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Underuse/overuse of benefits - looking for research
Benefits & Compensation
Underuse/overuse of benefits - looking for research
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
As with most companies, we are moving away from full coverage to an emphasis on more employee responsibility in healthcare. We've had discussions in which opinions prevail, so I'm looking for hard dat
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Forums » Topic Forums » Benefits & Compensation » Underuse/overuse of benefits - looking for research
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Underuse/overuse of benefits - looking for research
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 12:27 AM EDT
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Posts: 2
First: 11/28/2005 Last: 8/8/2006 |
As a participant in a high deductible plan, I can truly say I avoid health care if at all possible and would actually at this point give it up. I pay out of my pocket for everything we need, I have a $3,000 deductible. I agree with the person who posted that the majority of the people do not want to go to the doctors in the first place, it wastes to much time and money. Now that the expense is put beyond my reach I will wait until it is extreme and I am left with no choice. I am a typical benefits user. And passing the cost on to the typical user will reduce your costs for medical, but it may just hurt your production costs. |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 1:18 AM EDT
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Posts: 3
First: 8/8/2006 Last: 7/6/2007 |
Have to disagree with some of what's been posted.
It depends on the individual - some people are truly ill and should use the system - I don't think a higher deductible will keep those folks away from the Dr. Others use it as a way to address their needs - for every sniffle, cough, and cold, they run to the doctor, because they "only" pay $15. Those folks truly do need to learn to be better consumers. Everyone should not have to pay for them. As a whole, our country needs to be a better consumer - who is calling around to pharmacies and pricing meds? Our retirees are because their meds aren't covered at the same 'luxury' rate as current employees. We should all be calling around. Some pharmacies are meeting/beating others' pricing. We hear Walmart may be a loss-leader in Rx, in order to get folks shopping, they'll take a loss in Rx, they win everywhere else. We should be asking for better pricing from our physician offices - we had a savvy employee contact the hospital prior to his wife having their baby to set up payments on the amounts not covered by insurance (good consumerism - would we not do that when buying a car - figure out what the payments are going to be?). The hospital offered to write off 50% if he paid up front. He agreed. 50% - why charge it in the first place, if it can easily be written off? Something's not right in the health care system itself - and everyone should not have to pay for it. We should all be asking our physicians for alternatives, and sometimes questioning diagnoses. I watched my elderly mother, dying of cancer - go through seizures because her physician ordered a particular type of medicine. After consulting the internet and reading some really fine print in a medical journal, the med itself indicated it should not be prescribed for women over 70 or anyone with a sever diagnosis (such as cancer). Hmmm. We need to question the medical field here. As for Gladwell's New Yorker article - perhaps if the individuals noted early in the article had spent $2.00 on toothpaste on a regular basis, then there might not be a reason they have to pull out their own teeth. Try good hygiene. I've lived paycheck to paycheck - I always managed to purchase toothpaste. |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 3:04 AM EDT
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Posts: 1
First: 8/8/2006 Last: 8/8/2006 |
No one has been looking at the bill. $20 copay is what the consumer thinks some health care visits cost. This is nuts. The insurance companies and the brokers can continue to rachet up the cost of healthcare to pad their pockets while the American public looks the other way. Reform is necessary. We need to bring consumerism to the healthcare industry.
I work with a benefits administration firm where we specifically work to help employers and employees manage healthcare costs by applying consumeristic principles to benefit management. This doesn't mean that employees get stuck with huge costs. Rather, the cost is shared by the employee and the employer. The employees use financial tools (reimbursement accounts)to help them pay for higher deductibles. They can put money into reimbursement accounts because they save money in the premiums that they pay for their health insurance. Employers can offer premium savings to employees because they are not paying as much for the healthcare. The employer and employee take on more risk by buying larger deductibles thereby requiring the insurance carrier to cover less risk. This lowers premiums. Overall, employers and employees are saving money but still receiving quality healthcare. It doesn't have to be a no-win situation for the employer or the employee. We must be wise consumers and purchase what is needed. HSA's will be healthcare of the future. It will force consumerism back into the healthcare market. I applaude the person who wrote that individuals are calling around to check RX prices, or the gentleman who contacted hospitals prior to his wife delivering their baby to see if they could get a cheaper price if they paid up front. We need more consumers like this. Our company has helped employees of our clients save $750,000+ in HSA's over the past two years. It can work! |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 3:09 AM EDT
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Posts: 12
First: 2/12/2003 Last: 8/8/2006 |
Great discussion. For several years, I worked at a small hospital in Iowa, where we were self-funded and self-administered. We had some nice perks; employee paid premiums that were nominal. We instituted copays for some services and had no maximum OOP and still there was no change in usage. I now work for physician group in the same area. Our experience has been that people who work in healthcare seem to use the health benefits more than if they didn't. Claims costs are high; our plans require employee contributions though not as costly as the hospitals in the area. Deductibles are $250/single; $750/family. Physicians and employees alike pay this. Most employees don't know how much their physician or department really pays toward their healthcare - it's a lot. I guess that makes me more appreciative of the benefit. If an employee elects a lower premium in exchange for a high deductible, it's a choice. We have a large manufacturing company in town that in the "good old days" used to pay the entire cost of healthcare for the workforce. They can't afford to do that anymore so have instituted their own plan with a lot of mandatory rules. They do give their employees the choice to see physicians out of the panel - for a price. How often I've had to keep my mouth shut because they complain they can't see a physician because they aren't in the network. They have a choice - they can see physicians in their network for a nominal copay or they can pay out of pocket to see who they want. It's a choice. We do have a benefit that pays for a yearly physicial that does not have to meet the deductible. I think that's a smart preventative tool though I bet most employees don't take advantage of that.
