EBRI Notes

"Observations on the Differences and Similarities in the Japanese and U.S. Benefits Systems" and "Workers' Compensation Medical Costs Continue to Rise" and "Americans Value Having Choice in Benefit Programs,According to Recent EBRI/Gallup Survey"

Aug 1, 1992 10  pages


Observations on the Differences and Similarities in the Japanese and U.S. Benefits Systems—EDITOR'S NOTE: The following article is a recap of remarks from EBRI Fellow Tomomi Kodama made to the EBRI Board of Trustees at their June 1992 meeting. Ms. Kodama works for the Japanese Ministry of Health and Welfare (Japan's counterpart to the U.S. Department of Health and Human Services) and joined EBRI as a fellow from July 1991 to June 1992 to study human service issues in the United States. She spoke about what she learned at EBRI and what ideas she would take home.—From my work at EBRI, the first lesson I learned was the fact that the structure of the U.S. employee benefit system is considerably different from that of the Japanese system. The U.S. structure of employee benefits seems to be based on diversity and individualism. Companies have a real choice in selecting and planning their employee benefit plans. In order to attract and retain capable workers, each company tries hard to find some way to provide appealing benefits for its employees at affordable costs. In this sense, employee benefit issues are closely related to a company's management strategy. However, what explains the structure of Japanese employee benefits is equity and uniformity for everyone. The Japanese priority has been to assure equal access to benefits for everyone, even if it sometimes means providing mediocre services.

Workers' Compensation Medical Costs Continue to Rise—Between 1980 and 1990, the cost to employers of providing workers' compensation increased from $19.3 billion to $45.9 billion. Medical expenses are the fastest growing component of workers' compensation, representing 44 percent of total workers' compensation costs as of 1990, up from 38 percent in 1981. Historically, cost management strategies have not been used extensively to control workers' compensation medical costs. Since 1974, workers' compensation medical costs have been growing at a faster rate than non-workers' compensation medical costs. In order to contain these costs, employers are adopting cost containment strategies, and states have increasingly implemented cost containment mandates, often utilizing strategies commonly used in health care benefit plans.

Americans Value Having Choice in Benefit Programs, According to Recent EBRI/Gallup Survey—Most Americans say having choice in the employee benefits offered by prospective employers would influence their decision on whether or not to work for an employer, according to a recent public opinion survey conducted by EBRI and The Gallup Organization, Inc. Given the choice between two jobs with the same salary and benefit level, one that provides choice in selecting benefit options and one that does not, 40 percent of Americans who are employed or whose spouse is employed said the choice in benefits provided by the first employer would have a great deal of influence on their selection of employers, 44 percent said some influence, 12 percent said very little influence, and 4 percent said the choice in benefits would have no influence.