AIM is closely monitoring the Division of Health Care Finance and Policy hearings taking place this week at UMass (March 16, 18 & 19). AIM member company, John Hancock, testified yesterday as part of an employer panel.
John Hancock is co-founder of AIM's Health Care Employer Advisory Group (EAG). The EAG advises AIM leadership on important health care matters by reviewing health care legislation, studies, etc.; acting as a stakeholder group for public/private initiatives or organizations seeking the employer perspective and; providing public testimony, position statements, etc.
John Hancock's testimony, given yesterday, March 16, 2010 follows...
My name is Peter Mongeau. I am Vice President of Human Resources for John Hancock Financial Services, responsible for our employee compensation and benefits programs.
John Hancock is a financial services company with approximately 5,500 employees nationally, of which roughly 4,000 are in Massachusetts. Our projected 2010 medical plan spend for our current employees, including employee cost-sharing, is approximately $47 million dollars, of which more than 70%, or roughly $33 million, is spent in Massachusetts. We manage another $50 million dollars for retiree medical benefits.
Our medical plan increases, on a weighted-average basis, have been in the roughly 6 percent range for the last two years. On a relative basis, this is better than the 7.5 percent annual health insurance cost increase noted in the Division reports. However, it is still significantly greater than the 3.8 percent annual increase in GDP also reported by the Division. And, this rate of increase is greater than most of our other operating expenses, making it not acceptable in the long-term to our policyholders and shareholders.
We attribute our better than average medical spend increases to two overarching strategies, and we contend that these strategies are critical to reducing our health care costs while not compromising quality of care or access to care.
- One: Collaboration and partnership with our health plans to a) invest in and b) improve workforce health and productivity
- Two: Treatment and engagement of our employees as consumers, where choice and buyer information (or transparency) is important given the diversity of our workforce and the varying life situations, values and preferences of employees
I'd like to share with you an example of each strategy - one that has proven successful for John Hancock, and one that we are confident will help to reduce costs in the future.