Merits of Healthcare Plans

Malkavian · 02-08-2008, 02:36 PM

That Exxon thread got me thinking about different plans possible under UHC... My personal fave is high deductible CDHP, some of it's merits, and downsides are mentioned in the article below... So i was curious about what do people envision when they say 'Universal Health Care'.

Whether you support or oppose UHC, feel free to pitch in your pet plan. So... what would it be? Single payer? Medicare expansion? Private initiatives? Please be sure to state the total or per capita costs of you plan, and where did you get those from.

I'll start. Benefits of CDHP:
1. About 15% cheaper compared to conventional HMO plans, thanks to higher deductible. If implemented nationwide, that alone would save $350+ billion worth of taxes on a $2.5 trillion medical budget.
2. While you may still have to pay that deductible, it is your choice what you are spending it on, unlike with premiums that are simply lost to the insurance company.
3. The deductible is funded from a tax free HSA/HRA account, that rolls over year to year.
4. The only plan that i'm aware of that seeks to educate consumers of health care and provides economic incentives for healthy lifestyles.

Downsides:
1. If you have serious, chronic conditions, or simply don't care about your health, it'll cost you more. Though not catastrophically more - after the deducible has been met, regular insurance will kick in.
2. Empowering people to do their own cost benefit analysis is sort of like giving them a rope. Most will put it to good use, some will strangle themselves.
3. Current lack of easily available information to make good choices reliably. That's a major concern and needs to be addressed by requiring greater transparency from hospital networks and individual providers.

So... not perfect, but by far better than others that i saw so far. Works like a charm if you are healthy and plan on staying that way as long as possible, while saving money in tax sheltered investment account for a time when a real emergency strikes.

Quote:

Rethinking Health Care
Can more employee choice actually lower costs?
Randy Myers
CFO Magazine
February 1, 2008

Heading into this year, $7.3 billion Chesapeake Energy Corp. faced a 10.8 percent increase in the cost of providing health-care benefits — nearly double the expected national average. Higher-trending charges for medicines and hospital care played a part, of course, but in 2007 Chesapeake Energy also experienced a significant increase in unexpected large claims. Still, like any cost-conscious employer, it balked and began looking for a better deal. Ultimately, the self-insured company moved to a new administrator, Blue Cross and Blue Shield of Oklahoma. Thanks partly to the steeper discounts Blue Cross has been able to negotiate with providers, Chesapeake now expects its total health-care costs to climb only 5.3 percent.

But Chesapeake calculates that its move will yield more than a one-time savings. Not only will employees see no degradation of benefits, they'll actually gain some new services, including round-the-clock telephone access to medical professionals and tools to help identify high-performing providers. Over the long term, such features, which will educate employees and allow them to tailor health care to their needs, could play a bigger role in reducing the company's health-care tab than any administrative change.

"Health care will be affected only by total lifestyle changes, and that is the purpose behind these features," observes Lorrie Jacobs, vice president of compensation and benefits at Chesapeake.

It wasn't so long ago — indeed, it still happens — that the common strategy for combating health-care costs was to pass a larger share to employees. Now, progressive employers are thinking more broadly about how they manage health care, and searching for savings at the individual level. Some are even tailoring programs for employees with health risks or chronic conditions, says Guy D'Andrea, president of Discern Consulting. Others are turning to consumer-directed health plans (CDHPs), in which employees are given spending accounts to purchase routine services directly, along with a high-deductible insurance plan to cover nonroutine expenses. None of the solutions is problem-free, but the hope is that by engaging employees in both their health care and the associated costs, they'll become better, healthier consumers.

After racing ahead at double-digit rates for several years, total health-care costs for employers rose by only about 6 percent in each of the past three years, according to Mercer LLC. While some of the moderating may be due to employers shifting more of their premiums to employees, the consulting firm also theorizes that CDHPs and wellness programs are taking hold. In the meantime, companies continue to watch health-care spending. "If I'm not paying attention to what we're spending on benefit programs, that would not be smart," says Chris Lafond, CFO of market research firm Gartner Inc.

Spend Control
Gartner is just one of many firms that began offering a CDHP this year. Its plan is built around a health savings account, or HSA; such accounts are funded directly by employees. An alternative is to build a CDHP around a health reimbursement account (HRA), which is funded by the employer. In addition to shifting more responsibility for spending to employees, both types save employers money by virtue of higher deductibles. Mercer calculates that CDHPs cost employers an average of $5,970 per employee last year, versus $7,120 for an HMO (health maintenance organization) plan and $7,352 for a PPO (preferred provider organization) plan.

