Better health care Featured

12:33pm EDT December 20, 2006

Employee health care has come a long way. From a system that was nonexistent 90 years ago to one that allows employers and employees to choose the package that best fits everyone, health care in this country continues to evolve.

“The components are things that people have heard about before,” says Tina Antram, vice president at Hilb Rogal & Hobbs in Tampa. “The difficulty is putting them together in a way that’s effective for the employees so that employers and employees can better manage their costs.”

Smart Business talked to Antram about how employers can offer their employees the best possible health care.

Who is affected by the high costs of health care?

Everybody; you can’t pick up a newspaper or watch the news without hearing about it. The president’s State of the Union speech largely focused on health care in this country.

Last spring Mike Leavitt, secretary of the U.S. Department of Health & Human Services, appeared on the McLaughlin Group on PBS and was asked why the cost of health care has risen so far above the rate of inflation. He gave two main reasons.

First, a lot people are getting sick. Leavitt said that 75 percent of all health costs are from chronic diseases that can be prevented or managed.

Second, when people do get sick, few of them know what they pay for or what kind of quality in health care they receive.

The bottom line is that we aren’t very good consumers when it comes to health care.

What can we do about the problem?

We need to approach it as a multi-faceted issue on several levels. First is delivery system management, which includes things like evaluating the provider networks your health plan accesses and the discounts associated with them. It also includes the quality of services delivered. Employers should know how their health plan works in both of these areas. We are seeing an increase in what are called high-performing networks in addition to a standard PPO or HMO network an employer may be used to. Employers should be sure they have access to specialty networks and centers of excellence for high-cost and high-risk procedures such as transplants, as well as access to the pharmacy delivery system. They should know how their health plan performs in terms of pricing, formulary use, rebates, mail order and the handling of the newer high-cost, often injectible drugs.

A second component is population health management, where the concept of consumerism is evident. The idea is to influence utilization by creating educated consumers and improve the long-term health of the population by incentivizing better choices and healthier lifestyles.

An employer can implement a high-deductible health plan that will only initially save money. These plans work best in the long run if supported by proper communications and tools for employees to access. An employer needs to be sure to design an overall health plan to produce the desired behavior, such as preventive care at 100 percent coverage and applying deductibles and co-insurances to other benefits. We are seeing increasing interest in adding health risk appraisals and wellness programs to support this shift direction.

Finally, employers need to evaluate the performance of their health plan in terms of the programs they offer for cost containment and overall health promotion.

Why are best practices so important?

We have created this huge system that by 2014 could account for up to 20 percent of the nation’s gross domestic product. That has led to the concept of consumerism, one of the few things in the last few years that have shown any sign of helping slow the increase in costs. Consumerism is a movement and a paradigm shift and part of the process when we talk about best practice; things that employers can do to be sure that they are effective consumers with their health plans, whether it’s with a group of 20 employees or 20,000.

How did we get to this point?

We’re getting older, our demographics are changing, and we have increases in technology that add to the cost of health care. Additionally, we consume at the direction of the provider. The doctor says we need this test and that drug, and we on the consumer end have very little responsibility for what we do.

Over the last couple of years, employers have managed cost increases through cost-shifting through plan design (co-payments, deductibles) and premium contributions.  Many employers indicate they will depend upon cost-shift to mitigate their premium increases this year.  However, in addition, our leaders encourage employers to pursue the activities and efforts we have discussed today in hopes of impacting health care costs in the long term.

TINA ANTRAM is vice president at Hilb Rogal & Hobbs in Tampa. Reach her at (813) 261-7979 or tina.antram@hrh.com.