"Previous surveys focused on whether employers intend to drop coverage or not," says Mindy Kairey, a partner at Oliver Wyman,  and leader of the project. "But the question is more complicated than that. We wanted to understand why employers make the choices they do and to understand which types of new solutions will satisfy their needs."

More than 70 percent of employers said they don't fully understand health care reform. In light of the confusion, Oliver Wyman committed to examine why employers are still motivated to offer coverage and which avenues they will take in order to maintain affordable health care. According to a report about the survey, "one objective of our survey was to understand how employers might be enticed to continue private healthcare coverage…To better assess employer's specific interests in new solutions, our survey focused on two alternatives: private exchanges and value-based networks."

About 60 percent of employers were willing to choose a private health care exchange if it saved them at least 10 percent of health care costs. Another 20 percent were interested even if there were no savings. "Private exchanges offer an easy mechanism for employers to move toward a defined contribution approach, and many were interested in that. At the same time, they also want services to help their employees choose optimal coverage, and they want to avoid disruption as much as possible by offering plans that maintain current patient-physician relationships."

Half of employers would select a value-based network if it saved them at least 10 percent in health care costs, and roughly 20 percent were interested regardless of savings. "The employers who favored this approach are concerned about cost savings but see a similar balance between reining in health insurance costs and preserving employee experience. These employers say their strongest motivation for choosing a value-based network is to improve employee health."

Almost two-thirds of employers are not very satisfied with their current insurance arrangement, and 90 percent said they would accept major changes in their coverage to save money. "Because employers will be influenced by employee preferences (almost 60 percent will take employee input into account when making benefit decisions), it is imperative to clearly understand their needs and priorities. By doing this, health plans will be able to demonstrate that they are expert in engaging employees, serving their needs and, ultimately helping them achieve better healthcare outcomes."

• Employers are hungry for new solutions. When offered a private exchange alternative, 20 percent selected it even if no savings were involved, and an additional 60 percent said they would switch to save 10 percent on healthcare costs. When offered a value-based network alternative, 20 percent would switch even without savings and more than half would switch for 10 percent savings. Only 10 percent of employers said they would not consider either alternative. "Employers are very interested in alternatives to traditional insurance," says Kairey. "And their demand will only increase given their desire to continue to provide coverage to their employees. Private-sector insurance could still be a major part of the U.S. healthcare system—if health plans can quickly start demonstrating real improvements in value."
• Employees are willing to change. In a related study, we surveyed more than 700 individuals who currently receive their health coverage through employers. Almost two-thirds were less than satisfied with their current insurance arrangement and 90 percent said they were prepared to accept major changes if it saved them money.

"To me, our survey findings suggest that we're on the verge of a massive shift in how healthcare coverage works," says Kairey. "That's important, because more than 70 percent of the Americans who have health insurance receive it through their employers. If employers start to move toward models that promote efficiency and value, we could start seeing a profound level of real reform."