Rising Health Care Costs Drive Local Governments To Shift Strategies

WASHINGTON, Dec. 5, 2014 /PRNewswire-USNewswire/ -- Although health care costs have slowed recently, rising costs over the last decade have prompted many local governments to make changes to their plans and strategies, according to a new nationwide survey by the Center for State and Local Government Excellence.  The top cost drivers of local government health care increases cited by survey respondents were: 

1. increased claim costs (64 percent)
2. prescription drugs (57 percent)
3. an aging workforce (46 percent)
4. insurance company price increases (45 percent) and
5. federal health care policy (45 percent).

"Local Government Strategies to Address Rising Health Care Costs" describes the findings from a national survey conducted by the Center for State and Local Government Excellence (slge.org) and the International Public Management Association for Human Resources (ipma-hr.org).  Two hundred fifty-two (252) IPMA-HR members took part in the survey, which was conducted in August 2014 at the request of the University of Tennessee Institute for Public Service (IPS).

Fifty-seven (57) percent of respondents increased cost sharing of premiums paid by employees and nearly half of respondents reported that their local governments changed the way health insurance is provided.  Nineteen (19) percent of those reporting changes shifted employees to a high-deductible plan with a health savings account and 14 percent established a health reimbursement arrangement.

The report includes six case studies describing how local governments have produced savings in their health benefit costs.

• Disease management programs, on-site clinics, dependent eligibility audits, and regular review and rebidding of health care vendor contracts have achieved significant savings. Asheville, North Carolina, reports it has saved $4 for every $1 invested in chronic disease management.
• Corpus Christi, Texas, reduced health care costs by $1.84 million by conducting a dependent eligibility audit and establishing an on-site wellness clinic.
• Greater access to comprehensive medical care and related support services for offenders resulted in lower reincarceration rates and total inmate population in Hampden County, Massachusetts.
• Diverting offenders with extreme behavior problems into mental health services opened up capacity at the Buncombe County, North Carolina, Detention Facility, making it possible to rent the facility to crowded community jails and to generate $1,038,717 in new revenue.

Local governments report that providing easy access to health services at work sites not only supports employee wellness, but also reduces employee absenteeism and health care costs.  With the percentage of employee compensation that goes to health benefits rising over the past 10 years, many local governments have made significant changes to their health benefits. 

"Local government programs that contain costs and improve employee health are among the most important strategies," noted Elizabeth Kellar, president/CEO, Center for State and Local Government Excellence. "Wellness and disease management programs are offered by a majority of local governments and are valued by employees."

Download Local Government Strategies to Address Rising Health Care Costs at:
http://slge.org/publications/local-government-strategies-to-address-rising-health-care-costs

Access all the Center's research at: http://slge.org/research

About the Center for State and Local Government Excellence
The Center for State and Local Government Excellence helps state and local governments become knowledgeable and competitive employers so they can attract and retain a talented and committed workforce. The Center identifies best practices and conducts research on competitive employment practices, workforce development, pensions, retiree health security, and financial planning. The Center also brings state and local leaders together with respected researchers and features the latest demographic data on the aging workforce, research studies, and news on health care, recruitment, and succession planning on its website, www.slge.org.

About the University of Tennessee and the Institute for Public Service
As a federally designated land-grant institution, the University of Tennessee system has a three-fold mission of instruction, research, and public service.  Responsibility for this third function, in all areas except agriculture, falls to the UT Institute for Public Service (IPS).  A statewide operation, IPS connects people and solutions to improve efficiency and performance of government and business, and increase the prosperity and competitiveness of Tennessee.  Through its five agencies – the Center for Industrial Services, the County Technical Assistance Service, the Law Enforcement Innovation Center, the Municipal Technical Advisory Service, and the Naifeh Center for Effective Leadership – the institute provides on-site technical consulting and training for the state's cities, counties and industries; leadership training for state government; and law enforcement training nationwide.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/rising-health-care-costs-drive-local-governments-to-shift-strategies-300005687.html

SOURCE Center for State and Local Government Excellence

Related Links

http://www.slge.org