WASHINGTON, Jan. 11 (UPI) -- An ounce of prevention really is worth a pound of cure for large employers struggling to reduce their employee healthcare costs.
In announcing the release of the "Employer's Guide to Health Improvement and Preventive Services" on Tuesday, Helen Darling, president of the National Business Group on Health, told a teleconference that preventive services are "virtually the only way we are, in fact, going to reasonably and effectively control future healthcare costs."
Darling said large companies that implement such measures can see up to a 3-to-1 return on their investments.
"Large employers have struggled with cost sharing," Darling said. "They have come to believe we have to tackle the drivers of healthcare costs -- conditions that are preventable and avoidable and driven by lifestyle choices."
Many experts say technology is driving increases in healthcare costs, but reducing the need for using such technology -- via healthier employees -- also has a place in a company's benefits package.
The business guide, already sent to all 230-plus Fortune 500 companies that make up the National Business Group on Health, is available on online free of charge. Funded by the Robert Wood Johnson Foundation, the guide includes evidence-based recommendations on preventive services from the U.S. Preventive Services Task Force, sponsored by the Agency for Healthcare Research and Quality.
Dr. Carolyn Clancy, AHRQ director, said the guide takes clinical recommendations on preventive services, the success of which is supported by evidence-based research, and helps companies include them in health benefit packages.
For example, Clancy said, the task force found evidence that counseling can help obese patients lose weight, but only if it is done at a sufficient intensity and frequency -- at least twice a month.
"So this guide has specific actionable strategies on how that would be translated in benefit language," she said.
A survey last year of Business Group members, which collectively represent some 50 million U.S. workers, found preventable conditions -- heart disease, cancer, low-back pain, diabetes and pregnancy complications -- were the costliest health conditions in terms of direct medical claims.
HEALTH SPENDING -- THE REAL ISSUE
Two reports out Tuesday -- an annual tally of actual U.S. healthcare spending and a survey of adults on what U.S. health priorities should be -- both drive home a key point to Congress and the White House: spiraling healthcare costs are a big deal, on Capitol Hill and nationwide.
The Centers for Medicare and Medicaid Services found that Americans spent $1.7 trillion on healthcare in 2003, or 7.7 percent more than in 2002. Oddly enough, that was considered good news, because the growth rate of the increase was down from 9.3 percent in 2002.
Regardless of whether people actually understand the minutia of healthcare policy statistics, it appears adults do a pretty good job tracking their own spending and, in a Kaiser Family Foundation/Harvard survey that included about 1,400 people, listed reducing healthcare costs as the No. 1 health priority for Congress and the Bush administration.
Ranked second was shoring up Medicare financing for the future and well down the line, in eighth and eleventh place, were drug importation from Canada and medical malpractice reform, which has been getting lots of press in Washington.
There are other numbers to consider when divvying up responsibility, according to reaction from the Commonwealth Fund, a New York City research group.
"It is disturbing that private health insurance premiums continue to grow at a faster rate than health insurance benefit outlays, rising 9.3 percent in 2003, compared with benefit outlay increases of 8.2 percent," the fund said in a statement. "One consequence is that the net cost of private insurance and program administration is the fastest growing component of total health expenditures at 13.2 percent."
The Commonwealth Fund said, however, private health insurance premium growth slowed for the first time since 1996, coming in at 9.3 percent in 2003, a 1.4 percentage point drop from the previous year.
The role of the insurance industry -- profits and overhead -- in driving cost increases has received little attention so far, but that may change. Last week, the White House dodged media questions about insurance company finances regarding physician malpractice insurance premiums.
Malpractice premiums were increased 89 percent in 2004 by GE Medical Protective, so this week Connecticut Attorney General Richard Blumenthal, the Connecticut State Medical Society and the Connecticut Trial Lawyers Association called on Susan Cogswell, the state's insurance commissioner, to investigate.
