Thomas Scurfield

Wednesday, 21 July 2004 10:45

Bitter pill

Not long ago, most employers looked upon their prescription drug plans as simple and benign benefits, less likely to cause unrest than their annual company picnics. Today, however, drug coverage is demanding 15 percent or more of an employer's health care dollars, and the cost of it is rising faster than that of any other benefit.

We all know the reasons. Impressive new drugs reach the market each year, treating a wide range of ailments. Massive ad campaigns support these drugs, driving consumer demand as patients ask doctors for specific prescriptions. Drug utilization on the whole also is increasing, due in part to the growing population of older adults, who use three times as many drugs as younger people.

The result? A nation that, according to the Alliance for Health Reform, went from spending $12 billion on drugs in 1980 to spending nearly $122 billion by 2000. And experts project that spending on prescription drugs will continue to increase an average of 11 percent annually through 2008.

In response to these challenges, many employers are taking advantage of an increasingly broad and sophisticated set of tools to manage their pharmacy benefits programs. To get the most value from your plan, and to help promote the health and safety of your employees, you might consider taking advantage of some or all of these programs.

Identifying diseases early

It's vital for individuals and their physicians to manage treatment for conditions like asthma or heart failure very carefully. Patients who make positive lifestyle changes, use medications correctly and stay alert for symptoms have a better chance of staying well longer and avoiding hospital visits.

By analyzing pharmacy and medical data, a health insurer can help physicians identify plan members with certain chronic health conditions who could benefit from disease management programs. In essence, these programs help employees get the right medications and counseling to avoid potentially serious -- and costly -- conditions in the future.

Reducing drug-related health risks

By mapping employee pharmacy and medical data against medical histories, a health plan's computer system can help physicians and pharmacists minimize harmful interactions between certain medications and conditions, helping your employee avoid a dangerous and costly medical issue.

When a potentially dangerous interaction is found, many insurers proactively send a message to the pharmacist, who then uses professional judgment or contacts the employee's physician to discuss the situation. Similarly, these systems help health care providers protect your employees from many kinds of prescribing errors by flagging recently covered prescriptions that could cause severe adverse interactions with other drugs they may be taking.

Investigating step therapy

The newest drug on the market may not always be the most appropriate treatment for a given person's condition, but it often is the most expensive. "Step Therapy" programs encourage physicians and patients to explore effective and efficient medication options that may be available before trying therapeutically equivalent, more costly alternatives.

Leveraging mail-order pharmacies

For many short-term prescriptions, it makes sense to run to the local pharmacy. But mail-order pharmacy programs are great for employees who take certain medications on an ongoing basis.

Prescriptions can generally be ordered via phone, mail or Web, and are delivered right to the home. Depending on the benefit plan, the mail order program can save money for the employee and the company.

Educating employees about generics

Your health insurance company should be able to provide information about ways you and your employees can maximize the value of your benefit plan. For example, on average, generics cost 50 percent to 75 percent less than brand-name drugs. Accordingly, encouraging appropriate generic drug use can significantly reduce your plan costs.

While you may not be able to take advantage of every one of these programs, each offers a unique opportunity to leverage your pharmacy plan to promote improved employee health and keep a lid on escalating costs. Your insurer or broker should be able to provide more information and ideas about making your drug plan an easier pill to swallow.

Thomas J. Scurfield is the vice president of sales and marketing for Aetna's east central region, based in Cleveland. He has more then 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or

Tuesday, 01 November 2005 02:21

Disparities in health care

The population of racial and ethnic minorities in the United States is larger than ever, and is continuing to grow at a rapid pace. This demographic change is reshaping the American work force and, as a result, is having a profound impact on the health-related benefits companies offer their employees.

This may seem surprising, because employer-sponsored medical plans often have built-in flexibility to meet diverse needs. Employees can choose their coverage plans, doctors and other plan dimensions. In fact, with new consumer-directed products, employees have unprecedented freedom to tailor a plan to their needs.

