Consumerism Rising in Popularity

IN THIS ISSUE:


GALEN EVENTS


? Briefing On Drug Importation

? Presentation to Florida Select Committee

? Briefing on Consumer Choice in Medicare

? Presentation in Minneapolis


GERMANY EMBRACES CONSUMERISM?

AVERAGE COST HIKES MASK WIDE DIFFERENCES

CHOICE & COMPETITION LOWER COSTS

CONSUMERISM RISING IN POPULARITY

VENDOR CORNER


? United Healthcare buys Golden Rule

? Dental HRAs

? PacifiCare

? Destiny Health

? American Medicare Security

? Lumenos

? Definity

 


GALEN EVENTS


I have been remiss in keeping you up-to-date on Galen activities lately. We’ve been so busy it is hard to take the time to write them up. Here are some recent and upcoming events:


? The Galen Institute held a briefing on September 25, entitled “Importing Drugs from Canada: Impact on Patients Today and Cures for Tomorrow,” to explore the issues and implications. The event featured Sally Pipes, President of the Pacific Research Institute; Stephen Entin, President of the Institute for Research on the Economics of Taxation; and Carolyn R. Aldige, President and Founder of the Cancer Research and Prevention Foundation. Galen President Grace-Marie Turner served as moderator. A five-minute highlight video from the policy briefing is now available on the Galen web site, www.galen.org


? I am the keynote speaker at the first meeting of Florida’s new House Select Committee on Affordable Health Care for Floridians, in Tallahassee today. I’ll be giving my “100 Years of Market Distortions” presentation. To see the slides, go to http://www.galen.org/news/Market.pdf


? Please join us! Galen will be hosting another Hill Briefing on Consumer Choice in Medicare, October 7 in Room 121, Cannon HOB from 2:00 to 4:00 pm. The speakers will include Scott Nystrom, Senate Committee on Aging; Joel White, Ways and Means Committee (invited); Lauren Smith, Office of Rep. Cliff Stearns; and Joe Antos, American Enterprise Institute. For more details and RSVP information, go to: http://www.galen.org/events/choiceinmedicare.html


I’m working on a new paper that suggests Medicare reformers should pay attention to market dynamics and learn from the way private companies develop and refine new products. I’ll let you know when the paper is ready.


? On October 15, I’ll be giving a talk on Consumer Driven Health Care at a seminar sponsored by the Citizens’ Council on Health Care in Minneapolis. The emphasis will be on how public payers can benefit from the experience of the private side. You can get more information at: http://www.cchconline.org/pdf/ConsumerDriven03.pdf


GERMANY EMBRACES CONSUMERISM?


Germany’s parliament has just enacted by a vote of 517 to 54 a major reform of that nation’s health care system, set to go into effect January 1, 2004. I don’t have the details yet, but it sounds like they are moving in a consumer driven direction. A story in the “International Herald Tribune” says it will save billions of Euros by requiring people to pay more of their own costs. Other parts of the package included tax cuts, relaxing labor-market regulations, a cut in unemployment benefits, and a provision making it easier for small companies to dismiss workers.

SOURCE: http://www.iht.com/articles/111543.html


AVERAGE COST HIKES MASK WIDE DIFFERENCES


An article by John Dorschner in the “Miami Herald” says that the average rate increases employers are facing hides wide differences between employers. The article cites Towers Perrin consultant Chuck Sarkisian as saying, “Employers who made significant changes to restructure in the last couple of years are at the very low end, with either no increases or up 6 or 8 percent?. But those who haven’t restructured may be seeing increases of 20 to 30 percent.” One example is Broward County employees who are seeing increases of 43 percent for the most expensive offering but savings for the cheapest. Annual employee cost for family coverage with “an unrestricted Vista point-of-service option” will be $12,100, while those choosing the Vista HMO will pay only $3,328. Broward is also offering a UnitedHealthcare HRA product.

SOURCE: http://www.miami.com/mld/miamiherald/business/6873081.htm


CHOICE & COMPETITION LOWER COSTS


An editorial in the Seneca County “Advertiser-Tribune” points out that the FEHBP recently announced a 10.6 percent premium increase – small compared to other employers. It asks, “What’s so different about federal employee health insurance that federal premium increases regularly lag those of private-sector plans?” It answers, “Choice and competition?. Health plans compete vigorously for civil servants’ business.” By contrast, in the private sector, “employers, not employees, are the real purchasers.” The article concludes, “Increased choice and competition nearly always leads to lower costs. Policymakers therefore should embrace changes, such as expansion of medical savings accounts and individual tax deductibility of insurance premiums, that would increase consumer choice.”

