Employee Benefit News
By Lydell C. Bridgeford
September 7, 2010

American workers continue to see their health care costs increase, while receiving less comprehensive coverage. To complicate matters, employers are doing a lackluster job of shopping for quality health plans.

According to research by the Kaiser Family Foundation and the Health Research and Educational Trust, U.S. workers are paying, on average, about $4,000 for family health care coverage, a 14% or $482 jump from 2009 costs.

The spike occurred despite the total premiums for family coverage, which includes employer contributions, only increasing by 3% to $13,770 this year, researchers found.

Employer contributions for family coverage, however, remained steady, meaning companies are shifting more of the health care costs onto workers.

In the survey report, “2010 Employer Health Benefits Survey,” analysts also indicate that companies are raising the annual deductibles employees must pay before their health plans start to pick up the costs.

For example, a total of 27% of covered workers face annual deductibles of at least $1,000, up from 22% in 2009, according to the survey results. Among small employers with 3 to 199 workers the number rose to 46% for such deductibles.

Researchers conducted the survey between January and May of 2010. It included 3,143 randomly selected non-federal public and private employers with three or more workers. Of which 2,046 responded to the full survey and 1,097 responded to a single question about offering coverage.

“Much of the survey collection was done before the health reform law passed and most of the benefits arrangements described in the report occurred before there were any reasons to know what the health reform law would actually say,” explains Gary Claxton, vice president and director of the foundation’s health care marketplace project and the study leader author.

Still, since 2005, workers’ contributions to premiums have rose 47%, while overall premiums increased 27%, wages jumped 18%, and inflation spiked 12%.

“With the economy struggling, businesses have been shifting more of the costs of health insurance to workers through premiums, deductibles and other cost-sharing,” says Dr. Drew Altman, president and CEO at the Kaiser Family Foundation.

“This may be helping to stem the rapid rise in premiums that we saw in the early 2000s, but it also means employer coverage is less comprehensive. From a consumer perspective, the cost of health insurance just keeps going up faster than wages,” he adds.

In addition, 30% of employers admitted they reduced the scope of health benefits or increased cost sharing because of the economy.

Health plan quality

Meanwhile, the report reveals employers are not considering quality in their decision-making process on health plans.

Overall, large employers with 200 or more workers were more likely (34%) to review performance indicators on health plans than small employers with 3 to 199 workers (5%). The most common indicators used were the Consumer Assessment of Health Care Providers and System (77%) and hospital outcomes data (61%), according to the survey results.

About 75% of employers indicated that they were “somewhat satisfied” or “very satisfied” with the information available on health plan quality. However, only about 50% of firms claimed that the information was “somewhat influential” or “very influential” in their decision to select health plans.

Moreover, only six percent of employers said they review information on health plan performance, and the ones who did look at information on plan quality only half said it was influential to the their selection of a health plan, says Megan McHugh, research director at the Health Research and Educational Trust.

“With quality improvement efforts expanding and with increased focus on transparency, employers do have the ability to find data on quality of care and use it when they are comparing health plans,” says McHugh. “The lack of comparison shopping based on quality … is troubling. We are finding employers don’t hold health plans accountable for the care they offer,” she adds.

McHugh speculates that employers are choosing health plans based on price and quality might not rise to the same level of importance.

In addition, perhaps, employers are “weary of the value of quality indicators and don’t understand the indicators that are available to them. They also might believe that the quality monitors can be entrusted to others, such as the health plan and the accreditation organizations,” she explains.

Other key findings from the survey include:

• Consumer-driven plans have established a foothold in the employer market, tripling their market share from 4% in 2006 to 13% in 2010.
• Preferred provider organizations (PPOs) continue to dominate the employer market, enrolling 58% of covered workers. Average PPO family premiums topped $14,000 annually in 2010.
• Single-payer coverage increased 5% in 2010 to reach $5,049 annually. Workers on average are paying $899 annually for single coverage, up from $779 in 2009. Forty-seven percent of covered workers are in single coverage plans.
• Physician office visits: Among covered workers with a co-payment for in-network physician office visits, the average co-payment increased a small but statistically significant amount from 2009 to 2010 – from $20 to $22 for primary care and from $28 to $31 for specialty care.
• Mental health benefits: In response to the 2008 Mental Health Parity and Addiction Equity Act, 31% of firms with more than 50 workers made changes to the mental health benefits they offer. Most of this group eliminated limits on coverage to comply with the law, though a small share (5% of those making changes) dropped mental health coverage altogether.
• Wellness benefits: About three-fourths (74%) of employers offering health benefits offer at least one of the following wellness programs: weight loss program, gym membership discounts or on-site exercise facilities, smoking cessation program, personal health coaching, classes in nutrition or healthy living, web-based resources for healthy living, or a wellness newsletter.
• Health risk assessments: Among firms offering coverage, 11% give their employees the option of completing a health risk assessment to help employees identify potential health risks. Within this group, 22% —or a relatively small two percent of all employers—offer financial incentives such as lowering the worker’s share of premiums or offering merchandise, gift cards, travel, or cash to their workers. Large firms are more likely than small firms both to offer assessments and to offer financial incentives.