Studies show that despite this flexibility, racial and ethnic minorities as a group have less-favorable health care outcomes than nonminorities, even when insurance status, income, age and severity of conditions are comparable. [See "Disparities in health care: facts you should know"].

It also appears that employees do not access health care services in uniform ways. Fortunately, government agencies, civic groups and health plans are analyzing the issues that contribute to these disparities, and are striving to close the gaps in our health care system.

Effect on employers
Meanwhile, even if employers fund medical benefits equally for all their employees, some employees are likely to be underserved when they access the health care system. This can boost claim costs, such as when untreated minor illnesses become more serious, and create a work environment challenged by absenteeism, disability and lost talent.

Fortunately, health plans are offering employers a number of methods for achieving more consistent and appropriate health plan utilization by all employees.

  • Disease management programs. Health plans may have targeted prevention programs for conditions such as asthma, diabetes or heart-related diseases to reach higher-risk groups through foreign-language videos, Web sites and other resources.

  • Targeted education programs. Statistics show that African-American women experience consistently higher rates of premature births. Health plans may provide education about preterm labor, followed up by telephone calls and outreach services.

  • Screening reminders and programs. Hispanic and African-American women encounter barriers to getting annual mammogram screenings, which may lead to higher breast cancer mortality rates. Health plans may be able to reach out to those who have not been screened and provide breast self-examination materials or videos.

  • Spanish-language resources. Health plans should provide enrollment and plan brochures, claim information and other tools in Spanish. Some insurers may also provide Spanish-speaking nurses for 24-hour information, as well as online tools and disease management materials in Spanish.

  • Online self-assessment tools. Some health insurers offer sophisticated Web resources that enable employees to input health information and receive tailored assessments of their health risks. Based on these assessments, they may receive targeted educational materials and outreach services.

The National Business Group on Health also lists concrete steps companies can take to help reduce disparities. (Source: Why Companies are Making Health Disparities their Business: The Business Case and Practical Strategies, December 2003.)

  • At renewal meetings with health plans, ask about their initiatives to reduce health disparities; use the responses as criteria for renewal

  • Establish a quality measurement around reducing health disparities

  • Provide employees with information about appropriate health care services that are evidence-based and useful to all patients

  • Ask employees about their experiences communicating with health care providers and use the feedback as criteria for your health plan renewal

  • Launch culturally and linguistically competent health and wellness programs at the worksite
  • Develop and disseminate culturally and linguistically competent education materials that raise awareness of health issues that disproportionately affect minorities

Which of these programs and ideas will help your organization more ably address the issue of health disparities? It's a question you should address with your health plan provider and your human resources team. With some modest efforts, you will be on your way to providing access to high-quality and highly accessible health care resources for your employees and their families.

THOMAS J. SCURFIELD is vice president of sales and service for the Aetna’s north central east region and is based in Cleveland. He has more than 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or

Tuesday, 29 November 2005 04:23

Medicare drug plan

This fall, the media was abuzz about the biggest addition to government-sponsored retirement benefits in recent memory: the rollout of the new Medicare prescription drug (Part D) plan. The main media focus has been on Medicare beneficiaries, and their questions and concerns about the new coverage as they approach the January 1, 2006, go-live date.

However, not much has been said about the possibilities the new Part D plan holds for America’s small and mid-size employers. If these employers offer their retirees prescription drug coverage that is at least as generous as the government’s standard Medicare Part D coverage, these employers may be eligible for an employer subsidy, payable for each Medicare-eligible person enrolled in their plans. Sounds simple, right?

Unlike very large companies, which have many thousands of retirees and larger staffs to manage benefits programs, small and mid-size companies face challenges as they strive to incorporate the advantages of the Part D coverage into the benefits package they offer while minimizing the administrative hurdles.

