Too little focus on health costs

Concord Monitor – Online

The following editorial describes the one key component that seems to be missing from the national debate on Healthcare reform: Rising costs.

Most people agree that reform of our nation’s health care system is needed. Not everyone is covered by health insurance or covered well, exposing them to financial catastrophe if their health goes awry. Quality of health care varies from region to region, and from provider to provider. And costs are staggering.

A recent study showed health insurance premiums in New Hampshire have increased over 90 percent from 2000 to 2008. By comparison, wages rose just 21 percent over the same period.

Ask business people in New Hampshire to name their top challenges and they’ll tell you that at or very near the top of the list is paying for the rising cost of health care and health insurance for their employees. This has been a constant refrain for years from our members across the state, from every industry type, and from every size enterprise.

It’s remarkable, therefore, that health care reform under consideration by our congressional delegation in our nation’s capitol seems very likely to add to health care costs, not reduce them. What happened to “bending the cost curve” and eventually lowering it?

Pick your source – the Congressional Budget Office, the Lewin Group, the Centers for Medicaid and Medicare Services, and others – they conclude that health care reform legislation under consideration will, incredibly, increase costs, not lower them.

Lots of attention is being paid to expanding government programs like Medicaid, or creating new ones like a “public option” insurance plan, to cover more uninsured and underinsured individuals. Unfortunately, the federal government’s long track record of grossly under-funding health care providers for their cost of caring for individuals in existing government programs like Medicaid and Medicare makes many employers understandably concerned about expanding them or creating new ones.

More under-funding from the federal government means more cost-shifting to the business community in the form of higher health insurance premiums. How is this reform?

Too little attention is being paid to moving these massive federal programs away from the current fee-for-service payment structure which often rewards health care providers for providing more care, but not necessarily better care, because they get paid more.

Not enough attention is being paid to rewarding providers for lower utilization and improved health outcomes for patients. Too little attention is being paid to reforming our legal system so doctors move away from practicing defensive medicine in order to lesson the odds of being sued.

Until the great health care reform debate shifts emphasis away from its focus on expanding government health care programs or creating new ones, and toward reforming payment incentives, there will be no bending of the cost curve. The curve will continue to rise, and employers will find it increasingly difficult to provide a critical benefit for their employees, and compete in the global economy.

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Employer Confidence in Future of Health Benefits Declines

Employers are less confident about offering healthcare benefits today compared to the previous year. Still, according to a recent poll by Watson Wyatt the majority of employers will continue to offer healthcare benefits in the years to come. Read the following excerpt to learn more.

Healthcare Financial Management Association (HFMA)

 

Despite rising healthcare costs and other economic worries, a majority of large U.S. employers remain confident they will continue to offer healthcare benefits to workers 10 years from now. However, the level of confidence has slipped from last year because of economic concerns and uncertainty over the implications of potential health care reform, according to a new survey by Watson Wyatt and the National Business Group on Health.

According to the survey, 62 percent of employers are very confident they will continue to offer healthcare benefits 10 years from now, down from 73 percent last year. The survey also found that roughly four in 10 employers (41 percent) are sticking with their current healthcare strategy, while the remaining respondents have either revamped their strategy or expect to do so this year.

The survey of 489 large U.S. employers, conducted in January 2009, also identified a group of “consistent employers” that have maintained a long track record of lower healthcare cost increases over the past four years. These employers have outperformed other employers in five key areas: appropriate financial incentives, effective information delivery, quality care, metrics and evidence, and maximizing health and productivity.

To read the survey in full go to www.Watsonwyatt.com/research

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