http://ebn.benefitnews.com/news/report-health-costs-burden-rests-on-workers-shoulders-2684225-1.html?ET=ebnbenefitnews:e878:2125217a:&st=email&utm_source=editorial&utm_medium=email&utm_campaign=EBN_inBrief_090710

Wednesday, September 01, 2010
By Matt Cover, Staff Writer

(CNSNews.com) – Consumer-driven health care plans, which are being offered by more companies, cost less than traditional health insurance and are better at controlling the growth in health care spending, according to a new study.

The General Accountability Office compared both private and government-offered plans, both consumer-driven and traditional Preferred Provider Organization (PPO) health insurance plans.

Specifically, the plan compared PPOs to Health Reimbursement Arrangements. HRAs are a type of tax-advantaged account that reimburses enrollees for health care expenses. HRA-based plans typically have higher deductibles and lower premiums than traditional health insurance plans and unused account balances may carry over from year to year. HRAs are owned by the employer, and only the employer may make contributions to them.

Employees with HRAs can use the money in their personal accounts to pay for the medical services they want or need, unlike in traditional insurance plans where doctors bill insurance companies for whatever services they provide. Due to the limited amount of money in an HRA, patients have an incentive to make more prudent, better-informed decisions about where their health care dollars go.

Because patients can roll over money in their HRAs from year to year, they have an incentive to be thrifty in their health care spending. If their HRA is depleted, they often are placed in an accompanying high-deductible plan that increases out-of-pocket costs.

GAO found that health spending was significantly less for employees in both government and private HRAs than in either type of PPO.

GAO compared its findings with studies done by other researchers, concluding that patients in consumer-directed plans are healthier than those with traditional health insurance. “Our review of published studies generally found that HRA and other CDHP [Consumer-Directed Health Plans] enrollees tend to be healthier than those enrolled in traditional plans,” GAO said.

In addition to having healthier patients, the consumer-driven plans also experienced slower rates of spending growth, and thus were better than traditional plans at holding down the cost of health care.

“For the public and private employers we reviewed, health care spending and utilization of health care services for the HRA groups generally increased by a smaller amount, or decreased, compared with the PPO groups,” GAO found.

GAO found that the health status of participants did not account for the reduced spending observed in the studies. Healthier patients naturally need less health care and therefore spend less on health care. A type of plan that has mostly healthy enrollees will always have lower spending levels and therefore appear to be better at controlling costs, the study said.

GAO discovered that when researchers held health status constant, spending was still lower in consumer-driven plans than in traditional ones – meaning that health status did not account for the savings observed in consumer-driven plans.

“[T]he majority of the studies we reviewed that examined total or medical spending and controlled for differences in health status or other characteristics of enrollees reported lower spending among enrollees in HRAs and other CDHPs relative to traditional plans,” the report states.

GAO’s study showed that HRA enrollees were better able to hold their health care spending well below that of traditional insurance enrollees, spending only an average of $1,300 per year on health care compared to the average of $3,200 per year for enrollees in the PPO.

GAO also found that employees enrolled in both consumer driven and traditional health plans that were offered by private-sector employers spent less on health care than did employees in government-offered plans, which are often extremely generous.

“For the HRA group, similar to the public employer, average annual spending at the private employer increased by a smaller amount than for the PPO group,” GAO found.

“Specifically, average annual spending for the private employer’s HRA group increased by $152 per enrollee compared with $206 for the PPO group.”

Privately-employed enrollees had much lower levels of health care spending than did government employees, in both types of plans. Employees in consumer-driven plans spent an average of only $775 per year while those in the PPO spent an average of $1,400 per year on health care.

http://www.cnsnews.com/news/article/72050

In  covering cost transparency trends in the self-funded community, Ernie Clevenger mentions change:healthcare in his weekly newsletter MyHealthGuide Newsletter.

Read the full article here: http://www.myhealthguide.com/news.htm#change:healthcare

Light in the Darkness: How Information Will Create Transparency in Healthcare
Presentation Transcript
Miriam Paramore
SVP Strategy and Government Affairs at Emdeon
August 26, 2010

Presented at “The Naked Hospital – A Provocative Look at Healthcare” a Nashville Technology Council super roundtable event., Miriam Paramore of Emdeon, mentions change:healthcare in reference to cost transparency in the healthcare industry.

http://www.slideshare.net/nashtechcouncil/light-in-the-darkness-how-information-will-create-transparency-in-healthcare

Not the Government. Not the Employer.

In compliance with new health reform laws, employers are re-evaluating their health care benefits. In order to stay profitable as health care costs accelerate, “…more of the nation’s biggest businesses are planning to hike premiums and cost-sharing measures on their employees next year.”

