benefits barometer 2006 - caremark · pdf filethe 2006 benefits barometer is produced by...
TRANSCRIPT
A research resource for benefit
professionals featuring statistical
snapshots of benefit costs,
health benefit plans and the
benefits management function
2006Benefits
Barometer
a premier health solutions provider of pharmacy benefit management,
disease management, specialty pharmacy, and health management services,
Caremark is committed to providing our clients with personalized service, integrity
and value, while emphasizing safety and quality of care. We have a comprehensive
selection of tailored and measurable health solutions to effectively manage pharmacy
trend and total health outcomes, which enable our clients to optimize their health-
care investment. Solutions such as these are what make Caremark a trusted expert
and leader in the healthcare industry.
As
The 2006 Benefits Barometer is produced by Caremark Rx, Inc. with the cooperation
of SourceMedia, New York, NY.
Benefits Barometer 2006 3
Barometer, n.— an instrument that measuresatmospheric pressure. Today’s benefits professionals are feeling pressure from all
sides of the health benefits environment in theirunceasing efforts to reduce costs while still provid-ing employees with valuable and comprehensiveservices. To assist professionals in this challengingundertaking, Caremark and SourceMedia offer the2006 Benefits Barometer, which draws on a number of sources for data that provide readerswith a profile of the current atmosphere as itrelates to benefit plan designs and useful bench-marking information.
This publication contains three important sections:Benefit Cost Highlights, Health Benefit Plans andBenefits Management. The following sources arethe most frequently cited for the data presented inthis year’s Benefits Barometer:
• The Bureau of Labor Statistics’ 2005 EmploymentCost Index. This quarterly report publishes statisticsthat measure change in labor over time and thelevel of costs per hour worked. Indexes are avail-able for total labor costs, and separately for wagesand salaries, and for benefit costs. Some informa-
tion is available by region, major industry group,major occupational group, and bargaining status.Visit www.bls.gov for detailed statistics.
• Caremark Rx, Inc. For drug trend, disease man-agement and specialty pharmaceutical data, visitwww.caremark.com.
• Deloitte Consulting 2004 Annual 401(k)Benchmarking Survey. Conducted in August andSeptember 2004 among human resources andemployee benefits executives nationwide, the survey includes employer concerns, strategies andplan characteristics, providing the reader with acontemporary view of current approaches amongmany of the nation’s leading organizations.
• The Kaiser Family Foundation and HealthResearch and Educational Trust Survey of Employer-Sponsored Health Benefits, 2005. This annual surveyprovides detailed insights into trends in employer-based health coverage, including changes in premi-ums, employee contributions, offer rate amongfirms, and the use of consumer-driven health plans.The 2005 survey included 2,995 public and privatefirms with three or more employees. Completesurvey results are available at www.kff.org.
• The 2004 MetLife Study of Employee BenefitsTrends. The national study of employee benefitstrends surveyed both employees and employers during the third quarter of 2004. For more surveyresults, visit www.metlife.com.
Special thanks to the AARP, Ernst & Young,Hewitt Associates, Society for Human ResourceManagement, and Watson Wyatt Worldwide/National Business Group.
