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Role of Government in Healthcare – Has a ‘Tipping Point’ Been Reached?

Has a ‘Tipping Point’ Been Reached on the Role of Government in Healthcare?With great interest, I read a newly-released report by the Kaiser Family Foundation (KFF) and the Purchaser Business Group on Health (PBGH) on how corporate executives view the role of government when controlling health costs. Let me just say, the findings are not a flattering compliment to the status quo.

As we have found in Iowa and all over the country, healthcare costs continue to climb, year after year. In the past, employers have relied on private insurers and the quasi ‘market system’ to stem the tide of unaffordable healthcare costs, eschewing government regulations that would likely control how much providers are paid. As we know through Medicare and Medicaid, the government is able to reimburse providers considerably less than private payers.

This new survey of over 300 large private employers with at least 5,000 employees was important for yet another reason. The surveyed respondents were corporate leaders in key positions, such as CEOs, CFOs, COOs – individuals who have powerful decision-making roles within their organizations. They are prone to influence the trajectory of their organizations in the future. Equally impressive is the nice mix of industries represented: Agriculture, Construction, Financial Services, Manufacturing, Mining, Retail Trade, Services, Telecommunication, and Transportation & Distribution.

Key Findings

The overall takeaway is that a large share of corporate leaders are likely to SUPPORT government efforts to control health spending. Only a small share of respondents would oppose government regulations. 

As in the past, corporate leaders indicated they will continue to implement value-based payments, shift more costs to employees through plan designs and payroll-deductions – and find other ways to control their health costs – including direct-contracting relationships with health providers. But many leaders acknowledge that these measures have only been marginally successful, and despite conventional wisdom, large employers have little market clout to control their own costs.

This survey, therefore, sheds light on a new awakening that large employers may now have:

  • Bigger Role By Government – 87 percent of surveyed corporate officers believe the cost of health benefits will become unsustainable over the next 5 to 10 years. In fact, 85 percent indicate that the government needs to take on a bigger role in controlling costs and providing coverage.
  • Government Action on Hospital Prices – 78 percent of leaders expressed some level of support for government action on hospital prices, particularly in areas that have limited hospital competition. Of huge importance, less than five percent opposed these regulations.
  • Limiting Drug Prices – Surveyed leaders are equally supportive of having government limits on drug prices.
  • Public Insurance Option – About two-thirds (65 percent) of corporate leaders indicated having some level of support for a public insurance option for their employees. Additionally, a large majority support lowering the age for Medicare eligibility.

According to the surveyed executives, some advantages to having a greater governmental role in coverage and costs are:

  1. Employers are relieved of the responsibility and the costs of managing health benefits (61 percent).
  2. May enable the government to hold down costs (61 percent).
  3. May be able to increase consumer choices by offering public plans (e.g., public option or Medicare buy-in) to compete with private plans (47 percent).
  4. Might reduce administrative costs (29 percent).

Disadvantages include:

  1. Government doesn’t have a great track record of running big programs like this effectively (43 percent).
  2. Since the health care industry contributes so much money to political campaigns, lawmakers are never going to take steps to reduce costs (41 percent).
  3. Employers might not have the ability to tailor health benefits to their employee needs (30 percent).

Employers are in the Healthcare Business

Warren Buffett once said that “General Motors is a health and benefits company with an auto company attached.” In fact, GM spends more on healthcare than steel to make cars. Starbucks, as another example, spends more on healthcare than coffee beans. For most employers, after payroll, healthcare is the second largest expense. Whether employers like it or not, this puts employers smack in the center of the healthcare business.

It remains to be seen whether corporate leaders will put lobbying and advocacy energy into healthcare legislation that pushes for more government regulations on healthcare pricing. But if this latest survey is an indication of a new tipping point on the horizon, this could be a catalyst for real change. Of course, health providers and insurers will lobby hard to keep this from happening.

Executives of large organizations have historically been vocal on healthcare costs, but primarily resistant to increased government regulation. If employers no longer wish to be in the healthcare business, or at least, not quite like they have been in the past and present, their formidable voice for larger government involvement may become too loud for Congress to ignore.