EnPro Industries Inc., a Charlotte, North Carolina–based diversified manufacturing company, began offering its 2,800 U.S. employees an HRA-based CDHP five years ago. Approximately 1,800 use it; the remainder have stuck with an HMO offering or declined coverage. Steve Spradling, director of compensation and benefits, estimates that EnPro saved about 11 percent over the first three years compared with what it would have spent if it hadn't introduced the CDHP, and that the company's costs since then have continued to increase at a slower rate.

He credits that in part to an educational campaign. "We did a tremendous amount of communication in the first two years," says Spradling. "This was a new way of paying for and delivering health care, and the average employee was skeptical. But people have found over time that this is a very clean way to deliver it."

One notable change, Spradling notes, has been "very high usage of generic drugs" since the CDHP was initiated. The company is still struggling to get employees to use a lower-cost mail-order program, though, so it is now contemplating offering some financial incentive, such as paying for the first 30-day supply.

To date only about 5 percent of all employees are enrolled in CDHPs, according to Mercer, despite evidence that they save employees money. HealthPartners, a Minnesota-based not-for-profit HMO, found that employees in CDHPs spent 4.4 percent less than those in traditional plans because they used lower-cost or more-efficient providers. But there is a caveat: the study also found that CDHP participants tend to be younger and healthier, raising the question of whether insurers could segment employees in ways that could undermine the pooling of insurance risk.

Tailor-Made
Another type of segmentation may be more palatable. Tailoring health-benefit programs to the health segment that employees and their families belong to — a concept that consulting firm Watson Wyatt Worldwide calls targeted consumerism — could reduce costs. "It's a targeted approach to looking at how employee populations use health-care services," says Watson Wyatt's Ted Nussbaum. "Five percent of the population drives 50 percent of the costs, and 70 percent drives 10 percent. We look at what proportion of the population falls into various segments to help employers decide what to emphasize. For younger, healthier employees, you target health-improvement programs — diet, exercise, weight loss. At the other extreme, you have disease-management or health-management programs that can keep people with acute conditions stable or improve their health."

Lafond says that when Gartner decided to offer an HSA to its employees this year, alongside its traditional PPO and HMO offerings, one of the attractions was that it would likely appeal to younger employees, who are less likely to be confronting major medical expenses but nonetheless cannot afford to forgo insurance.

In addition to three types of insurance plans for its U.S. employees, for example, Gartner also offers the Gartner Employee Assistance Program in the United States and Canada. Through a third-party provider, associates are given access to counseling on a wide range of issues, including family concerns and substance abuse. Features include unlimited, 24-hour-a-day access to a telephone hotline and three live visits with a counselor annually. "I can't really say what cost benefit this has provided," Lafond says, "but we hope that providing an avenue to deal with issues early can impact costs longer term."

EnPro is taking the idea of tailoring one step further. "We already pay 100 percent of an annual physical and have disease-management and wellness programs," Spradling says. "In 2008, we want to expand some of these programs on-site. We're looking at what types of programs may best suit an individual who, say, lives in Deloitte, Wisconsin, [versus] an employee in Houston. For example, we may have a higher incidence of diabetes in one location, so we may put a stronger emphasis on diabetes education there."

Data Dilemma
While health-care consultants generally agree that giving employees greater control over spending should drive down costs, they also agree that won't happen without access to reliable quality-of-care data. For competitive reasons, however, plan administrators are loathe to disclose their financial arrangements with health-care providers. And many providers shy away from reporting quality data, concerned that there are too many underlying variables to make comparisons.

Fortunately, headway is being made. Not-for-profit organizations such as the National Quality Forum, The Leapfrog Group, and Bridges to Excellence have all developed metrics for assessing quality. The simplest metrics, says Leapfrog Group acting CEO Karen Linscott, are procedural: for example, does the provider follow accepted best-practice procedures, such as administering beta blockers after a heart attack? Next in value are structural metrics: Does the provider have adequate staffing? Finally, there are outcome-based metrics: How do a hospital's infection and morbidity rates compare with its peers'? "Outcome metrics are the gold standard, but there aren't many of them," Linscott laments.

