4 Ways Business Plans to Bend the Health Care Cost Curve

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Helen Darling

For the unvarnished view of the state of health care in America, there is no better place to turn than the National Business Group on Health (NBGH), which represents 300 mostly large employers, including 63 of the Fortune 100. The groups members provide health care coverage to more than 50 million US workers, retirees, and their families. The group's president, Helen Darling, did the math for AHRA attendees during her keynote and it clearly does not add up.

"For a famly of 4, it costs over $18,000 in health care," she says. "Median income is up to or below $42,000. At the rate we are going with wages flat or declining and health care increasing at 6% to 7% annually, there will come a day when someone walks through the door and they would get more in health care than they would in wages. The gap is actually shrinking."

Employers are acting now to do what they they believe health care reform did not accomplish: bend the cost curve.

With wages flat or declining and health care premium increases of 8.9% projected for 2011, the NBGI will focus on the following initiatives:

1. Improving Quality. Errors are costly for patients, employers, and hospitals. The CDC estimates the annual cost of hospital-acquired infections (HAIs) at $5 billion. NBGI has launched a safety initiative that will actively promote the adoption of a culture of safety by a hospital’s chair, board and C-level executives and effectively exclude providers from PPOs if they cannot demonstrate a commitment to patient safety and ongoing patient safety research.
2. Initiate Consumer-Directed Health Plans. Look for businesses to get serious about educating their employees on their role in health care, both as payor and consumer. “As a taxpayer, you pay for public sector health care and through taxes, you also pay for the health care of government employees,” says Darling. “Most people think health care is what keeps them healthy. One of the things we want to have everyone understand is that if you take care of yourself, you won’t need health care. Most of the things people get health care for are preventable.”
3. Wellness Initiatives to Improve Employee Health. Employers will become much more active in this arena, and many will begin to tie financial incentives to participation in wellness initiatives, such as exercise and smoking cessation.
4. Increase Employee Cost Sharing. Employers will continue to shift more of the cost of health care premiums to their employees. In fact, 63% of employers surveyed by NBGI plan to do so in 2011; 46% will increase out-of-pocket maximums; 44% will increase in-network deductibles; and 21% will increase copays for specialist care.

“Workers don’t realize that they have been giving their pay raises to the health system,” Darling says. “States and local governments have $100s of billions in unfunded healthcare benefit liabilities. We must have a healthier, more productive, educated workforce to compete.”
The increases in imaging utilization also have not been lost on NBGI members. To bend that rising utilization curve, NBGI has identified the following action items:

• Reduce radiation associated with x-rays throughout the health care system
• Develop quality and privileging criteria
• Require ACR accreditation and use of ACR and ACC appropriateness criteria
• Monitor CT use and flag excessively scanned patients
• Include CT in patient safety initiatives
• Educate patients on benefits and risks of medical imaging
• Use the PHR to track cumulative medical radiation exposure
• Avoid heavily marketed imaging centers that promote full-body scans
• Require patients to bring imaging studies to appointments
• Equip every child with an imaging card modeled on the inoculation record

“We are going to have to rebuild the country and use some of what we save to pay for people who don’t have insurance and also to educate our children on healthy lifestyle choices,” says Darling. “Together, I know this organization and everyone else here is up to it.”