What Do Employers and Employees Want in Health Care?

A Business Professor Delves Into Needs, Wants and Concerns

October 27, 2009

By Pamela McLaren

Rahul Bhaskar has always been focused on security issues and his entry into health care and insurance was no different.

A year ago, the professor of information systems and decision sciences was exploring the 1996 Health Insurance Portability and Accountability Act and working with several health insurance providers when his focus shifted to not so much security but what business owners and their employees are seeking in health care.

Bhaskar is spending the fall semester exploring the small business aspect of the proposed health care plan.

And everyone, he discovered was questioning the proposed health care plan and what it would mean.

“Companies are concerned because they feel they will be compelled to pay for insurance. … they feel like they are losing control of the situation, the negotiation of cost and range of services, etc. that they have done in the past,” he said. “They also are concerned that by having all companies offer the same insurance coverage, there would be no incentive to join or to stay with the company that they work for.”

So “I decided to take out the politics and look at the dollars and cents of the proposed plan,” Bhaskar said. “I am ultimately trying to extrapolate if this plan will cost what the government says it will.”

The researcher developed a list of 13 issues and services provided under health care plans/insurance, including premium and out of pocket costs, copayments, prescription costs and limit of service.

Then, Bhaskar interviewed more than 360 California small business employers with less than 100 employees, as well as a separate pool of 500 employees.

He conducted a conjoint analysis, which looked at all 13 factors and determined which ones are most important to each group.

“I found out that most important to employers is the maximum out-of-pocket cost and the annual deduction for the company — in other words, the ultimate cost to provide insurance to their employees,” Bhaskar said.

“Similarly, employees are mostly concerned with the amount they would pay in monthly premiums and the amount of copayments they would be required to make.”

“I think that the base result is that employers want to be able to manage this cost as they do all the other costs of doing business and be able to ‘customize’ to fit the needs of their employees within the limits of what they feel they can afford,” said Bhaskar.

“Employees are concerned that they not be shut our of the services they want and need. And they want insurance at an affordable rate that they can pay and still be able to cover their other living expenses.”

Bhaskar joined Cal State Fullerton in 2002. He holds a doctorate from the University of Wisconsin-Madison.

Related Story:

Rahul Bhaskar Helps Fight Cyberterrorism