IN THIS ISSUE:
? The Zombie Returns – Single Payer Ideas Never Die
? Head of San Diego Medical Society Unimpressed with Single Payer
? Chicago Tribune Examines Variations on HRA Design
? Creative Thinking in Consumer Driven Benefit Design
? Bringing It All Back Home in Arkansas
? NAIC in Chicago
? NAABC in Chicago
? Health Underwriters in Virginia
? Health Underwriters in Ohio
? Health Users Group in Florida
? International Health Economics in San Francisco
The Zombie Returns – Single Payer Ideas Never Die
We start out this issue with a report in “Modern Healthcare” about the new push for universal coverage. Writer Laura Benko takes her cue from Maine where newly elected Governor John Baldacci “intends to fast-track the proposal (for universal health care) through the legislature within the next four months and begin implementing the plan before year-end.” Of course the bill hasn’t been written yet, but the article quotes the governor’s spokeswoman Trish Riley as saying, “We’ve reached a point where something has got to be done, and it’s got to be done now.”
This kind of hysterical frenzy is never the formula for good public policy, as Ms. Benko reminds us later in the article. She remembers that, “In 1993, Washington (state) enacted the Health Services Act, a sweeping reform package aimed at insuring every state resident by 1999?. But in early 1995? 90% of the new law was repealed?.”
The article looks at other state initiatives under consideration in Illinois, Maryland, Massachusetts, and Wisconsin, and focuses on California, which is considering several proposals. One that is being pushed by the CEO of Blue Shield of California, Bruce Bodaken, would be a mandate on employers. Another, sponsored by state Senator Sheila Kuehl, “would establish a single-payer system to cover medical, dental and vision care, prescription drugs, mental health services and long term care for every state resident. The system would be funded by taxes on payroll, investment income, tobacco and alcohol and run by a new state agency controlled by an elected commission.” Wow!
But the article also mentions that voters in Oregon defeated a similar proposal just six months ago by a four-to-one margin. Collectively, all of the states are running deficits of $82 billion (almost half of which is in California), and ERISA curtails much of what the states might want to do to solve their fiscal problems. It also cites information from Canada’s Fraser Institute that single-payer in that country has led to growing waiting lists of patients.
The piece wraps up with a quote from the president of the Maine Hospital Association, Steven Michaud, who notes, “It’s a pipe dream to think states can tackle (universal coverage) on their own when many are barely able to preserve the services they already have.”
Head of San Diego Medical Society Unimpressed with Single Payer
James G. Knight, MD, the president of the San Diego Medical Society, has an observation or two about all this frenzy in the “San Diego Union Tribune.” He says one of the jobs of a doctor is to tell you what you don’t want to hear — “So here it is: no one can afford to give you everything you want for free, forever?. That is especially true for quality health care.” He adds that while most Americans now consider health care a “right … 85 percent of Americans want nothing to do with paying for their own care.” He asks, “How can something be that important, yet not be worth paying for?” He goes on to say that the reason there are so many uninsured is because insurance has become so expensive, and the reason insurance is so expensive is because most people get their care for free, or for a $5 copay.
Dr. Knight is unimpressed with the current raft of universal health care proposals — “Can California, currently facing a $35 billion deficit, be relied upon to responsibly run a massive new system that will be the sole provider for 30 million Californians?” Rather, he says, “It’s time to put the consumer back in the game. American consumers must be empowered to take control of health care.” He says, “The growing national trend toward ‘consumer directed health care’ is a practical and immediate necessity,” and legislators should confine themselves to making sure there is a truly competitive marketplace.
SOURCE: http://pqasb.pqarchiver.com/sandiego/ The article ran on Sunday, April 13, 2003. You may search the archives for a free abstract or purchase the complete text.
Chicago Tribune Examines Variations on HRA Design
Ann Meyer follows up her article on consumer driven health care with a second installment in the “Chicago Tribune” this week. She says “small business owners aren’t quite nervy enough to impose a high-deductible insurance plan on their employees.” So they are softening the blow with HRAs. She notes the IRS ruling last June has sparked interest, and quotes John DiVito of Flexible Benefit Service Corp., as saying, “The reaction to this has been overwhelming.” She says some of the advantages are that an HRA can go with any kind of insurance plan and the HRA doesn’t need to be pre-funded. Patrick Moore of Diversified Insurance Services warns employers against managing their own HRA fund because of HIPAA’s privacy rules, “You don’t want to be handling explanation of benefits for people because you would be getting information you shouldn’t have.” He recommends using a third-party administrator to administer the fund. The article says, “HRAs with standard PPOs also are generally less expensive than their sister products: the consumer-driven health plans offered by insurance companies.” It says those plans are more expensive because they offer intensive consumer education and support. This observation is interesting, and probably true in the first year or two of coverage, but it raises a question about longer-term effects. Will consumers become better shoppers with just the financial incentives, or do they need the educational aspects as well? The article gives as an example a banking trade group in Chicago that has raised its Blue Cross Blue Shield hospitalization deductible to $1,000 (from no deductible) and is using an HRA only to help pay for $750 of the deductible. The HRA does not roll over, but employees get the advantage of reduced premium.
