Consider the facts:
- Chronic diseases such as cancer, cardiovascular disease, stroke, and diabetes account for about 70% of all deaths in the United States each year.
- These same conditions severely limit the lifestyles and productivity of 10% of Americans—about 25 million people.
- In 2005, 133 million people—nearly 50% of the population—suffered from at least one chronic condition.
- Researchers believe a great majority of these diseases—between 70 and 90%--could be prevented if people would eat healthier foods, exercise regularly, and stop using tobacco products.
- The cost of medical care for people with chronic diseases accounts for more than 75% of the nation’s $2 trillion in healthcare expenses each year. (1)
- From 1995 through 2005, as the number of hospital emergency departments was decreasing, the number of ED visits increased by 20%--an average increase of more than 1.7 million visits per year (see chart below). Nearly 14% of these visits were considered non-urgent, suggesting that many patients could have waited to schedule appointments with their doctors. (2)
Meanwhile, health insurance premiums increased 91% between 2000 and 2007 as wages for American workers increased just 24%. The financial burden worsened as more and more employers attempted to control healthcare expenses by shifting costs to employees through higher premiums, deductibles, and other cost-sharing strategies. (3)
Drew Lamb, an insurance broker with BB&T Insurance Services in Charlotte, has worked on the frontline of this cost containment effort for 16 years. “Businesses that I work with have reached the saturation point of what they can afford and what their employees can afford,” he said. “They’re looking for creative ways to manage it, which is where I come in. We talk about consumer-driven healthcare, HSAs; we look a lot at how they’re structuring their benefit internally.” |
|
One goal of consumer-driven health plans (CDHPs) is to encourage people to use healthcare services more appropriately and become more aware of the costs. CDHPs typically combine a high-deductible health insurance plan (HDHP) with a tax-advantaged savings account such as an HSA, HRA, or FSA. These savings accounts can be used to pay deductibles and other out-of-pocket medical expenses.
Clive Burger of Colonial Insurance Services in Midland, NC, said this type of plan is becoming more popular among his self-employed clients, especially those in the start-up phase of business. HDHPs offer lower premiums and first dollar coverage for preventive care, but no other reimbursements are made until the deductibles are met. “That makes people think about it,” Burger said. “Instead of just rushing to the emergency room or to a doctor for something they don’t necessarily need, they’re going to have to decide whether they’re going to pay for it or not.”
Managed care plans offer enrollees a financial incentive to use participating providers, and like HDHPs, they also encourage preventive care. These plans have been around for many years now, however, and it’s debatable whether they’ve succeeded in preventing disease or managing costs. (See chart below for more details on these and other health insurance options.)
Case in point—American & Efird, an industrial thread manufacturer headquartered in Mount Holly, NC, which has offered its employees self-funded and fully insured managed care plans for a long time. “We were faced year after year with double-digit increases—significant increases in the mid-twenties—in our healthcare costs to our associates,” explained Barry Chambers, A&E’s Vice President of Human Resources. “We did everything we could with plan design, steerage, pricing, and it wasn’t having any impact whatsoever. So four and a half years ago, we decided to go down a different path.”
A&E established onsite medical clinics staffed with nurse practitioners at every one of its manufacturing centers in North Carolina. All employees—over 1,200 people—were encouraged to visit these clinics free of charge. In addition, A&E collaborated with its insurance provider to begin educating employees on the importance of taking ownership of their health and making better decisions about their utilization of healthcare services. The wellness initiative evolved over time to include health risk assessments, screenings, and discounts for participation in the program.
Within one year, A&E’s double-digit increases for healthcare costs were whittled down to a single digit. Two years ago, the annual increase had diminished to 4%, and last year it was down to 0%. Chambers was awed by the rapid turnaround but his expectations remained realistic. “It’s not going to be successful every year. There’s always the possibility of a catastrophic claim here and there that will affect your program. But the key is to reduce the number and frequency of those catastrophic claims. Then the overall healthcare spend should go down and those savings should go back into the pockets of the employees.”
Another strong advocate for wellness programs is Harry Floyd, a principal at Trinity Consulting Incorporated, a boutique benefits brokerage and consulting firm in Charlotte. While he admits that return on investment is difficult to measure, he sees plenty of anecdotal evidence that wellness initiatives are paying off. Floyd encourages employers “to do it all. You have to bring creative ideas in medical plan designs; to make sure you have the right insurance carrier in terms of networks and access to doctors; and to implement wellness programs that encourage employees and spouses to change their behavior—how the plan is used and how people take care of themselves.”
A key to getting employees to participate in wellness programs is offering incentives. Terrie Reeves, founder and president of Wellness Coalition America, which specializes is customized wellness initiatives, has found through extensive research that the number one motivator for participation is money. She said, “While premium discounts can be successful, we’re encouraging our clients to offer cash bonuses—one at mid-year and one at year-end—because that creates a dynamic that keeps people engaged and proactively involved throughout the year. The monetary reward coupled with communication, inspiration, and education will have a tremendous impact on people’s lives.”
Ultimately, your employer can only do so much. The rest is up to you. Here’s what industry experts recommend if you want to do your part to control healthcare costs:
- Know your plan design including your network of doctors, your prescription benefit plan, requirements for precertification, deductibles, and co-pays. Most carriers provide a lot of helpful information on their websites about plan design as well as educational materials about health and fitness.
- Utilize healthcare proactively by seeing your primary care physician at regular intervals and by following his or her recommendations for screenings. Take your medications as directed and use generic drugs when available.
- Care for yourself by eating right, exercising regularly, avoiding tobacco products, managing your stress, and getting enough rest.
- Take advantage of any disease management or wellness programs offered by your insurance provider that can help you manage chronic conditions and reach your wellness goals.
- Become an informed consumer of healthcare!
Helpful online resources:
- Your insurance provider’s website: information about your healthcare and pharmacy benefit plans
- cdc.gov: information and statistics on health and safety
- familydoctor.org: health information from the American Academy of Family Physicians
- healthfinder.gov: health information from the Office of Disease Prevention and Health Promotion
- irs.gov: information on consumer-directed health plans (CDHPs)
- kidshealth.org: information about children’s health
- mayoclinic.com: health resources provided by the Mayo Clinic
- medlineplus.gov: answers to health questions by the National Institutes of Health
- mypyramid.gov: information and tools on nutrition and fitness
- WebMD.com: general information on health
- wellnesscoalition.com: general information on health
Sources:
- http://www.cdc.gov/nccdphp/overview.htm#3
- Nawar EW, Niska RW, Xu J. National Hospital Ambulatory Medical Care Survey: 2005 Emergency Department Summary. Advance data from vital and health statistics; no. 386. Hyattsville, MD: National Center for Health Statistics. 2007.
- http://www.healthaffairs.org, doi: 10.1377/hlthaff.27.4.w298 (Published online June 10, 2008)
|