A research resource for benefitprofessionals featuring statisticalsnapshots of benefit costs, health
benefit plans and the benefitsmanagement function
BenefitsBarometer
4 Benefits Barometer 2006
BENEFIT COSTSLegally
Industry or Total Wages and Paid Supplemental Retirement required Otheroccupation category compensation salaries Total leave pay Insurance and savings benefits benefits
Civilian workersCost per hour worked $25.86 $18.21 $7.64 $1.70 $.64 $2.05 $1.09 $2.12 $.04State and local government workersCost per hour worked $35.46 $24.17 $11.29 $2.69 $.32 $3.79 $2.33 $2.11 $.05Private industry workersCost per hour worked $24.24 $17.21 $7.03 $1.54 $.69 $1.76 $.88 $2.12 $.04
83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 0582
0%
-3%
3%
6%
9%
12%
14%
16%
18%
20%
Health Benefits
Total Benefits
Source: Bureau of Labor Statistics, 2005
2004 200520032002200120001999199819971996
Source: Bureau of Labor Statistics, 2005
2%
3%
4%
5%
6%
7%
8%
Quarter
Wages and Salaries
Benefits
Employment Cost Index, Private Industry, 12-Month Percent Change,Total Benefits, and Health Benefits
Employment Cost Index for Civilian Workers, Changes in Wages and Salaries, and Benefit Costs
Employer Costs per Hour Worked for Components of Compensation,June 2005
Source: Bureau of Labor Statistics, 2005
Benefit Cost Highlights
Source: Bureau of Labor Statistics, 2005
Source: Bureau of Labor Statistics, 2005
Benefits Barometer 2006 5
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
LargeMediumSmallOverall
19%
15%
22%
21%
(1-99 employees) (100-499 employees) (500 or more employees)
A
Source: Society for Human Resource Management 2005 Benefits Survey Report
2%
10%
20%
50%
30%
70%
40%
60%
80%
LowerHigherAbout the same
81%
17%
2%
C
Average Percentage of Salary Reflecting Cost of MandatoryBenefits by Firm Size
Change in Percentage of Salary Reflecting Cost of MandatoryBenefits (Compared with Previous Fiscal Year)
Benefit Cost Highlights
Source: Society for Human Resource Management 2005 Benefits Survey Report
Source: Society for Human Resource Management 2005 Benefits Survey Report
0%
2%
4%
6%
8%
10%
12%
14%
16%
2006Projected
200520042003200220012000
9.4%10.2%
15.2% 14.7%
12.3%
9.2%9.9%
Source: Hewitt Associates Health Value Initiative
1
National Average Annual Health Care Cost Increases
0%
5%
10%
15%
20%
200520042003200220012000199919961995 1997 19981993 199419921990 199119891988
* Estimate is statistically different from the previous year shown at p<0.05. No statistical tests were conducted for years prior to 1999.† Estimate is statistically different from the previous year shown at p<0.1. No statistical tests were conducted for years prior to 1999.Note: Data on premium increases reflect the cost of health insurance premiums for a family of four.
12.0%
18.0%
14.0%
8.5%
0.8%
5.3%*
8.2%*
10.9%*
12.9%*13.9%†
11.2%*
9.2%*
Health Insurance PremiumsOverall InflationWorkers’ Earnings
Increases in Health Insurance Premiums Compared to OtherIndicators, 1988-2005
6 Benefits Barometer 2006
Health Benefit Plans
Source: Hewitt Associates Health Value Initiative
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits: 1999-2005; KPMG Survey of Employer-Sponsored Health Benefits:1993,1996; The Health Insurance Association of America (HIAA): 1988, 1990; Bureau of Labor Statistics, Consumer Price Index (U.S. City ofAnnual Inflation (April to April), 1988-2005; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment StatisticsSurvey (April to April), 1988-2005
Benefits Barometer 2006 7
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits: 2005
* Tests found no statistically different estimates between fully insured and self-funded plans at p<.05.Note: Data on premium increases reflect the total cost of health insurance premiums for a family of four.
0%
5%
10%
15%
20%
Self-Funded
Fully Insured
POSPPOHMOConventionalAll Plans
0
9.3% 9.1%
4.7% 5.2%
10.0%
8.0%
9.9%9.2% 9.6%
8.1%
Premium Increases, by Plan Type and Funding Arrangement, 2005*
0% 20% 40% 60% 80% 100%
1988 73% 16% 11%
46% 21% 26% 7%
27% 31% 28% 14%
14% 27% 35% 24%
10% 28% 39% 24%
8% 29% 21%42%
24%7% 46% 23%
27%4% 52% 18%
24%5% 54% 17%
25%5% 55% 15%
21%3% 61% 15%
1993
1996
1998
1999*
2000*
2001*
2002*
2003*
2004
2005*
* Distribution is statistically different from the previous year shown at p<.05. No statistical tests were conducted for years prior to 1999. Information was not obtained for POS plans in 1988.
Note: A portion of the change in enrollment for 2005 is likely attributable to incorporating more recent Census Bureau estimates of the number of state and local government workers and removing federal workers from the weights.
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 1999-2005; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996. The Health Insurance Association of America (HIAA), 1988.
