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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Health insurance premiums increase for the healthcare industry |

 Healthcare premiums are on the rise in 2009 and, no surprise, the costs continue to shift to consumers.  More and more individuals and families are facing greater healthcare premiums and less coverage leaving them with greater out-of-pocket expenses. If you are faced with increased out-of-pocket expenses related to healthcare issues, Medical Cost Advocate can help.

Most U.S. healthcare organizations saw an increase in their health insurance premiums this year, according to information contained in the 2009 Compensation Data Healthcare report.

The 2009 Compensation Data Healthcare results reveal that, although the average premium increase had been decreasing in previous years, the average premium increase was 9.9 percent for all plan types. The data is collected by Compdata Surveys, a national compensation survey and consulting firm.

Comparatively, the average premium increase was 7.0 percent in 2008 and 10.9 percent the previous year. When comparing plans in 2009, 66.5 percent of organizations offering PPO plans saw an average increase of 9.5 percent. Those offering HMO and POS plans had average premium increases of 9.4 and 9.8 percent, respectively. HDHP plans had increases of 9.6 percent.

“Medical plans continue to be a source of scrutiny, as high health insurance costs are cutting into organizations’ bottom lines,” said Amy Kaminski, manager of marketing programs for Compdata Surveys. “Organizations continue to search for ways to reduce healthcare costs, but often higher costs are passed on to employees.”

To contain rising costs, healthcare providers used a variety of methods. The most often used method was coordination of benefits, at 81.4 percent in 2009, while a network of healthcare professionals was employed by 77.3 percent. Utilization review was prevalent, as 62.7 percent of organizations used it to contain costs.

The 2009 Compensation Data Healthcare results showed 63.6 percent of companies increased the employee portion of the premium in their efforts to reduce costs. This is higher than the percentage seen in 2007.

Currently, 37.4 percent and 16.4 percent of organizations increased deductible levels and employee co-insurance levels, respectively. On average, healthcare providers contribute 9.8 percent of payroll toward the cost of health benefits, which is the same cost to provide all of the following benefits: dental, life, retirement, disability and other non-mandated benefits.

Compensation Data Healthcare 2009 contains data on more than 200 industry-specific job titles and more than 250 benchmark titles ranging from entry-level to top executives. Data is collected annually from employers across the country.

The results provide a comprehensive summary of pay data, benefit information and pay practices with an effective date of January 1, 2009.


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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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