The question is how to keep benefits competitive while not shouldering the brunt of the expense. It's a delicate balance. |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 3:09 AM EDT
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Posts: 1
First: 8/8/2006 Last: 8/8/2006 |
Good points are being made. It is difficult to see good solutions that we could effect. The landscape is controlled by forces much bigger than the individual consumer or even the small business choosing a health plan. The example of a consumer negotiating a write-off of the patient's portion of the bill is interesting but it is prohibited under our health plan and could result in cancellation of the benefits; from the insurer's perspective that would be increasing their portion and they've seen all the tricks. What about giving consumers the option to use chiropractors and herbalists on the same basis as medical doctors? It might increase health care costs without much medical benefit and maybe some harm. But adding these benefits wasn't done because of consumer demand; it was mandated by legislators who enjoyed the attention and funds of the industry lobbyists. Stop blaming the little guys! |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 3:11 AM EDT
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Posts: 1
First: 8/8/2006 Last: 8/8/2006 |
If a sickly employee goes untreated due to medical cost and does not take sick days, the rest of your employees can also become sick. This increases both medical cost, sick leave time costs and a loss in production. |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 4:58 AM EDT
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Posts: 1047
First: 4/11/2002 Last: 9/14/2011 |
C'mon...who actually believes in HSA's? Call it what it is - a different form of cost shifting. The same thing can easily be done by changing the contribution percentage on your current health plans.
Now that these plans have been around for a few years, we're just now starting to see surveys and data that debunk HSA's. Employees do not like them, would not recommend them and the total costs (out-of-pocket expenses + premiums) on average are higher than a conventional comprehensive health plan. This is just the tip of the iceberg...how will these plans play into attraction and retention? What about large claims down the road that are going to be inevtiable if people bypass services because of cost? One of the most interesting stats I've see is that while 3.2 million people are actually in these plans, only 26% of them actually fund their HSA. So what's going to happen to the other 74% if a major claim occurs? |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 6:16 AM EDT
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Posts: 1
First: 8/8/2006 Last: 8/8/2006 |
I worked for the health insurance industry for over 20 years. I can tell you that all of the initiatives (precertification, utilization management, generic drugs, higher deductibles, copayments, networks, etc.) put in place save money only for a short period of time or in most cases transfer the savings to another area of health care - this occurred when surgeries previously performed inpatient were moved to outpatient). Health care costs were manageable until the automotive industry bargained for usual and customary payments rather than fee schedules. Because the payments were based upon charges, physicians found that they could put in large fees and about six months later the amount paid would rise to meet those charges, creating a vicious cycle. In addition, hospitals all had to have new equipment, MRI, Cardiac Units, etc. These were bought and put in place and the only way to pay for them is to use them resulting in some unnecessary procedures. You also have patients who sue physicians because they seem to have deep pockets. Then, malpractice premiums go through the roof. All of these items have resulted in large health care costs. We are living longer and this results in increased costs. I'm not sure that any of these situations will ever be resolved. |
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Underuse/overuse of benefits - looking for research
posted at 8/8/2006 10:30 AM EDT
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Posts: 3
First: 10/8/2002 Last: 8/8/2006 |
If we look to what has brought us to this point, of a medical business structure that is incomprehensible, it comes to several federal government laws.
1) the law that business can provide group insurance which is not taxable to the employee and tax-deductible to the employer. This allowed pooling of all people, protecting each person from any financial consequences for poor health decisions. This is unlike auto insurance that only partially pools people and provides consequences for poor driving actions. 2) The medicare law that took a business function away from the private sector and into the uncontrolled public sector. Note that in testimony in 1964, the prognosis for costs 25 years hence was $9 billion dollars. In reality, in 1989 medicare cost was $89 billion - off by a factor of ten. 3) the HMO law that required all businesses of a certain size to offer an HMO alternative. That taught us all that medical care cost just $10. 4) Other federal and state mandates have increased premiums to the height that they stand today. So the first solution would be to slowly untangle government from the business of medicine. When people know the cost (like clothing), know the consequences will be there for their actions (like solo drivers in an HOV lane), and educate themselves on the better procedures for themselves or their families (like any home remodel project), then people will make better health decisions with better outcomes and lower prices. Until then, there is no good short term answer. |
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Underuse/overuse of benefits - looking for research
posted at 10/17/2006 2:05 AM EDT
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Posts: 1
First: 10/17/2006 Last: 10/17/2006 |
We look at it as this...consumption patterns at an open bar (managed care, low copays) are decidedly different than that at a cash bar (high-deductible plans).
The question does indeed remain whether folks are for-going treatment b/c they might have to pay more out of pocket. This is an educational process...maybe the 1st year they might not have contributed to their FSA or HSA, but they will learn from their mistakes and take their premium savings and begin contributing to their cash accounts. This is a cultural shift and these paradigms take time to really grab hold. View it similarly to when 401ks came to the market. Participation was slow going at first, but now most every employee contributes to their retirement plans at the least a minimum level. AND THEY'RE BETTER FOR IT!!! |
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