As the Medicare prescription drug program becomes effective this January, employers should not wait for too long to investigate Part D coverage. For most, it comes down to two options: apply directly for the Medicare subsidy or work with a Medicare-approved health insurer that can offer a Prescription Drug Plan (PDP) for retirees.

Direct subsidy
Those thinking about applying directly for the subsidy should consider such factors as the utilization patterns of retirees, the demographics and geographic dispersion of the retiree base, and whether the number of retirees makes it worth the administrative demands that may accompany the direct-subsidy route.

The initial application process is lengthy, and takes more than 40 hours by Medicare’s own estimates. After that, you must provide monthly paperwork in order to confirm that your company is indeed providing such benefits. In addition, you may need to maintain six to 10 years of retiree benefits data in case of a government audit.

So, it’s crucial to have a human resources infrastructure — particularly experienced benefits managers — to help manage the considerable paperwork involved. You may also need to hire an actuarial company to help ensure that your plan delivers the right benefit level to meet the eligibility requirements for the Medicare Part D program.

PDP solutions
With such significant requirements, it’s not surprising that many small and mid-size companies are turning to PDPs for a one-stop-shopping solution to this dilemma.

Here’s how it works. The employer receives the value of the government subsidy through a reduced premium from the PDP. Because the PDP has economies of scale, it can provide employers and retirees with myriad services that go beyond what an individual employer could reasonably provide. Among the highlights:

  • The PDP handles all of the government requirements, including applications and updates. If there is a government audit, the PDP handles this as well.

  • Because they provide health and other benefits to retirees, the PDPs have the educational tools to help retirees better understand the new drug program. The PDP handles plan enrollment and often provides excellent communications programs, as well as high-tech Web tools to help retirees investigate, price and compare drugs.

  • The PDP may also offer a ready-made suite of flexible plan designs for employers, so you can find a plan that matches your benefits strategy.

  • Many PDPs also offer Medicare Advantage, allowing you to integrate the new drug coverage into your health benefits program for your retirees who are Medicare eligible,[BS1] which streamlines your procurement and benefits administration process. What’s more, retirees can access the entire range of medical-related benefits using one ID card.

Weighing options
If you are on the fence — wondering whether to establish a relationship with a PDP or go it alone — your broker or consultant may help you assess your options. With careful consideration and execution, you should be able to enjoy the government subsidy while ensuring that your retirees receive the greatest possible value from the benefits package you provide.

Thomas J. Scurfield is vice president of sales and service for Aetna’s north central east region and is based in Cleveland. He has more than 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or

Friday, 30 September 2005 11:11

Enrollment season

It isn’t surprising that some employers look upon the enrollment season with a bit of dread. The last several years have delivered ever-increasing benefits costs, which many companies have been compelled to share with employees through higher premiums or changing benefits. In addition, a new generation of health plans has expanded the role that employees play in managing their health-care decisions. These trends, among others, have made open enrollment more important, more complex and more emotionally charged than ever.

Yet despite these realities — or perhaps because of them — many smart employers have seized on the open-enrollment process as a means to strengthen employees’ understanding of their benefits and the overall function of rewards in the context of the business.

Advance planning and timely communications with employees can make a huge difference. Here are a few ideas to help you prepare.

n Define your goals. As you approach open enrollment, establish your organization’s goals. Do you want everyone signed up by a certain date so ID cards arrive by the new year? Are you hoping that half of your employees will choose a consumer-directed health plan? Your carriers should be ready to work with you to help you establish the right blend of benefits features, employee contributions and marketing efforts to achieve your enrollment goals.

n Plan your approach. Based on your goals, create a workable timeline so that employees and managers have the right information at the right time. For example, if you are working with your health insurance carrier to offer new online tools, make sure your IT team is at the table early. Similarly, you may want to include your front-line managers in early discussions of upcoming benefits changes. Make sure you give employees enough time to assemble, analyze and discuss plan information with family members before the enrollment deadline.

