February 2, 2011
Dear Congressman Johnson;
You have invited employers within your district to “weigh in” on the new healthcare law and I am writing in response to your invitation. The focus of the reform should be on the development of strategies to allow for coverage to affordable for employers while at the same time allowing for quality of care. We all agree the cost of the care is too high and each year it continues to increase.
While employers struggle to stay competitive in their respective markets, healthcare costs make up a very large portion of their overall cost of doing business. Healthcare costs have a direct bearing on the local, state and national economies. At the same time in our very own district the quality of medical care can vary widely by provider. Unfortunately, because our current system is designed to serve the health care system rather than the end user (the consumer paying for the service), the system is based on volume versus outcome. We have an epidemic of lifestyle related chronic diseases being treated by quantity, not quality.
My consultant often speaks of an example in her enrollment meetings of how employees purchase their cars. Consumers have access to plenty of data on the quality and reputation of autos they might purchase. No one goes out to spend $20,000 to $40,000 without “shopping around” and having done their homework up front. Yet when it comes to our own healthcare, how many of our employees ask how much a surgical procedure or an office visit is going to cost before the procedure is performed? This lack of information results in very little competition in the medical profession based on cost or quality. This is no surprise when the end consumer is typically so poorly informed.
One of the other issues that we have to face is recognizing that we have been our own worst enemies as a result of creating “first dollar benefits”. Under the healthcare reform package, in order to be “grandfathered” an employer plan cannot have a significant change in its current benefits or it will lose its “grandfathered” status. If an employer currently has doctor office co-pay or an RX co-pay, and he needs to remove that feature from the plan in order for the plan to survive economically, he is unable to do so. The new law going forward will not allow employers’ plans to have higher than a $2,000 deductible in the year beginning 2014! If we had all been better stewards of our healthcare plans and had not bent to competition, we would have kept our employees involved in their health care costs by having them share in smaller medical expenses. This could have been done through employee participation in “up front” deductibles. If properly incented, employees would make it their business to know exactly what doctors were charging for doctor office visits and what pharmacies charges for prescription drugs. We would have a better educated consumer and they would be more involved in the decision making process. As it stands now we have to make decisions based on whether or not to stay “grandfathered” versus putting our employees in a position to be better stewards of their benefit dollars. If an employer makes the decision to remove the upfront doctor office co-pay, the largest deductible that he can have moving forward beyond 2014 is $2,000. Who will be able to afford a $2,000 deductible in the year 2014 when we will have to pay for all of the preventative benefits slated to take effect if we are not grandfathered at 100% with no co-pay?
The combination of increasing obesity and sedentary lifestyle cause much of the chronic disease in our country, and it is reaching epidemic proportions. It is one of the factors driving our costs, and of course the employees understandable want to have everything covered at little or no cost to them. When we combine that with the way we have our system structured we have a perfect storm or escalating costs. Our doctors and hospitals have to treat based on a defensive medicine mentality. It is clear this results in unnecessary care and higher costs. At the same time, it does not guarantee high quality, just more procedures. It just shields the provider from fiscal responsibility and increases demand and results in higher delivery of medical care and continued cost escalation.
What we really need is the flexibility to design our own plans, suited to our own needs, the needs of each and every group of employees. It is not relevant what the government thinks is best for us, but rather what we can afford as employers. Let the free market system work. Allow us to provide services in the marketplace to our employees such as patient advocates – services where by the employee can glean critical information about the cost of a procedure beforehand and actually have incentives to do so through plan design. Let us give the empowerment back to the consumer. Put the competition back where it belongs, and make medical providers compete for patients based on cost and quality like any other efficient good or service. For a true transformation to really happen, consumers have to have information about the services being offered to them. They have to know how much procedures cost and know the quality of the care being given to them. There are programs available that deliver just that (knowledge up front). Using them will create better health care consumers while promoting cost reductions and improved quality.
Let us truly use the word transparency in our medical plans and make information available for the employees to use. The only way to get them involved is to allow for redesigning benefit plans to remove doctor office co-pays without being penalized. Let us truly have what was promised. Allow us to have OUR health care plans, not ones run by the government. All of the health reform legislation you can throw at us will not work at obtaining better outcomes in the long run if you do not recognize the actual impediments to those better outcomes. We have to shift our benefits to reward good outcomes, and to truly do that we must give individuals the tools to better manage their health and their care, and make them responsible for each.