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UltraLink - FOCUS...on benefits
March 2006
Several US Coalitions Are Measuring Provider Performance
There are several coalitions across the US that have begun to measure hospital and physician performance. Among them are the Employer Health Care Alliance Cooperative in Wisconsin and the Mid-America Coalition of Health Care in Missouri.
These initiatives work on several levels: 1) they provide a powerful incentive for health care providers to improve the quality of care they provide, 2) give employees and health care users better information to help them make informed choices, and 3) enable employers to make better decisions on plan design and other aspects of health care.
Most of these efforts focus on measuring performance on specific areas of healthcare, especially in the treatment of chronic conditions which often are the costliest to consumers. The Alliance group in Wisconsin will publish their next report "Quality Counts," this spring which will measure overall hospital performance, maternity care and cardiac care. They plan on branching into other areas in the future.
Data is gathered from several sources with publicly reported data a key element. The Alliance used information from The Leapfrog Group, an organization that promotes health care quality and billing data that hospitals are required to submit to the State of Wisconsin Bureau of Health Information. Because these organizations don't want to over-burden the health care providers with reporting, knowing that they would get a lot of push-back or potentially not get the information at all, they are working with already reported data but finding ways to turn it into more consumer friendly formats.
The reports are distributed to their members utilizing different methods. The Mid-America Coalition makes its report available over the Internet while the Alliance provides hard copies but is looking into a password protected Internet access for the future. The Alliance's hard copies have a tear-off postcard for employees to provide feedback and 81% of respondents said that they found the report useful.
Employers are utilizing these reports in different ways. Winterthur North America provides the Quality Counts report to its employees, primarily through their company intranet. They have received positive feedback from their employees and will continue to distribute the information to them. On the other hand, Sprint Nextel Corp. does not provide the information directly to employees but they use it with respect to having a dialogue with other groups, an effort by employers to encourage providers to be more open with respect to performance reporting, creating more transparency.
The next step for the coalitions is to find more ways to expand their analysis and benchmark performance.
Sources: Business Insurance, March 13, 2006.
Public Employees Also Turning to Public Health Assistance
There have been a lot of stories in the press recently about lawmakers passing legislation forcing large employers such as WalMart to spend more money on health benefits for their employees so that so many of them don't have to turn to public health assistance. It turns out some of the public employers are having the same issues with rising health care costs and a growing number of their employees are also looking for public health assistance.
Government budgets are also being squeezed by their employees escalating health costs, forcing them to shift more of the expense onto the employees. Those lower wage employees can't always afford it. Some examples:
- On the Massachusetts' Executive Office of Health and Human Services' list of employers with 50 or more employees using public health assistance, the city of Boston is ranked number six.
- In Texas, 15 of the 20, employers identified by the state's Health and Human Services Commission report of employers with individuals enrolling in the Children's Health Insurance Program, were public employers - mostly school districts.
How is this happening? Due to budget constraints more and more government entities are reducing their employees' access to health benefits by turning positions into part-time or temporary positions that are ineligible for benefits, or by increasing the benefits contributions to a point that sometimes they are just unaffordable. In Ohio last year, the state increased employee health plan contributions from 10% to 15% because of significant budget concerns.
According to David West, Executive director of the Center for a Changing Workforce, a nonprofit organization in Seattle that focuses on issues affecting low-wage and nonstandard workers, "Perma-temps - people without health insurance - are almost as big a problem in the public sector as the private sector. His research has found that in the state of Washington 10% of their 160,000 employees were receiving government health assistance.
To account for some of this Rich Johnson, senior vp and national public sector health practice leader for the Segal Co. in Washington noted that often government budgets are limited to the number of full-time benefit eligible employees that can be hired, therefore they require the use of many temporary or part-time staff who are usually not eligible for health benefits. Also, Segal's Johnson notes that the government can't just raise prices like private employers can, they would have to raise taxes to get more funding for their employees.
According to Steve Kreisberg, head of collective bargaining at American Federation of State, County and Municipal Employees in Washington, which represents about half of the nation's public employees, in general, most public-sector employees prefer better benefits packages with less salary. But, Darrell E. Wells, director of risk management for the city of Odessa, Texas, and chairman of the board of trustees of the Family Health Benefits Pool that provides coverage to city employees, said, "the fact is, I don't know of a single government that is so rich and fat and happy that it can keep up with the increased cost in employee health care."
In Louisiana when Kip Wall, former chief executive officer of the Office of Benefits for the state of Louisiana realized that 9% of the state's workers could not afford their health benefits, he tried to create a low-cost plan but unfortunately they could never put one together that was of significant value to the employees to make it worth it to invest.
So, it seems, for all of the press coverage of lawmakers going after large private sector employers, it turns out, the government is suffering from the same issues of rising health care costs.