Out-of-pocket spending for health services grew 7.6 percent in 2003, at nearly the same rate as overall health spending growth, compared to 6 percent in 2002 -- an indicator of increased cost sharing in employer-sponsored health plans.
Hospital spending is about one-third of total national health expenditures and 2003 saw a growth slowdown to 6.5 percent from 8.5 percent in 2002.
Prescription drug spending growth also slowed from 14.9 percent in 2002 to 10.7 percent in 2003 and CMS attributed it to fewer prescriptions being dispensed, the conversion of prescription drugs to over-the-counter, and a growth in the use of cheaper generics.
EMPLOYERS EXPECT HIGHER COSTS IN 2005
The growth in healthcare spending increases may be slowing, but some 500 U.S. employers, covering more than 6 million people, believe their healthcare costs are going to go up in 2005.
Hewitt Associates, the human resources services firm, said its latest study finds companies anticipate cost increases of 12 percent but say they can only afford 8 percent.
Hewitt said closing the gap will mean different strategies for employee healthcare benefits. Some 7 percent of companies surveyed actually were shifting responsibility for healthcare strategy to their finance and purchasing departments.
"Increasingly, companies are recognizing that incremental changes are insufficient to attack the healthcare cost crisis, so they are moving beyond the more common methods for controlling costs to create more sustained and systematic changes," Jack Bruner, Hewitt's national healthcare practice leader, said in a statement.
Look for more tiers of cost sharing and a bigger push to get employees in high-deductible coverage backed up by health savings accounts.
COUNTIES WORRIED ABOUT MEDICAID CUTS
That funny feeling Congress is going to find ways to cut federal Medicaid spending in 2005 is not just a Washington phenomenon. It has trickled all the way down to county commissions.
Larry Naake, executive director of the National Association of Counties, told UPI's HealthBiz whether it is a little something tucked into the budget reconciliation process or a full-court press to change the program's financial structure, "we're sort of anticipating something is going to happen."
The council decided to be pro-active, sending a letter to President Bush asking him not to reduce the federal deficit "on the backs of local taxpayers."
It is easier to explain a complex program such as Medicaid, which is different in all 50 states, by simply saying it is a federal-state partnership in which the federal government matches what the states spend to provide healthcare for the poor and disabled. Less transparent is the role counties play, in particular in states where Medicaid program spending is cut in times of tight budgets.
"Financially, when the federal government or state government doesn't pick up the cost -- then counties become the providers of last resort and have to pick up the tab one way or another," Naake said.
The only way counties realistically can do that is by increasing property taxes -- which is a Catch-22 proposition. Counties that are home to the poor who need these services also tend to lack a sufficient economy and tax base over which to spread such increases.
"County governments are more accessible to their residents than state and federal governments and, being closer to the issues, are more likely to see the effects of our local health system in its entirety," the letter to Bush said.
For example, New York state's net Medicaid local share for 2003 was more than $5.5 billion, an 11 percent increase over 2002. New Hampshire's 11 county nursing homes were under-funded by more than $37 million in 2003 -- made up entirely by county property tax dollars. Gaston County, N.C., saw its share of the Medicaid payments go from $7.1 million in 2000 to $13.9 million this year, an increase of more than 20 percent per year.
In 15 states, counties have the major responsibility for Medicaid finances, Naake said.
A NAC task force on Medicaid is looking at how to streamline the system and include more outcomes or results based measurements for payments, rather than just the volume of cases.
"We understand the need for Medicaid reform, but simply shifting federal costs to states and counties as a deficit reduction strategy is wrong," the letter continued. "Currently many county services are being unmet due to the rising costs associated with uncompensated health care which are seriously depleting our local budgets."
The Bush administration has wanted to turn the match-funding system to a block-grant system, effectively capping what the federal government pays for Medicaid. Democrats on the Hill are geared up for a battle if the issue comes up in legislation.
--
E-mail [email protected]
