Health care’s challenging future Featured

7:00pm EDT November 25, 2008

As the New Year approaches, economic challenges confront local employers, including rising costs of health care benefits. How can businesses overcome these challenges?

Smart Business asked Barry Arbuckle, Ph.D., president and CEO of MemorialCare Medical Centers and chair of California Hospital Association, for advice.

Where can employers start?

Good health is good business. In California, healthier lifestyles programs could save $1.7 billion annually, according to the California Endowment (see July 2008 workplace wellness column). The health cost of a low-risk 45- to 54-year-old worker is $2,081 annually compared to a high-risk worker of $5,813. Costs to employers can be minimal. Instead of building a fitness center, offer employees a pedometer and mealtime walking programs and sessions to learn how to achieve better health. Ask hospitals, public health departments and community-based organizations like American Cancer Society and American Heart and Lung associations to share information and resources on low- to no-cost screenings, prevention and healthy lifestyle programs on-site and in the community.

What is the role of health plans?

Many health plans offer workplace assessments, screenings and educational programs at little to no cost. Open enrollment — when employees select benefits for themselves and their families — is also critical (see August 2008 health plan enrollment column). And ensure hospitals and physicians included in your health plan are part of a larger system of care. A health care system with multiple locations and thousands of physicians offers more comprehensive services and the latest in equipment and procedures.

What will the future work force look like?

The health of California’s 9.4 million children and your future work force is at risk. Fifteen percent are uninsured, one-third are overweight and 60 percent don’t reach state math and reading goals (see September 2008 column on investing in the future).

Employers can ask local hospitals and health departments to offer information and programs on healthy lifestyles for children. Employers should also press for legislation that promotes healthy foods in schools, expands exercise programs and ensures comprehensive programs for kids with chronic diseases like asthma and diabetes.

What about the uninsured?

In California, the 6.8 million uninsured and 6.5 million underinsured impact hospitals and employers. About 75 hospitals and 70 emergency rooms have closed in the last decade (see January and April 2008 columns on the business of medicine and its state of emergency). Coupled with low government reimbursement, critical labor shortages, unfunded mandates and more, most California hospitals are on the critical list. Employers are not immune. The cost of the uninsured and inadequate reimbursement means higher premiums. Employers can help hospitals stay afloat by supporting comprehensive health reform statewide and working with representatives at the national level to resurrect Association Health Plans that permit small employers to come together to purchase health coverage at lower rates.

How does information technology fit in?

Electronic medical records take the guess work out of health communication by placing patients’ medical history onto computers and information systems, allowing clinicians to better coordinate care through immediate access to secure patient data (see February 2008 legible medicine column). This minimizes waste and inefficiency of manual and paper-based processes and maximizes clinical quality through support at points of decision-making. Employers should advance efforts to establish standards for sharing data among health providers through legislative advocacy and encourage government financial support of health IT expansion and implementation.

What is the role of quality?

Employers should query physicians and hospitals about their quality initiatives. Do they have teams like we do at MemorialCare that design and implement best practice tools, offer education, and monitor outcomes and opportunities for improvement? Are clinical outcomes documented and easily accessible? How focused are they on supporting a strong culture of patient safety? What type of awards have they received from external organizations for quality and safety?

What else can employers do?

Ask local hospitals and health plans to help perform a benefits audit to ensure you are getting the most competitive price and package for your benefits. Encourage policymakers to advocate for health care-related issues. Offer scholarships for students wishing to pursue health-related degrees. And consider increasing philanthropic contributions to nonprofit health care organizations to ensure your employees and the communities you serve have the best quality care available.

BARRY ARBUCKLE, Ph.D., is president and CEO of MemorialCare Medical Centers ( and chair of the California Hospital Association. Reach him at or (562) 933-9708. MemorialCare Medical Centers include Saddleback Memorial Medical Center in Laguna Hills and San Clemente, Orange Coast Memorial Medical Center in Fountain Valley, Anaheim Memorial Medical Center, Long Beach Memorial Medical Center and Miller Children’s Hospital in Long Beach.