Back Button
Menu Button

Iowa Employers and Health ‘Exchanges’

Healthcare ExchangesAs employers review their health insurance options for 2015, we know that some may have interest in learning more about electronic marketplaces – better known as ‘exchanges.’

Exchanges basically come in two varieties – private and public. Private exchanges are established by benefit consultants, insurance companies and other third party vendors. Under the auspices of the Affordable Care Act (ACA), public exchanges were implemented to allow qualified individuals to receive premium subsidies from the federal government. In addition, small businesses with fewer than 25 full-time equivalent employees may be eligible for premium tax credits depending on the average wages paid to employees.

Iowa has a hybrid public exchange – which is a joint federal/state arrangement. Also known as a ‘partnership’ exchange, it is similar to the federal public exchange, whereby subsidies and small business tax credits are available for qualifying individuals and businesses.

As we all know, the primary concern for employers who offer health insurance is COST. Cost drives behaviors for both employers and their employees, resulting in health plan alterations that can help alleviate (but not solve) annual premium jumps. Usually plan design changes come in the form of elevated deductibles, copayments, out-of-pocket maximums and employee contributions. Such behaviors result in shifting costs to others but does not address the fundamental issues that adversely impact health costs.

Inevitably, questions arise about the growth of exchanges and how they may eventually contain costs. Will employers embrace the exchanges here in Iowa and elsewhere? Can annual premium increases be tempered due to the eventual ascension of exchanges, both private and public? Without a doubt, many questions surface as to whether exchanges can and will make a difference with cost. Yet, the waters remain turbulent and uncertain for the foreseeable future.

Within our 2014 Study, we did ask employers about their intentions to offer health coverage through a private or public exchange in 2015. From this, we learned that 15 percent of Iowa employers appear interested in exchanges for 2015, with almost 21 percent coming from employers with fewer than 250 employees.

Interest in Exchanges for 2015Based on organizational size, the smallest employers appear more likely to embrace participation in exchanges, as 32 percent of employers with 2 – 10 employees indicated interest. While only three percent of employers with 201+ employees show interest in exchanges for 2015.

Interest in Exchanges by Employer Size

Of those 15 percent of employers interested in exchanges, about 29 percent (coming only from organizations with under 250 employees) responded that their preference would be to explore only private exchanges, while five percent indicated they would consider public exchanges. Two-thirds (66 percent) of employers who have interest in exchanges responded to having interest in both the private and public exchanges.

Type of Exchange

Will exchanges make a great impact to the cost problem confronted by individuals and employers? My simple answer is no, employers should avoid having high expectations that electronic marketplaces will somehow control health costs. This would be pure delusions of grandeur. Expecting exchanges to control costs is nothing more than rearranging chairs on the Titanic – it may feel like progress is being made, but the bow of the ship has a gaping hole that requires immediate attention. The gaping hole that I am referring to is a dysfunctional healthcare system and unhealthy lifestyles.

Make no mistake, merely shifting costs to employees should not be confused with controlling costs.

Health exchanges may likely be beneficial in other areas for employers and their employees, just not in controlling health costs. Let’s first fix that hole.

To learn more, we invite you to subscribe to our blog.

Mental ‘Rubber Ball’ Continues…and a BIG ‘Thank You!’

Mental Rubber BallIt all began in 1998 – and it wasn’t my idea.

About three years after starting David P. Lind & Associates, my first and only associate at the time, Brad Johnson, walked into my office and sat down across from my desk and asked, “Do you have a few moments?” I must admit, I did not know what to expect from this unanticipated dialogue – and I was a bit nervous.

“Sure.” I said.

For the next couple of hours, we had a discussion that I will never forget. Brad had an idea, and he wanted to knock the concept around like a rubber ball in a racquetball court. In addition to the floor, it hit all four walls and the ceiling countless times and it was virtually impossible to contain its’ kinetic energy after each subsequent surface smack. The idea was growing legs quickly!

From this experience, came my first big lesson in business: Never underestimate ideas that come from your employees. In fact, ALWAYS encourage suggestions and new approaches that may seem too big at the time. After giving the idea(s) the necessary attention, time and dialogue, allow it (them) to simmer and then revisit the concept with additional levity and a fresh perspective. Then, if appropriate, ACT!

Brad’s idea was a simple one. “Why not perform an employee benefits study in Iowa to help our clients (employers) benchmark their benefit plans to other employers locally?” His suggestion was basic – yet brilliant!

Another lesson? Don’t spend a great deal of time looking at your competition. Instead, watch what people actually do, observe what they use, how they see, feel, hear, touch and interact with every aspect of a product or service. Then move on it.

In the 16 years since my game of mental ‘rubber ball’ with Brad, we have completed 16 annual employee benefits studies, and surveyed 12,460 employers. During that time (1999-2014), Data Point Research, Inc. has served as the backroom ‘engine’ for undertaking this survey process. I am grateful for the work they do and the professionalism they consistently demonstrate on behalf of my organization.

Scott Woodruff of Majestic Limousine Services

Scott Woodruff of Majestic Limousine Services

As in 2013, we offered a special incentive to employers who took part in this year’s survey. Participants were automatically entered into a random drawing for one of two iPads. This year’s winners are Amy Hanson of Prairie Lights Books (Iowa City) and Scott Woodruff from Majestic Limousine Service (West Des Moines). Both recently received their iPads and were gracious to allow me to use their names within this blog. Thank you, Amy and Scott. Again, congratulations!