n Get the messages right. In addition to anticipating targeted information needs within your company, take the time to create general messages that both explain plan changes and the context that surrounds them. For example, if co-payments are increasing, highlight the overall claim increase the company itself is absorbing. In talking about changes, make sure to explain what is not changing as well. This gives employees a more balanced picture and puts overlooked-but-valuable existing benefits into the spotlight.

n Communicate through multiple media. Before the actual enrollment kit reaches your employees, you should share information in multiple, diverse ways. Your health insurance carrier should offer resource materials, such as newsletter articles, brochures or posters to get you started. Whenever possible, take advantage of existing communication channels, such as the company newsletter and staff meetings to get the message out and underscore the integration of benefits issues into your overall business success.

Note that, in many cases, plan changes will impact each employee differently. You should anticipate these issues and be prepared to help employees understand your company’s need to revise its benefit structure. Ask your health benefits carrier if they have information tools available to help your employees evaluate the plans offered based on their own health benefit consumption.

n Gauge your success. After enrollment is over, compare your results to the initial goals you set. Too often, companies rely on anecdotal feedback. You need hard facts. Conduct a simple e-mail survey that asks: “Did you receive your ID cards when they were promised?” or “Were you given the right information to make an informed decision about your medical plan choices?” Your health insurance carrier may be able to help you link your survey to an online enrollment process, if your company uses one.

Based on the success of your open enrollment process, you may want to work with your health insurance carrier to get an early start in planning for next year. The more you communicate the power of your benefits programs throughout the seasons, the less daunting — and more enriching — this ritual of open enrollment will be for you and for your employees.

THOMAS J. SCURFIELD is vice president of sales and service for the Aetna’s north central east region and is based in Cleveland. He has more than 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or

Wednesday, 27 July 2005 20:00

High-tech health

With the release of the latest national health care costs figures, some might imagine that employers — who carry much of this burden through company health plans — are breathing a sigh of relief.

Why? Because, according to the Bureau of Labor Statistics, health care costs rose just 7.5 percent in 2004, a far cry from the 11.4 percent rise in 2002. But while costs may be rising less dramatically, employers’ health benefits costs remain a challenging financial responsibility as they demand an ever-larger share of overall operating expenses. In addition, health care cost increases continue to outpace pay increases for most employees, making it ever more difficult to afford coverage.

In response to these challenges, health insurers have been proactive in offering employers and employees new tools to manage these costs. For example, there are more plan designs than ever before, including the newest consumer-directed plans, which marry high-deductible coverage to various employee accounts for health-related savings.

In addition to these high-profile plan approaches, there are quieter innovations in the health arena that can deliver significant savings for employers.

Proactive help
Some of the more visible programs available involve the concept of health care management. For example, disease management programs identify and provide targeted services to members with certain chronic illnesses who, based on statistics, are likely to enjoy better health if actively helped with their conditions.

These programs reach out to people with such conditions as asthma, coronary artery disease, chronic heart failure, diabetes and low back pain. They also focus on helping women who are experiencing high-risk pregnancies, helping them stay on a healthy course to avoid unnecessary complications.

Services might include outreach and support from the insurer’s medical management team, all designed to assist the member with getting the right care from her physician every step of the way.

Using data
Some of this may sound familiar, but what’s different is how medical data are used to assess risk factors and check for errors, gaps and omissions of care that may help clinicians seize opportunities to improve health and wellness. As they process claims, insurers compile millions of pieces of data related to diseases, treatment paths and costs. The data can help alert physicians to risk factors for serious diseases, such as high cholesterol and obesity, which can lead to heart disease or diabetes.

Alternatively, data may show patterns that might link certain conditions. For example, an insurer’s data may indicate that many patients with chronic lower back pain also experience depression.

With this knowledge, the insurer’s medical staff can work with health care providers to ask the right questions, detect related exacerbating conditions and get patients more comprehensive treatment that can improve their health and help them stay at work or return to work more quickly.

