10/2001: The Pulse
It's not been easy getting back to work after the events of last month. We have all been affected by the attack, directly or indirectly. Before the attack, something as simple as the sudden closing of National Airport would have seemed a catastrophe. Today it seems almost trivial.
The United States has been changed. To the extent we have been shaken from our complacency and our petty bickering, it will be for the better. To the extent we rediscover the role of government is to ensure the public safety, not to act as our nanny, it will be better still.
This does connect to health care reform. The police, firefighters, and construction workers of New York City have proven to be more competent than the CIA and FAA. Who would dare say they are incapable of choosing their own health care coverage anymore? Who would suggest the federal government should take care of it for them?
MN Chamber: Workers Want More Choice
Americans are quite confident in their own abilities, according to a survey of employers and employees conducted by the Minnesota Chamber of Commerce.
The survey found that 77 percent of employers and 78 percent of employees favor the idea of workers customizing their own benefits; 75 percent of employers and 71 percent of employees favor financially rewarding workers for controlling their use of benefits; and 52 percent of workers like the idea of "choosing their own coverage with only financial assistance from their employer."
Source: Contact Annamarie Hingos of the Minnesota Chamber of Commerce at 651/292-4694 or firstname.lastname@example.org.
Survey: Worker Satisfaction Less Important
You've probably already heard about the latest Kaiser Family Foundation survey of employers on their benefits programs. KFF is actually just the latest sponsor of this survey, conducted annually by Jon Gabel. Gabel is employed by the Health Research and Educational Trust, an off-shoot of the American Hospital Association.
Gabel started doing this survey many years ago, when HIAA sponsored it. There is nothing very surprising in the latest version: PPO enrollment is going up while HMO enrollment is going down; costs are rising faster than at any time since 1992; large employers have more savvy than small employers; etc. etc.
One thing of interest is that employers are paying much less attention to employee satisfaction than they used to in choosing a benefit plan. Only 47 percent of employers responding to the survey said employee satisfaction was a "very important" consideration. Also, almost no one pays attention to NCQA or HEDIS quality measures when choosing a plan.
The KFF survey also finds that a mere 17 percent of firms, including only 41 percent of "jumbo" firms (5,000+ workers), "have the ability to link medical care data to individual employees," which is a requirement of HIPAA effective October 16, 2002--just a year from now.
The report is good background information and is available at the Kaiser Web site.
Source: "Employer Health Benefits," http://www.kff.org
NBCH: Employers Skeptical of Change
A report titled "Alternative Strategies for Managing Employee Health Benefits" was issued by the National Business Coalition on Health (NBCH) in September. The report--a recap of a meeting NBCH held in January--takes what it styles a stance of "healthy skepticism" towards new ideas.
The report emphasizes, for instance, a Deloitte Touche survey that concluded 80 percent of employers are not considering any significant changes in the way they purchase health benefits. Fifty-nine percent of those said they wouldn't change because of employee resistance. (It is interesting how often employers underestimate their workers' willingness to change.)
NBCH also offered its own definition of "defined contribution," which emphasizes a "fixed" contribution from the employer. The report includes extended summaries of presentations by Randy Johnson of Motorola and Pam Krol of Lucent Technologies. Both firms are being cautious in embracing change, looking at more quality assurance, use of technology for information support, and outsourcing of benefits administration. Generally, the report is pretty negative on defined contribution.
EBN: Models for Defined Contribution
Much more upbeat on defined contribution is the first in a two-part series in Employee Benefit News, by Jill Elswick. The article lists five different business models as defined by the new Consumer Driven Health Care Association, and indicates which of the association's members fit into each model.
Elswick says all the models are "miles from the vilified notion of tucking grimy wads of cash into employees’ hands and ordering them to buy coverage on the back streets of the individual health insurance market." "Paternalism survives," she adds, "but with a twist."
Source: "Business Models Emerge for Consumer-Driven Health Care," September 1, 2001, http://www.benefitnews.com
Consumers Need "Skin in the Game"
The Charlotte (North Carolina) Observer says "consumers don't have enough skin in the game," in a report on a recent meeting of the local Association of Health Underwriters. A panel of speakers told the group that the essential problem in health care is that "the consumer is not the payer."
The article concludes, "health-care types are hot on medical savings accounts and other 'defined contribution' plans.”
Source: "Group Discusses How to Control Health-Care Costs," Mike Stobbe, September 8, 2001, http://www.charlotte.com/
Goodman on Health Reform
NCPA President John Goodman was interviewed by Linda Seebach in the Rocky Mountain News in early September. He covers a lot of health care ground, including the problems created by misguided regulations and the need for more consumerism in health care. He offers "flexible spending medical accounts" as a step in the right direction.
Source: "Free-Market Thinking About Health-Care Policy," Linda Seebach, September 8, 2001, http://denver.rockymountainnews.com/archive
Fortis Sees Surge in MSA Sales
Fortis Vice President Scott Krienke expects a surge in MSA sales if the expansion provisions in the PBOR are enacted, according to an article on BestWire. Krienke says Fortis currently has about 30,000 MSA policies in force, representing 10 to 15 percent of new sales for the company. He said the limits placed on the current program by Congress have depressed sales. "The temporary nature of this has really stifled the general awareness of the product throughout America," he said.
Krienke believes the expansion would create more competition, but also inspire Fortis' own agents to market MSAs harder.
Source: Contact Dennis Kelly at dennis.Kelly@ambest.com for a copy.
MyHealthBank Kicking in Washington
MyHealthBank is being well-received in Washington state, according to a press release from the company. The release quotes the president of Wilson Oil of Longview, Washington as saying his employees are very happy with the new range of choices available. Some are adding their own funds to improve their coverage, while others are putting money into their Health Freedom Accounts to cover gaps in their coverage. He says the program didn't cost his company extra but still provides excellent coverage for employees.
Source: Contact Becky Engel at 503/222-0626 or email@example.com.
Greg Scandlen is senior fellow in health policy at the National Center for Policy Analysis in Dallas, Texas. To sign up for his free weekly e-newsletter, Scandlen's Health Policy Comments, log on to www.ncpa.org/sub/. Scandlen can be contacted by email at GMScandlen@aol.com.