In addition to the work being done by not-for-profit organizations, some plans have started to identify subsets of higher-quality providers. But Nussbaum cautions that the exercise may need to be more rigorous. Right now, he says, some higher-performing networks include two-thirds of a plan's physicians, calling into question just how well they separate the wheat from the chaff. One problem: health plans are torn by the conflicting desire of participants and employers to be able to choose from many providers and the obvious benefit of including only top performers in networks.

Despite such caveats, one benefit Chesapeake Energy saw in moving to Blue Cross and Blue Shield of Oklahoma was its ability to pool claims data with others in the national Blue Cross Blue Shield Association. Specifically, Blue Cross allows participants to see data on providers across the nation in order to make educated choices.

The Downside of Empowerment

To be sure, the trend toward giving employees more control over health care runs risks. "To me, the real danger is that we lack the information required for consumers to behave in the way we hope they would," D'Andrea says. And John Asencio, senior vice president of Sibson Consulting, speculates that that is one reason why CDHPs have "not taken off."

D'Andrea also concedes that workers responsible for more of the first-dollar spend on health care might be tempted to seek care less aggressively. "That is the danger, but in some ways that's also the point of these plans — to ask employees to make that cost/benefit analysis," he says. The HealthPartners study, however, does indicate that employees did not avoid care but instead got preventive services.

There is also a fiduciary risk associated with HRAs that should not be overlooked, says Chip Kerby, a partner with McDermott Will & Emery, especially since such accounts are not covered by ERISA. And ultimately the question must be asked: Could all this segmentation lead employers to hire only younger, healthier workers? It's an idea D'Andrea discounts. "To the extent that's a problem, it's a problem that already exists today," he explains. "A self-insured employer would have that incentive today, and I don't think it's a pervasive problem."

Perhaps not. But the jury is still out on whether consumerism is the answer to all that ails health-care economics.

Randy Myers is a contributing editor of CFO.

Just Say No

Could employers be partly responsible for the runaway health-care costs of the past few decades? Many consultants say yes, by virtue of having endorsed insurance schemes indifferent to quality of care. "Most existing health plans have incentives that reward providers for providing more care and high-intensity care, not high-quality care," observes Guy D'Andrea, president of Discern Consulting.

One employer — the federal government — plans to change the paradigm. Beginning October 1, Medicare will stop paying for some preventable medical conditions that patients acquire in hospitals, including certain infections and pressure ulcers. The dual goal is to push hospitals to provide better care and lower costs.

Private plan administrators are watching the model closely — and some providers are also taking action. The Leapfrog Group, a not-for-profit organization of employers and other health-care purchasers, recently announced that 658 hospitals will adhere to its "Leapfrog Never Events" policy, meaning they'll waive costs related to rare medical errors, such as operating on the wrong body part. They represent just over half the hospitals that responded to the 2007 Leapfrog hospital survey. — R.M.

Source

jowey · 02-09-2008, 07:50 AM

Apparently the current initiatives started with Nixon, they have not worked.

This industry should have addressed the upcoming problems with predatory practices and ensured that they maintained their niche in the long term. If they had reduced the profits in the short term and ensured quality service to the community, we would not be having these discussions. We would not have a large population of disposable people without health care who are trapped in a vicious circle of dependency.

This industry chose to steal from service and harvest huge profits for their investors. They have identified hat they cannot self-regulate. They have had 37 years to make this work, they have not. Technically they have committed service fraud supported by their cronies in government.

This country needs a house cleaning, but in the mean time people suffer through the vicious predatory cycle that has been implemented.

I opt for this becoming a social service provided by the government, which should answer to the society which it serves. It has a vested interest in a healthy tax paying population. The government should not tell people where to go or who to see, it should just facilitate and support the service and protect against fraudulent practices.

I have had discussions where people do not agree with this position, claiming that government should not tell them who to see. They trust companies who have demonstrated that they are opportunistic and multi-national to take care of them, not to let them die so that organs could be harvested for some rich guy across the ocean. They trust them not to experiment on them. When I say this they say that the the government should regulate these practices. So I will pay some insurer that may or may not cover a condition and then I will pay the government to oversee their buddies. The result will be that the individual is lost in the bureaucratic red tape - which is what we have.

With national socialized medicine at least the individuals will be medically cared for. The pool of money would be self supporting regardless of economic assets of the subset, whether state or corporation. This would continue through the human life cycle. The rich would still have the choice of going to see a "better" doctor but every legal citizen would be taken care of.

Having provided that rant, regardless of model the goal is to maintain this society not to prey upon it.

