|
|||
|
|
|
||||||
|
Healthcare 2009: Issues and Challenges
In 2009, the nation will still be struggling with a slow economy, tough business challenges and dispirited consumers, making it hard for the public to feel that we are on the path to a more vibrant economy. HR executives will have to do more with less, yet still have to compete to recruit and retain talent with an ever more complex workforce. Employers will have to find ways to offer quality benefits that are affordable for employers and employees, even with average healthcare costs well over $10,000 per active employee. HR executives will be drawn into the debates about national healthcare reform and will have to become more engaged to ensure that their business needs are protected. Even large employers who may believe a government solution to the healthcare crisis would be acceptable will quickly learn that they will still bear high costs and administrative burdens, while having even less control over costs and design than before. Some politicians see the Employee Retirement Income Security Act as a barrier to their desires to micromanage employers' health plans and shift even more costs to employers. Employers need to remind political leaders that virtually all of the innovation in healthcare benefits and purchasing has come from the work of large employers that would be unable to innovate and provide quality coverage and services for their employees and dependents without ERISA's pre-emption of state mandates. HR executives will need to push the healthcare industry to transform itself and come into the 21st century in health-information technology. As Craig Barrett, chairman of Intel, said on June 16 at the Health Reform Summit in the U.S. Senate: "Virtually every other industry provides more quality at a lower cost and is constantly improving. There is no reason the healthcare industry can't do the same." Employers are agents of change. Even more government-oriented policy thinkers -- those who think it's the government's job to act as a regulator -- believe that large employers play a key role in fostering innovation at a speed unimaginable by government agencies.
National Healthcare Reform: Will 2009 Be a Big Year? In 2009, the nation will have a new president -- the first in eight years, a long time in politics -- and a new Congress. The newly elected officials will have run on campaign pledges for substantial change, no matter who wins. But, those leaders will inherit a host of problems that will be very expensive to correct, along with massive, unfunded liabilities that will become harder and harder to ignore. The federal deficit for fiscal year 2008 is already twice the size of the prior year's, including interest on the public debt of $377 billion. The hole we are in could be even worse if countries, such as Japan, Korea and China, tire of bailing out the profligate Americans. Healthcare -- including Medicare, Medicaid, Veterans Affairs, and Department of Defense -- may indeed be the "Pac Man" of the federal budget, as a growing proportion of our gross domestic product is being consumed by healthcare. The Congressional Budget Office reports that, from 1975 to 2005, healthcare costs rose every year at least 2.2 percent faster than the gross domestic product. Now, healthcare consumes 16 percent of the GDP, but will reach 50 percent by 2082 if nothing is done to control spending. It's no wonder that Federal Reserve Chairman Ben Bernanke, congressional leaders and the head of the CBO all recently said we have to get costs under control now. The talk of the presidential campaigns was about health insurance and coverage for the 47 million uninsured, and little, if anything, about the most important issues: costs, patient safety, quality, inefficiencies and waste, which are marbled throughout the healthcare system. Virtually all experts, no matter what party or background, believe that providing insurance to millions of people without other major reforms will drive up costs even faster and, once in place, will be even harder to control. But, many hope that significant reforms can be enacted, which can occur by building on the political momentum of the presidential or congressional elections, or on a state level. In any event, 2009 will be a hard year economically and any hope that political solutions will rescue us must be tempered with fiscal realities. In addition, while there is always a lot of talk during elections about how leaders will bring disparate parties together for meaningful change, it is very hard to reach agreement on such important topics and very easy to create political gridlock that stops all progress. Pundits often say: every stakeholder group has its own ideas for reform, but Plan B is the status quo, which is why national healthcare reforms have not been enacted before. Even with the support and enthusiasm of current congressional leaders with safe seats, legislating change usually takes a lot longer and is a messier and more complex process than most realize. There is not going to be "new" money -- whether from our bankrupt government or the beleaguered private sector -- to buy our way out of the dysfunctional healthcare system. The business community has to provide practical, focused leadership to reform healthcare within the current level of investment. Leaders, including HR executives, need to make hard decisions, agree to make trade-offs and aggressively pursue waste reduction, quality improvement and productivity enhancements to achieve better healthcare for all at an affordable price for the country. In Washington, the only people who are saying "no" to more investments are the business people who have to find the money to pay for additional benefits. Everybody else can tax the public or add to the deficits and pass the burdens on to the next generation. Most HR executives have come to understand that Americans are paying for our wasteful and unsafe healthcare system either directly in medical claims -- through taxes for public programs, including the Medicare payroll tax -- or through the cost shift by paying higher rates for care to make up for public payers' lower payment rates. Just covering the 47 million uninsured will add to cost pressures and worsen other problems. We have to use all of