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‘Disruption’ Will Be Painful (Part II)

Health care in Iowa 2013 and beyondIn last week’s blog, Seeking Truth in Health Care (Part I), I shared four observations regarding health insurance for Iowa employers. This blog continues the discussion about how this may impact the health care provider community in Iowa.

As reported annually from the Iowa Employer Benefits Study©, health insurance premiums continue to skyrocket, which erodes take-home pay for employees, especially those who fall below the 400% Federal Poverty Level. In addition, employers continually purchase higher cost-sharing health plans that require employees to assume more out-of-pocket expenses. All of this means that health care providers – hospitals and physicians alike – will continue to see inflated receivables from individuals in the private payer sector. Not only is this unsustainable for the employment market, it will create greater financial tension for health providers when attempting to collect the cost-sharing portions from employees.

The wellness culture is taking root, as the emphasis in the employment community is all about healthy and productive employees. This new transformation in wellness can be seen not only with employers, but also in communities and statewide, as witnessed by the Healthiest State Initiative and the Blue Zones® Project. Many smaller Iowa employers have yet to embrace wellness initiatives, but appear to be willing to do so – as they are looking for both assistance and direction to make this process easy to implement and maintain. With this, opportunities to partner with employers exist for health care providers. Developing sustainable business models will be paramount for such opportunities to flourish in the new health world.

Another implication that will likely impact health providers is the concept of ‘defined contribution’ (DC.) As health premiums increase, employers will look for obvious ways to limit the ‘distraction’ of offering their own health plan(s). One possible and likely approach is to provide employees with a flat subsidy (that might be tied to the Consumer Price Index) to purchase their own coverage through a private exchange.

It is my understanding that an employer offering access to a private exchange (and providing “adequate” subsidies) would be similar to offering health coverage and therefore not be subject to the $2,000-per-worker penalty under the Patient Protection and Affordable Care Act (PPACA) for employers with over 50 employees. The DC approach may intensify improved efficiencies, price concessions, access and convenience – as employees would become more astute to the true cost of insurance…and demand more information from health care providers. As a result, health providers will need to transform themselves to be more efficient due to increased pressure to be transparent both in cost and outcomes.

Finally, most Iowa employers believe that health reform will NOT solve the cost issue. Greater complexities in the insurance market will only serve to frustrate employers who look for new directions on how to manage the cost and uncertainties. A ‘Provider Renaissance’ is sorely needed to deliver higher quality care at lower costs. Without a doubt, disruption in health care will be painful for all.

There you have it. The above implications are my best guess – at least for now!

Next week’s blog will address the potential “Winners” in the future – and what it may eventually mean for the employer community.

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Faith and Well-being

Iowa HealthThe Daniel Plan?

I recently read an article in TIME magazine (June 11) about how a Bible passage is impacting a mega-church in California…but in a way one would not expect. Rick Warren, Pastor of Saddleback Church in Lake Forest, CA, discovered his church members were a bit heavier (weight-wise) while he and other pastors were baptizing about 800 congregants during a four hour period (they estimated about 160,000 pounds of people were baptized that day). Warren, by the way, authored the immensely popular book, “The Purpose Driven Life”.

From this experience, Warren used a passage in the Book of Daniel describing a story of four Jewish boys who refused to “defile themselves” with meat and wine offered by King Nebuchadnezzar. Instead they chose vegetables and water and grew fitter (and apparently much healthier).

Armed with this biblical story, Warren launched the Daniel Plan – a health and fitness program for congregation members who wish to participate. The program begins with a diet of 70% unprocessed fruits and vegetables and 30% lean protein, whole grains and starchy veggies. In addition, this plan includes exercise groups, nutrition training, sports, recipe tips, small support-group meetings, and many other programs. The results since implementation (January, 2011) are very impressive. About 15,000 people have signed up to participate in this program, and it is estimated that the church has lost 260,000 pounds in this last year (Warren is shooting for 800,000 lbs). Warren intends to take this program internationally in the future.

So why am I writing about this?

For me, it’s encouraging to learn that people can collectively work together to accomplish a common goal to lead healthier lives. This particular situation stems from a faith-based community that provides the accountability and support measures needed to make this a successful endeavor. The TIME article does mention how important faith is to ones’ mental and physical well-being. In fact, various studies show that faith and health mix quite well with one another. For example, people who attend church service may be less apt to die in a given year when compared to those who don’t attend a faith-based service. People who help others tend to have a healthier profile. There are many other studies that link faith to good health.

Here in Iowa, the Iowa Healthiest State Initiative  provides a somewhat similar approach through personal connections (small groups, community involvement, etc). The spiritual component found in the Daniel Plan is very intriguing to me.

Iowa as Healthiest State…What a BHAG!

David P. Lind BenchmarkYup, making Iowa the healthiest state in the nation in five years is a Big Hairy Audacious Goal!

You know. The kind of visionary goal Jim Collins and Jerry Porras were thinking of when they coined that term in 1994*. Something so strategic and compelling that it’s a game changer.

For sure, the new Healthiest State Initiative is a BHAG. We are currently ranked 16 among all 50 states according to the 2011 Gallup-Healthways Well-Being Index®, so although we are above average, we’ve got a ways to go to take the top spot.

Can we get there?

Well, that depends on you, and me, and your employees—on all of us making a whole lot of small changes that add up.

That’s what The Blue Zones Project™ is about—helping us achieve this BHAG— community by community, business by business—helping us become more like those Blue Zone communities around the world, where people live longer, healthier, more productive lives.

How?

  • All Iowa towns have the opportunity to become Blue Zones through a competitive application process.
  • Ten towns will be selected to receive direct access to national experts in transforming themselves into a Blue Zone Community™.
  • Businesses can adopt changes whether they’re in a Blue Zone or not.

As an Iowa employer, what’s in it for you?

  1. Healthy employees mean more productive (and happier) employees who will positively affect your organization now and into the future.
  2. Having healthy employees, both physically and mentally, is a competitive advantage.
  3. The bottom line—lower medical costs translate into lower insurance costs.

Sure, I know, it’s easy to be cynical about yet another healthy living initiative, especially one with such lofty goals. Really, you may be thinking, we can’t change our habits so much that we will become the healthiest state in the nation.

But the truth is, Iowa will be better off by pursuing such a BHAG. We can achieve it if we really want to!

*Built to Last: Successful Habits of Visionary Companies, written by Jim Collins and Jerry Porras, 1994