Malkavian · 02-09-2008, 05:35 PM

Quote:

I have had discussions where people do not agree with this position, claiming that government should not tell them who to see. They trust companies who have demonstrated that they are opportunistic and multi-national to take care of them, not to let them die so that organs could be harvested for some rich guy across the ocean. They trust them not to experiment on them. When I say this they say that the the government should regulate these practices. So I will pay some insurer that may or may not cover a condition and then I will pay the government to oversee their buddies. The result will be that the individual is lost in the bureaucratic red tape - which is what we have.

I think people themselves should have the choice whom to see... That would be possible if enough information was available to made grounded decisions.

jowey · 02-09-2008, 06:47 PM

Quote:

Originally Posted by Malkavian

I think people themselves should have the choice whom to see... That would be possible if enough information was available to made grounded decisions.

I agree, currently who one sees is dictated by their plan. It is disheartening when one has the information to choose a doctor and then be told by their plan that the doctor is not part of it.

If it was state controlled one may be restricted to the state that one lives. National would allow access to a national pool of talent....

jowey · 02-11-2008, 03:40 PM

Has socialized health care failed because of bureaucratic bungling or because of outsourcing and "favors" given to "special interests".

I keep hearing about the failure of Medicare, Medicaid and VA - all alleged examples of socialized health care. Are they failing because of incompetent government or predatory business practices ?

If the failure was because of predatory business practices then these institutions cannot be considered "socialized medicine". They are examples of an implementation by those in government who sold out to their buddies....

We need a house cleaning.....

Malkavian · 02-11-2008, 03:45 PM

Quote:

Originally Posted by jowey

Has socialized health care failed because of bureaucratic bungling or because of outsourcing and "favors" given to "special interests".

I keep hearing about the failure of Medicare, Medicaid and VA - all alleged examples of socialized health care. Are they failing because of incompetent government or predatory business practices ?

If the failure was because of predatory business practices then these institutions cannot be considered "socialized medicine". They are examples of an implementation by those in government who sold out to their buddies....

We need a house cleaning.....

Those plans are big... They have enough power to fight any business. They are neutered because Republicans exist, but that's government problem, not business.

jowey · 02-11-2008, 04:40 PM

Quote:

Originally Posted by Malkavian

Those plans are big... They have enough power to fight any business. They are neutered because Republicans exist, but that's government problem, not business.

They theoretically have the power to fight any business. The problem appears that those in government implementing this process choose not to "fight" business and defend the interests of their departments.

It appears to be the problem of the dynamic, personal interests in the success of industry - classic conflict of interest is rampant between both government and business and society suffers.

I agree that Republicans demonstrate sociopathic behavior. Repeatedly they break things and then claim that the broken toy supports their position.

W.M.DEEEZ · 02-11-2008, 06:18 PM

I've had one of those high deductible accts. for about 2 years.

I'm self employed, and before this plan, my premiums went from about $250.00/mo, to almost $600.00/mo. in less than 3 years.

I'm healthy, take no prescriptions, and quite frankly, never went to doctors at all.

So, the high deductible acct. works for me, as my premiums are under $200.00/mo.. Of course, I pay the first $5200.00 out of my pocket if I need medical help.

I am entitled to put about $2500.00/year into a health savings acct., tax free as long as I use it for medical care.

I would rather save the money, and use it how I want, rather than pay what would no doubt be over $700.00/month to the ins. co.

But I am healthy. If I was on any one or two medications, it might be worth the ultra high premiums.

Malkavian · 02-11-2008, 06:47 PM

Quote:

Originally Posted by jowey

They theoretically have the power to fight any business. The problem appears that those in government implementing this process choose not to "fight" business and defend the interests of their departments.

It appears to be the problem of the dynamic, personal interests in the success of industry - classic conflict of interest is rampant between both government and business and society suffers.

I agree that Republicans demonstrate sociopathic behavior. Repeatedly they break things and then claim that the broken toy supports their position.

Well, somebody votes the Republicans in... I don't think they just walk in from the street...

Malkavian · 02-11-2008, 06:53 PM

Quote:

Originally Posted by W.M.DEEEZ

I've had one of those high deductible accts. for about 2 years.

I'm self employed, and before this plan, my premiums went from about $250.00/mo, to almost $600.00/mo. in less than 3 years.

I'm healthy, take no prescriptions, and quite frankly, never went to doctors at all.