Beyond seizing these opportunities, this powerful data allows the insurer to gain insights into potential treatment conflicts that could escape the attention of the patient’s doctor. In fact, some insurers offer programs that proactively alert doctors to potential areas of concern.

The bottom line is that insurers can now provide practical, timely, clinical decision support to physicians and patients, which can help to improve patient safety and medical quality, reduce medical costs and improve employees’ productivity.

Take a look
Might your company benefit from applying some of these data-enabled health plan approaches? It may be worthwhile to investigate your options by taking a closer look at the options in your existing health plan or by consulting with your insurance broker or consultant regarding the available options in your market. The choice you make might take your plan to the next level of effectiveness and quality improvement, empowering your employees and their doctors with better tools for health and potentially lowering your health plan costs in the bargain.

Thomas J. Scurfield is vice president of sales and service for the Aetna’s north central east region and is based in Cleveland. He has more than 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or

Tuesday, 24 May 2005 06:35

Health benefits literacy

Health benefits literacy -- the ability to understand and navigate health insurance options and benefits -- is essential to helping employees take the first step as savvy health care consumers.

Workers are progressively more responsible for managing their health care as consumer-directed health plans gain in popularity. At the same time, they are expanding their roles in seeking information, measuring and monitoring their health, and making decisions about insurance and options for care.

With 3.2 million Americans covered under some form of a consumer-directed plan, it is increasingly important that employers take rapid steps to educate employees about this new role. Employees need the tools, information and support to make well-informed decisions. At the heart of this effort are employee communication and education, both critical for a successful transition to consumer-directed health care.

Here are some suggestions to help get you started.

Pre-enrollment ­ a rationale for change

Managers play a significant role in shaping employee opinion. This is especially critical once the decision has been made to move to new plan designs.

Beyond presenting advantages and features of the plan during this transition period, employee communications should demonstrate the need for change and highlight the support available to employees. Consider using communication avenues such as announcement letters, newsletter articles, pre-enrollment posters and independent, third-party viewpoint articles to address policy changes and answer employee concerns.

Enrollment -- cultivating an informed consumer

The enrollment phase focuses on helping employees fully understand the consumer-directed plan offerings and assists them in making their health plan election through tutorials and interactive tools.

Decisions workers make now can impact their future. Cultivate an informed consumer by providing access to interactive decision-support tools

* Plan selection and cost estimator tools. These interactive decision-support tools assist employees in making their health plan election during open enrollment. Members input basic information about their utilization of health care services to estimate their out-of-pocket health care costs. The tool then compares available plan offerings and allows employees to see estimated costs associated with various health care scenarios.

* Health savings account (HSA) savings calculators. These tools demonstrate the potential savings and tax advantages associated with an HSA. Members provide basic information about their age, annual HSA contribution, expected interest rate from the HSA administrator and marginal tax rate.

The calculator provides the potential HSA balance over time, a comparison of HSA savings to other after-tax, interest-bearing savings vehicles and the potential tax savings for HSA contributions. The tax savings illustration is helpful in understanding the differences between using the HSA for current medical expenses versus growing the HSA over time.

* HSA/health reimbursement account (HRA) online tutorials. These are designed to help members better understand these products and aid understanding about how the rise in health care costs has led to the increase in health care consumerism; the benefits available through HRAs and HSAs; the basic structure of the benefits plans; and the tools and resources that support these new offerings.

Post-enrollment -- supporting consumer responsibility

It is important to continue to support consumer responsibility during the post-enrollment period. Making the change to a consumer-directed health plan is not a one-time event, it is a strategy carried out over several years.

During post-enrollment, the focus is on reinforcing employee involvement in the decisions made about their health care, updating them on new tools and services available, and reminding them of the existing tools. Ongoing communications throughout the plan year also provide additional opportunities to strengthen employees' abilities to get more involved in their health care decisions.

