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UltraLink - FOCUS...on benefits
April 2005
Hospital Quality Data Available to the Public
The federal Centers for Medicare and Medicaid Services (CMS) have unveiled an important new website comparing the quality of care provided by nearly every hospital in the U.S. for three common conditions.
Using 17 measures, the website allows comparisons across hospitals of the quality of care provided for pneumonia, heart attack and heart failure. By next year, officials plan to add measures of hospital-acquired infections and patient satisfaction. Users can select hospitals by name or by state, county, city or zip code. Graphs display the selected hospitals' results with each other and with state and national averages. A brief description of each measure and its importance is included.
The website is the result of efforts by the Hospital Quality Alliance (HQA), a consortium of leading hospital and health care organizations including the American Hospital Association, the Federation of American Hospitals, the Joint Committee on Accreditation of Healthcare Organizations and others. The Alliance has engaged hospitals nationwide to voluntarily report specific quality measures in a standardized fashion. The data are gathered from medical records rather than from billing data, an important distinction as it allows for more accurate measurement of more specific and clinically relevant measures. The website can be viewed at http://www.hospitalcompare.hhs.gov/
Source: Modern Healthcare's Daily Dose, April 1, 2005
Rising Costs Take Their Toll
Not unexpectedly, rising health costs continue to take their toll on employer benefit offerings. A Hay Group report indicates that only 17% of medium to large employers paid 100% of workers' premiums in 2004, down from 29% in 2000. And most employers who do pay 100% of premium have increased copayments and/or deductibles over the past few years.
As has historically been the case, the richest health benefits tend to be negotiated by labor unions. But even unions have lost ground in recent years. The New York Times reports that while Verizon, SBC and BellSouth still pay 100% of premium for workers in their largest unions, the unions accepted a one-year pay freeze and higher copayments in order to sustain that level of contribution. Similar concessions have been made by unions in the other industries. Perhaps most noteworthy are those made by the United Auto Workers, long known for negotiating the gold standard of benefits. This year the UAW agreed for the first time to allow Chrysler to impose deductibles for employees and retirees who use PPOs after the costs of PPOs exceeded even those of indemnity plans.
Some smaller businesses appear to be dropping health benefits entirely in the face of unrelenting costs. A recent survey by the New Jersey Business and Industry Association showed a decline of 4% in the number of firms offering health benefits to full-time workers, raising concern about the ability of the state's businesses to attract and retain good workers.
Sources: The New York Times, March 22 and March 23, 2005; Central New Jersey Home News Tribune, April 5, 2005.
Contributions Linked to Salary May Make Cost Shifting More Palatable
A growing number of employers are using a "sliding scale" to determine employee contribution to health benefits, with lower income employees paying less than those in higher income brackets.
A recent Hewitt Associates survey found the percentage of firms using this approach increased from 18% in 2004 to 21% this year. Two companies that have used such a strategy - Wachovia and American Standard - report positive feedback from employees, who tend to view it as a fair approach. A Wachovia official noted that their objective is to "retain lower-paid employees who may be impacted more severely by rising health costs."
Experts caution that it may be difficult to persuade senior management to move to the arrangement as it will increase their personal contributions. They also advise keeping the tier structure simple to ease administration; Wachovia used four salary tiers: less than $30,000, $30,000 - $49,000, $50,000 - $99,000 and $100,000 or more.
Source: BenefitNews.com, March 22, 2005
A Swing Back to HMOs?
The public may be rethinking its backlash against HMOs now that fewer restrictions on care and provider choice have contributed to such substantial cost increases.
Findings from the most recent Household Survey by the Center for Studying Health System Change show that the percentage of working-age citizens willing to accept limitations on their choice of health care providers in order to save on out-of-pocket expenses increased from 55% in 2001 to 59% in 2003. The finding was particularly notable because that rate had remained stable since 1997.
In the late 1990s, consumer backlash led many employers to ease health plan restrictions on care and provider choice, which contributed to rapid and sustained cost increases. By 2002, many employers were shifting increasing responsibility for these costs to employees. At the same time, fewer employees have had access to lower-cost alternatives in recent years: only 47% of covered workers had access to an HMO product in 2003, compared to 64% in 1996. Workers who are willing to accept restrictions in order to lower their costs thus have few options to choose from.
Rather than attempting a return to HMO-style restrictions, employers may instead move to products with more options, such as those that allow for lower-cost access to a narrow, "efficient" provider network. Although these plans are not currently in widespread use, they may represent a way to increase the availability of lower cost options for those who want them.
Source: The Center for Studying Health System Change; Issue Brief No. 94, March, 2005.
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