the tools and resources that employers have to effect improvements, while providing valued health coverage to our employees and dependents. At the same time, we have to use the leverage we have as purchasers of care for approximately 160 million people to change the healthcare-delivery system. We have a healthcare system that is underperforming in every important area. The quality and safety of healthcare are far below where they should be. The average total medical spending for a typical American family of four is $15,609 in 2008, 7.6 percent higher than 2007, according to the actuarial firm Milliman Inc. The waste in our system is easiest to see when compared to other high-standard-of-living countries. In 2004, the United States spent 15.3 percent of its GDP on healthcare, while Germany spent 10.6 percent and the United Kingdom spent 8.1 percent, according to the Organization for Economic Cooperation and Development. While there are many differences, we know also from U.S. healthcare research that a healthcare system based on the right mix of primary care and specialty care with every person having a medical home -- a physician or office that knows the patient for years and holds medical records -- produces the most effective and efficient care, with more satisfied physicians and patients, and lower overall costs. While the healthcare system needs dramatic improvement, effective, high-quality, evidence-based healthcare can be an important tool for maintaining or restoring the health of your workforce and dependents. Disease and injury prevention and health promotion -- which involve changing individual lifestyles and managing risks -- can also help people stay well and avoid illnesses and injuries that reduce productivity. A wise employer will understand that high performance, organizational effectiveness and strategic success are directly connected to the health and productivity of its workforce and will take every step needed to promote health, and mental and physical well being. In a sea change over the last five years, employers recognize that to control runaway costs without just making employees pay much more for their healthcare, they have to help them improve their health so they need less medical care and fewer prescription drugs. Close to 80 percent of all medical treatment needed is related to lifestyle choices that harm health: smoking, sedentary lifestyles, obesity, nutritionally harmful eating habits and not using seatbelts or helmets, according to the Centers for Disease Control and Prevention. In the National Business Group on Health's 2008 Annual Employer Survey, we document a dramatic change in what the most successful employers are doing. Eight in 10 (83 percent) employers offer or require employees to take health-risk appraisals to determine their health-risk factors in order to mitigate risk through health-improvement programs of growing sophistication. Seventy-four percent offer weight-management programs that focus on reducing obesity among employees, 56 percent implement lifestyle-behavior-change programs purchased separately and 60 percent offer health coaches to help employees and adult dependents lose weight or reduce risk factors.
Now Is a Time to Reassure Employees HR executives have a great opportunity to help their employees deal with some of their worries about healthcare costs and their own financial security. They can remind employees how much the company is paying for their coverage, which employees rarely understand until they see what they would have to pay if they left the company or a child turned 25 but was still in school. Most importantly, they can reinforce that one of the most important benefits is the security that the company's healthcare benefits provide against financial catastrophe, if the employee sustains any serious illness or injury. That point could be driven home for employees if, for example, a premature infant spent weeks in a neonatal ICU costing $500,000 or someone was treated for a stroke or heart attack costing hundreds of thousands. Most people never need such protection but there is great value in it and employees need to be reassured about their security. This is also a good time to communicate all of the ways an employee can save money by his or her choices. If you offer a consumer-directed health plan, it will usually cost the employee quite a bit less in premiums. If you offer a health-savings account with a high-deductible plan or a health-reimbursement account, you can show how to save for current expenses and for retirement, if not spent during active years. Finally, not all employees take advantage of generics, mail order, and flexible-spending accounts (pre-tax dollars), which can save employees a lot of money. Now is a great time to promote these good ideas, since employees and their dependents may be more focused on cash savings than ever before. The many tools and resources you already offer them will be more useful than ever. Most importantly, you can also tell them again that the best way to improve their quality of life now and literally to the end of their lives and save money on healthcare is to do all of the things they can to keep themselves and their families physically and mentally healthy. They have a lot more control than they realize. HR executives can help people understand what physicians, medical researchers and other experts have documented -- just as employees can spend their lives planning and saving for retirement -- they determine the quality of their last 20 years by how they live today. Helen Darling is president of the Washington-based National Business Group on Health (formerly Washington Business Group on Health), a national nonprofit, membership organization devoted exclusively to providing practical solutions to its employer-members' most important healthcare problems and representing large employers' perspective on national health policy issues. Its 300 members, including 65 of the Fortune 100 in 2006, purchase health and disability benefits for more than 50 million employees, retirees and dependents.
November 19, 2008 Copyright 2008© LRP Publications |
||||||
Print
Email
Write to the Editor
Reprints
|
||||
|
||||
|
||||
|
© Copyright 2010 LRP Publications. All rights reserved.
|
||||