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Health Plan Executives Foresee Continued Decline in Small Business Enrollment, According to CSC Survey

Wednesday, December 17, 2008 General News J E 4
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Majority Predict Increase in Consumer-directed Plan Participation



FALLS CHURCH, Va., Dec. 17 /PRNewswire/ -- Nearly three-quarters of health plan executives expect the current economic crisis to have a greater impact on their business than the 2001-2002 downturn, according to a survey released today by CSC (NYSE: CSC) entitled, "Insuring the Future: Health Plans Respond to the Financial Crisis." While few expect immediate changes in enrollment and membership levels, more than two-thirds expressed concern that continued rising unemployment would drastically affect their plan operations and profitability.



Fifty-four percent of health plan executives expect small group/business plan renewal to decrease as businesses fail and other market pressures force small companies to eliminate health coverage for employees. Large employers are expected to maintain their commitment to group health insurance coverage; less than 31 percent of health plan executives expect a decrease in large group plan renewals. However, almost three-quarters of plan executives foresee an increase in consumer-directed plans with higher deductibles and lower premiums as employers shift more of the cost to their employees. Nearly two-thirds expect an increase in government program enrollment as economic disruption and unemployment expand welfare participation.



Fewer than 15 percent of health plan executives predict significant layoffs or other cutbacks in their immediate future. Cost-cutting efforts will remain a top priority, according to almost 50 percent of those surveyed, as will projects directed at growth in selected market segments.



Plan executives also expressed concern regarding their provider networks, where the effects of unemployment and economic dislocation are felt almost immediately. Of those surveyed, 73 percent said they expect to see cash flow difficulties among their affiliated providers, and 54 percent foresee the economy impacting the access and availability of some provider networks.



"The credit crisis, exacerbated by rising unemployment, is decreasing access to healthcare around the country," said Deward Watts, president of CSC's Global Healthcare Sector. "As businesses look to reduce costs, many will choose products that shift financial responsibility to employees, and others will choose to drop health benefits altogether. To remain competitive and grow, health plans must act quickly to design products and implement programs to meet the needs of these 'new consumers,' and to meet the product and benefit requirements of employers, their traditional customers.



Survey research was conducted in November 2008. CSC interviewed 30 senior executives representing 26 health plans. Eighty-three percent of the participants hold C-level positions. To view the results report, visit http://www.csc.com/health_plan_survey.



CSC's Global Healthcare Sector, which serves healthcare providers, health plans, pharmaceutical and medical device manufacturers, and allied industries around the world, is a global leader in transforming the healthcare industry through the effective use of information to improve healthcare outcomes, decision-making and operating efficiency.



About CSC

CSC is a global leader in providing technology-enabled solutions and services through three primary lines of business. These include Business Solutions & Services, Global Outsourcing Services and the North American Public Sector. CSC's advanced capabilities include systems design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting. Headquartered in Falls Church, Va., CSC has approximately 91,000 employees and reported revenue of $17.3 billion for the 12 months ended Oct. 3, 2008. For more information, visit the company's Web site at www.csc.com.





SOURCE CSC
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