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The Business of
Health Care Report In 1999, U.S. businesses spent an estimated $821 billion in benefits for their employees, a $226 billion increase since 1990. For non-government business, approximately 27 percent was for Social Security, 34 percent in group health benefits, and 7 percent in pension and profit-sharing, according to the Employee Benefit Research Institute. The cost of benefits becomes increasingly pertinent, given what has been a tight labor market - especially in the Southwest. At a time when companies might like to reduce their overhead, they have had to spend more in benefits, especially for health care coverage. Also, businesses have feared shifting benefit costs to employees or reducing benefits in order to remain competitive in hiring and retention. Texas Health Resources is a good example of the dilemma. Hiring and retention are at the top of our priority list, since selected health workers are at a premium for pay and benefit incentives. Texas Health has more than 15,000 workers in the North Texas area, the third largest employer. During 2001, Texas Health will pay a staggering $160 million for benefits, 15 percent more than we paid last year. Paid time off (like vacations, bereavement leave and holidays) is the biggest percentage at almost 31 percent. Federally-mandated benefits such as Social Security and Medicare are 28 percent, and medical benefits are 26 percent of benefit costs. And then we set aside $4 million in Success Sharing to reward employees at year's end if the company meets its goals. These benefits comprise 8 percent of our total operating costs for the year. When business leaders share with me concerns about the high cost of benefits, I understand their pain. We look at benefits as one of the competitive ways we can attract and keep the best workers. If you have comments on health care or suggestions for topics to be addressed on this program, e-mail me at DougHawthorne@TexasHealth.org. Source: David Jackson, Employee Benefits Research Institute Stay tuned to our weekly Business of Health Care reports here on TexasHealth.org and on News Radio 1080 KRLD. ©
2001 Texas Health Resources |
