Employers Missing Out on Best Financial Benefits of Preventive Care

Armen Hareyan's picture

Financial Benefits and Preventive Care

Employers in the United States are increasingly offering preventive health care services as part of their employee benefits, and they say they are doing it because they want to save money on their workers. But employers are less likely to include services like nutrition and smoking counseling that would provide the most bang for the buck, a new report in the American Journal of Health Promotion concludes.

More than 90 percent of the employers surveyed for the report say that the potential savings offered by preventive care programs, through lower health care costs and less absenteeism, are important to them, according to Jeffrey Harris, M.D., of the University of Washington School of Public Health and Community Medicine and colleagues.

Yet only 20 percent of the employer programs included services to help employees quit smoking, tackle alcohol abuse, eat better and get more exercise. Flu shots, another relatively low-cost service with a high potential financial return, were also covered by few employers.

"Employers seek financial return from their offerings of clinical preventive services to employees, but they are least likely to offer the services most likely to provide this return," Harris said.

Still, the report suggests that employer coverage of preventive services "is reasonably good," he added.

Harris and colleagues analyzed data from a 2001 nationwide survey of 2,180 employers of varying sizes. The survey included private and government businesses.


The researchers found that physical exams, immunizations and cancer and cholesterol screenings were among the preventive services most often covered by employers.

Large employers, those with 500 or more employees, were more likely than medium and small businesses to cover preventive services. Harris and colleagues suggest that larger employers may have had more bargaining power and resources to negotiate for these benefits with health insurers. Large employers were also more likely to offer preventive services like cholesterol screenings directly at the workplace.

HMO health plans were also more likely than point-of-service (POS) or preferred provider organization (PPO) plans to offer preventive care, the researchers found. Half of the employers in the survey used PPOs, 37 percent used HMOs and 20 percent used POS plans.

Harris and colleagues also found that only one-third of the employers used some sort of incentive to get their employees to use the preventive programs. Larger employers were more likely to offer a financial incentive, such as a lower insurance premium rate, while mid- and small-sized employers used incentives such as time off to use the services.

Despite the fact that the Public Health Service and other clinical guideline groups give high priority to preventive services such as quitting smoking, insurers and employers are still skeptical about them, says Marguerite Burns, a researcher at the Center for Tobacco Research and Intervention at the University of Wisconsin Medical School.

Burns and colleagues recently published a study showing low rates of coverage for tobacco cessation programs among state government employers. The researchers found no single explanation why the states did not cover the service.

"It really ranged from not even having it on the agenda, which begs interesting questions about how potential benefits reach the 'agenda,' to costs, to a view that smoking cessation therapy is not very effective," she says.

Harris and colleagues agree that employers may not be covering "lifestyle modification" programs because they feel the programs do not work or that they aren't cost-effective in the short run.