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New Era in Iowa Healthcare (Needed)

Value in Health Care DeliveryI’ve recently been visiting with healthcare providers around Iowa discussing how employers view health insurance and the value of healthcare delivered to their employees and family members. The discussion has been both open and honest. In fact, Iowa hospitals and physicians appear to be both interested and concerned with what they are learning.

My presentations evolve around four key observations that I have made over the past 29 years, both as a benefits consultant (my past life) and as a researcher. The intent of sharing these observations with the provider community is to convey the ‘pain points’ experienced by Iowa organizations regarding exorbitant health care costs and to begin a new dialogue of collaborating resources to find meaningful solutions in our health care world. After all, we are all in this mammoth problem together, right?

Here are my four observations:

  • Observation #1 – Health insurance premiums for Iowa employers have increased by 164 percent from 1999 to 2012. A great deal of uncertainty exists about the future of the health care ‘system.’

Year-after-year, employers continue to pay a handsome portion of the insurance premium. We know that take-home pay continues to erode for employees, as cost-sharing continues upward through increased payroll deductions and benefit plan alterations that include both higher deductibles and out-of-pocket maximums. This is clearly unsustainable for ALL of us. For communities to remain healthy and vibrant, employers must find solutions to this escalating problem.

  • Observation #2 – Iowa employers continue to embrace wellness initiatives, as they desire to have a healthier and more productive workforce.

Gradually we are morphing into a new social conscience of embracing healthier lifestyles – as more Iowa employers continue to assess and implement wellness efforts. We also have the Healthiest State Initiative and Blue Zones Projects™ in the news. The statewide Capital Crossroads Community Wellness Study reported that Iowa employers are open to partnering with community-wide wellness programs. For those employers currently without wellness programs in place, only three percent feel that wellness programs don’t work! This is encouraging.

  • Observation #3 – Lack of transparency in health care is a major concern and frustration to Iowa employers and their employees. Health insurance has become a major distraction to employers.

There is a growing belief that the ‘market’ approach does not work for ‘buyers’ of health care. In the next few years, will we see a gradual shift by employers to a more defined contribution approach by limiting financial support for employee premiums? Will value-based benefits begin to take hold that will nudge employees to use ‘higher value’ health providers and utilize approved medical procedures requiring less out-of-pocket exposure? Transparency of costs and outcomes are essential for the private market(s) to exist as health providers WILL definitely be held more accountable in the future.

The Accountable Care Act (ACA) will not solve the cost issue for employers and their employees. In fact, the ACA adds greater complexity in the insurance markets, forcing employers to search for opportunities that will relieve tensions and uncertainties. A ‘Provider Renaissance’ is sorely needed to deliver great value for the insurance premium being paid.

So what does all of this mean to the healthcare provider community?

Employers want to TRUST that hospitals and physicians will:

  1. UNDERSTAND the employer perspective, which is the need to be competitive by having a healthy workforce. Health providers must have the employers’ best interest in mind.
  2. CONSISTENTLY provide quality outcomes at reasonable costs – i.e. receive greater value for the dollar paid.
  3. COMMIT to do these critical things on an on-going basis – long term.

As mentioned in a prior blog, our fragmented delivery system is really not a “system,” but rather a concoction of multiple temporary or expedient remedies that attempt to solve our problems as we confront our health care needs. No one is at fault, yet we ALL are.

Now is the time for employers and the healthcare provider community to work together – starting with a meaningful and trusting dialogue that will result in concrete solutions.

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Wellness Grants? Yes, more to come…

Iowa Employer Benefits StudyDid you know that under the ACA (health reform law), Wellness Grants will be awarded to small employers (those with less than 100 employees who work a minimum of 25 hours per week)? In addition, these grants are intended to provide for comprehensive workplace wellness programs. Employers are eligible to receive these grants only if they did not provide a workplace wellness program prior to the enactment of health reform on March 23, 2010.

In our 2011 Iowa Employer Benefits Study©, we asked Iowa employers (those with fewer than 101 employees) if they were aware of the new Wellness Grant Program that could help subsidize the cost of starting a wellness program.

Any idea on the percentage of Iowa employers aware of this program?  You might be surprised…see below.

 Iowa Employer Benefits Study

Based on these results, a great deal of education lies ahead on how employers can apply (and qualify) for such grants. More on wellness programs in Iowa in upcoming blogs…I promise!

Wellness: Bending the Cost Curve

Wellness and Health Care Costs in IowaWill wellness programs stem the tide of rising health care costs?

That’s the million dollar question.

Health insurance rates in Iowa increased an average of 10.2% annually during the last five years, according to our Iowa Employer Benefits Study©. No wonder employers are looking for ways to bend the cost curve.

So are wellness programs going to provide the magic bullet? I have to say, “Possibly, however…”

There are at least two major forces—upstream and downstream—that adversely affect health care costs, and only one is affected by wellness programs.

  1. Upstream force: unhealthy lifestyle behaviors        
  2. Downstream force: a dysfunctional health care delivery system

Conventional wisdom suggests that if we identify and minimize or treat health risks upstream before they become major (and more expensive), we should eventually incur fewer costs downstream.

I admit there is truth to this. Decrease unhealthy behaviors that lead to the “lifestyle diseases” —heart disease, stroke, some cancers, type 2 diabetes, metabolic disorder and a few others—and you lower the need for expensive procedures.

But for most people, improving lifestyle behaviors leads to involvement with the health care delivery system – the downstream force – and this fragmented system is not geared to provide efficient, coordinated and recommended care. In fact, in 2003 the Rand Corporation released shocking results from the largest and most comprehensive analysis ever undertaken on health care quality in the U.S.

Adults in the U.S. fail to receive recommended health care nearly half the time!

Unbelievable, you say. We have the best health care system in the world, you say. Well, here are a few examples:

  • Less than a quarter of diabetics had their blood sugar levels checked regularly, putting them at risk for kidney failure, blindness and amputation.
  • Just 45% of heart attack patients received medications that would reduce risk of death by more than 20%.
  • Patients with high blood pressure received less than 65% of recommended care, putting them at increased risk for heart disease, stroke and death.

Just as staggering—according to the study, inappropriate care happens everywhere! While a study that came out in 2003 may seem dated, the reality on the ground has not improved. The Dartmouth Atlas of Health Care continues to support the Rand findings by documenting the variations of how health care is delivered in this country.

So by all means, implement a well-designed wellness program. But don’t expect miracles when it comes to bending the cost curve. Until we address our dysfunctional delivery system, your payoff may come in healthier and more productive employees.