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Health Care Crisis - Latest Update

Consumer Driven Health Plans - Dead or Alive?
Doctor Ratings - Gaining Momentum with a Statistical Windfall
Wellness Programs - The Carrot and the Stick
Trust but Verify: Auditing for Eligibility for Coverage
Summary

It seems that one of the factors in the ongoing health care crisis for employers is the sheer complexity of the issues and problems involved.

On top of trying to run a business, employers and HR professionals have to sort out the complexities and variables of the health care system and various means of coverage - such as Consumer Driven Health Plans, Wellness programs, eligibility issues, doctor ratings, conflicting studies and information, benefit cost variables, disease management, and so on. Worse yet, employers are required to explain this complicated nest of snakes to employees in "plain language". Good luck on that one.

All of this takes place as the costs for healthcare escalate before our eyes.

Employers continually have to try to sort out complicated systems and issues that sometimes seem to take as much energy and concentration as it does to run their normal business concerns. The pressure continues to build, as this has been going on for years, with no end in sight.

In an effort to help employers keep working on this issue we will present some updates here that may provide insight into some of the latest developments in the employer health care crises.

Consumer Driven Health Plans - Dead or Alive?

Consumer driven health care seems to be getting a sputtering start. The raw numbers of people on the plans are increasing, but at a slower rate than expected. The effectiveness of these plans is also being called to account.

The pros and cons of these health care plans are being debated vigorously.

Depending on whom you ask, you can find that CDHPs are on the rise and will do much to curb this crisis, or that CDHPs are faltering and on their way out because of lack of participation and effectiveness.

This was highlighted at the National Consumer Driven Healthcare Summit in Washington recently. This summit featured presentations from groups that have been critical of CDHPs (the Commonwealth Fund and the Consumers Union) and others who are in favor of them (such as the Consumers for Health Care Choices).

On the negative side, the findings of the 2nd Annual EBRI / Commonwealth Fund Consumerism in Health Care Survey found that enrollment in the plans has been more or less static since 2005.

In addition the Consumers Union claims that consumers did not drive Health Savings Accounts but that "employers trying to save money and insurers trying to increase profits" was the motivation behind these plans. In their view, this has led to the enrollment rates being lower than expected up to this point.

On the positive side the Consumers for Health Care Choices attributed the slowdown in the rate of increase in health care costs over the past few years to the emergence of consumer-driven health care. They compared the current situation to the impact that managed care had in the early 1990s.

Members of this organization claim that the Consumer Directed Health movement is transforming health care, and that the products are being adopted faster than any other type of plan. They feel that the reason consumers are selecting products with managed care networks is because that this is primarily what insurers have been offering up to this point.

An important aspect of most consumer-driven health plans is that they are designed to emphasize wellness and prevention in order to reduce future health care costs. However, whether this is actually the case or not is also being debated by rival factions.

Insurers and vendors promoting CDHPs claim to have statistics showing that members are more likely to access preventive health care services, such as cancer screenings. Benefit consultants and some other organizations on the other hand, claim to be finding just the opposite.

Studies by UnitedHealth Group, Cigna Healthcare, and Aetna, among others, claim that CDHP members made greater use of preventive care and wellness services than other plan members.

However, Kaiser Family Foundation and Thomson Healthcare claim that studies show that PPO members used more preventive services than CDHP members did. Some of this may be comparing "apples and oranges", and parsing fine points of statistics that don't often tell the whole story.

Some benefit experts attribute the so-called lower use of wellness and preventive care services by CDHP members to misunderstanding - people think they shouldn't have tests because they think they'll have to pay for them, when this may not actually be the case. Also, people often hold off on following up on conditions until they have more than one problem before seeing a doctor, so there is a time lag and distortion of the use of services because of this human tendency.

In reality the problem of employees not seeking preventive care is most likely broad based, and not exclusive to CDHP members because most employer-sponsored plans cover preventive care at 100 percent.

It seems that whether it's a consumer-driven plan or not, many employers are doing a less than satisfactory job of telling people that health is their own responsibility and that they need to take a more active part in these issues.

Doctor Ratings - Gaining Momentum with a Statistical Windfall

In August a federal court ruled that Medicare should release claims data on the quality and cost of thousands of physicians to Consumers' Checkbook, the nonprofit organization that publishes Consumer Reports.

The ruling was made by U.S. District Judge Emmet G. Sullivan in Washington, with Health and Human Services named as the defendant.

HR Policy Association and other employer and consumer groups wrote to HHS Secretary Michael Leavitt urging HHS not to appeal the decision, while the American Medical Association urged HHS to appeal the ruling.

Consumer's Checkbook wants to use the information to create a free resource that would report the number and types of procedures performed by each physician to aid consumers in selecting doctors. The group initially brought the lawsuit against the Department of Health and Human Services in hopes of making public every health care claim paid by Medicare.

The release of this information could be a windfall to employers and other groups who are actively looking for greater cost and quality transparency in the heath care marketplace. In an executive order last year President Bush called for greater cost and quality transparency in the health care system, so it remains to be seen whether The Department of Health and Human Services will appeal the ruling.

