How to Align Evidence-Based Benefit Design With the Employer Bottom-Line: A Case Study

Abstract

To illustrate how to use evidence-based benefit design (EBD) by presenting the case study of a major manufacturer. Key components of the company's measurement and management approach to EBD are introduced. Descriptive results on the direct and indirect cost and utilization trends of the company's US active workforce during 2002 to 2008 are presented. From 1999 to 2002 aggregated to 2008, health care costs dropped sharply, with 2006, 2008, and projected 2009 reporting decreases even as annualized increases in national expenditures approximated 10%. Annualized rates for hospitalizations, office visits, and prescriptions showed corresponding decreases from 2004 to 2008. From 2002 to 2008, workers' compensation/disability and absenteeism costs decreased 38% and 46%, respectively. These results support the company's direction in health benefit design although further confirmation is needed. Ongoing quality improvement processes are discussed, as are implications for implementing EBD.