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Midterm Elections and Healthcare – The Consensus For Moving Forward Is…

The votes were cast and we now have a split in party control in both the House and Senate. What does this mean for healthcare as we now look toward the 2020 elections and beyond? Here are a few “bottom line” excerpts from various healthcare experts who follow the Washington political gridlock circus.

Drew Altman, President, Kaiser Family FoundationNovember 8 Blog

With a Democratic House, a Republican Senate, and President Trump in the White House, get ready for two years of maneuvering but little progress on health care – unless you look beyond Washington…Democratic control of the House stops any Republican efforts to revive their efforts to repeal and replace the Affordable Care Act, block grant Medicaid or impose a per capita cap on federal Medicaid spending…the same applies to any big changes Republicans might want to make to Medicare…the proposals made in Congress and the campaign are important because they can shape the agenda after 2020. But for now, the states are where the real action is.”

Merrill Goozner, Editor Emeritus of Modern HealthcareNovember 8 Editorial

“…Given the powerful special interests invested in preserving the status quo, the most likely scenario over the next two years is inaction on each of those issues (addressing root causes of high healthcare costs, universal healthcare, surprise bills for out-of-network charges, etc.). This year’s election offered no guidance toward a politically acceptable solution to healthcare’s core problem: its unacceptably high cost.”

Stephen Miller, Online Manager/Editor, Compensation & Benefits, Society For Human Resource Management (SHRM) – November 8 Article

Mr. Miller summarizes many thoughts from national pundits about the next two years in healthcare – much of this relates to the employer perspective on regulation. Miller writes:

“The partisan divide makes it unlikely that any major changes in the ACA will advance to the desk of President Donald Trump. That doesn’t mean bipartisan efforts to address health care challenges are off the table. Meanwhile, heading into the 2020 presidential election, progressives will continue to advocate for government-funded single-payer health care for everyone.”

The Commonwealth FundNovember 7 Analysis

“…efforts to repeal the ACA or make large-scale changes to programs like Medicaid are likely off the table, though the (Trump) administration is expected to continue to pursue actions to undermine key elements of the ACA. What we may see is congressional activity on two fronts: stabilizing the individual health insurance markets and controlling high drug prices…”

Robert Pearl, M.D., Contributor to ForbesNovember 7 Blog

Dr. Pearl finishes with a paragraph that summarizes nicely the many blogs that I have written over the past seven years:

“Looking ahead, don’t expect your healthcare to change (or improve) much over the next two years. That’s because we have confused the disease with the symptom. Rising healthcare premiums and excessive out-of-pocket expenses are not the real problem. They are the result of wasted effort, inefficiency and price-jacking among healthcare’s biggest players: drug companies, hospitals and specialists. Health insurance coverage is essential, but until we as a nation grapple with how care delivery is structured, reimbursed, technologically enabled and led, voters will remain concerned about costs, fearful of losing their coverage and confused about how best to improve healthcare in the future.”

These are just a few post-election prognostications about healthcare’s uncertain road to reform. As we know from past observation, gridlock will continue and states will work diligently to find their own solutions to both access ‘quality healthcare’ and identify cost issues.

With a special thanks to Dr. Pearl (again) from his November 2 piece in the Los Angeles Times, the following quote is most appropriate for healthcare and how it usually fares in our national and local elections:

Campaign promises are like babies: easy to make, but hard to deliver.

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Top 15 Non-Insurance Benefits Employees Desire

Top 15 Non-Insurance Benefits Desired by EmployeesThe Iowa Healthiest State Initiative’s (HSI) vision is to become the healthiest state in the nation. In 2017, based on separate national indexes that provide different measures, Iowa is ranked #15 by the America Health’s Rankings®, and #21 by the Gallup-Healthways Well-Being Index®. The pursuit of this vision is both difficult and no doubt never-ending, but well worth the effort.

According to benefits provider, Unum, who recently surveyed 1,227 working adults in the U.S., the most coveted employee benefits is time spent away from the office. When presenting survey participants with 15 perks that are non-insurance and retirement related, participants were asked to choose their top five options. Ranked by popularity, the results are:

  1. Paid Family Leave* – 58%
  2. Flexible/remote work options* – 55%
  3. Professional development* – 39%
  4. Sabbatical leave* – 38%
  5. Gym membership or onsite fitness center* – 36%
  6. Student loan repayment – 35%
  7. Onsite healthy snacks* – 28%
  8. ID theft prevention – 28%
  9. Financial planning resources – 27%
  10. Fitness goals incentives* – 18%
  11. Public transit assistance – 16%
  12. Pet insurance – 15%
  13. Pet friendly offices – 15%
  14. Health coaching* – 14%
  15. Dedicated volunteer hours* – 12%

Many of the above benefits that employees appear to value, particularly those with an asterisk (*) beside them, fit nicely with the mission as outlined by HSI:

Improving the physical, social and emotional well-being of Iowans.

As the labor market continues to tighten in Iowa and around the country, employers are constantly looking for meaningful ways to attract (and retain) qualified employees. Accordingly, I’m planning to include some of these miscellaneous (but highly-valued benefits) in the 2019 Iowa Employer Benefits Study©.  Specifically, we wish to poll employers on whether they offer various paid and unpaid leave benefits, work/life benefits, wellness and other general perks. Largely dependent on the robustness of any given employment marketplace, the availability of employee benefits tend to be more localized.

