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UltraLink - FOCUS...on benefits
December 2004
WellPoint/Anthem Merger Expected to Close Soon
The merger of WellPoint Health Networks and Anthem, Inc. appears to be back on track after objections by California's Insurance Commissioner, John Garamendi, threatened to derail the deal.
Garamendi's key concern was that the merger, especially the associated payments to executives, was not in the best interests of California consumers. His final approval came after Anthem and WellPoint pledged $265 million to support health care in California, with $100 million going towards hospital upgrades, $35 million to health clinics in underserved areas, $15 million for nurse training programs and $15 million to recruit low-income citizens into state-funded health programs.
Subsequent to California's approval of the merger, Georgia Insurance Commissioner John Oxendine, who had approved the deal initially, brought Anthem back to the negotiating table to seek additional concessions. A pledge of $126.5 million over 20 years to support rural health care in Georgia led to Oxendine's approval. Fifteen percent of WellPoint's membership is in Georgia, compared to 50% in California.
Progress on Patient Safety?
Two recent surveys suggest that progress on improving patient safety in hospitals is moving slowly.
In results of its Hospital Quality and Safety Survey, the Leapfrog Group reports on progress hospitals have made towards meeting the Group's first three major recommendations: implementation of computerized physician order entry (CPOE), physician intensivist staffing of intensive care units, and volume standards for 6 high-risk surgical procedures (i.e, a minimum number of procedures performed each year) . Their findings: 4% of hospitals fully meet the standard for CPOE, 19% meet the standard for ICU staffing and from 3 - 32% meet the volume standards on the 6 high-risk procedures. The Leapfrog Group is a coalition of more than 160 Fortune 500 corporations and other large purchasers of healthcare that was formed in response to the 1999 Institute of Medicine report that first raised the issue of patient safety to national prominence.
In addition to these three standards, the Leapfrog survey queried hospitals on 27 other safety standards recommended by the National Quality Forum, a non-profit group created to promote quality in healthcare. Using those results, a Quality Index was calculated to indicate the extent to which individual hospitals comply with the safety recommendations; it can be viewed at www.leapfroggroup.org.
In a study of consumer perceptions of quality of care, the Kaiser Family Foundation reports that 48% of respondents are concerned about the safety of the medical care they or their families receive, and 34% indicate that they or a family member has experienced a medical error at some time. 63% feel that reporting of serious medical errors should be required and made publicly available.
Kaiser Health Savings Accounts
In a shift of corporate culture that reflects underlying health care trends, The Wall Street Journal reports that Kaiser Health Plans in selected markets will begin offering Health Savings Accounts to augment the high-deductible plans they introduced last year.
Although the company has built its reputation by providing comprehensive, physician-managed care in staff-model HMOs, the growing demand for lower-priced, high deductible insurance products has prompted Kaiser to expand its offerings. Dr. Arthur Southam, Senior VP of Product and Market Management at Kaiser notes that the company felt the move was necessary both to increase membership and to avoid adverse selection.
Kaiser HSAs will be available in 2005 in Colorado, Georgia and the Northwest, and are expected to be available in California in 2006. Wells Fargo Bank will act as Kaiser's HSA partner.
Spousal Surcharges for Health Insurance: The Next Trend?
Although not new, spousal surcharges - charging employees more for health coverage if their working spouse declines his or her own company's insurance - may be becoming more widespread. The Kaiser Family Foundation reported recently that 12% of employers currently impose such surcharges and another 11% are "very" or "somewhat" likely to do so this year or next.
Proctor & Gamble, Wal-Mart and Verizon are among the large companies that currently impose spousal surcharges, and Chlorox and Gannett will be using them for 2005. Reported amounts of the surcharges range from $40 - $150 per month. The National Federation of Independent Business is predicting wider use of the surcharges among small businesses as well.
Although the administrative complexity of surcharges - collecting the information, trusting employees to answer honestly and making changes throughout the year as they occur - is a downside, ongoing cost increases will undoubtedly prompt more employers to consider adding surcharges to their benefit programs.
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