Business briefs

Group insurance expected to rise double digits in 2003—again 

Group health care plan costs continue to skyrocket, and insiders predict no relief this year. According to a survey released in December by Mercer Human Resource Consulting, costs rose an average of 14.7% last year.

The survey, which involved nearly 2900 employers, found that plan expenses for large employers (those with 500 or more workers) rose by 11.5% to $5758 per employee last year. Smaller companies faced increases of 18.1% or $5492 per person. Mercer included employer and employee premium contributions for medical, dental, prescriptions, mental health, and vision care in its definition of health plan costs.

To put this trend in perspective, health care costs increased an average of $722 per employee in 2002, $494 per person in 2001, and $333 in 2000. Employers do not anticipate the pattern to break this year, either. Health costs are expected to rise an average of 14%.

What are they doing in response? Employers are demanding that plans require a hospital deductible and limiting the number of managed care choices employees have—both strategies that force employees to take a larger fiscal responsibility for their health care. A similar idea is multiple-tier pricing for prescriptions in which employees choose the type of medication they want—and the price they are willing to pay for it.

Selected findings from the survey were:

Business Insurance, Dec. 9, 2002

No end to health care rate hikes 

Experts say employers should prepare for even bigger health care cost increases this year (and you thought last year was bad). According to an analysis by Hewitt Associates Inc, group health care plans can expect an overall average increase of 15.4%, with an average cost per employee of $6295. Rate increases are predicted to average 16% for HMOs and about 15% for POS and PPO plans.

In 2001, group health plans rose 13.7% to an average of $5456 per employee, Hewitt says. HMO costs increased the most, rising 14.9% to an average of $5157 per person. PPO costs climbed to 13.8% to $5545, and POS plans cost 12.4% more at $5639.

Lincolnshire, Illinois-based Hewitt based its 2003 estimates on budgets that employers had set and the health care premium increases they had received through September 2002. Even though actual increases could be somewhat smaller in 2003, if more cost-shifting to employees reduces utilization, the rates are likely to outpace recent increases substantially.

Business Insurance, October 14, 2002

GE workers vote to strike over health care cost increases 

FORT LAUDERDALE—Delegates to the IUE-CWA/GE Conference Board unanimously voted in October to authorize a national strike, the first in 3 decades, if General Electric persists in plans to increase health care costs for workers and retirees.

GE had announced plans to unilaterally increase copayments for workers and retirees in its managed care plan, Health Care Preferred, effective January 1, 2003. Under the national contract, IUE-CWA locals have the right to conduct a national strike in response.

The increases would come less than 6 months before the opening of national negotiations in May 2003, at which health care costs are expected to be a major subject of bargaining in labor negotiations. GE has indicated it will demand more cost increases during those talks. The company's stated goal is to shift another 15% of costs onto workers and retirees.

IUE-CWA represents 50,000 active and retired members at GE. The national agreement expires in June 2003. For more information, contact Lauren Asplen of IUE-CWA at (202) 513-6304 or go to www.iue.org.

Empire BCBS gets green light for profit status 

Empire Blue Cross Blue Shield has been granted regulatory approval to become a for-profit company. Empire had amended its proposed conversion plan after a public meeting in August. These changes include providers for obtaining regulatory approval for rate increases of more than 10% on individual direct-pay indemnity products and Medicare supplement policies. The changes will affect approximately 150,000 of Empire's 4.6 million customers, a spokeswoman said.

CMS launches landmark disease management demonstration 

WASHINGTON—The CMS has selected PacifiCare Health Systems Inc, with its subsidiary, Prescription Solutions, QMed, Inc, and Alere Medical, Inc, operating jointly as HeartPartners—to participate in its landmark disease management (DM) demonstration Project.

The HeartPartners Program will provide DM services and a comprehensive tiered prescription drug plan for up to 15,000 chronically ill Medicare fee-for-service beneficiaries with congestive heart failure. The program also will address the significant comorbidities of coronary artery disease and diabetes. The goal of the project is to provide more comprehensive services to Medicare beneficiaries and their physicians to better manage their chronic conditions that will result in improved quality and reduced medical costs, sufficient to offset the cost of the DM and pharmacy services.

The participants were selected in a national competitive evaluation process. The program is expected to begin early this year, is authorized for 4 years, and is the largest of the 3 projects awarded for the CMS Disease Management Demonstration. HeartPartners members will operate under a single, coordinated management and operational construct.

For details, visit www.qmedinc.com, www.rxsolutions.com, www.alere.com, or www.pacificare.com.

Largest rehabilitation service providers listed 

Business Insurance has published a list of the largest rehab service companies based on 2001 revenues. More than half of these companies offered workers' compensation, long- and short-term disability, auto and general liability, and auto no-fault services. The top 10 services are as follows:

Consultants develop consumer-driven health care on-line assessment survey 

NEW YORK—Buck Consultants, a human resources consulting firm, has developed an on-line survey that helps employers determine whether consumer-driven health care would work in their organizations. The survey scores the responses and gives an overall assessment of the organization's readiness to implement consumer-driven health care. In such a program, employees become much more involved in their health care purchases than in a typical medical plan by managing a spending account and accessing medical information in purchasing their health care services.

Buck principal Dave Delahanty said, “The decision depends on the employer's need to control costs, the demographics of its workforce, how it communicates with employees, and the support that such an initiative would receive.”

The assessment survey also compares the respondent's scores against a database of responses in management support, communications, management objectives, employee behavior and demographics, and controlling costs. Sample questions include the following:

The survey questionnaire and a real-time summary of the current results can be found on www.buckconsultants.com/Services/cdhsurvey.asp. The average scores are shown on a scale from 0 to 5, with a score between 3.0 and 4.0 indicating a high readiness to implement consumer-driven health care.

Humana announces job cuts 

Humana Inc. announced in December that it will lay off 2300 workers at a cost of $145 million for severance packages and other expenses. The figure represents about 17% of the health care giant's workforce. The company also said it will close 3 of its 7 customer service centers.