Half Of Health Care Costs Stem From 4% Of Workers
Employers will be disappointed if they rely solely on employee incentives and consumerism to rein in health inflation, according to a new Watson Wyatt analysis.
“Efforts to create better health care consumers must involve more than high-deductible health plans,” says Sylvester Schieber, U.S. director of benefits consulting at Watson Wyatt. “It’s up to employers to understand the varying needs of employees and to respond with targeted consumerism, an approach that uses different strategies to engage different segments of the population.” Just 4% of employees and dependents account for 50% of total medical costs in any given organization, Watson Wyatt reports. Those individuals make such an impact because they have catastrophic and/or chronic diseases. The healthiest group, 72% of participants, account for just 11% of health care spending.
The sickest employees are unlikely to be won over by incentives and consumer-driven health plans, Watson Wyatt concludes, so those tactics alone can't curb health inflation.
“Rather than using financial incentives to encourage seriously ill hospital patients to reduce plan spending, directing them to high-quality delivery centers will be far more effective in making them better consumers and controlling plan costs,” notes Ted Nussbaum, director of Watson Wyatt’s group and health care consulting services in North America.
Article provided by Benefit News 4-27-06
Blues Plans Target New Products at Small Groups, Individuals
Blue Cross and Blue Shield plans are using a variety of tactics in an effort to expand coverage for small groups and individuals through new products. The strategies include waiving administrative fees, negotiating lower provider reimbursement and partnering with local chambers of commerce to offer lower-cost products to these groups.
For example, a new product from Blue Cross and Blue Shield of Kansas is limited to those who have not had insurance over the past 12 months; Anthem Blue Cross and Blue Shield plans in Indiana, Kentucky, and Ohio are offering the Blue Access Value plan to individuals; and the Oklahoma Blues plan partnered with local chambers of commerce.
"We thought it was important to help lower the amount of uninsured in the market and [at the] income level where they make too much for Medicare but not enough to afford their own insurance," explains Kansas Blues spokesperson Mary Beth Chambers.
Anthem Blue Cross and Blue Shield plans in Indiana, Kentucky and Ohio have introduced an individual PPO benefit plan called Blue Access Value. Anthem spokesperson Christi Robinson says the plan offers traditional benefits at a more affordable price.
To read this article in its entirety click on
Blues Plans.
Romney Uses Scalpel Before Signing Massachusetts Health Bill
Massachusetts Gov. Mitt Romney cut several provisions, including a dental benefits provision and a penalty on certain businesses, before signing a major health finance reform bill into law.
The law, created by a bill now known as H.B. 4479, could end up requiring most individuals and most employers with 11 or more employees to have health coverage.
The law also will expand public insurance programs aimed at low-income residents; create new health insurance subsidies to help moderate-income residents buy health coverage; impose a temporary moratorium on the creation of new benefits mandates; help young adults stay on their parents' health insurance plans; and create a system of penalties and incentives to promote compliance with the insurance purchasing requirements.
Article can be viewed in entirety in the National Underwriter Magazine, April 17, 2006 Vol. 110 No. 15
Mandatory Health Screenings Reap Huge Rewards
Cadmus Communications, a publishing services company in Richmond, Va., took a radical approach to employee wellness last year: It required employees to take a health risk assessment, blood pressure screening and cholesterol screening. Seventeen employees lost their health coverage this year because they didn't cooperate.
Cindy Ellis, a Cadmus benefit manager, admits workers initially questioned the mandates: "A lot of people said, You're invading my privacy. What are you going to do with this information?' We talked to our lawyers and made sure what we were doing was legal."
Not surprisingly, Cadmus found high levels of hypertension and high cholesterol among its staffers. Although 23% of employees thought they were overweight, 78% actually were. Nurses followed up to ensure that workers received appropriate treatments. The company also organized weight-loss contests with cash prizes and provided a 25% subsidy for Weight Watchers memberships.
The results? Cadmus saw a 21% drop in hospital admissions, a 44% reduction in the length of hospital stays and a 33% decrease in diagnostic testing costs last year. Its health premiums jumped only 7% for 2006, compared to 22% for 2005.
To read this article in its entirety click on
Employee Benefits News.
The Value Of An Eyecare Benefit
Health care benefits rank number one on the list of effective retention initiatives. Because Americans consistently rank vision as the most important sense, it's only logical that every benefit package should include quality eyecare coverage. These statistics tell the story of how an eyecare benefit that promotes good vision can enhance your employees' productivity and performance:
- Over 75% of the U.S. population between age 25 and 64 require some form of vision correction.
- Visual impairment is one of the 10 most frequent causes of disability in America.
- Two-thirds of employees would trade a vacation day for eyecare benefits.
- Regular and thorough eye exams can sometimes detect serious illness, such as diabetes or high blood pressure, and may curb helathcare costs later on.
