Study says companies expect health reform to raise costs

June 1, 2010 J Roberts

Many employers are worried that the new healthcare reform will raise the cost of care and that the increased cost will be passed on to employees. Read more.

THE ASSOCIATED PRESS • May 25, 2010

Big companies think health care reform will hike their costs, but most expect to continue offering subsidized benefits to workers, according to a new Towers Watson study.

The benefits consultant surveyed 661 companies this month and found that 94 percent of those that responded believe the reform law passed by Congress earlier this year will raise costs. Eighty-eight percent plan to pass the increases on to employees, and 74 percent anticipate reducing health benefits and programs.

That could mean insurance co-payment or deductible hikes or more high-deductible plans, said Mark Maselli, who heads Towers Watson’s North American Health and Group Benefits unit.

He added that companies will likely continue to offer “medical coverage that individuals are used to having” at least for the foreseeable future. Nearly three quarters of the companies responding to the survey said they expect to continue providing subsidized coverage for active employees.

Maselli said benefits could change as the reform law unfolds over the next few years. But he saw no need for employees to panic.

“You’ve got coverage now, you’re likely to continue to have it through your employer, and it’s something you want to monitor over time,” he said.

Some companies could see small reform-related cost hikes next year, after the start of provisions that ban lifetime maximums for benefits and extend coverage of young adult dependents on parental plans to age 26. Maselli and other benefits experts say the size of this hike will depend greatly on the company and the employees it covers.

Towers Watson’s national survey spanned several industries and involved companies with a median size of 5,600 employees.

It also found that big companies generally plan to continue offering health promotion and wellness programs. But 43 percent of employers that offer retiree benefits expect to reduce or eliminate them.

Containing health care costs was an essential or high priority for 96 percent of survey respondents, who were asked how important specific reform goals were to their organization.

Majority of Americans confused about health care

May 4, 2010 J Roberts

More than a month after the passing of landmark healthcare reform, Americans are confused more than ever over the legislation; some are down right angry. A recent poll by Kaiser Health illustrates the sentiments felt by Americans across the country. Read on to learn more.

Kaiser Health

The majority of Americans are confused about how the newly enacted health care law will impact them, according to a new Kaiser Health Tracking Poll released Thursday.

“People are struggling to understand how the law will affect them and their families and to separate fact from political spin,” said Kaiser President and CEO Drew Altman.

Nearly a month after its passage, the public remains deeply split over the legislation: 46 percent view it favorably and 40 percent don’t, with another 14 percent undecided. Further demonstrating the division: 31 percent expect the bill to help them, 32 percent expect the bill to hurt them and 30 percent don’t expect it to affect them at all.

The partisan divide is stark: 77 percent of Democrats support the law, while 79 percent of Republicans oppose it. Independents tend to side with Republicans, with 46 percent opposing the law while 37 percent support it.

The poll showed, however, that a clear majority of Americans support many specific provisions that go into effect this year. For example: 86 percent are in favor of tax breaks for small businesses that offer coverage to their employees. Also, 81 percent are in favor of stopping insurance companies from dropping someone who has a major health problem. Even the provision that allows children to stay on their parents’ health plans until age 26, which drew fire from some on the right, was supported by 74 percent of those surveyed.

Americans experience a wide variety of emotions when reacting to the new law – but, according to the poll, confusion wins out over anger and relief. On the whole, 55 percent of the public said they’re “confused” – with 45 percent “disappointed” and an equal number “pleased.” Forty-two percent said they were “anxious,” and 40 percent said they’re “relieved.”

There’s anger, too.

Thirty percent of Americans say they’re “angry” about the law – and 16 percent of that group describe themselves as “very angry.” According to Kaiser, the specific grievances of that 30 percent broke down this way: “9 percent did not like the way the policymaking process worked, 7 percent did not like the final content, and 12 percent did not approve of either.”

The poll, which surveyed 1,208 adults in mid-April, produced one fascinating nugget sure to raise eyebrows in newsrooms around the country: Regardless of how they felt about health care reform, more Americans turned to cable news shows for their updates than any other news source. Asked to choose their “most important” source of news when following the legislation, 36 percent said cable news channels and their Web sites – easily topping the competition of network news (16 percent), newspapers (12 percent), family and friends (10 percent) and radio (9 percent).

Republicans were more likely to watch cable news, while Democrats preferred network news programs.

