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Provider Reimbursements, Data Top Employer Concerns

March 31, 2009
Related Topics: Health and Wellness, Featured Article, Compensation
Employers have their own ideas about reforming the U.S. health care system as Congress and the Obama administration begin to develop such legislation.

High on employers' priority list are revamping the way medical care providers are reimbursed and expanding the availability of medical results so providers and consumers better understand the effectiveness of treatments for specific conditions.

At the same time, employers are adamant that some elements of the health care system be retained, chiefly continuing the bar on state and local governments from imposing their own requirements on employer-sponsored health care plans. Those ideas were discussed at a round-table session at the National Business Group on Health's annual conference in Washington in March.

John Rains, vice president, compensation and benefits, at restaurant chain Cracker Barrel Old County Stores in Lebanon, Tennessee, said reformers should focus on provider reimbursement. Under the current system, Rains said, provider compensation is based on volume of services, not quality. That results in duplication of effort and wasteful health care spending, he said.

Rains cited a personal example of how the reimbursement system generates duplication and unnecessary spending. When his mother was injured in a recent fall, she was taken to a hospital emergency room, where X-rays were taken. When she was taken later to her primary care physician, the doctor insisted on having another set of images taken.

Variation in providers' care is another way health care dollars are wasted, said Brian Marcotte, vice president, compensation and benefits, in the Morristown, New Jersey, office of Honeywell, a technology and manufacturing company.

Research has found that providers vary greatly in the intensity of the services they use and how they treat medical problems. Employers and others say one way to combat that situation is for more information to be available so providers have a better understanding of what treatments for particular medical conditions are the most successful.

"We need to know what works and what does not," said National Business Group on Health president Helen Darling.

In some cases, though, a cost-effective strategy could be to boost reimbursement of some medical providers. "We need to elevate the status of primary care providers. They are not paid enough" and their reimbursement is not consistent with the value they offer, said Emily Diedrich Foster, director of government relations in the Washington, D.C., office of engine manufacturer Cummins.

Many health care experts say the reimbursement system is so skewed in favor of specialists that some parts of the country have severe shortages of primary care providers. That has cost consequences as primary care providers often are in the best position to spot a medical problem before it develops into a more complicated condition that is more expensive to treat.

Still, panelists said, parts of the current system are worth retaining.

Foster, for example, said a provision in the Employee Retirement Income Security Act that pre-empts state and local laws that relate to employee benefit plans is vital. Without ERISA pre-emption, it would be nearly impossible for multistate employers to comply with what would become a patchwork of state and local requirements for benefit plans, she said.

While upcoming reform legislation is almost certain to include a play-or-pay mandate in which employers either would have to offer coverage meeting a specified standard or pay some type of assessment, some panelists say it is hard to stake out a position on a mandate until there are more details.

"So much will be in the details," Marcotte said, such as what benefit threshold employers would have to meet to be exempt from the "pay" part of the mandate.

Ultimately, "reform will require compromise and open minds," said panel moderator Pamela Kimmet, senior vice president, human resources, at Coca-Cola Enterprises in Atlanta.

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