Measuring employee satisfaction

Measuring employee satisfaction – determining the cost and quality of employee health care benefits

John Regan, III

Too often, employers take a passive role in examining and influencing their local health care markets. This allows providers to determine the cost and quality of employee health benefits.

Enter the Bay Area Business Group of Health, San Francisco. Working with member companies and consultants William M. Mercer Inc., BBG?H has produced data that go beyond the capabilities of individual companies and vendors. It hopes to use the data to influence how health care providers set rates and provide services.

BBGH is a non profit coalition of 14 large employers consisting of: Bank of America, Bechtel Group Inc., Chevron USA Inc., Fireman’s Fund Corp., Kaiser Permanente, McKesson, Mervyn’s, Pacific Gas & Electric, Pacific Telesis Group, Raychem Corp., Stanford University, Transamerica Corp., Union Bank, and Wells Fargo. Formed in 1989, the coalition works to improve the quality of health care and to identify ways to moderate rising costs. Combined, these employers provide coverage for more than one million lives (about two-thirds of whom participate in various forms of managed care) and have a total annual health care bill of about $1 billion.

In 1989 to 1990, the coalition conducted employee satisfaction surveys (another is being done this year) to determine the following:

* What employees think about the quality of their employers’ health plans;

* How employees evaluate health care by plan (such as indemnity versus independent practice association);

* How the survey could be developed to evaluate dissimilar models of health care delivery consistently and fairly;

* The most important areas for possible intervention;

* The most important data for research;

* What information would best aid employees during annual open enrollments;

* How to establish a database to identify annual trends and to monitor ongoing performance;

* What additional information on satisfaction employers could combine with information on cost, clinical quality, and financial stability to evaluate HMOs more effectively;

* How to establish standards for service quality: and

* How to identify health risk variations in plans.

The findings

The survey conducted in May 1990 included more than 14,000 respondents enrolled in 163 plans. It took about three months to complete and produced reliable data for virtually every HMO in California.

The survey produced findings in nine major categories relating to a variety of service quality issues. In addition, the survey produced demographic and plan participation data, specific to employers, and employees, that provide ways to isolate performance variables.

Overall, the most interesting finding of the survey (which was consistent with previous findings) is the extreme variation in satisfaction among plans of the same type. For instance, while employees generally are more satisfied with HMOs that contract with independent practitioner associations (IPA-model HMOs), staff-model HMOs, or indemnity plans, the range of responses for IPAs sh ows plans with both high and low degrees of satisfaction (see “Employees’ satisfaction by plan type”). This finding indicates the importance of evaluating customer satisfaction when choosing plans.

For indemnity plans and IPA-model HMOs, having a courteous support staff and the ability to solve administrative problems were the most important factors associated with employee satisfaction. Satisfaction with staff-model HMOs, on the other hand, was most influenced by satisfaction with physicians’ care.

Satisfaction with most plans did not significantly change from the year before. One exception, an IPA that moved from a satisfaction rating substantially below the norm to a position comparable to its major local competitors shows the need for plan sponsors to evaluate each plan annually.

Enrollees in the three categories of plans felt differently about what they liked and did not like about their particular plans:

* Indemnity plans ranked highest in terms of satisfaction with physician services, but lowest with respect to cost, covered benefits, likelihood to be recommended to a fellow employee, and general satisfaction with the plan.

* Staff-model HMO participants were the most satisfied with the range of benefits covered by their plans and the costs they paid out of pocket. These participants, however, were least satisfied with quality of care.

* IPA-model participants were comparatively the most satisfied with premium costs and quality of care, were most likely to recommend the plan to fellow employees, and in general, were the most satisfied with their medical plan.

These differences in satisfaction do not indicate that one type of plan is better for all employees. It could be, for example, that enrollees in indemnity plans were generally less satisfied because they were older and sicker, or because they were generally harder to please. Put such a dissatisfied employee in an HMO with high satisfaction ratings–and he or she might be even more dissatisfied. It seems likely that most employees are already in the type of plan they would like best.

Finally, a wealth of data provides comparisons of:

* variations in waiting times for routine appointments;

* number of hospital days and office visits;

* access to and participation in health awareness and promotion programs;

* effectiveness of plan and physician communication; and

* affordability of indemnity and PPO arrangements.

Using the data

The survey results show that there are compelling reasons to gather such information on satisfaction. Overall, the variables influencing employee satisfaction are both measurable and controllable and should be a part of any employer’s negotiations with its health care providers.

In addition, the data allow employers to concentrate their efforts in the areas that will yield the best results. In BBHG’s survey, these key elements were cost, customer service, and physician relationship.

Sharing the data with employees is another important step. With a careful and balanced presentation of the information, employers can address existing biases about certain plans and lessen the impact of provider advertising on enrollment patterns. Combined with effective pricing and benefit design policies, this information can greatly assist employees in making choices that balance their needs with those of the employer. Additional specific uses of this information including the following:

* identifying problems;

* communicating to employees about enrollment;

* documenting vendor service quality claims;

* evaluating selection risks of plans; and

* matching employers’ needs with specific vendors’ performance or identifying trade-offs.

The future

The 1989 and 1990 surveys serve as a cornerstone for future surveys. Currently BBGH is conducting a 1991 survey for a coalition in Los Angeles. Using an updated survey, the results will add a third year to a growing database.

BBGH hopes to expand the survey into more geographic areas through alliances with other employer coalitions. The longer range goal for the survey is to further pinpoint the dynamics of employee choice and satisfaction.

John Regan III is a survey project manager, and Janice Stanger is a survey consultant, both with William M. Mercer Inc. Patricia Powers is executive director of the Bay Area Business Group of Health.

COPYRIGHT 1991 A Thomson Healthcare Company

COPYRIGHT 2004 Gale Group