Posted on 05/20/2002 1:09:58 AM PDT by sarcasm
WASHINGTON -- Health analysts call it "the perfect storm."
Like the deadly weather pattern that struck the Northeast in 1991, a confluence of skyrocketing insurance premiums, a shaky economy and rising unemployment is swamping American businesses.
As companies try to cope over the next several years, millions of workers and retirees will find themselves uninsured or paying a greater share of their health insurance costs.
For many, employer-provided health insurance will follow the path already taken by employer-provided pensions. As with 401(k) retirement plans, employees will assume more responsibility for their own health care by choosing what kind of insurance coverage and how much medical care they will receive.
Political analysts view the health insurance storm as a potent campaign issue, reminiscent of the early 1990s health care crisis that helped propel Bill Clinton into the White House.
But mindful of the disastrous Clinton health reform proposal, which many people say cost Democrats control of Congress in 1994, neither the Bush administration nor congressional leaders have shown any enthusiasm for tackling the health insurance crisis.
The storm winds are blowing from many directions.
Health insurance premiums this year are expected to increase an average of 13 percent to 15 percent, the steepest increase in a decade. That's on top of average increases last year of 11 percent.
And it's likely to get worse. Next year's increases will be at least as high as this year's and probably higher.
Some consumers already are being hammered.
The California Public Employees' Retirement System -- the nation's largest health insurance plan after the federal government's -- recently announced a premium increase of 25 percent. Other insurers have posted increases more than twice as large.
The size of the CalPERS increase set off alarm bells throughout the country.
"If the second-largest purchaser of health care in the nation... can't negotiate better than a 25 percent premium increase, what in the world is going to happen to the rest of the businesses?" said Pat Schoeni, director of public affairs for the bipartisan National Coalition on Health.
Other analysts say the CalPERS increase is not a bellwether for the industry.
Because the program was able to restrain premiums below national levels for several years, they say, the new rate merely represents a catching-up by insurance companies.
At least five factors are generally blamed for the steep increases in premium costs:
While managed care was able to hold premiums flat during much of the 1990s, it wasn't able to restrain the underlying growth in health care costs, particularly in prescription drugs and hospital costs.
Where HMOs once threatened to exclude individual hospitals that didn't meet their pricing demands, now hospital groups are threatening to exclude HMOs.
But rising premiums are not the only element in the health insurance storm.
The unemployed often lose their health insurance or are unable to afford temporary insurance plans. The most recent figures show unemployment at 6 percent nationwide, but higher for some groups.
Families USA, an advocacy group for broader insurance coverage, recently estimated that the major corporate layoffs during 2001 resulted in 2.2 million more workers losing insurance coverage.
That means there are about 41 million uninsured Americans, said the group's executive director, Ron Pollack.
In a paper published in November, the National Coalition on Health Care predicted that the weakened economy, exacerbated by the impact of the Sept. 11 terrorist attacks, might result in 6 million more Americans losing health insurance by the end of this year. Over the three-year period of 2001 to 2003, 86 million Americans could temporarily lose their health insurance coverage, the coalition predicted.
"We think the perfect storm is upon us and may be getting even worse," Schoeni said. "If this was not a bad recession -- if this was a small blip and we're doing this badly -- I don't know what a big blip would do to us."
Businesses are responding to the premium increases in a variety of ways, but the bottom line is likely to be higher costs and more choices for workers and retirees.
Employers generally refrained last year from asking workers to assume a greater share of the premium costs, deductibles or co-payments, said Paul Fronstin, director of health research costs for the Employee Benefits Research Institute.
But he noted growing indications that employers are forcing workers to carry a greater share of the costs.
A survey of employers conducted by Hewitt Associates, a global management consulting firm, found that employers are expecting an average annual premium increase over the next few years of about 13 percent, but they're only willing to pay 8 percent of that increase.
"You look at that kind of gap and ask who is going to pay for it, and the answer is the employee," said Ken Sperling, Hewitt's health care practice leader.
A Hewitt report last October predicted that many companies this year will pass on at least 25 percent to 30 percent of their premium increases to employees, which means increases ranging from $186 to $463.
Businesses also are considering passing along higher deductibles and co-payments to make employees aware that prescription drugs and doctor visits cost far more than the $5 or $10 that many workers pay.
Dave Romans, a senior consultant with the consulting firm Watson Wyatt Worldwide, noted that "63 percent of employees underestimate the total cost of health care, and 69 percent overestimate how much of a share of health care they are paying."
One way of making employers realize the cost is to shift from co-payments to co-insurance, says Jamie Robinson, a professor of health economics at the University of California, Berkeley.
A co-payment is a fixed fee, such as $10 for a doctor visit. Co-insurance requires the patient to pay a fixed percentage of a medical service's cost. That puts the burden of selecting services based on price more squarely on the patient.
Writing in the March edition of the health policy journal Health Affairs, Robinson said the shift to consumer-driven spending is designed to promote the view that "health care is a scarce resource in need of priorities rather than an unlimited entitlement for which someone else can be forced to pay."
An even broader shift may be coming regarding the way workers choose health care coverage.
Instead of "defined benefit" plans in which employers buy a health insurance policy and employees pay a share of the premiums, there is a growing movement toward "defined contribution" plans.
Under such plans, the employer puts up a certain amount of money, and workers buy health coverage and services from a menu of options.
One consumer-directed model is a medical spending account.
Under this model, an employer contributes a fixed amount into a worker's accounts. During the year, the worker pays all medical bills out of this account. When the account is exhausted, the employee is responsible for all subsequent expenses up to some "catastrophic" level, above which insurance takes over.
Workers who do not exhaust their account in one year roll the remaining money into next year's account.
"I would estimate we're going to see 5 to 10 percent of the Fortune 500 companies implement" such plans next year, said Romans of Watson Wyatt.
