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With health care costs continuing to increase at double-digit rates,
companies need a defined contribution approach to achieve short-term savings
and long-term reform. Watson Wyatt believes that the most viable solution
to this crisis is "reDefined Contribution health care," a planned,
staged approach that allows companies to take immediate actions and work
toward fundamental changes.
Conceived by Watson Wyatt, reDefined Contribution health care highlights
behavior change to strike at the underlying problems of employer-sponsored
health care. Bringing to bear the economic forces that are the hallmark
of the U.S. economy - choice, competition and efficiency, this new approach
retains the advantages of employer-sponsored group insurance, but provides
the freedom to customize coverage, options and price. Companies continue
to provide employer-sponsored benefits, but use plan design changes to
limit their liability by increasing financial incentives at the point
of care to change employees' behavior, generate more efficient utilization
of health care services and drive down health care costs.
Taking the reDefined Contribution pathway can produce immediate results
and sustainable change, as employers can expect to achieve the following
results:
- Substantial cost savings
- Predictable costs and accurate budgets
- Greater employee satisfaction
- Higher workforce productivity and reliability
- Permanent changes in costs and markets
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