The Health Benefits Dilemma
Time is running out for employers -- and society as a whole -- to make some hard choices on health-care benefits. While recommendations abound, there are dilemmas aplenty, including whether consumer choice should trump universal options that may offer better quality and value, but less freedom.
By Dallas Salisbury
Health insurance at work is the No. 1 benefit workers want -- beyond pay and vacation.
Small wonder that Wal-Mart has recently announced improvements in the health-insurance plans they offer their workers, after a spate of bad publicity, heightened discussion of union organizing and a less- than-complimentary PBS Frontline program.
As a very successful low-price firm, this is an especially meaningful health-benefits enhancement, at a time when most employers continue to consider increasing the health costs shouldered by their workers.
Small wonder that new surveys from AARP on 50+ workers, and from Merrill Lynch on worker attitudes towards retirement, suggest that the need for health insurance will either keep many older Americans working longer or working part time once "retired."
The combination of ongoing declines in availability of pre-65 retiree health insurance, double-digit increases in Medicare premium costs, and the ongoing shift to 401(k) and single-sum distributions, are likely to increase the value of offering health insurance in the decades ahead.
For employers that face problems filling technical and other jobs as the unemployment rate continues to rest below 5 percent, providing health insurance can help attract and retain.
Elected officials are getting the message of the importance of health insurance as well. The new laws in Vermont and Massachusetts are likely to be followed by a number of other states seeking to move towards universal coverage.
Initiatives, such as
Save Lives/Save Dollars
in greater Detroit, seek to increase value by quality improvements and cost effectiveness through disease management, adherence to clinical guidelines, and differential payments to providers, based upon outcomes.
At the same time, the Detroit chamber is one of many across the nation with programs to allow small employers to offer health insurance. At the Mackinac Conference 2006 in early June, more than 1,000 people gathered for annual policy discussions. CEOs, senators, congressmen, the governor, academics and analysts all highlighted the central importance of health insurance and health care -- and the importance of finding some way to bring costs under control. Consumerism and integrated delivery systems, like the Henry Ford system in Detroit, were two common themes.
Consumerism has been embraced by most everyone in terms of the desirability of individuals having good information on options, costs, quality and outcomes. New reports from the California Health Foundation,
Consumers in Health Care: Creating Decision-Support Tools That Work
and
Health Care Cost Comparison Tools: A Market Under Construction
, re among the latest in a constant stream of work setting out both the challenges and the opportunities of moving towards a more consumer-centric model for health delivery.
Yet, that movement brings another dilemma front and center: Integrated care is seen by many as providing the best cost/quality value, but it does so by limiting individual choice, while open consumer choice is the core principle for many of the advocates of moving to a consumer-driven system.
The Medicare Modernization Act of 2004 created a citizens commission to make recommendations for the health system. Their
recently released recommendations
have been the subject of attacks by the strongest advocates of consumer-driven care and health-savings accounts because they call for central government action aimed at universal coverage and the development of integrated systems across the nation as opposed to individual choice as to (1) whether they have health insurance and as to (2) unlimited choice of providers.
Dilemmas aplenty! Are we willing to spend the funds required to get to single electronic medical records? Will we move to universal coverage in order to rationalize the cost of a system in which we assure some emergency care to all, regardless of ability to pay?
Will we move away from employer benefits to an individual-choice model that could result in much higher uninsured rates and even greater cost challenges? Or will we decide on individual choice but then deny care to anyone who has not decided to purchase health insurance?
Will employers spend more to provide health insurance to meet attraction and retention needs, or put cost control first and seek workers willing to go without coverage?
The 2006 and 2008 elections are likely to bring many health issues to the front burner.
There are no easy answers, but with health care spending as a percent of GDP projected to climb from 16 percent to over 22 percent in a few short years and the number of uninsured growing, the nation will not be able to put off dealing with these issues much longer.
June 12, 2006 Copyright 2006© LRP Publications
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