Increasing health benefits literacy provides a pivotal opportunity for employers wanting to increase the adoption rate of consumer-directed health plans. Working in partnership, health benefits providers and employers should provide educational materials in easy-to-understand formats, along with credible health information and tools that support informed decision making.

Thomas J. Scurfield is vice president of sales and service for the Aetna's north central east region and is based in Cleveland. He has more than 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or

Tuesday, 22 March 2005 06:02

Part-time benefits

Most business leaders have read about the growing problem of the uninsured in America but probably didn't think they could help resolve it -- let alone realized they have a stake in resolving it.

But every business is bearing the burden of uninsured Americans and can help ease the problem by taking some simple, practical steps.

According to the U.S. Census Bureau, there were about 45 million uninsured Americans in 2003, a number that continues to grow. Uninsured individuals commonly forego necessary medical care; nearly 40 percent postpone care due to the cost, according to the Kaiser Family Foundation. In addition, according to The Institute of Medicine, uninsured people receive fewer preventive services and less care for chronic conditions than their insured counterparts.

As a result, the uninsured tend to get sick more often and for longer periods, adding significantly to the spiraling medical costs that show up in every business's annual health care costs.

Hard working and uninsured

Businesses have an even deeper connection to the uninsured problem -- most of the uninsured are, in fact, employed. Six out of 10 have full-time jobs and another 15 percent work part time or part of the year. Some work two part-time jobs without coverage through either employer.

Those without health insurance are working in virtually every American business, uninsured because they are ineligible for benefits or because the cost of premiums or deductibles is too high.

As a result, the working uninsured are prone to missing preventive care and suffering more serious conditions later, resulting in a threefold problem for businesses:

* Short-term presenteeism (being at work but preoccupied with personal matters to the detriment of productivity) as workers struggle through personal and family health issues without seeking appropriate care.

* Longer-term productivity losses as workers leave your employ to seek jobs that provide benefits, wind up in emergency rooms or are lost to disability

* Continuing increases in health plan costs as local care providers pass on the nonreimbursed expense of treating uninsured patients.

According to a May 2004 statement released by the Health Care Policy Roundtable, a cross-industry collaboration of human resources leaders, the economic impact of the lack of health insurance on productivity, absenteeism, turnover and increased health care costs could be as high as $152 billion per year, or about $1,000 for every American worker in 2004.

Plans reduce turnover

Many businesses are taking advantage of a new breed of "limited benefit" plans. In essence, employees gain access to preferred-provider networks, service discounts and other benefits, typically subject to annual benefits caps. In addition, an employer can choose any level of premium subsidy -- including none at all.

Offering benefits to employees who are typically ineligible for company-sponsored benefits can provide businesses with two advantages beyond chipping away at the problem of spiraling health care costs.

First, it helps to stabilize your work force. Offering easy-to-access health care can increase productivity because employees will be more likely to get the treatment they need and thus stay healthy.

Second, high turnover is a major issue in many industries as benefits-exempt employees float from company to company seeking a slightly higher wage. Businesses then spend excessive amounts of money and time recruiting and training replacements. These same employees, equipped with a meaningful differentiator -- access to health care benefits -- will be less likely to slip away to a competitor.

The benefit types and dollar maximums offered under these plans are flexible and may include medical, dental, vision, term life and short-term disability coverage, as well as in-hospital cash benefits. In addition, plan designs could include out-patient expenses for office visits, lab, diagnostic tests, X-rays, surgery, anesthesiology and prescription drug coverage.

If you don't offer access to health benefits for all of your employees, look at these new plans. Your insurance broker or consultant and your company's financial advisers can help you find a plan that fits your budget -- and helps you maintain a more stable and healthy part-time work force.

Thomas J. Scurfield is vice president of sales and service for the Aetna's north central east region and is based in Cleveland. He has more then 25 years of experience working in employee benefits and holds both the Chartered Life Underwriter and Certified Employee Benefit Specialist designations. Reach him at (330) 659-8020 or

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