SOURCE: http://www.advertiser-tribune.com/edit/story/0924202003_edtedit924.asp


CONSUMERISM RISING IN POPULARITY


Writing in the Cleveland “Plain Dealer,” Mary Vanac reports that “local employers are hoping that health care ‘consumerism’ and workplace wellness programs will rein in runaway health insurance costs.” She says that, while managed care helped restrain costs for a while, “it also caused employees to lose touch with the true cost of their care.” She adds that HRAs combined with a high-deductible insurance plan are “rapidly rising in popularity among small and mid-sized employers.” She cites Anthem’s “Anthem ByDesign” product as a local example.

SOURCE: www.cleveland.com


VENDOR CORNER


We haven’t looked at what the vendors are up to in a while, so let’s go on a whirlwind tour of some of the latest developments:


? United Health Group is buying Golden Rule Insurance for a reported $800+ million. That’s a lot of money and it seems to suggest that United is expecting the MSA expansion to be passed by Congress this year and is trying to position itself for an explosion in MSA sales.

SOURCE: http://www.indystar.com/print/articles/0/075421-4570-127.html


? Jill Elswick reports in “Employee Benefit News” that Dental HRAs are catching on. She cites the Aetna DentalFund as a key example that can be sold as a stand-alone product or integrated into Aetna’s HealthFund program. Some vendors claim dental coverage can be “consumer-driven” without an HRA component. One example is DentaQuest Ventures which typically covers preventive services at 100%, basic services at 80% and restorative services at 50%. Another approach emphasizes dental education with an example offered by the Principal Financial Group’s Go2Dental.com program. The article says Principal is taking a wait-and-see stance on consumer driven care, but figures educational programs will be in demand no matter the underlying financing arrangement.

SOURCE: http://www.benefitnews.com/subscriber/Article.cfm?id=37881229


? PacifiCare is expanding its Self-Directed Health Plan to the small group market in Colorado, according to a company release. The program uses an HRA “Self-Directed Account” along with PPO coverage. Enrollees have on-line access to their claims history as well as account balances. The company expects this product to be available to small businesses in Arizona, Nevada, Oregon, Oklahoma, Texas, and Washington by the end of the year. It has been available in California since January, 2003.

SOURCE: Contact Dan Miller at dan.miller@phs.com or 714-226-3726.


? Destiny Health is touting a new study of its parent company’s experince with consumer driven health. The parent, Discovery Holdings of South Africa, is the world’s largest provider of such coverage with 1.5 million members and ten years of experience. Destiny CEO Ken Linde says the study puts to rest a number of myths about consumerism, including that members will forego preventive care to save money, that CD health is only good for the healthy, and that the programs don’t really save money, but only shift costs to workers. He says the evidence contradicts all of these claims.

SOURCE: For a copy of the study, contact Eileen Rochford at eileenr@theharbingergroup.com, or 773-463-2480.


? American Medical Security (AMS) of Green Bay, Wisconsin is rolling out an HRA product in the small group market. There are three plan designs that will be available in 32 states through independent agents. Company CEO Samuel Miller says these products will help “customers provide employee health benefits in a challenging cost environment.” AMS currently enrolls 546,000 people.

SOURCE: Contact Cliff Bowers at 920-661-2766


? Lumenos has another big account under its belt, this time the Deluxe Corporation, the world’s biggest check printer with 6,000 employees. The company holds its open enrollment season in October.

SOURCE: Contact Mary Angela Shannon at mashannon@lumenos.com or 703-236-6312.


? Definity is hooking up with Medco Health Solutions to offer a new pharmacy benefit. Also in the mix is Evolution Benefits that will provide a debit card service. Medco’s Brian Griffith is quoted in the release as saying that Definity customers have 25 percent lower pharmacy costs when adjusted for severity of illness. He says, “There is great value in supporting Definity Health to create this exciting new product.” It is not clear from the release if this will be available as a stand-alone product or sold as a complete package of benefits.

SOURCE: Contact Chris Delaney at chis.delaney@definityhealth.com or 952-277-5603.





 


Please send all comments/questions directly to me at gmscan@aol.com.



“Consumer Choice Matters” is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.


If you wish to subscribe/unsubscribe or update your address, please send an e-mail to galen@galen.org.


The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.