Sources: Business Insurance, March 13, 2006
Automatic Provider Payments Being Tested
As higher deductibles, co-pays and premiums for patients increase, providers are finding that patients have become slower to pay, driving providers' collection costs and bad-debt accounts up. This April, in Texas, UnitedHealth Group, Inc. is launching a new automatic payment program called OnePay where they will take the money directly out of an employee's paycheck, with interest. The goal of this program is to get patients to pay for services more promptly. And, according to UnitedHealth it will provide greater convenience to all involved in the payment process.
UnitedHealth's clients - large employers - may see lower costs. Tenet HealthCare Corp., a Dallas-based hospital company who is enrolled in the pilot expects to possibly accept discounted payments from employers and patients. "Any sacrifice we would make would be offset by the gain we would get on those additional collections," says Stephen Mooney, Tenet's vice president of patient financial services.
The way that it will work is that UnitedHealth will pay the patient's portion directly to the provider upon the processing of the claim. It will attempt to collect from the patient within 20 days. If patients are unable to pay 100% right away, they will then act as a creditor receiving payments, plus interest, deducted from the patient's paychecks until it is paid in full. The rate charged will be prime rate, currently at 7.5%, which they are able to offer because the option to collect from paychecks makes it a low financial risk. In addition, they chartered their own bank Exante in 2002 which will serve as the lender to employers participating in One-Pay. Employees and medical providers will enroll themselves in the program on a voluntary basis.
The benefit to employees is convenience. In a focus group of lower income consumers they felt that the availability of low-interest rate payment plan was appealing. In addition, the enrolled patients would feel the discounts offered by the providers. Tenet and UnitedHealth are both participating as employers in the pilot program.
Some in the health care industry feel that the automatic bill payments may pose a risk because of the complex nature of the medical bills. They feel that patients will be less likely to review these bills and won't be able to challenge the errors before the bill is paid. UnitedHealth states that for patients challenging any medical charges it will freeze the 20 day deadline, interest accumulation and paycheck deductions. If the money has been already paid then the patient will have to make a case to get it back.
The deductions are not the first line of payment, though. UnitedHealth will first go to patient's FSA or HSA to see if the money is available for deduction. If a patient doesn't want to pay out of their HSA account they can opt to skip this step. Also, employers determine at what level to set paycheck deductions.
Other providers have started alternative payment plans. WellPoint Inc, and American Express Co. have started to offer a credit line to Empire patients with HSA accounts who would be issued a "HealthPay Plus" card to be used at the provider's office. Empire then processes and pays the insured portion of the claim and American Express pays the patients portion, billing them back. Interest rates will vary by employer. In addition, Aetna Inc., and Highmark Inc., say that they plan to offer patients an automatic payment option out of their HSA accounts by the end of the year.
Source: The Wall Street Journal Online, March 13, 2006
Employers See Surge in the Purchase of Voluntary Benefits
Because of their desire to attract and retain employees and to meet the needs of a changing work force, many companies are offering employees the option of purchasing voluntary benefits. While employees are often required to pay 100% for these additional types of insurance, they are embracing them. According to Eastbridge Consulting Group, a marketing advisory firm serving the insurance and financial service organization in the US and Canada, nearly 64% of employers offer at least 1 voluntary benefit. And, sales of these benefits have more than doubled from $2 billion in 1997 to $4.22 billion in 2004. The largest portion of sales is attributed to life insurance followed by disability insurance.
Several health insurance industry experts weigh in on the cause of this rise in purchase by employees.
- Three things are fueling the surge: employer cutbacks, employee recruitment and retention, and new product development - AIG Benefit Solutions
- Consumer-driven health care movement has helped to fuel employer interest - Watson Wyatt Worldwide
- Employers want to offer tailored benefits to fit employees' lifestyle needs, and voluntary benefits are a way to meet those needs at a low or no cost to the employer - MetLife
- There is an availability of new products that historically were not available through work, such choices as home and auto insurance which are offered at a discount - Aon
- The savings that can come from purchasing voluntary insurance through an employer can help offset those increased payments for employees' health benefits contributions - insurers will typically offer between a 5% and 10% discount so employees can save in one area to pay for the other. There is also the convenience of payroll deductions which in such cases as auto insurance can spread the payment over the course of a year rather than the alternative of having to pay 100% upfront - Liberty Mutual Group
- Some types of insurance can be purchased on a pretax basis - Assurant Employee Benefits
There can be significant benefits for employers but they should also be careful to make sure that they scrutinize the plans just as closely as they would their core health benefit programs and be careful to not to appear to endorse the products. Employees often assume that if it is being offered by their employer then it has been screened.
Source: Business Insurance, February 27, 2006
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