- 1,000 eye injuries occur in the workplace daily and cost businesses more than $300 million per year in lost production time, medical expenses and worker's compensation.
- A recent study found that blurred vision causes more hardship in people's daily lives than a history of major illness such as diabetes, high blood pressure and heart attack.
Article provided by Vision Service Plan 4-5-06.
Mental Health Coverage Affordable, Study Finds
A new study involving federal employees has found that providing better mental health coverage does not lead to an explosion in insurance costs, a potentially important development in an old national debate over what insurance plans should cover.
The study, published today in the New England Journal of Medicine, examined seven federal health plans in the years after 1999, when President Bill Clinton ordered companies in the Federal Employees Health Benefits Program to provide coverage for mental health and substance abuse that is comparable to that for other health conditions.
Researchers found that, contrary to the predictions of some policymakers and analysts, the use and cost of such services did not increase, compared with the experience of private health plans with less generous mental health benefits -- provided that new benefits were offered under managed-care plans. The changes did, however, mean lower out-of-pocket expenses for people who used the services under the federal plans.
This article can be viewed in its entirety in
The Washington Post.
Health Costs Trend Slows, Use Of Care Management Grows
Employers saw some relief in health benefit costs, which rose an average of 6.1% in 2005, down from 7.5% in 2004, according to Mercer Human Resource Consulting's survey of 2,999 employers. Meanwhile, prescription drug inflation was 11.5% last year, down from 14.3% in 2004.
The average cost of health benefits was $7,089 per employee last year, up from $6,679 in 2004. Small employers experienced lower costs and slower cost increases than large employers, Mercer reports.
Roughly 22% of large employers offered a consumer-driven health plan last year, up from 12% in 2004. The use of disease management programs jumped from 32% of employers in 2004 to 41% of employers last year, while the use of health risk assessments grew from 14% to 18%, and the use of behavior modification programs increased from 9% to 16%.
About 25% of employers provide health insurance for part-timers. Another 7% apply a surcharge to coverage for any spouses who have access to coverage elsewhere, or refuse coverage in that situation. Companies are increasingly covering same-sex domestic partners, with that proportion growing from 11% in 2004 to 19% last year.
Mercer principal Tracy Watts says employers have been focusing less on cost-shifting to employees and more on care management.
Article provided by BenefitNews, March 28, 2006.
Most ER Patients Are Insured, Study Says
Challenging a common notion that uninsured patients are clogging hospital emergency rooms, a new study has found that the vast majority of adults who turn up there frequently have health insurance and regular doctors.
The finding suggests that expanding health coverage will not by itself significantly help emergency rooms cope with demands that include patients seeking care for routine problems such as colds or sinus infections, experts said.
The uninsured account for just 15% of emergency-room visits, according to the study to be published today by the American College of Emergency Physicians. The nonprofit organization advocates for the interests of emergency-room doctors and supports medical research.
Emergency rooms are crowded because they fill up with patients who cannot get in to see their own doctor or are waiting for regular hospital beds, experts said.
This article can be viewed in its entirety at
Business News.
Electronic PHI Security Deadline
We have received questions about HIPAA's Security deadline for small employers. The deadline for compliance is April 20, 2006. It is important that all covered entities (even small group plan sponsors) take the same steps toward HIPAA Security Compliance as larger plans took last year.
Small Health Plans Defined: For HIPAA purposes, plans that paid premiums or claims of $5 million or less in the most recent plan year. In addition to the Privacy Rules, HIPAA imposes rules for maintaining the security of Protected Health Information (PHI) that is kept in electronic format.
The HIPAA Security Rules apply only to electronic Protected Health Information (e-PHI). This includes information stored in or received or sent by a computer, phone voice response, or fax-back systems. The security rules require covered health plans to implement administrative, physical, and technical safeguards in order to protect this information.
What should small employers do?
The below statement was made by CMS (Centers for Medicaid and Medicare Services) to help clarify the roles of group health plan sponsors in complying with HIPAA's security rules.
"The employer must go through the risk analysis required by the HIPAA Security Rules to determine if any of their computer systems contain any electronic Protected Health Information (e-PHI). Assuming no e- PHI was discovered during the analysis, based on the flexible standards of the HIPAA security rules, there would not be much for the employer to do."
The first step the plans should take is to appoint a HIPAA security officer. While this must be a single individual, it may be the same person as the HIPAA privacy officer. The group health plan sponsor should then determine if it maintains any electronic Protected Health Information. If no e-PHI is discovered, the plan's HIPAA compliance documents should be updated to reflect that fact. If e-PHI is discovered, the plan must then comply with all of the standards set under HIPAA's security rule.
Below is a link to a checklist for HIPAA Security Rules put together by CobraAid.
http://www.hipaa-aid.com/documents/HIPAASecurityRulesChecklist.pdf
