and by providing employees with essential information to manage their health.

The 14th Annual National Business Group on Health/Watson Wyatt Employer Survey on Purchasing Value in Health Care details current trends and best practices in employer-sponsored health care benefit programs.

Key Findings include:

• Annual median cost increases for health care including plan changes have reached a plateau at 6 percent in 2007 and are expected to remain at this level through 2009. Without plan changes, average trends would have been 8 percent.
  
• Best-performing companies — those with a median two-year average cost increase in the lowest quartile among all respondents — have a median two-year trend of 0.5 percent. Conversely, poor-performing companies — those in the highest quartile — have a cost trend of 10.5 percent.
  
• Companies that have maintained health care cost increases at or below the median for each of the last four years — a group we call consistent performers — have outpaced all other companies in most of the five key areas critical to success.
  
• Due to recent events affecting the economy and financial markets, most respondents either have changed or plan to change their health care strategy (60 percent).
  
• Today, 51 percent of companies have a CDHP in place — nearly a 9 percent increase over last year. Enrollment rates in CDHPs are also increasing at a pace of two percentage points per year, rising to 12 percent in 2008.