Are Tough Times Prompting Employees to Skimp on Health Care?

    They warn that employees who forgo necessary care now could end up costing their employers more later, in both additional health care expenditures and increased absenteeism, should a serious health threat go untreated or a chronic condition get worse.

    Meanwhile, some employers are using incentives to ensure that their employees get the care they need at low or no cost.

    With family budgets strained by higher fuel and food costs, U.S. residents are filling fewer prescriptions and visiting the doctor less often, researchers say.

    IMS Health Inc., a health care analytics firm based in Norwalk, Connecticut, this summer recorded the first decline in prescriptions issued since 1996. The number of prescriptions dispensed in the second quarter of this year fell almost 2 percent from a year earlier. That followed a 0.5 percent drop in the first quarter, the first time that number has been negative since 1996, IMS Health said. It also found that doctor visits dropped 1.2 percent for the 12-month period ending in July.

    Although the number of prescriptions was down, the dollar value of drug sales still posted modest growth of 1.4 percent, rising to $288 billion in June from a year earlier, IMS Health said. Still, sales growth has slid dramatically from late 2006, when annual prescription sales growth approached 12 percent.

    In a survey fielded in July, the National Association of Insurance Commissioners found that 22 percent of consumers have reduced the number of times they see the doctor and 11 percent have cut back the number of prescription drugs they take or reduced the dosage of those medications to make prescriptions last longer.

    Watson Wyatt Worldwide’s forthcoming "2008 Employee Perspectives on Health Care" survey, which was conducted in May and June, found that 40 percent of workers went to the doctor only for more serious conditions, up from 35 percent the year before, and that 17 percent did not fill or skipped doses of prescribed medications, up from 13 percent in 2007.

    Although it will be a while before any trends are reflected in employers’ benefit plan spending, benefit consultants have begun advising employers to be aware of the phenomenon and its potential ramifications.

    "I think employers have been so preoccupied about the economy in general from a business perspective that they may not realize the implications of employees’ self-imposed cuts in health care utilization," says Jennifer Boehm, a principal in Hewitt Associates’ health management practice who is based in Atlanta.

    "When people are worried about fuel costs and food costs and about whether they’ll have a job tomorrow, they may reduce their prescription drug intake, particularly those drugs that don’t have a symptom-relieving effect," Boehm says. "What you don’t want to have happen is to have folks stop taking their meds or taking them in a way that’s not effective and then end up in the emergency room or developing more serious conditions later on."

    Jodi Prohofsky, senior vice president for health solutions operations at Cigna Corp. in Eden Prairie, Minnesota, says she’s already starting to notice an uptick in the use of emergency room services by individuals with chronic conditions.

    "Their choice is, `I either have to put gas in my car, food on my table, or take my pills.’ We’re going to see them choose not to take their pills, pill splitting or other things, such as not going for routine doctor visits. And then we’ll see them in the emergency room," she says.

    Employers must be vigilant, says Tracey Moorhead, president and CEO of the Washington-based DMAA: The Care Continuum Alliance, formerly the Disease Management Association of America.

    If not, "we’re going to see a decline in health status across the population," Moorhead says. "While some forms of belt-tightening make sense in tough economic times—dining out less often or car-pooling—we can’t afford to extend cost-cutting to medical care, especially for people with chronic conditions."

    After reading news reports on the reduction in health care spending nationwide, Andy Gold, executive director of global benefits planning at Pitney Bowes Inc. in Stamford, Connecticut, asked the company’s pharmacy benefit manager to track prescription compliance. The company also sent notices to employees reminding them of resources available should they consider forgoing necessary health care to save money.

    "We’re reminding people to use their health plan. We reminded them they can use their [flexible spending account] to pay for health care-related expenses. We reminded them about the importance of adhering to maintenance medication," Gold says.

    Since the economic slump happens to coincide with open enrollment, EMC Corp. also is promoting its flexible spending account, says Delia Vetter, senior director of benefits and programs for the information technology company, which is based in Hopkinton, Massachusetts. "In times like these, the FSA becomes a financially advantageous tool to mitigate out-of-pocket costs" by allowing employees to pay for health care expenses on a pretax basis, she says.

    John Garner, CEO of Garner Consulting, based in Pasadena, California, says several of his employer clients are changing their health plans to ensure that their employees get essential care in the current economic climate.

    "One client waived all co-payments on preventive services," Garner says. "Another client is waiving co-payments for insulin and diabetic supplies [and] another client modified its plan to cover some of the newer immunizations."

    The intent of this strategy, known as value-based insurance design, is to ensure continued access to care for plan members who can’t afford it but need it the most.

    Hoping to relieve some of the pressure on its employees’ pocketbooks, Pitney Bowes is adding several drugs to its existing value-based insurance design program in 2009, Gold says.

    Mark Fendrick, co-director of the University of Michigan’s Center for Value Based Insurance Design in Ann Arbor, hopes that value-based insurance designs will be more widely adopted. Since they remove or reduce patient copayments for high-value services, broader use of the plans could mean that "even in tough economic circumstances, individuals will have unfettered access to essential medical services."

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