SHARE THIS ARTICLE

About the author

IN THIS ISSUE:


GALEN EVENTS


? Briefing On Drug Importation

? Presentation to Florida Select Committee

? Briefing on Consumer Choice in Medicare

? Presentation in Minneapolis


GERMANY EMBRACES CONSUMERISM?

AVERAGE COST HIKES MASK WIDE DIFFERENCES

CHOICE & COMPETITION LOWER COSTS

CONSUMERISM RISING IN POPULARITY

VENDOR CORNER


? United Healthcare buys Golden Rule

? Dental HRAs

? PacifiCare

? Destiny Health

? American Medicare Security

? Lumenos

? Definity

 


GALEN EVENTS


I have been remiss in keeping you up-to-date on Galen activities lately. We’ve been so busy it is hard to take the time to write them up. Here are some recent and upcoming events:


? The Galen Institute held a briefing on September 25, entitled “Importing Drugs from Canada: Impact on Patients Today and Cures for Tomorrow,” to explore the issues and implications. The event featured Sally Pipes, President of the Pacific Research Institute; Stephen Entin, President of the Institute for Research on the Economics of Taxation; and Carolyn R. Aldige, President and Founder of the Cancer Research and Prevention Foundation. Galen President Grace-Marie Turner served as moderator. A five-minute highlight video from the policy briefing is now available on the Galen web site, www.galen.org


? I am the keynote speaker at the first meeting of Florida’s new House Select Committee on Affordable Health Care for Floridians, in Tallahassee today. I’ll be giving my “100 Years of Market Distortions” presentation. To see the slides, go to http://www.galen.org/news/Market.pdf


? Please join us! Galen will be hosting another Hill Briefing on Consumer Choice in Medicare, October 7 in Room 121, Cannon HOB from 2:00 to 4:00 pm. The speakers will include Scott Nystrom, Senate Committee on Aging; Joel White, Ways and Means Committee (invited); Lauren Smith, Office of Rep. Cliff Stearns; and Joe Antos, American Enterprise Institute. For more details and RSVP information, go to: http://www.galen.org/events/choiceinmedicare.html


I’m working on a new paper that suggests Medicare reformers should pay attention to market dynamics and learn from the way private companies develop and refine new products. I’ll let you know when the paper is ready.


? On October 15, I’ll be giving a talk on Consumer Driven Health Care at a seminar sponsored by the Citizens’ Council on Health Care in Minneapolis. The emphasis will be on how public payers can benefit from the experience of the private side. You can get more information at: http://www.cchconline.org/pdf/ConsumerDriven03.pdf


GERMANY EMBRACES CONSUMERISM?


Germany’s parliament has just enacted by a vote of 517 to 54 a major reform of that nation’s health care system, set to go into effect January 1, 2004. I don’t have the details yet, but it sounds like they are moving in a consumer driven direction. A story in the “International Herald Tribune” says it will save billions of Euros by requiring people to pay more of their own costs. Other parts of the package included tax cuts, relaxing labor-market regulations, a cut in unemployment benefits, and a provision making it easier for small companies to dismiss workers.

SOURCE: http://www.iht.com/articles/111543.html


AVERAGE COST HIKES MASK WIDE DIFFERENCES


An article by John Dorschner in the “Miami Herald” says that the average rate increases employers are facing hides wide differences between employers. The article cites Towers Perrin consultant Chuck Sarkisian as saying, “Employers who made significant changes to restructure in the last couple of years are at the very low end, with either no increases or up 6 or 8 percent?. But those who haven’t restructured may be seeing increases of 20 to 30 percent.” One example is Broward County employees who are seeing increases of 43 percent for the most expensive offering but savings for the cheapest. Annual employee cost for family coverage with “an unrestricted Vista point-of-service option” will be $12,100, while those choosing the Vista HMO will pay only $3,328. Broward is also offering a UnitedHealthcare HRA product.

SOURCE: http://www.miami.com/mld/miamiherald/business/6873081.htm


CHOICE & COMPETITION LOWER COSTS


An editorial in the Seneca County “Advertiser-Tribune” points out that the FEHBP recently announced a 10.6 percent premium increase – small compared to other employers. It asks, “What’s so different about federal employee health insurance that federal premium increases regularly lag those of private-sector plans?” It answers, “Choice and competition?. Health plans compete vigorously for civil servants’ business.” By contrast, in the private sector, “employers, not employees, are the real purchasers.” The article concludes, “Increased choice and competition nearly always leads to lower costs. Policymakers therefore should embrace changes, such as expansion of medical savings accounts and individual tax deductibility of insurance premiums, that would increase consumer choice.”