Prices for health care vary. Becoming smarter healthcare consumers is the best way for employees to protect themselves. Cost transparency and having the opportunity to choose providers and services based on price and location are key.

Faced with rising health costs, large employers plan to shift burden to workers
By Mike Lillis – 08/18/10 11:46 AM ET
http://thehill.com/blogs/healthwatch/health-reform-implementation/114823-faced-with-rising-health-costs-large-employers-plan-to-shift-burden-to-workers-

I always appreciate words of wisdom from someone who has “been there, done that” and Christopher Parks recent guest post on Catalyst Healthcare Research blog – For the Record exemplifies his experience with and passion for healthcare.

In Healthcare Costs, Transparency and Feeling Vindicated Parks says, “… the lessons we’ve learned about transparency and healthcare are really quite simple.  When you incentivize people to make value-driven healthcare choices and provide unfettered access to information about those choices, invariably consumers make far more insightful decisions about their care, its cost and its quality.  It’s simple common sense.  I have no doubt that with greater transparency placing more information and control into consumer hands, Americans could realize millions in healthcare cost savings.”

To learn more about change:healthcare, our cost transparency solution and the need to educat healthare consumers check out the Christopher’s entire post here and visit www.changehealthcare.com.

Christopher Parks was the guest blogger on “For the Record” by Dan Prince, President of Catalyst Healthcare Research. Read his entry “Healthcare Costs, Transparency and Feeling Vindicated.“

http://www.catalysthealthcareresearch.com/learning-center/for-the-record/2010/08/17/healthcare-costs-transparency-and-feeling-vindicated/

CHANGE:HEALTHCARE CEO TO RECEIVE “INNOVATOR AWARD”
FOR WORK IN CONSUMER DIRECTED HEALTHCARE (CDHC) AND BENEFITS INDUSTRIES

NASHVILLE, Tenn., (August 9, 2010) – The Chief Executive Officer of Nashville-based cost transparency company change:healthcare, Christopher Parks, has been picked to receive an “Innovator Award” from national health and benefits magazine CDHC Solutions.

The accolade is part of the magazine’s annual “Solutions Superstars” program that identifies the best cutting-edge work in the healthcare benefits and compensation arenas.  The award recognizes Park’s and change:healthcare’s pioneering efforts helping employers maximize the return from their consumer-directed healthcare (CDHC) plans and their employees reduce healthcare costs.

“This award is humbling,” Parks said.  “Our sole purpose as a company has been to harness web technology in innovative ways to help employers and employees save money on their healthcare expenses…while better navigating the country’s healthcare system in the process.   I’m grateful for a team of employees that loves to find novel solutions to healthcare costs challenges and clients that want to partner with us in putting them in place.  This award is testimony to all of them.”
The healthcare technology company provides information to employers, employees and third party administrators to assist them make more informed healthcare consumer purchase decisions that save money.   Specifically, the company helps employers with consumer directed healthcare (CDHC) plans and their workers choose the most affordable providers for medical services, treatments and prescriptions by analyzing a company’s medical claims and continually sending cost-savings alerts to employees when savings opportunities are found.

CDHC (Consumer Directed Health Care) Solutions is a publication of the Field Media Group based in Alpharetta, Georgia, which serves the human resources and benefits industries.  An integrated media operating company, its other communications property is EmployersWeb.com magazine.

A 20-year veteran of the healthcare industry, Christopher Parks founded change:healthcare in 2006 following management stints at various healthcare companies including Healthways, HealthCare Microsystems, National Seating & Mobility and Global Healthcare Exchange (previously Neoforma).  

We have moved just down the street into a new office space in Maryland Farms business park in Brentwood, TN. Please take note of our new address:

change:healthcare
12 cadillac drive, suite 240
brentwood, tn 37027

800-655-0732
615-523-1255
info@changehealthcare.com

Kaiser Health News, in collaboration with the Los Angeles Times, recently wrote a brief piece on a cost-saving service change:healthcare has been encouraging consumers to do all along: negotiate the price of service with your doctor’s office, especially if you can’t afford the amount they’re billing you for. The article advises taking the following steps:

• Understand your treatment so you can avoid unnecessary procedures and/or tests
• Shop around for the best price, which can vary by location
• Offer to pay a negotiated rate upfront so the provider won’t have to wait to be reimbursed
• Get the lower-price agreement in writing

Of course, change:healthcare is designed to assist you with several of these steps. We aim to inform you about both the types of procedures and medications you might be receiving, as well as the range of prices of these services in your region. You don’t want to be overpaying on an already big-ticket item like your healthcare, so keep in mind that it never hurts to ask for that discount!

SOURCE: http://www.kaiserhealthnews.org/Stories/2010/August/02/doctor-discounts-patients.aspx?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NewFromKaiserHealthNews+%28New+From+Kaiser+Health+News%29