Race Is On to Pin Blame For High Health-Care Costs

March 3, 2010 J Roberts

Who’s to blame for rising healthcare costs, insurers or providers, such as doctors or hospitals? Depending who you ask, either side places the blame on the other. Whether it’s insurers’ trying to meet the bottom line and remain profitable or physicians and hospitals attempting to increase revenue and improve their margins, one thing is for certain: Healthcare costs continue to rise.

Read on to determine where the blame lies.

By AVERY JOHNSON

A battle over who to blame for rising health-care costs is escalating, as groups seek to pin the problem on each other and say none of the health-care legislation under consideration does enough to solve it. U.S. spending on health care reached $2.5 trillion in 2009, according to federal estimates. It is expected to jump to $4.5 trillion in 10 years.

Insurers contend that they must pass on ever-higher bills from hospitals and doctors. Hospitals say they are struggling with more uninsured patients, demands by doctors for top salaries, and underpayments from Medicare and Medicaid.

And doctors say they are strong-armed by insurance monopolies and hampered by medical malpractice costs.

In the rush to point fingers, few solutions are emerging.

“It’s always someone else’s fault,” said Robert Laszewski, president of health-care consulting firm Health Policy & Strategy Associates. “There is not an incentive for these people to cooperate because the game they are all playing is getting a bigger piece of the pie.”

The issue has come into sharp relief as WellPoint Inc. has sought to defend its plan to raise some prices in California by up to 39%.

In a hearing Wednesday on Capitol Hill, WellPoint Chief Executive Angela Braly singled out dominant hospital systems for demanding 40% rate increases and drug companies for roughly 20% profit margins.

A WellPoint spokeswoman said that at least one hospital had asked for a 220% payment increase.

Many Democrats have cited lack of competition among insurers as a driver of higher prices. On Wednesday, the House of Representatives voted to repeal a longstanding insurance-industry exemption from federal antitrust laws. The bill now heads to the Senate, where its future is less certain.

Doctors complain of a lack of competition among insurers, as well.

A report by the American Medical Association this week argues that 500 insurance-company mergers in the past 12 years have led to markets dominated by one or two health plans.

This year, two insurers control 70% of the market in 24 states, up from 18 last year, the report said.

“There is no other company for doctors to go to” when an insurer comes to them with terms that they find unfavorable, said AMA President James Rohack. But insurers say is it doctors and hospitals that have gotten too powerful through consolidation.

A study published Thursday in the journal Health Affairs appears to back up their point, saying that insurers are weakened in their negotiations by their inability to exclude prominent doctors and hospitals from networks.

Authors from the Center for Studying Health System Change, a nonpartisan research group, conducted 300 interviews with California doctors and hospital and insurance executives in late 2008.

The study said two big networks of providers now dominate the northern part of the state: Sutter Health owns two dozen California hospitals and medical centers, and Catholic Healthcare West runs 33 hospitals.

In addition, the study said, doctors who are increasingly banding together for negotiating power are commanding yearly double-digit payment increases.

Hospitals and doctors shot back that the study was largely anecdotal and said integration improved efficiency.

Catholic Healthcare West said it took on $1.5 billion in bad debt from government underpayments last year; its size, it added, makes it possible to achieve some savings.

Sutter Health said increases in its reimbursement rates from private insurers have been in the single digits.

“We are doing our best to keep costs down because these health-care premium increases are not sustainable,” said Bill Gleeson, vice president of communications a Sutter Health.

Hospital costs: Pull back the curtain

February 23, 2010February 25, 2010 J Roberts

Read how one state’s governor is not only reviewing insurance rates, but also hospital rates as he and the state look for ways to curtail excessive increases.

If nothing else, Governor Patrick’s proposal for state review of both hospital and insurance rates should start an overdue discussion of how to keep health cost increases from smothering economic growth in the state.

The course advocated by the state’s payment reform commission last year – a move away from fee-for-service payments – may be the long-term solution. But in the meantime, both employers and individuals are facing increases well in excess of the national rate of medical inflation. Forcing both insurers and hospitals to lay out their contract proposals before a rate-oversight body would at least end the shadow play that has kept the public in the dark about wide differences in hospital costs.

Also, Patrick’s proposed requirement that insurers at least offer small businesses a plan with a network lacking some higher-cost hospitals would ensure that companies have that more affordable option. In the past, consumers and their employers have been wary of plans that lack access to marquee hospitals, but years of spiraling health costs have probably changed some minds. Let the debate, or “conversation,’’ as Patrick calls it, begin.