SOURCE: http://www.advertiser-tribune.com/edit/story/0924202003_edtedit924.asp


CONSUMERISM RISING IN POPULARITY


Writing in the Cleveland “Plain Dealer,” Mary Vanac reports that “local employers are hoping that health care ‘consumerism’ and workplace wellness programs will rein in runaway health insurance costs.” She says that, while managed care helped restrain costs for a while, “it also caused employees to lose touch with the true cost of their care.” She adds that HRAs combined with a high-deductible insurance plan are “rapidly rising in popularity among small and mid-sized employers.” She cites Anthem’s “Anthem ByDesign” product as a local example.

SOURCE: www.cleveland.com


VENDOR CORNER


We haven’t looked at what the vendors are up to in a while, so let’s go on a whirlwind tour of some of the latest developments:


? United Health Group is buying Golden Rule Insurance for a reported $800+ million. That’s a lot of money and it seems to suggest that United is expecting the MSA expansion to be passed by Congress this year and is trying to position itself for an explosion in MSA sales.

SOURCE: http://www.indystar.com/print/articles/0/075421-4570-127.html


? Jill Elswick reports in “Employee Benefit News” that Dental HRAs are catching on. She cites the Aetna DentalFund as a key example that can be sold as a stand-alone product or integrated into Aetna’s HealthFund program. Some vendors claim dental coverage can be “consumer-driven” without an HRA component. One example is DentaQuest Ventures which typically covers preventive services at 100%, basic services at 80% and restorative services at 50%. Another approach emphasizes dental education with an example offered by the Principal Financial Group’s Go2Dental.com program. The article says Principal is taking a wait-and-see stance on consumer driven care, but figures educational programs will be in demand no matter the underlying financing arrangement.

SOURCE: http://www.benefitnews.com/subscriber/Article.cfm?id=37881229


? PacifiCare is expanding its Self-Directed Health Plan to the small group market in Colorado, according to a company release. The program uses an HRA “Self-Directed Account” along with PPO coverage. Enrollees have on-line access to their claims history as well as account balances. The company expects this product to be available to small businesses in Arizona, Nevada, Oregon, Oklahoma, Texas, and Washington by the end of the year. It has been available in California since January, 2003.

SOURCE: Contact Dan Miller at dan.miller@phs.com or 714-226-3726.


? Destiny Health is touting a new study of its parent company’s experince with consumer driven health. The parent, Discovery Holdings of South Africa, is the world’s largest provider of such coverage with 1.5 million members and ten years of experience. Destiny CEO Ken Linde says the study puts to rest a number of myths about consumerism, including that members will forego preventive care to save money, that CD health is only good for the healthy, and that the programs don’t really save money, but only shift costs to workers. He says the evidence contradicts all of these claims.

SOURCE: For a copy of the study, contact Eileen Rochford at eileenr@theharbingergroup.com, or 773-463-2480.


? American Medical Security (AMS) of Green Bay, Wisconsin is rolling out an HRA product in the small group market. There are three plan designs that will be available in 32 states through independent agents. Company CEO Samuel Miller says these products will help “customers provide employee health benefits in a challenging cost environment.” AMS currently enrolls 546,000 people.

SOURCE: Contact Cliff Bowers at 920-661-2766


? Lumenos has another big account under its belt, this time the Deluxe Corporation, the world’s biggest check printer with 6,000 employees. The company holds its open enrollment season in October.

SOURCE: Contact Mary Angela Shannon at mashannon@lumenos.com or 703-236-6312.


? Definity is hooking up with Medco Health Solutions to offer a new pharmacy benefit. Also in the mix is Evolution Benefits that will provide a debit card service. Medco’s Brian Griffith is quoted in the release as saying that Definity customers have 25 percent lower pharmacy costs when adjusted for severity of illness. He says, “There is great value in supporting Definity Health to create this exciting new product.” It is not clear from the release if this will be available as a stand-alone product or sold as a complete package of benefits.

SOURCE: Contact Chris Delaney at chis.delaney@definityhealth.com or 952-277-5603.





 


Please send all comments/questions directly to me at gmscan@aol.com.



“Consumer Choice Matters” is a free weekly newsletter published by the Galen Institute, a not-for-profit public policy organization specializing in research and education on health policy. Visit our website at http://www.galen.org for more information.


If you wish to subscribe/unsubscribe or update your address, please send an e-mail to galen@galen.org.


The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.

SHARE THIS ARTICLE

About the author