Employer Wellness Survey Results Available

Results from Herbruck Alder's Employer Wellness Survey of Northern Ohio companies are now available.

Survey highlights:

• Twenty three percent of Northern Ohio employers responding to the survey have comprehensive wellness programs. This is 39 percent more than the results of the previous annual survey reported.
• 17 percent of respondents are in the process of developing a wellness program.
• 51 percent offer smoking cessation programs through health plans.
• 45 percent offer weight control and/or weight loss services.
• 80 percent offer onsite food services, from full-service cafeterias to vending machines. Of those, 34 percent publish nutritional content to help employees make healthy food choices.
• 39 percent can identify successes within their wellness programs, such as employees quitting smoking, sharing healthy recipes, starting exercise programs, and participating in weight-loss competitions.

Click here to read recent press release.

Please contact Alison Muth at 216.377.2595 or amuth@herbruckalder.com to receive a copy of the results report.

Is the problem the cost of the insurance or the cost of the collision centers?

I want to go on record that I am in favor of some health reforms. I am also a news junky. I read many articles each day from Google News, which comes from all sorts of reporting and opinion sources covering all sides of the health reform debate.

Let me begin by stating the obvious - health insurance is expensive. Whether it is Medicare, Medicaid, group or individual, insurance products are expensive. This is because of the unlimited nature of the coverage. The proposed removal of any connection between our personal usage of the service and the cost of the coverage will only make matters worse.

All of the above insurance policies (yes, Medicare is like an insurance policy) are expensive because we (the insured) are priceless, and we routinely use services ranging from preventive to critical care. Providers of care are analogous to car repair shops that change oil, sell new tires, perform major and minor collision work to repair fender benders, or declare a car “totaled” if it’s involved in a head-on or t-bone crash.

However, the business of fixing humans is different from the business of fixing cars. There are many times we don’t fix the paint chips, small dings or even windshield cracks because the damage is minimal and we would have to pay for it out of our own pockets. Car insurance simply does not cover all damages, and it certainly does not cover oil changes and new tires (preventive exams and hip replacements – get the connection?). Sometimes we choose to pay out-of-pocket because we don’t want our rates to go up. When does this happen with health insurance?

We have come to expect health insurance to cover everything – from soup to nuts – from knees to sneezes and wheezes. What’s more, the repair and collision centers – hospitals and doctors’ offices – are incredibly expensive and their prices have a broad band width. We have little control over the cost of repair. Further, we generally cannot get an estimate in advance of the cost of the service, and pricing is inconsistent based upon the type of “payer” that pays the bill. I do not get the same discount that Anthem BCBS would get and Anthem does not get the same discount that Medicare (the U.S. Government) gets. Thus, we all lean on some form of “health insurance” to finance our way forward.

So, everyone already has access to health care. The problem is that health care is expensive and not everyone can self pay for all of the health care they need. Further, our present system says that if you do not have any money, just go to the emergency room and you can get treated without any cost to the patient. Try that at a collision center or car dealer.

We can’t do that at a Doctor’s office either. So why doesn’t someone just make a Doctor’s appointment, see the Doctor in his or her office, and pay the $80 when they are sick? Isn’t that access to health care? Is it because people don’t think they have to pay for the service? Is it because they can’t afford the service? Should this be covered by insurance?

Health insurance really is needed for most of us (except for guys like Gates and LeBron) as a way of financing something that is very expensive: Repairing our worn knees, hips, hearts, lungs, bellies, bowels and brains. What is weird though is that our government wants insurance to pay even when we have not been overly responsible. When you drink and drive and crash, people can die, go to jail, lose driving privileges and lose automobile insurance.

When we eat too much, drink too much, exercise too little and live unsafe and unhealthy lives, we don’t lose our right to eat and drink. Government reform says insurance must cover the collisions that come from our poor lifestyle choices and wrecked bodies and lives. By the way, insurance companies won’t be able to charge different prices to different people either. Bad drivers get good driver rates. How does that work? I guess good drivers will pay more and bad drivers will pay less.

Despite the frequently negative perception of insurance companies, they are still not the core of the problem. The problem is twofold:

1. Covering chronically reckless lifestyles without personal consequence; and
2. The cost of all underlying services.

You see, if insurance must cover the cost of prevention and repairs – for the sick as well as the healthy (both the good and bad drivers) -- we need to bring down the cost of hospitals and other care providers so that the insurance can also come down.

One final thought and I think we can agree on this notion – when we get our cars fixed after they are in a wreck most of the cost is wrapped up in the actual repair work to our cars. It is not in the adjuster, the administrative costs that the insurance company has to administer the claim, or even sending us the bill for the auto policy. The expense is mostly in the cost of the collision center - to the ones repairing the cars. The same is true with health insurance.

Mark Alder, President of Herbruck Alder - malder@herbruckalder.com - www.herbruckalder.com

Other points of view:

Other points of view:

You can lead a horse to water, but you can’t make it drink. You can cover all with health insurance, but you can’t make people take care of themselves.

Here are examples of a few good changes (reforms) that have occurred over the last 30 years or so since I entered into the health insurance business. These changes gave people access and offered a way to help themselves:

1. COBRA – Allows employees to continue coverage if they leave employment;
2. Credible Coverage Rules – If you were previously insured, a new employer must cover your pre-existing conditions;
3. Health Savings Accounts – Encourage thrift and wellness by insured members;
4. Small Group Reform in most states – Permits rating up of, but not declining of, groups, thus guaranteeing access for all who choose to purchase;
5. Rating by Medical History – Good risks pay less (encouraging wellness) and bad risks pay more but have rate ceilings;
6. Medicare Advantage Plans – Insurance companies willing to offer coverage to Medicare-eligible individuals (take them out of Medicare) and the government gets to negotiate a cost which saves the government money. A market-driven solution.