Creative Thinking in Consumer Driven Benefit Design
“Employee Benefits News” is also keeping track of the many variations in plan design that fall under the “consumer driven” category. Jill Elswick writes that, on the road to consumerism, health plans “are now exploring a number of bypasses, side streets, and off-ramps.” She quotes consultant Chase Carey as saying, “It’s too soon to be calling an HRA on top of a big deductible PPO plan the consumer-driven health plan of the future.”
Ms. Elswick cites several variations on the theme, including “Plan Design Consumerism,” in which employers make a defined contribution available and workers can use those funds to pick and choose their own network of physicians, benefits, or cost-sharing. Each change in the design results in a different total cost of the coverage. Two of the leaders in this model are Vivius, which is working with Health Net, and Choicelinx, which is with Oxford Health Plans and Blue Cross Blue Shield of Massachusetts.
But Definity’s Chris Delaney argues that, while such a building block approach may give workers “pause to think about the cost implications” at enrollment, they don’t affect behavior at “the point of care.” And Lumenos’ Doug Kronenberg says these plans may sensitize consumers to the cost of coverage, but they don’t address the cost of the care itself. It’s “kind of tweaking the old system,” he adds.
Humana’s Beth Bierbower takes a middle-ground, arguing for choice. “Not everybody is interested, ready, or willing to take a product that’s an HRA with a high deductible on the back end.” She says while only 6% of Humana’s employees chose an HRA, they all benefited from the educational tools. They have seen a “14% jump in preventive services, but an overall reduction in claims.”
Another variation in plan design is coming from Mutual of Omaha, according to the article. They will be introducing an HRA that features separate deductibles for medical (possibly $1,500) and drugs ($200). And Wausau Benefits has developed a product that includes an out-of-pocket deductible before the HRA kicks in. Finally, CareGain features a “HealthcareIRA” which rolls 25% of unused HRA funds into “a portable lifetime medical expense account,” but returns the balance to the plan sponsor to help with the next year’s costs.
Ms. Elswick concludes, “Such creative thinking is likely to continue as the notion of consumer-driven health expands into the mainstream.”
Bringing It All Back Home in Arkansas
The “Arkansas Democrat-Gazette” brings it all home, explaining how consumerism is beginning to impact Arkansas. The state is currently “studying a plan for the state’s 31,000 employees and retirees and its 45,000 school employees and retirees,” according to Sharon Dickerson of the Department of Finance and Administration. Michael Taylor, a Towers Perrin consultant, says, employees “have to realize that this is their money they’re spending and not a third party’s.” The article quotes Cato’s Tom Miller as predicting consumer-driven plans will provide premiums of “between 5 percent to 10 percent lower than rates offered by traditional managed care.” Writer Tom Liskey says, while the concept is “relatively new to the health care industry,” it is “as simple as seeing the price tag before making a purchase.” But the “starting point is the consumer.” Only when they get interested in the price, will providers start to reveal what their prices are. NCPA’s John Goodman says, “If patients are footing the bill, providers are going to have to be more forthcoming in their prices.” That, in turn, will develop a competitive impulse to lower prices.
SOURCE: http://www.ardemgaz.com/ The article ran in the business section on Sunday April 20, 2003. The paper charges for archives.
I’ve got a number of talks coming up, including:
? The National Association of Alternative Benefits Consultants in Chicago on April 28th. Go to http://www.naabc.com for information.
? The Virginia Health Underwriters in Richmond, VA on May 1-2. Contact Ginger Ashton at firstname.lastname@example.org for information.
? The Ohio Health Underwriters in Columbus, OH on May 6. Go to http://www.ohio-oahu.org for information.
? The Health Care Users Group of CSG Healthcare in Ft. Meyers, FL on May 8. Contact Mworek@GatewayHealthPlan.com for information.
? The International Health Economics Association in San Francisco on June 16.
Maybe I’ll see you at one of these events.
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