Consumer groups say this data has limitations but can still be used to rate physician quality by detailing what kind of medicine a doctor prescribed and whether a patient experienced complications or died after surgery. This is all done without releasing any patient information.

The American Medical Association claims that Medicare data gives an inaccurate picture because it does not focus on whether a patient's care led to recovery or not, but only how much the care cost and what it consisted of.

Advocates believe that this information will eventually lead to higher quality and lower costs for consumers since they would be able to compare the services and effectiveness of various doctors available before making choices based on actual statistical data. In addition they feel that making this information public may encourage physicians to improve.

In another development concerning doctor ratings the health insurer WellPoint will join with Zagat Survey to create an online tool to be used by 1 million of its members to rate their doctors. The WellPoint survey will evaluate trust, communication, availability and office environment.

An AMA spokeswoman said the association had no position on the Zagat survey for WellPoint. According to Zagat the ratings are meant to let consumers evaluate the things they are qualified to judge in a doctor, and to give them the most information that might be of interest to them when they are deciding on a doctor. It also allows them to say what they think about their doctors.

And finally, joining the momentum in the information trend, Microsoft has released a web site for health care consumers, along with WebMD and Revolution Health.

Wellness Programs - The Carrot and the Stick

To ensure that more consumer-driven health plan members use wellness and preventive care services, a growing number of employers are turning to increased or modified communication of benefits, as well as the offering of financial incentives.

Some companies are changing the language they use in promoting the services as part of their positive push in motivating employees to use wellness programs.

One company promoted the benefits as "free stuff." Such items as well-child visits, routine checkups and gynecological visits, including related laboratory work, were promoted as "free." And further, rather than calling it a high-deductible health plan, it is referred to as an "upfront deductible".

The "incentives" side of the equation includes reductions in employees' monthly premiums, contributions to employees' health reimbursement arrangements or health savings accounts, gift certificates and more. There is a growing trend of using phased incentives, where payments are made to plan members at the beginning, middle and end of a care management program to ensure they follow through.

On the other hand, some employers are reverting to the "stick" method of motivation by charging employees more for their health insurance if they allow health risks such as tobacco use, obesity or high cholesterol to go unchecked.

One company that is taking this approach is Clarian Health. Their newest program will assess $5 per-paycheck fees on employees who do not meet minimum standards for body mass index, cholesterol, blood glucose, blood pressure and nonuse of tobacco.

This year employees will be required to complete a health risk appraisal to enroll in their benefits for 2008, and those who cannot claim nonuse of tobacco for at least six months will be assessed a surcharge of $5 per paycheck in 2008. The program's total possible assessment is limited to $25 per paycheck for an employee who fails to meet all five standards. However, if employees have a medical condition that prevents them from meeting certain standards, they can obtain an exemption by providing a doctor's note.

Industry experts feel that incentives are a better way for employers to go rather than punishment, but in the last year employers are beginning to use both the carrot and the stick combined.

Trust but Verify: Auditing for Eligibility for Coverage

By doing an audit and forcing documentation that spouses and dependents who are on your plan are actually related to the employee in question, some companies claim you can drop your total number of covered individuals by as much as 10 to 15 percent.

Employers are sometimes attempting to save money by weeding out grown children, ex-spouses and other employee dependents that are no longer eligible for benefits. Though some people are trying to "beat the system" by having ineligible relatives on their health coverage, many may just be confused or uninformed about the latest rules for coverage.

One high profile case of this happening is with Ford Motor Company. When they started a program that was designed to determine whether everyone receiving health-care benefits was properly enrolled they found tens of thousands of ineligible dependents were receiving benefits.

Here are two of the more common scenarios for people ineligibly covered: people who got divorced but their ex-spouses continued to receive benefits, and worker's children who got married and were no longer eligible for benefits but continued to receive them.

In Ford's initial program there were two phases. The first is an amnesty phase, in which letters go out to all employees explaining that they could be asked to reimburse Ford if future audits show that ineligible dependents are making claims and being covered by company-paid premiums. The second phase is a full audit to determine whether relatives of employees have been improperly receiving health-care benefits and, if so, for how long.

Ultimately, penalties in the form of payroll deductions are involved.

Employers are also tightening up the procedures for adding dependents for coverage. To ensure that the dependent is really eligible companies may ask for a driver's license, birth certificate, adoption papers, marriage license or the front page of a tax return.

As the stakes get higher the loopholes are being closed and employers are becoming more vigilant in monitoring eligibility for coverage on sponsored health plans.

Summary

In this article we have covered some areas developing in the continuing health care crises, such as the debated status of CDHPs, doctor ratings, motivation for wellness programs, and auditing for ineligibles receiving benefits.

Everyone seems to agree that things can't go on as they are and that significant change may be "just around the corner".

With all of the talk about "solving the health care crisis" amongst the presidential candidates some people are placing hopes in the upcoming elections that may signal a change.

Meanwhile, employers continue to try to make the best out of the situation - and we hope we can contribute by updating you on some of the latest developments and ideas for dealing with an increasingly complex and costly issue.

Reemploying Returning Veterans 

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