Conventional HMO PPO POS
Health Plan Enrollment for Covered Workers by Plan Type, 1988-2005
Health Benefit Plans
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2005
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 1999-2005; KPMG Survey of Employer-Sponsored Health Benefits: 1993, 1996; The Health Insurance Association of America (HIAA), 1988
8 Benefits Barometer 2006
0 $12,000$2,000 $4,000 $6,000 $8,000 $10,000
0
Single
Family
All Plans
Conventional
HMO
PPO
POS
Single
Family
Single
Family
Single
Family
Single
Family
$3,413 $4,024$610
$8,167 $10,880$2,713
$3,284 $3,782$498
$7,658 $9,979$2,321
$3,203 $3,767*$563
$7,852 $10,456*$2,604
$3,548 $4,150*$603
$3,183 $3,914$731
$7,551 $10,801$3,250
$8,449 $11,090$2,641
*Estimate of total premium is statistically different from All Plans by coverage type at p<.05.Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2005.
Worker Contribution Firm Contribution
Average Annual Premiums for Covered Workers, by Plan Type, 2005
0
40
80
120
160
200
240
$8$37 $27* $30
Single Coverage Family Coverage
$42* $47 $51 $52
$122 $129$149*
$201*$222* $226
0
1988 1996 1999 2001 2003 2004 2005 1988 1996 1999 2001 2003 2004 2005
S
0%5%
10%15%20%
25%
30%
35%
11%
21%
14%* 14%16% 16% 16%
29% 28% 27% 26% 27% 28%26%
*Estimate of total premium is statistically different from All Plans by coverage type at p<.05.Note: Family coverage is defined as health coverage for a family of four.Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2005.
1
Single Coverage Family Coverage1988 1996 1999 2001 2003 2004 2005 1988 1996 1999 2001 2003 2004 2005
No statistical tests were conducted for years prior to 1999.
Average Monthly Worker Contribution
Percentage of Premium Paid by Covered Workers
Health Benefit Plans
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2005
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2005
Benefits Barometer 2006 9
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2005
2004
2003
2002
2001
2000
27% 49% 22% 2%
41% 41% 18% 1%
55% 30% 13% 1%
63% 23% 13% 2%
65%3% 20% 10% 1%
70% 15% 8% 2%
Four-tier Three-tier Two-tier
Payment is the same regardlessof type or cost of drug
Other
* Distribution is statistically different from the previous year shown at p<.05.No statistical tests are conducted between 2003 and 2004 due to the addition of a new category.Note: Fourth-tier drug copay information was not obtained prior to 2004.Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2000-2005.
4%
Distribution of Covered Workers Facing Different Cost SharingFormulas for Prescription Drug Benefits, 2000-2005
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2000 2001 2002 2003 2004 April 04-March 05
July 04-June 05
4.1%4.7%
6.1%
7.0% 7.1%6.6%
6.1%
3.4%2.8%
1.6%2.3%
2.7%3.0% 3.0%
Manufacturer Price General Inflation
Note: Average increases for 2004 and 2005 exclude Vioxx 12.5 mg and 25 mg tablets, which were withdrawn from the market in September 2004. The average increase in second quarter 2005 also excludes Bextra 10 mg and 20 mg tablets, which were withdrawn from the market in April 2005.Source: AARP Public Policy Institute and the PRIME Institute, University of Minnesota, based on data found in Medi-Span Price-Chek PC (Indianapolis, IN: Wolters Kluwer Health Inc., September 2005).
Average Annual Percentage Change in Manufacturer Prices for Most Widely Used Brand Name Prescription Drugs, 2000 ThroughSecond Quarter 2005
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
All
7.7%
4.2%
7.3%
3.7%
6.0%
2.5%
Employer Health Plan
Gross PEPM Trend
Utilization Trend
S
Gross Prescription Drug Trend, Percentage Increase on All Drug Costs per Cardholder, January to June 2005 overJanuary to June 2004
Health Benefit Plans
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2000-2005
Source: Caremark Analytics & Outcomes, Book of Business. ©2005 Caremark.All rights reserved.
Source: AARP Public Policy Institute and the PRIME Institute; University ofMinnesota, based on data found in Medi-Span Price-Chek PC (Indianapolis,IN, Wolters Kluwer Health Inc., September 2005)
s
This page contains prescription brand name drugs that are registered or trademarks of pharmaceutical manufacturers that are not affiliated with Caremark.