And a big thanks to the other 1,000 organizations who participated in this year’s survey! If your organization was one of this year’s survey participants, an email was sent to you on September 17, 2014, with a unique link to download your FREE copy ($300 value). If you missed this email, please check your Spam or Junk email folders. Otherwise, please contact us.

For the record, kinetic energy has taken that simple rubber ball into new, unexplored surfaces outside the racquetball court. No telling where the ball will eventually go!

To learn more, we invite you to subscribe to our blog.

Voices on Hospitals: Access and Patient Satisfaction

Finding Your VoiceBefore I continue my discussion on employer perceptions of Iowa hospitals, I would like to react to a Commonwealth Fund report “Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally” published on June 16th.

It is a fact that we pay for world-class healthcare in the U.S. No one can honestly dispute this. Yet, there’s a major gap in what we pay for healthcare versus the outcomes we receive — commonly known as ‘value.’ 

When we compare our expensive healthcare system to 10 other major industrialized countries, as the Commonwealth Fund recently did, the U.S. ranks dead last in the quality of its healthcare system. As we already know, we spend far more than any other country on healthcare (per capita), and yet the Commonwealth Fund reports “…further findings indicate that from the patients’ perspective, and based on outcome indicators, the performance of American health care is severely lacking.” In fairness to U.S. healthcare providers, this report factors in other criteria that does not directly relate to provider performance here in the U.S., such as our troublesome access to insurance coverage and equity issues.

This report is like fingernails on a chalkboard — for one key reason. In Iowa, we continue to compare our health outcomes ‘progress’ to other states, rather than with our international counterparts. I understand it is more convenient to compare Iowa metrics with comparable metrics from other states, after all, each state operates under the same federal healthcare ‘system’. But let’s be honest, it is very easy to be selective on which metrics to use when comparing the progress of our outcomes with other states. Aren’t we merely comparing Iowa to other under-achieving benchmarks?

It’s really about our expectations, right?

Since we are paying world-class prices for our healthcare, then we need to proactively compare our outcomes to…well, the world. Incrementally making progress comparisons to other states only serves to prolong our inevitable desire to produce world-class outcomes. With the risk of sounding naïve about this subject, I am convinced Iowa can and should take the lead by being the petri-dish for world-class care. But to do so, we must ‘think’ world-class and, consequently, use the appropriate benchmarks to get us there.

There, I said it. Now, shoot me.

As previously mentioned, future blogs will address how Iowa employers view hospitals on 12 different ‘indicators’ across five Iowa regions. Today’s topic addresses employer perceptions on hospitals regarding “Access to Services” and hospitals’ “Concern for Patient Satisfaction.”

Employer perceptions about our hospitals can be interpreted as unique perspectives coming from key stakeholders who have much to gain (or lose) from the local care that is provided to their workforce.

The five arbitrarily-carved regions in Iowa consist of the following number of counties (99 total counties):

  • Central – 9 counties
  • Northwest – 27 counties
  • Northeast – 25 counties
  • Southwest – 17 counties
  • Southeast – 21 counties

Indicator #1: Access to Hospital Services
Using a 10-point scale, (1 is ‘failing’ and 10 is ‘excellent’), Iowa employers rated statewide hospitals a 7.3 regarding having access to their services. When converting this score to a grade, the overall statewide grade for this indicator is a ‘B.’ (See NOTE below.)

The following map shows little measurable difference between the five regions for this indicator. The northwest region has the highest average of 6.9, while central Iowa follows at 6.6. When applying weights to the regions, many regions actually grade at a mid-to-high ‘C.’ If you have not reviewed our ‘Voices for Value’ white paper, it is available for download. ‘Voices’ briefly addresses this particular subject on pages 14 & 15.

Regional - Access to Services Map-Master

Indicator #2: Concern for Patient Satisfaction
Overall, employers give statewide hospitals a score of 6.9, or ‘C+.’ However, when we look at the five regions under this indicator, it becomes more interesting. Employers in the northwest region clearly feel their hospitals have more empathy for patient satisfaction, grading hospitals at a low ‘B.’ The northeast and central regions grade their hospitals at a low ‘C,’ while both the southeast and southwest lag behind equally at high ‘Ds.’ Our ‘Voices’ white paper discusses this topic on pages 15 & 16.

Regional - Concern for Patient Satisfaction by County Map-Master

Former Massachusetts Congressman Tip O’Neill frequently stated “All politics is local.” As you will see in upcoming blogs, employer perceptions on Iowa hospitals vary greatly based on location. So we might say that “All healthcare is local.”

Local problems can be addressed with local solutions, to a great extent, but only if we have appropriate expectations of the desired outcomes we wish to seek.

Next week:  “Electronic Health Records” and “Consistent Quality of Care.”

To learn more, we invite you to subscribe to our blog.

NOTE:  When grading the entire state, it is important to distinguish that employer respondents were not weighted, which means all employers (regardless of size) have an equal voice. However, when we break out the five Iowa regions, the results are size-weighted so that organizations with more employees have a louder “voice.” Because each region is size-weighted, the average regional scores will appear lower than the statewide average score, in this case, 7.3. Sorry to get technical, but I wanted to address why the statewide averages do not exactly jive with regional averages. If we dig deeper by county, the map becomes very colorful because not all counties are alike, since not all hospitals are alike.