Additionally, HSI’s mission and goals fit nicely with the workplace culture that Iowa employers must continue to assess. If employers are expecting to attract and retain healthy and productive employees, there is no time like the present to begin aligning the interests and desires of their employees with the overall benefits package they provide.

The culture of any organization is very often reflective of the benefits and compensation provided to its employees. Appropriately aligning this desired culture with workplace benefits will continue to distinguish forward-thinking employers.

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After 15 Years, Not Much Has Really Changed (Except My Age)

I recently was cleaning out some very old files and came across a document that I wrote 15 years ago. Before tossing it, I decided to read it just one last time.

In 2003, I authored a ‘Commentary’ for the ‘Iowa Commerce’ magazine, an Iowa Association of Business and Industry publication that is no longer in existence. The article was simply titled, “Rising Health Insurance Rates in Iowa.” Little did I know that this title would continue to reflect on the state of our healthcare 15 years later.

In fact, the circumstances then should seem rather archaic compared to today’s challenges, right? See what you think:

Health insurance rates have been increasing dramatically for the last several years in this country. More specifically, employers in Iowa are experiencing higher increases in health insurance costs than employers have been receiving nationwide. With such increases, what are the economic tradeoffs confronting Iowa employers each year?

Our firm, David P. Lind & Associates (DPL&A), recently completed the fifth “Iowa Employer Benefits Study©.” For the last three years, we have noticed a disturbing trend that is plaguing businesses in Iowa – health insurance rates are increasing faster in Iowa than in the rest of the country. For example, our 2001 study showed that health costs increased 17.4 percent in Iowa compared to the Kaiser Foundation Study, which showed an average increase nationally of 11 percent. In 2002, the DPL&A study found that health insurance rates increased by 18.7 percent in Iowa versus 12.7 percent nationally (Kaiser). Finally, in 2003, health insurance rates in Iowa increased by another 18.2 percent. The Kaiser study for 2003 has not been released as of this writing, but other national studies are again proving that Iowa is experiencing higher than average rate increases for health insurance. In fact, over the last five years, our study shows an average increase in health insurance rates of 55 percent in Iowa! Such staggering increases have a profound economic effect on Iowa employers and their ability to make capital improvements.

There are a few key reasons why health insurance rates increase faster in Iowa than nationally. According to Iowa Cares About Medicare, an advocacy group, the state of Iowa has the largest percentage of its population over the age of 85 in this country. In addition, Iowa currently has the fifth highest percentage of people over age 65. People over the age of 65 are eligible for Medicare, the federal health insurance program for the elderly. A report from the Center for Studying Health System Change finds that per person spending on health care increases an average of $40 a year for each year a person ages from 18 to 50. At age 50, spending begins to accelerate rapidly, rising an average of $152 a year for each additional year in age between 50 and 64.

Also, Iowa ranks among the highest states nationally in the percentage of individuals who are overweight, according to a study funded by the U.S. Centers for Disease Control and Prevention. That same study found that people who weigh too much are at an increased risk of heart disease, diabetes, most types of cancer, and other illnesses. It also showed that an obese Medicare recipient costs $1,486 more annually than a Medicare patient at a healthy weight. Unfortunately, Iowa ranks 50th in the country for the rate of Medicare reimbursement that Iowa providers receive when giving care to the elderly. Consequently, Iowa medical providers (hospitals and physicians) must shift costs to the private-payer side to make up for the shortfalls received from the Medicare program.

According to the Iowa Insurance Division, Iowa employers with fully-insured medical plans (self-insured employers excluded), have paid approximately $2.46 billion for medical insurance in the year 2002. With rate increases averaging over 18 percent during the past two years, Iowa employers could possibly pay $2.9 billion in medical insurance premiums for 2003, approximately $443 million more than paid in 2002. Again, this does not include self-insured employers (State of Iowa and many large employers) and self-employed individuals who have private health insurance. In our 2003 study, Iowa employers were asked the hypothetical question: “If your medical insurance premiums remain stable (do not increase) over the next 12 months, how might your organization apply these ‘savings’ elsewhere with the organization?”

Overall, 10.4 percent of employers responded that they would make capital improvements and/or equipment purchases. Smaller employers (less than 250 employees) were more likely than larger employers to make this “investment.” Confronted by this huge economic trade-off of lost capital, it becomes more difficult for employers (both nationally and in Iowa) to reinvest this money to grow their business.

Clearly this trend must abate. We should not spend our time blaming various industries or organizations for this problem, but rather, offer constructive solutions that address healthcare affordability without sacrificing quality of care. A meaningful and ongoing dialogue must develop between all the major “players” within the delivery (and payment) of our healthcare system that would create a new vision and leadership agenda for the future. Why not begin this dialogue in Iowa?

Again, this was written in 2003. Thankfully, the average annual rate increase reported this year by Iowa employers (8.4 percent) is less than half of what was reported 15 years ago (18.2 percent). However, the discussion of affordability continues to plague us today. Since I wrote this piece, the combined rate increase reported by Iowa employers (2004 – 2018) exceeds 140 percent – with no real end in sight.

Except for my age, not much has really changed regarding the escalation of healthcare costs.

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