10 Benefits Barometer 2006
$0
$10
$20
$30
$40
$50
$60
$70
$80
Generic‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05
$7 $8 $9 $9 $10* $10 $13 $15*$17*$19*$21*$22*$17
$20$25*
$29*$33*$35*
^ ^ ^ ^
$48
$74*
Preferred Nonpreferred Fourth-tier
* Estimate is statistically different from the previous year shown at p<.05.^Fourth-tier copayment information was not obtained prior to 2004.Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2000-2005.
Average Copays for Generic, Preferred, Nonpreferred, and Fourth-tier Prescription Drugs
0
20
40
60
80
100
Small Firms(3-199 workers)
Midsize Firms(200-999 workers)
Large Firms(1,000-4,999
workers)
Jumbo Firms(5,000 or more
workers)
All Firms
5%10%
20%*
5% 7%
20%*
5% 9%
20%*17% 20%
33%*
5%10%
20%*
2003 2004 2005
* Estimate is statistically different from the previous year shown at p<.05.Note: The prevalence shown above is for all HDHPs, regardless of whether they are offered with an HRA, are HSA qualified or neither.Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2003-2005.
Percentage of Employers that Offer a High-Deductible Health Plan by Firm Size
Health Benefit Plans
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2000-2005
Source: KFF/HRET Survey of Employer-Sponsored Health Benefits, 2003-2005
Benefits Barometer 2006 11
0% 20% 40% 60% 80% 100%
Health care costs
Retirement savings accounts
Workers’ compensation
Benefits for retired employees
Long-term care
87%
44%
31%
25%
18%
M
Source: The MetLife Study of Employee Benefits Trends, 2004.
Employee Benefits Issues Concerning Senior-Level Management Most
40%43%
29%29%
29%26%
24%20%
23%21%
22%25%
20%22%
18%10%
15%18%
11%14%
11%8%
10%5%
Benefits to help work-life balance
Employee decision support tools
Cost shifting to employees
Common platform for administration
401(k) investment education
Retirement planning
Wider array of voluntary benefits
Employee self-service on Net
Internet access for all employees
General financial planning
Outsourcing benefits administration
Build or expand benefits website
M
2004
2003
Source: The MetLife Study of Employee Benefits Trends, 2004
Most Important Employee Benefits Strategies
Benefits Management
Source: The MetLife Study of Employer Benefits Trends, 2004
Source: The MetLife Study of Employer Benefits Trends, 2004
12 Benefits Barometer 2006
70
60
50
40
30
20
100
Individualmeetings
Groupmeetings
PaperInternet/Intranet
CustomerService Rep(telephone)
IVR
0
2004
2003
Employers’ Current/Preferred Methods of Enrollment
55%54%
53%49%
37%46%
36%47%
25%17%
22%17%
15%13%
14%
12%
9%11%
Controlling health/welfare benefits costs
Retaining employees
Increasing employee productivity
Increasing employee job satisfaction
Attracting employees
Reducing HR administrative costs
Helping employees make better benefits decisions
Addressing more of employees’ diverse needs
Helping employees make better financial decisions
2004
2003
Most Important Employee Benefits Objectives
Benefits Management
Source: The MetLife Study of Employer Benefits Trends, 2004
Source: The MetLife Study of Employer Benefits Trends, 2004
Benefits Barometer 2006 13
Totalworkers
2–9workers
10–49workers
50–999workers
1,000–2,499
workers
2,500–4,999
workers
5,000–9,999
workers
10,000–24,999
workers
25,000+workers
17%15%
8%
17%21% 19%
26% 26%22%
Percentage of Employers Expecting to Take On AdditionalBenefits Costs, by Company Size
2005
2004
Move from regional tonational plans
Increase the number of plan options
Change medicalvendors
Integrate health careand disability
Change pharmacyvendors
Decrease the numberof plan options
Use clinical riskadjustment
Move from national toregional plans
49%29%
25%17%
21%11%
21%5%
20%9%
13%7%
8%4%
8%4%
Employers Are Changing Their Relationships with Health Plans
Benefits Management
Source: The MetLife Study of Employer Benefits Trends, 2004
Source: Watson Wyatt Worldwide/National Business Goup on Health,Managing Health Care in a New Era, 2005
14 Benefits Barometer 2006
Outcomes for the Caremark CarePatterns®
Disease Management Program
The CarePatterns® Disease Management Programs cover more than 3 million lives nationally and are the first toreceive both physician and participant based NCQA accreditation. Outcomes are monitored and reported on clinical, quality and economic indicators for each population. The diabetes program summarizes the improvementin key clinical measures achieved.