"It's gaining a lot of traction just because of what is happening in the health care world. Employers are looking for a solution, and this is one of the solutions that is floating out there."
Another model allows workers to buy "multi-tiered" coverage under which the amount of their co-payments depends on the cost of hospital treatment and drug treatments they receive. High-cost hospitals and name-brand drugs require a higher co-payment.
Sperling, of Hewitt, said "employers are interested in the new models, but they're not interested in throwing away" their managed care and other insurance plans. Instead, they're offering the new plans to workers as an additional option.
He noted that "the market is not convinced yet that these models will be effective in lowering costs."
LOL, The unions will never allow their minions to pay more. Every time our local teachers union contract comes up they sqquak if they have to may a measy 1% more of their contribution.
Besides the incredibly silly stereotyping going on here (which unfortunately does not surprise me), it is the decided lack of solid reasoning (which again does not surprise) which causes me to respond
Please demonstrate (using facts instead of hyperbole) how an increase in women in medicine is the cause of a decline in "hard driving specialists". You give zero evidence to back up your statement, but provide ample evidence of another cause...skyrocketing malpractice costs.
Do you really believe that an cardiology specialist makes no more than the doctor at your local HMO. Get real. click here for salary info. It took less than 1 minute to find this information. If you don't like that survey try this one. Maybe you'll like this one.
Your last point (if there is indeed a point here) that women docs "just plain quit" if they marry another doc needs substantiation, which of course you studiously avoid providing.
The reason (IMHO) that we won't see your reasons added to the costs is because they're not reasons at all, just your own personal opinion/agenda. I think we have learned more about you from your post as opposed to being enlightened about anything having to do with the health care debate.
The problem is healthcare coverage is seen as an entitlement, so free market forces will never be allowed into play.
Women don't want to go there...hours and demands too high. Women now make up over 50% of new med school attendees. Women prefer the cushy office or quieter hospital specialties. Internist specialties, gasmen, that ever-lucrative opthalms. GS's don't make those big bucks, either. Neither do the neuros, who have mal premiums in the hundreds of thousands of dollars in some states to contend with. We already know what's happening to OBs who deliver babies...there's fewer.
Women docs often marry men docs, and when they do, they often retire "temporarily" to tend to children. Then can afford to--
Sterotyping? Perhaps. Just observing, and reading about the alarming drop in GSs. How many female general surgs do YOU know? I don't know any. How many lady anesthesiologists? I happen to know several.
I'll play some more stereotyping. Gen surgs are a particular personality type (so are neuros), an arrogant sort that aren't too feminine . Most loved they are when they sew you back together again, but are often abrasive in other contexts. And, no, I haven't the stats to back that up. Just some experience.
Ask your local hosp how easy it is lately to get new gen surgs on staff to answer emergency call.
Mark
That is an excellent point. I am intimately familiar with that BS as I once did Utilization Review--what a crock! We have a huge number of government bureaucrats trying to cut costs, while an entire industry has grown up trying to maximize reimbursement.
In the meantime, the health consumer is the loser.
Yeah, Hillary Care will make sure that we are all EQUAL. No one will have decent healthcare. The Socialist Rules and Regs will make sure of that.
HA!!
~and broke & unhealthy as we've ever been, at that.
HA!
...just *nuts*.
How do you hide a ten-dollar bill from an orthopedic surgeon? (You hide it in his medical journals)
How do you hide a ten-dollar bill from a radiologist? (You hide it on the patient)
How do you hide a ten-dollar bill from a plastic surgeon? (You can't hide a ten-dollar bill from a plastic surgeon.)
It requires some familiarity with the various specialist sterotypes to laugh at such humor, but orthopods *are* known for disliking academics, just as internists *are* known for being compulsive anal-retentives, and women *are* known to prefer the tidier specialties such as radiology, anesthesiology, opthalmology the various internal medicine specialties.
If you need general surgeons, you need general surgeons. If half of the new medical school grads (women) veer away from that specialty, then there will be fewer general surgeons. Add to that other pressures, and there's no dressmaker (dressmaker?) waiting for you in the OR when you crash your car.
Is this a great country or what?
Nobody that is except Steve Forbes. Check out forbes.com in the subject...... Steve knows and his ideas work in practice.
and no, taking these online quarrels too seriously is not something that would show up on my profile
As opposed to going to the politically connected, which is the Democrat goal.
True. But it takes time and - as someone else pointed out - the cutting edge will always be beyond the means of the average person.
... Solace for this uncomfortable, inescapable fact of existence can be had, among other places, in the teachings of Christ.
Solace can be found in many ways. You find yours in Christ. I find mine in intellectual and aesthetic exploration. There are many other - often much more destructive - ways.
What is clear is that a successful society must offer hope of a better lifetime - in this lifetime - to a sizeable segment of the population - or their children.
You're no bimbo! This is exactly correct...
We already have socialized medicine in this country, and it is destroying all medicine with it. It's called Medicare. The government tries to fix 10,000 prices in 3000 counties across the United States. Doesn't work, never has, never will. Don't think doctors are getting a piece of these double digit increases in insurance premiums, either. Here in Montana, Blue Cross is raising cost of some products 10-15%, and did the same last year. Physicians overall saw no increase in their reimbursement either year, and for some physicians reimbursement has gone down every year for the last 8 years.
Whatever you want to believe is fine with me but frivolous malpractice suits cost US untold millions every year. Honest lawyers are there for when a malpractice suit NEEDS to be filed but they are way out-numbered by the sharks.
I admit that there are some lawyers who possess the same scruples as your average businessman and will do anything for a buck, but most lawyers are more professional than you realize. Malpractice suits are not easy to win. Most of the time the lousy doctors and hospitals get away with it. parsy
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