Knowledge is a critical weapon in the
battle against rising health care costs.
As more employees become responsible for paying for a greater portion of
their health care coverage, the ability to
make smart consumer decisions becomes
more important than ever.
“The average person with health care
coverage is blissfully unaware of the real
cost of health insurance,” says Bob
Dawson, president and CEO of Health-America and HealthAssurance.
Smart Business spoke to Dawson about
the importance of being an informed consumer in the health care market.
How well informed are consumers of the
costs of health care services?
If a person goes to the doctor for a
sprained ankle, the copayment only covers
a fraction of the cost, even though the person might feel like he or she is paying a significant portion. Nor do people realize that
getting a sprained ankle treated in an emergency room can be more than 10 times
more expensive than receiving the exact
same treatment at their doctor’s office.
So being unaware of actual health care
costs contributes to several problems. One,
an increased use of services; secondly, a
general dissatisfaction of benefits because
people don’t understand the underlying
costs. Finally, there is a resistance to any
changes in benefits. So without a real
understanding of health care costs,
employees are not informed consumers.
Are we better consumers than we were when
employers paid for all benefits?
We are becoming better in certain areas,
typically with pharmacy programs, using
the emergency room and some physician
office visits. As individuals share in a
greater portion of the cost for their pharmacy benefits, they might be more willing
to consider using generic drugs or even a
therapeutic alternative. A good example is
taking Prilosec, available over the counter,
as opposed to taking Nexium, which is
much more expensive. We encourage people to speak to their physician about taking Prilosec because the cost and the copay
will be substantially different.
The same is true with the emergency
room. If people realize there may be a significant copay for the ER, perhaps they will
think about going to their physician’s office
rather than to the emergency room for
nonemergency situations. Of course, if it’s
appropriate, we want them to go to the
emergency room and get the treatment
they need in a timely fashion.
What are some ways to help employees
become informed customers?
First, recognize that health insurance premium increases are directly due to underlying increases in health care costs and utilization. So the math might be something
like this: Let’s just say the unit cost of
health care services (a doctor’s visit or a
hospital stay) increases at 5 percent a year.
The utilization of those services increases
another 5 percent per year and now you
have more than 10 percent annual increase
reflected in the health insurance premium.
Then the best thing an employer can do is
share the cost of health insurance premiums
with employees. In fact, many employees
will be shocked to learn what their employer pays on their behalf. Communicating this information is especially important during
times of open enrollment or during benefit
changes. But it’s never too early to start. An
employer needs to spotlight the per-employee average or highlight the cost of
individual and family packages. This compensation does not show up on paychecks
and employees don’t really understand its
value.
An employer can also compare the benefit package offered by the company to the
national average or other companies within the industry. Often, a company’s cost-sharing amounts, deductibles and options
are the same or better than the national
average, but their employees do not realize
it.
What information can employers make available to their employees?
Here’s some information that employers
can share throughout the year.
First, explain the factors driving health
care costs. They include increased use of
services, new and experimental services,
duplication of services and the like.
Let the employees know that a trip to the
emergency room for nonemergency treatment costs much more than a visit to the
doctor’s office.
Explain the differences between emergency care and urgent care.
Educate the employees about their pharmacy options and the difference between
generic and brand-name drugs.
Promote the use of in-network providers,
as there is usually a financial incentive to
use them.
Post newspaper stories about the
increased costs of health care. This information is often covered in business publications or your daily newspaper.
But most importantly don’t forget that the
best and cheapest way to treat any illness
is to prevent it in the first place.
Communicate health and wellness tips,
like those available on many reputable
health education Web sites.
BOB DAWSON is president and CEO of HealthAmerica and
HealthAssurance. Reach him at (717) 540-6353.
