Survey: For Fast-Growth Private Companies, Higher Health Costs Hurt
According to the most recent PricewaterhouseCoopers Private Company Services' Trendsetter Barometer, most fast-growth private businesses (57 percent) claim to have suffered an impact from increased healthcare costs over the past 12 months, and/or expect to suffer wage/hiring impacts over the next year. Specifically, higher costs contributed to slower profit-growth (43 percent), while 38 percent foresee additional wage or hiring impacts in the next year. Anticipated hardships include lower wage increases for current employees (34 percent), slower hiring (10 percent), and/or hiring of more part-time versus full time workers (10 percent).
Despite the negative impact of higher healthcare costs, most private company CEOs (58 percent) believe their current healthcare plans are "successful," while 21 percent say their plans are only "moderately successful," and 14 percent have been mixed or not successful. However, nearly half reportedly have no metrics in place by which to objectively measure the effectiveness of their healthcare plans.
PPO plans are offered by 68 percent of private companies, followed by HMO plans (46 percent) and POS Plans (11 percent). Surprisingly, consumer-directed plans, which can often help lower costs and promote healthier life choices, are offered by only 6 percent of surveyed companies.
Currently only 28 percent offer a wellness program and 3 percent intend to do so. Nearly 60 percent of "Trendsetter" companies do not offer a wellness program, nor do they plan to offer one in the next 12 months. Those that do offer wellness programs emphasize healthcare information services (88 percent) and exercise programs (71 percent).
Nearly half (42 percent) of the "Trendsetter" CEOs say costs of providing healthcare benefits to employees are higher than those of large, public companies; 31 percent disagree. Of those with higher costs, a majority (55 percent) do not believe they are at a disadvantage in competing with public companies for talent, but 42 percent do.