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MMA 2003 Health Care Purchasers' Survey

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One of the Michigan Manufacturers Association's top advocacy issues is controlling health care costs. Many Association members have expressed their concern over double-digit health insurance increases and the impact these added costs have on their companies' competitiveness and survival. These compiled results will be taken into consideration as we formulate possible solutions to rising health care costs.

Questionnaire and aggregate results

1. How many employees work at your company's Michigan location(s)?

Comment:

Response to the survey, to some degree, reflects the company population that finds the survey subject matter important. The greatest number of respondents were representatives of small companies (fewer than 500 employees); representing 95.5 percent of respondents. The percentage of companies with fewer than 500 employees within the entire MMA membership is 92.1 percent.

2. Does your company provide health insurance coverage for employees?

Comment:

Nearly all member companies provide health insurance coverage for their employees. However, comments received by respondents indicate that their ability to continue to provide coverage, due to rising rates, is in jeopardy.

3. What kind of health care programs does your company provide to employees?

4. By how much have your health insurance premiums increased over the past year? Or premiums have decreased by: ____________?

Comment:

The highest percentage of respondents (nearly 48 percent) saw health insurance rate increases in the 11-20 percent range the past year. More than 85 percent of companies experienced dboule-digit increases.

5. By how much do you expect your health insurance rates to increase in the coming year? Or decrease by: ____________?

Comment

Perhaps optimistically, 18 percent of respondents expect increases of up to 10 percent, compared to only 8.7 percent of companies that actually experienced increases of between 0 and 10 percent in the past year. More than 93 percent expect to see increases up to 30 percent in the coming year.

6. Rate how concerned your company is about the rising costs of health care?

Comment:

More than 82 percent of companies are "extremely concerned" about rising health care costs. More than 95 percent are at least somewhat concerned, rating the issue between 1 and 4 on a 1-5 scale.

7. Rank the following issues in order of importance to your company:
   (1=most important/7=least important)

 Compiled weighted ranking

 Percentage of respondents indicating 1^st ranking
 for each issue area (non-weighted)

Comment:

Controlling health care costs was, overwhelmingly, the issue respondents found most important. Reducing business taxes, increasing workforce skills and controlling workers' compensation costs followed.

8. Which measures have been implemented by your company to offset rising health care costs?

Comment:

Employers are increasingly forced to pass health care rate increases on to their employees. More than 77 percent of companies increased employees' deductibles and/or co-pays and another 59 percent asked employees to pay more of their own insurance premiums.

Perhaps most alarming, employers are reducing their workforces and/or reducing hiring in an effort to control costs. More than 41 percent of respondents indicated that they have used one or both of these methods to mitigate health insurance costs increases; together the third most commonly cited cost-control measure.

9. Indicate the top three reasons your company's management believes health care costs are escalating:

Comment:

Respondents overwhelmingly implicated "rising prescription drug costs" as a main cause of rising health care costs (more than 83 percent). The second and third most cited causes were, respectively, "rising medical liability insurance rates" (50 percent) and "inefficiencies in the health care sector" (40.6 percent).

Companies also believe a fair amount of blame lies with health care consumers themselves. "Consumers' lack of cost consciousness" and "consumers' over utilization of the health care system" were cited by 22.5 percent and 21.5 percent of respondents, respectively. Together the two responses equal nearly 44 percent; the third most commonly cited reason for rising costs.

10. How important is the issue of rising health care costs in employee relations, e.g. employee recruitment, retention, collective bargaining, etc.?

Comment:

More than 78 percent of respondents believe rising health care costs are an important issue in human resources management, rating it as a 1 or 2 on a 1-5 scale, where 1 represents "extremely important."

11. Do you believe health care costs could be better controlled if employees were more aware of the costs of their health care choices?

Comment:

The majority of respondents (more than 55 percent) believe employees should take more responsibility for health care cost control.

12. Do you believe increasing health care costs impede your company's ability to provide health insurance to employees?

Comment:

Nearly 70 percent of company representatives surveyed believe health care cost increases make providing coverage to employees more difficult.

13. Do you believe Michigan's health insurance marketplace is competitive compared to other states in which your company provides health insurance?

Comment:

It appears the majority of respondents do not have locations outside of Michigan with which to compare costs. More than 16 percent of respondents, however, believe that Michigan's health insurance marketplace is not competitive with other states, as compared to nearly eight percent who believe Michigan is competitive.

14. Do you believe Michigan's health insurance rates impede your company's competitiveness?

Comment:

Nearly half of respondents (48 percent) believe health insurance rates in Michigan impede their companies' competitiveness.

15. Would health care costs be a factor in a decision to move your company's operations out of Michigan?

Comment:

The majority of companies surveyed (56 percent) would not consider health care costs when making a decision to move out of state; 15 percent would consider health care costs in a location decision.

16. Do you believe rising health care costs threaten your company's ability to remain in business?

Comment:

Forty-five percent of respondents do not believe health care costs threaten their companies' ability to remain in business. A large percentage (nearly 40 percent), however, do believe that rising insurance rates threaten their companies' survival.

Methodology

The print survey consisted of 16 questions and was mailed to all MMA member companies the week of June 3, 2003. The deadline for responses was June 27, 2003. Respondents had the option of returning the completed survey by return mail, by fax, or completing the survey online. The data was tabulated and analyzed in-house.

Some percentages of response totals do not equal 100 percent due to rounding and blank responses.

MMA received 607 responses back by mail, 59 online and 23 by fax, for a total of 689 responses for a response rate of 23.5 percent.