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Clueless on Health Care Costs?

David P. Lind BenchmarkEver try to figure out what your health care providers actually get paid?

I didn’t think so. As a patient, you probably check to make sure that the doctors, hospital and pharmacy are considered “covered” by your insurance plan. Why? That keeps your out-of-pocket expenses down because of discounts your health plan negotiated with these providers.

But as patients/consumers, we’re clueless about the negotiated discounts with any given health care provider. We’re out of the loop. Discounts are negotiated privately between insurance companies and health care providers. They’re not posted anywhere, and no one is required to share that information.

But here’s the rub for you, the employer:

Negotiated discounts can vary greatly between insurance companies and will affect your underlying costs.  So which carrier has the deepest discounts?

Competition between insurance companies for pricing purposes is a good thing, but the level of competition needs to be transparent to employees and patients for market forces in health care to flourish—and eventually hold costs down.

True market forces are hindered by the current confidential pricing process.

Enter Consumer Driven Health Plans. Under this concept, an employer allocates a sum of money annually to offset employees’ portions of a high-deductible plan (health savings accounts are part of a consumer-driven plan). Employees are motivated to get the best health care deal they can find.

That’s good, but consumers are most effective when they understand the true cost of a given product or service BEFORE the purchase is made. Encouraging employees to become better consumers is not enough if they don’t know the true cost and value they receive.

We are far from a patient-centered market in health care. This needs to change—and until it does, we as consumers, will be kept in the dark.

Health Reform…Are You a Skeptic?

David P. Lind BenchmarkAs an employer, what do YOU think of health reform? Will it successfully attack rising health insurance rates that you continue to pay year after year? Will the Iowa health insurance exchange in 2014 make any difference for small employers? What about the Supreme Court’s involvement?

Most of these questions (and many others) were asked of Iowa employers in our 2011 Iowa Employer Benefits Study©. So how did they respond? They’re a skeptical bunch.

  • 54 percent either “somewhat agree” or “strongly agree” that the health law should be repealed completely
  • 68 percent at least somewhat agree that the law should be repealed in some parts only, while keeping other parts of the law intact
  • 65 percent believe employer health plan costs with increase because of health care reform
  • Only 17 percent agree that a state-based insurance exchange will keep health insurance rates lower than without health reform (41 percent are unsure)
  • 54 percent believe the provision of the law to require coverage (or pay a fine) should be repealed (also known as the individual mandate)
  • 51 percent want a repeal of the provision that requires employers with over 50 employees to either continue offering coverage or pay an annual penalty of $2,000 per employee.

Iowa employers do, however, support the provision that prohibits insurance companies from denying coverage to individuals due to poor health. I think this is one part of the law that most everyone agrees we should keep…but to do so, insurance companies need the assurance they are covering healthy people too.

All of this leads to the Supreme Court hearing arguments in late March about challenges to this law, specifically the constitutionality of the law’s individual mandate that requires most Americans to obtain health insurance and of provisions requiring states to expand eligibility for their Medicaid programs. Based from the arguments, it is likely the Supreme Court will issue a written opinion before the close of the current term in June, 2012.

STAY TUNED…regardless of the outcome, we will continue to see rising health care costs (and insurance premiums) for the unforeseeable future. Iowa employers have reasons to remain skeptical and apprehensive for the time being.

 

Employee Trust…Do You Have It?

David P. Lind BenchmarkTrust can be an over-used word in today’s world, but sadly is difficult to find…as it must be earned.  Trust, it is said, is the new currency in our shrinking world (thanks in large part to social media).  Trust sounds good in theory, but it is the elusive butterfly for many of us.  Why?

For starters, we live in a world that changes BEFORE we can ever get comfortable with the latest status quo.  In many ways, we really don’t have a lot of time to develop a secure level of trust, and because of this, we experience broken promises, vanishing hope, and unfortunately, unfulfilled dreams.  Employers, however, have a unique opportunity to offer a more secure environment that can foster a deep sense of trust to their employees.  This can be such a powerful asset with immeasurable consequences for employers.

According to Great Place To Work, the definition of a great workplace includes three interconnected relationships.  Through such relationships, employees in a great workplace will:

 1) trust the people they work for,      

2) have pride in what they do, and      

3) enjoy the people they work with

Great Place To Work® developed the Trust Index©, which has found that organizations with high trust score well in three categories:  credibility, respect, and fairness.  This is stuff that you don’t have to purchase from a vendor, such as an insurance company, but rather develop practices, policies and behaviors that foster these key categories internally for long term success.

So why is this important to you?  It’s very simple.  By building a reputation based on trust, you not only give the market what it so desperately wants and needs but you also establish a unique and sustainable value proposition for your organization (employees).  The organization that owns the trust niche will own its marketplace destiny.  This is a win-win proposition for both the organization and its’ employees.

Be that elusive butterfly…create a culture of TRUST in your workplace!