There’s not much to catch up on this week due to the short work week. I hope that everyone enjoyed Thanksgiving. I certainly did enjoy Thanksgiving, but not today’s Redskins game.

Mercer, a major consulting firm, issued its 2008 National Survey of Employer-Sponsored Health Plans. According to the study,

Total U.S. health benefit cost rose by 6.1 percent in 2007, the same pace as last year, to an average of $7,983 per employee.

Among large employers (those with 500 or more employees), average in-network PPO deductibles rose by about 11 percent, from $426 to $473 for individuals and from $1,022 to $1,134 for families. Small-employer deductibles, already much higher, rose by only about 2 percent for individuals (from $859 to $872 among employers with 10-499 employees) but by 5 percent for families (from $1,786 to $1,879).
“Given that the majority of covered employees are in PPOs, an increase in deductibles of this size could dampen employers’ total health cost increase by about a point,” said Blaine Bos, Mercer worldwide partner and spokesperson for the survey. But even if employers made no benefit cuts at all, the rate of increase still appears to be slowing. Employers estimated that the cost of their largest medical plan would increase 8 percent in 2008 “before changes.” That’s down from 9 percent in 2007 and 10 percent in 2006. “The slowdown in the underlying trend reflects slowing utilization,” said Mr. Bos. “And that is very likely tied to the proliferation of health management activities and other consumerism strategies.” The survey found that 80 percent of large employers use health management programs as a way to control cost and improve productivity, while 52 percent are actively promoting employee consumerism. The majority of employers using these strategies say they have been successful (63 percent for health management and 62 percent for consumerism). Large employers, which tend to be more proactive in cost management, experienced a somewhat lower average cost increase than small employers in 2007 (5.1 percent compared to 6.6 percent)

Another factor that may have served to slow cost increases was the growth in enrollment in consumer-directed health plans, the type of medical plan with the lowest cost by far. In 2007, the percentage of employees enrolled in a CDHP (based on either a Health Savings Account or a Health Reimbursement Account) rose from 3 percent to 5 percent of all covered employees.

Evidence that the plans are cost-effective is accumulating. CDHPs delivered substantially lower cost per employee than either PPOs or HMOs in 2007. CDHP cost averaged $5,970 per employee, compared to $7,120 for HMOs and $7,352 for PPOs . Of the two types of CDHPs, HSA-based plans were less expensive than HRA-based plans ($5,679 compared to $6,224). Employer account contributions are a standard feature of HRAs but not of HSAs: over a third of large HSA sponsors do not contribute. Among those that make an HSA contribution, the average contribution is about the same as the average HRA contribution: $626 and $621, respectively.

CMS has a released an “issues paper” intended to frame the debate over the best way to transition Medicare providers of care to a value based purchasing system. According to Modern Healthcare.com, “[t]he issues paper will serve as a discussion piece at a public meeting that will be held by the CMS on Dec. 9. Issues identified and discussed during this meeting will assist the agency in developing options for its value-based purchasing plan. The deadline for comments on the issues paper is Dec. 16.”

Finally, a few more Open Season articles — here, here, and here . Open Season ends next Monday December 8.