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New Study on Exercise Guidelines

New Study about Exercise GuidelinesDespite religiously biking and working on both the elliptical and rowing machines, I recently learned that my blood pressure is somewhat elevated. I can only assume that this may be caused by my high-salt dietary habits. Having garnered my attention, it’s time to make necessary changes.

The motivation for change was also heightened by a new report on how high blood pressure can possibly be reduced without relying on medications.

A new study published in the American Journal of Preventative Medicine suggests that exercise guidelines from the U.S. Department of Health and Human Services (HHS) might require an update. Here are the new findings:

  1. Weekly Exercise of at Least Five Hours (300 minutes) – The current HHS guidelines suggest that adults should aspire to perform at least 150 to 300 minutes weekly of moderate-intensity exercise. Brisk walking, swimming, and mowing the lawn are three good examples. However, the new study concludes that moderate exercise should be around five hours per week. In other words, if you exercise at 150 minutes per week, you are only half-way to the new recommended level. As mentioned in the study, “Moderate physical activity levels may need to exceed current minimum guidelines to prevent hypertension onset using the 2017 American College of Cardiology/American Heart Association definitions.”
  2. How Five Hours Per Week was Determined – Researchers analyzed a mid-1980’s project that extended for 30 years. Of the 5,000 teens followed, only those who completed more than 300 minutes of exercise every week avoided hypertension. Hypertension occurs in nearly half of all American adults and is defined as blood pressure at or above 130/80mm Hg. High blood pressure levels can cause risk for cardiovascular disease and events, which can be fatal. In 2018, nearly half a million deaths in the U.S. included hypertension as a primary or contributing cause.
  3. Racial Disparities – The new study indicates that Black respondents exercise far less than White respondents. The result? Black individuals suffered more acutely from the effects of hypertension than White respondents. This finding, it should be noted, is not earth shattering. According to the Centers for Disease Control and Prevention (CDC) in 2020, racial disparities in hypertension prevalence is greater in non-Hispanic Black adults (54 percent) than in non-Hispanic White adults (46 percent), non-Hispanic Asian adults (39 percent), or Hispanic adults (36 percent). Hypertension rates also vary greatly by state.

Summary

It is widely known that high blood pressure can be treated by a combination of medication and lifestyle changes. For employers, worksite programs related to physical activities, nutrition, alcohol use, stress, type 2 diabetes and obesity can aid employees in prevention and reducing high blood pressure.

Of course, modifying behaviors is the ultimate challenge to employers, their employees and family members. It begins and ends with finding the ‘right’ motivations to alter lifestyle choices.

As for me, exercising is no problem, and I feel confident that my blood pressure can be reduced by making a few dietary changes that I should have been making earlier. With that said, I really will miss those salted pistachios!

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2021 Iowa Employer Benefits Study
POSTPONED

2021 Iowa Employer Benefits Study POSTPONEDAs many of you are aware, the Iowa Employer Benefits Study was not performed in 2020. The reason was quite simple – the unprecedented uncertainty facing most Iowa businesses during the Covid-19 pandemic. As difficult as the decision to postpone was, it was no doubt the right one.

In early 2020, during the beginning of the pandemic, we attempted to perform the survey and quickly learned that fewer organizations desired to be interviewed, which prompted us to suspend the survey process. The cost to perform surveys increases if more organizations need to be interviewed.

Now in 2021, another tough decision has been made. After visiting with many individuals and organizations, I have concluded that 2021 is just too soon to pursue this important survey.  I could certainly randomly interview 1,000 Iowa organizations, but many organizations are still digging out of massive business and personnel upheavals that will require a ‘reboot’ of their workplace practices.

We understand that many individuals who respond to our surveys are charged with multiple organzational tasks that come with time pressures. My desire is to be mindful of the key issues facing employers and to, yet again, refrain from being an additional distraction during this time. I do look forward, however, to performing an assessment this fall about whether to pursue the 2022 survey. By that time, we will have a much better idea of what changes Iowa employers will have made in their workplaces and how these changes may impact future workplace environments.

I am confident that 2021 will prove to be a year of great progress in overcoming the personal and professional challenges we have all endured.

Please continue to stay safe!

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