So, the high deductible acct. works for me, as my premiums are under $200.00/mo.. Of course, I pay the first $5200.00 out of my pocket if I need medical help.

I am entitled to put about $2500.00/year into a health savings acct., tax free as long as I use it for medical care.

I would rather save the money, and use it how I want, rather than pay what would no doubt be over $700.00/month to the ins. co.

But I am healthy. If I was on any one or two medications, it might be worth the ultra high premiums.

Yes, they key with this account is to stay healthy... It'll pay for a catastrophic situation, but not routine stuff... I have mine through employer, so i get matching contributions (and no premiums for 2 years, $300 thereafter)... So right now, i'm getting paid $50/month to keep my health insurance...

Out of pocket cost is $1200, which is reasonable...

02-09-2008, 07:50 AM	#2 (permalink)
jowey Senior Member Join Date: Oct 2007 Location: Virginia Posts: 944 Blog Entries: 21 Thanks: 13 Thanked 13 Times in 10 Posts	Apparently the current initiatives started with Nixon, they have not worked. This industry should have addressed the upcoming problems with predatory practices and ensured that they maintained their niche in the long term. If they had reduced the profits in the short term and ensured quality service to the community, we would not be having these discussions. We would not have a large population of disposable people without health care who are trapped in a vicious circle of dependency. This industry chose to steal from service and harvest huge profits for their investors. They have identified hat they cannot self-regulate. They have had 37 years to make this work, they have not. Technically they have committed service fraud supported by their cronies in government. This country needs a house cleaning, but in the mean time people suffer through the vicious predatory cycle that has been implemented. I opt for this becoming a social service provided by the government, which should answer to the society which it serves. It has a vested interest in a healthy tax paying population. The government should not tell people where to go or who to see, it should just facilitate and support the service and protect against fraudulent practices. I have had discussions where people do not agree with this position, claiming that government should not tell them who to see. They trust companies who have demonstrated that they are opportunistic and multi-national to take care of them, not to let them die so that organs could be harvested for some rich guy across the ocean. They trust them not to experiment on them. When I say this they say that the the government should regulate these practices. So I will pay some insurer that may or may not cover a condition and then I will pay the government to oversee their buddies. The result will be that the individual is lost in the bureaucratic red tape - which is what we have. With national socialized medicine at least the individuals will be medically cared for. The pool of money would be self supporting regardless of economic assets of the subset, whether state or corporation. This would continue through the human life cycle. The rich would still have the choice of going to see a "better" doctor but every legal citizen would be taken care of. Having provided that rant, regardless of model the goal is to maintain this society not to prey upon it. __________________ O homines ad servitutem paratos...Emperor Tiberius A long standing member of the "Moronic Order of Singularity"
	Top

02-11-2008, 03:40 PM	#5 (permalink)
jowey Senior Member Join Date: Oct 2007 Location: Virginia Posts: 944 Blog Entries: 21 Thanks: 13 Thanked 13 Times in 10 Posts	Curious.... Has socialized health care failed because of bureaucratic bungling or because of outsourcing and "favors" given to "special interests". I keep hearing about the failure of Medicare, Medicaid and VA - all alleged examples of socialized health care. Are they failing because of incompetent government or predatory business practices ? If the failure was because of predatory business practices then these institutions cannot be considered "socialized medicine". They are examples of an implementation by those in government who sold out to their buddies.... We need a house cleaning..... __________________ O homines ad servitutem paratos...Emperor Tiberius A long standing member of the "Moronic Order of Singularity"
	Top

02-11-2008, 06:18 PM	#8 (permalink)
W.M.DEEEZ I don't exist either Join Date: Oct 2007 Posts: 1,513 Thanks: 6 Thanked 51 Times in 38 Posts	I've had one of those high deductible accts. for about 2 years. I'm self employed, and before this plan, my premiums went from about $250.00/mo, to almost $600.00/mo. in less than 3 years. I'm healthy, take no prescriptions, and quite frankly, never went to doctors at all. So, the high deductible acct. works for me, as my premiums are under $200.00/mo.. Of course, I pay the first $5200.00 out of my pocket if I need medical help. I am entitled to put about $2500.00/year into a health savings acct., tax free as long as I use it for medical care. I would rather save the money, and use it how I want, rather than pay what would no doubt be over $700.00/month to the ins. co. But I am healthy. If I was on any one or two medications, it might be worth the ultra high premiums. __________________ Don't it always seem to go, that you don't know what you've got til it's gone
	Top

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