I am in favor of reform that helps cover more people. I am in favor of covering people who want to be insured. I am in favor of requiring insurance companies to accept all who want coverage with rate caps.

I want enough reform to fix the things that are broken.

Mark Alder, President, Herbruck Alder - malder@herbruckalder.com - www.herbruckalder.com

News Flash! AARP Supports Health Care Reform

Now isn’t that curious? Their 40 million person membership is made up of folks over age 50 - a large percentage of whom are eligible for Medicare. I understand the need for Medicare reform, but AARP’s support for health care reform goes beyond supporting Medicare. I suspect they are supporting health care reform that will result in a cost shift away from their members and to the younger and healthier population.

Let’s focus on one aspect of their support of the Legislation which passed in the House last week – community rating. The Bill would not permit rating based upon medical history by health insurance companies. Older people have more medical history (generally speaking). Medical history chronicles usage and helps insurance companies evaluate risk. A good health risk should cost less because there is less history. A high risk should cost more for the same reason.

Age rating provides an adjustment for pooling, but medical rating adds a metric to encourage good behavior by us as individuals. Studies suggest that as much as 70% of health costs are lifestyle related. Shouldn’t we retain features that encourage good behavior? Needing less medical service is good because less usage (out of need) means less cost.

If concern is over the unhealthy paying too much, most states already have reformed pricing practices that prohibit insurance companies from charging too much. In this way and other ways, health insurance companies already do pool risk. This means they don’t charge as much as they might need to any given risk. To offset losses from the high risk group, they charge more than required on a low risk individual or group. This is pooling or spreading of risk.

Is AARP’s goal to have its members pay less? Probably so. But should the outcome result in those under age 50 paying more? Why not support legislation that reforms and improves Medicare?

Mark Alder, President, Herbruck Alder - malder@herbruckalder.com - www.herbruckalder.com

Pending Healthcare Reform Legislation

The pending healthcare reform legislation suggests that penalties will be levied to those not purchasing coverage. The proposed penalties are phased in and appear smaller than the premiums.

Follow this logic:

If:
Health reform brings penalties for those that don’t buy coverage,

And:
Some employers don’t offer, and some individuals don’t buy, coverage today because coverage is too expensive,

Then:
Won’t companies and individuals just pay the penalties?

We can only hope for income tax reform. I might choose to stop paying taxes.

- Mark Alder, President, Herbruck Alder - malder@herbruckalder.com - www.herbruckalder.com

My Quick Response to this Morning’s News

My quick response to this morning’s news. I intend to write our House and Senate leaders again.

The House went first and it passed. Now it’s the Senate’s turn. We may have health reform legislation yet this year. Based upon my understanding, this new Federal Legislation would trump State Legislation and bring new “reform” to prior health “reform” initiated at the State level. As such, higher costs are on the way.


Currently in Ohio, groups with 2 to 50 employees already cannot be denied coverage. Pre-existing conditions are covered immediately if individuals can show proof of prior coverage. Groups are rated based upon medical history and rated up with a guaranteed maximum cost. Many groups are not rated up because they are blessed with healthy employees or they have worked to improve the risk of their employees via wellness programs and incentives.

Groups over 100 are rated based upon their claims experience. Is this medical history? In the words of Sarah Palin – “You bet’cha!”

Without medical underwriting to give credit for small groups’ “good health,” pricing will rise dramatically for companies in states that have health reform already. If insurance companies can only use age demographics to renew large groups, costs will rise for companies that have been active with wellness and other risk management programs.

What rewards will accrue to owners and individuals for their personal contribution for keeping costs low? Few rewards for risk management; fewer still for personal responsibility. Will companies see a need to offer wellness programs in the future? Will employees be encouraged to eat right, eat less, and exercise more?

I am fearful that government, rather than market forces, will bring costs up for all; and medical rationing will be the only tool left to reduce costs. Less for more -- was this the goal?


- Mark Alder, President, Herbruck Alder - malder@herbruckalder.com - http://www.herbruckalder.com/

Public Option

The “left” favors it, and the “right” opposes it. The “it” is a Public Option for health insurance. I have written that I am not in favor of a Public Option. To be more specific, I am not in favor of a Public Option that does not fairly compete.

Competition is good. A Public Option is good if the rules apply to all who are competing for the health insurance business. This includes the government. If the government-run Public Option guarantees a “level playing field” then I will change my mind and be supportive of a government-run Public Option.

As of right now, here are a few of my concerns – in the form of questions:

1. Does the Federal Government have to comply with State law and coverage mandates --as the insurance industry does for its insured plans?
2. Does the Federal Government need individual State approval to write a national or regional plan -- as the insurance industry does for its insured plans?
3. Does the Federal Government need to have Statutory Reserve Requirements -- as the insurance industry does for its insured plans?
4. Will the Federal Government need to stop dictating pricing to providers (hospitals and physicians) and begin negotiating with providers -- as the insurance industry does presently?
5. Do the health insurance rates charged by the Federal Government need to be sufficient to cover their cost of doing business -- as most private businesses must do to stay in business?

These are not complicated questions. However, if the answer to these questions is “No,” then the Public Option is a Trojan Horse for a Single Payer System – and I am not in favor of a Single Payer System either.

- Mark Alder, President, Herbruck Alder - malder@herbruckalder.com - www.herbruckalder.com