Benefits Management
Diabetes Clinical Indicators
100%
80%
60%
40%
20%
0%
CCeenntteerrss ffoorrDDiisseeaasseeCCoonnttrrooll22000022
AAnnnnuuaallBBaasseelliinnee MMoorrbbiiddiittyy aanndd MMoorrttaalliittyy
WWeeeekkllyy RReeppoorrtt 22000044
Source: 2004 Book of Business. ©2005 Caremark. All rights reserved.
HHeeaalltthh PPllaannEEmmppllooyyeerrDDaattaa aanndd
IInnffoorrmmaattiioonnSSeett 22000033
Benefits Barometer 2006 15
Outcome for the Caremark CarePatterns®
Disease Management Program
Source: 2004 Book of Business. ©2005 Caremark. All rights reserved.
Benefits Management
Caremark was the first and only prescription benefits manager to receive full patient and practitioneroriented accreditation from NCQA in 2002. Effective 9/2005 to 9/2008, Caremark received full patientand practitioner oriented accreditation for its chronic obstructive pulmonary disease (COPD), asthma(adult and pediatric), heart failure, coronary artery disease (CAD), and diabetes programs.
CarePatterns® is a portfolio of disease-specific, patient-centered programs currently available for 10chronic medical conditions, including some of the highest cost-per-patient diseases covered by planstoday. By monitoring a participant's entire care, not just drug therapy, and coordinating the activities of the participant, physician, pharmacist, and the specially trained CarePatterns nurses and case managers, the participant's quality of life can be improved and the overall cost of treatment reduced.
Changes in Hospitalizations
18 Benefits Barometer 2006
Benefits Management
Expected Spending per Part D Beneficiary
Note: Estimates exclude premiums and assume no supplementation of Part D coverage.
Source: “The Medicare Rx Drug Law — Estimates of Medicare Beneficiaries’ Out-of Pocket Drug Spending in 2006: Modeling the Impact of the MMA,” (#7201), The Henry J. Kaiser Family Foundation, November 2004
Distribution of Part D Participants, by ProjectedOut-of-Pocket Prescription Drug Spending
Under MMA, 2006
This information was reprinted withpermission from the Henry J.Kaiser Family Foundation. TheKaiser Family Foundation, based inMenlo Park, California, is a nonprofit, independent nationalhealth care philanthropy and is notassociated with Kaiser Permanenteor Kaiser Industries.
©2006 SourceMedia Inc. and Employee Benefit News. All rights reserved. SourceMedia, One State Street Plaza, New York, N.Y. 10004 (800) 367-3989
Benefits Barometer 2006 17
Specialty Pharmaceuticals
Benefits Management
Source: Caremark data on file, 2003 to Q1-Q3 2005. ©2006 Caremark. All rights reserved.
% of Total Gross Cost
Specialty Drug Trend
2004 U.S. Pharmaceutical Market
Caremark Book of Business Specialty Drug Benefit Trend
BETTER OUTCOMES FOR A HEALTHIER BOTTOM LINE
To learn more about Caremark Rx, Inc., visit www.caremark.com.
© 2006 Caremark.All rights reserved.
Targeted SolutionsCaremark delivers personalized, data-driven solutions and disease management programs to fitour clients’ overall health management objectives.
Aligned IncentivesWe collaborate with our clients to achieve their unique goals and meet their financial andbusiness needs.
Improving Healthcare While Controlling CostsWe assist our clients in engaging and empowering plan participants to become prudenthealthcare consumers, which can lead to improved health outcomes and a healthier bottom line.
Caremark is a premier health solutions provider of pharmacy benefit management, diseasemanagement, specialty pharmacy, and health improvement services.
2211 Sanders RoadNorthbrook, IL 60062
www.caremark.com
©2006 Caremark. All rights reserved.
15042-0206106-011215a — 01.06 (8.5 m)