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The Importance of Health Care at AT&T

The Importance of Health Care at AT&T. The State of Health Care in the U.S. The U.S. spends more per capita on health care than most other developed countries; Americans spend more on health care than on housing, food or energy

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The Importance of Health Care at AT&T

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  1. The Importance of Health Care at AT&T

  2. The State of Health Care in the U.S. The U.S. spends more per capita on health care than most other developed countries; Americans spend more on health care than on housing, food or energy Although the rate of increase for health care costs has slowed somewhat, it is still one of the fastest-rising costs in America, outpacing the rate of inflation A September 2007 survey by the Kaiser Family Foundation found that health insurance premiums rose 6.1 percent in 2006, faster than inflation, which rose 2.6 percent A variety of factors, from technological advances to advertising, fuel Americans’ consumption of health care

  3. Costs of providinghealth care rise every year U.S. Health Benefit Costs National AverageAnnual Medical Cost Per Employee +8.9% +5.7% +8.5% +10.4% +13.2% +15.6% +15.5% Source: Hewitt, Health Value Initiative, September 2007 Assumptions: Data based on large employers; based on medical, prescription, and administrative costs * projected

  4. Large insuredpopulation adds to AT&T costs AT&T’s CorporateHealth Care Challenge • AT&T provides health care coverage for1.2 millionpeople • 714,000 Active employees and dependents • 505,000 Retirees and dependents $5.5 billion Total Annual AT&T Health Care Expense

  5. Greater usagehelps push AT&Tcosts above average AT&T Health Care CostsCompared to National Average 2006 National Annual Average Health Care Cost Per Person AT&T employees use more health care than the national average $9,041 AT&T Management Annual Average Heath Care Cost Per Person $9,108 AT&T Bargained-For Annual Average Health Care Cost Per Person* $10,225 *Average for employees covered by core bargained-for contract

  6. AT&T’s Health Care Objectives Maintain a healthy workforce and engage employees in behavior changes Offer high-quality, cost-effective health care coverage that is valued by AT&T employees and their families Target employee cost-sharing atmarket levels to allow AT&T to attract and retain talent Create greater employee and retiree involvement in controlling health care costs and making informed health care decisions

  7. AT&T employees' contributions well below market EmployeeContributions to Health Care US Workforce $7,000 $6,000 75% of Americanspay more for healthcarethan AT&T employees $5,000 $4,000 $3,000 $2,000 Family Coverage $1,000 Individual Coverage $0 25th 50th 75th AT&T Mgmt Percentile Percentile Percentile Source: For National Averages - Hewitt, Health Value Initiative, September 2007; For AT&T – JP Morgan -- Assumptions: Based on medical, prescription and administrative costs

  8. What AT&T Needs to Compete Globally Improved value from its health care investment – healthier, satisfied employees Lower, sustained, predictable costs More employee responsibility for making wise health care decisions and managing their care Improved employee awareness of health care costs and employer’s investment Administrative efficiency

  9. Copy AT&T’s Efforts to Improve Costand Enhance Quality Work closely with health plan providers to control costs and ensure performance Emphasize individual accountability and responsibility • Employee access to information and tools • Plan designs that promote informed decision-making Change plan design and contribution requirements • Promote consumer-driven health plans • Increase employee financial stake in decisions Improve quality, efficiency and effectiveness of care • Care managementprograms • Performance-based health care strategies,such as making data transparent to employees on doctor and hospital performance and pricing • Improvedprescription delivery

  10. How AT&T Employees Can Assist in Managing Health Care Costs Focus on a healthy lifestyle Make informed decisions on health care Use available on-line tools and resources Keep out-of-pocket costs as low as possible: • Choose the coverage plan that makes the most sense for you • Use network providers and choose generic prescriptions

  11. AT&T’s Leadership Rolein National Health Care Debate AT&T and the CWA have joined forces with the Better Health Care Together Coalition to pursue national health care policy changes AT&T is also active in working toward health care policy reform with a number of other national coalitions AT&T has joined a coalition of major employers in an initiative called Dossia, aimed at accelerating the development of electronic health records to improve the quality of health care and lower overall costs

  12. Copy Health Care Summary AT&T continues to provide above-market health care coverage to its employees and retirees AT&T is leading the way with a consumer-driven approach to health care, which is helping control costs for the company, employees and retirees AT&T is out in front of the national health care dialogue Employees and retirees play an important individual role in controlling health care costs

  13. The Importance of Health Care at AT&T

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