Millerwood Communications

Back to the Future on Health Care Reform

As Washington assesses their next steps on health care reform, it may be time to return to the original issues people were concerned about before the bill was started. Yesterday, I was organizing my files on health care communication and came across a piece published by BlueCross Blue Shield of Tennessee in 2005. It was interesting to see how, five years ago, they thought we could control costs. Their five key factors for controlling costs in Tennessee were:

1. Tennessee is No.1 in prescription drug use. New high-priced drugs are hitting the market faster. TV and magazine ads are effective, powerful persuaders and encourage use. Consumers are paying less of the total drug cost. Ten years ago, consumers paid 60 percent of the cost of their drugs. Today, it's only 29%. In Tennessee, insurance companies and government programs cover 83% of all drug costs. People are largely unaware of what's actually being spent on the drugs they take.
2. People are seeking more care, more often.Tennessee residents are spending more money faster on health care. Yet Tennessee is 42nd in overall health — making it one of the top 10 unhealthiest states, with lower life expectancy than the U.S. average. Across the nation, consumers are using more health care services, seeking care more often as the population ages. And as medical technology has advanced, so have associated costs.
3. Unhealthy lifestyle choices are driving costs up. The greatest impact is personal health behaviors — the very thing that can be fixed and controlled —status by 50%.
4. Mandates and legislation add to increasing costs.No matter the intent, federal and state mandates and legislation add costs to your health care premium, Government mandates have increased 25-fold in the past generation. Experts estimate that regulations-including the new HIPAA Administrative Simplification requirements-represent about 15% overall medical cost increases nationwide, roughly $10 billion for the current year.
5. Insurance fraud and abuse takes its toll.Like shoplifting, insurance fraud and abuse ends up costing everyone more. The American Medical Association and others estimate the annual cost of health care fraud to be between 3 and 14% of benefits paid. In 2002, BlueCross BlueShield of Tennessee paid $13.6 billion in health care benefits--so the potential impact is enormous.

So from this list of why health care costs are increasing the solutions are:

1. People take accountability and responsibility to maintain and manage own health.
2. Patients develop relationship with their doctors to manage health and control costs to reduce unneeded medical expenses.
3. More consumer-driven health care plans to make consumers of health care aware of costs so they can manage their utilization and expenses.
4. Insurance companies work with federal and state legislators to make sure practical considerations are made whenever health care issues are concerned.
5. Tort reform to manage litigation and damage to help control fraud and abuse activity.

So that was 2005. I wonder what has changed in five years and how far the new Health Care Reform Bill goes to address these problems? I guess we'll know soon.

Timing Key for Rewards Programs

We've all heard of or have been part of one.

Rewards programs that offer prizes, gift certificates, cash or time off to employees who have met some set of criteria are popular.

But when is the right time to start a rewards program?

Common sense would say that the time to strike is when morale is low and needs a good boost. But that could be the worst time.

Introducing a rewards program into a toxic work environment can create jealousy among workers or foster a "too little too late" response. The same can be said for holding a company outing or holiday party when employees are overworked, underpaid and frustrated.

Rewards programs and company events are best when used to enhance a healthy business environment. If there is need to improve morale, the first questions to ask include:

1. Are business goals clearly defined and shared with employees?
2. Do employees feel they are contributing to business goals?
3. Is the compensation plan fair and well-communicated?
4. Are under-performing employees being managed through a performance plan to improve?
5. Do the current employees fit in the desired company culture?

So before you break out the CEO bobble-head dolls and gift cards to distribute to high performers at the next summer outing, take a look at the company's foundation.

If the answer is "no" to any of the above basic questions, hold off. Instead, put efforts toward getting to a healthy work environment.

Small Businesses in Benefits Crunch

In a recent insurance survey of small businesses, almost half of the respondents say they plan to cut back on employee benefits in the future.

That puts small businesses at a big hiring disadvantage from larger employers who can afford to offer more robust benefits.

Combined with other benefits larger employers are more likely to offer like job sharing, telecommuting and flextime, small businesses are going to be increasingly challenged to offer employees a plan that offers good benefits, but also keep costs in check.

When trying to adapt to our changing economy, employers need to remember what employees value.

In addition to health care, employees also appreciate a 401(k) plan, vision insurance and time off. Plans that offer personal financial security, such as life and disability insurance, go a long way in easing employees' concerns in the event of sickness or death.  

Small companies, as well as medium to large organizations, will need to continue to evaluate costs for the company and for employees. This may mean getting creative with the benefits that are offered and who pays for them.

Group benefits plans can offer employees reasonable rates, while the employer incurs no direct costs. Some analysis is required for time off policies, flex time and telecommuting. These policies have no direct costs, but there is an indirect cost that needs to be considered. 

Looking at a total benefits plan, employers can keep up with the changes by implementing plans that are attractive to employees, and don't break the bank for employers.