BLOG Medicine

Health Costs Push Companies to Set Targets for Workers

In a recent New York Times article, Tim Race warns us that the nation's employers are aiming to get their money's worth from ever more expensive medical insurance by playing a bigger role in managing and monitoring their workers' health.

Race focuses on four such employers: Intuit, BB&T Corporation, Textron, and Carlson Companies.  The employer's programs vary from voluntary medical questionnaires, to blood draws and fitness tests.  Monitoring is frequent and often detailed, and while rewards for participation focus on cash and merchandise incentives, premium discounts, and health coaches, medical monitoring by employers has raised privacy concerns.

The employer-based health programs are meant to comply with federal privacy and nondiscrimination provisions such as the Health Insurance Portability and Accountability Act (HIPAA) and Americans with Disabilities Act (ADA), and, so far, such protections have been adequate for keeping ethical bosses from using medical data when deciding which employees deserve raises or promotions and which should be put on probation or fired.■

Who Killed Health Care?

Sean Silverthorne asked Professor Regina Herzlinger, the Nancy R. McPherson Professor of Business Administration Chair at the Harvard Business School, to discuss her latest work, Who Killed Health Care?, in the 4 June 2007 Harvard Business School Working Knowledge for Business Leaders.

Key concepts in Herzlinger's book include:

• Today's American health care system is set up structurally to reward the major players—hospitals, health insurers, and lawmakers—while short-changing patients and taxpayers.
• Health care is not the hotbed of innovation and entrepreneurial activity one might expect from a $2 trillion industry. Risk takers are often beaten down by established interests.
• Not only is the system under-performing, it is also killing patients through uncaring bureaucracies, over-stressed care providers, and poor management.

An influential healthcare researcher, Herzlinger is also the author of Market-Driven Health Care (1996) and Consumer-Driven Health Care (2004).

If you've not already done so, be sure to add Herzlinger's books to your reading list.  Her more than 30 years of research in the healthcare industry give Herzlinger a unique approach to both the topic and how she writes about it in her books.  BLOG Medicine strongly recommends that you check out her work.■

Health Care Under Your Control

Health Savings Accounts (HSAs) may be the smart choice, according to the 28 May issue of BusinessWeek.

Only 12% of companies with 1,000 or more employees offer HSAs.  The insurance component is a catastrophic policy that must, by law, have a $2,200 minimum family deductible and an out-of-pocket limit of $11,000.  According to the Kaiser Family Foundation and Health Research & Educational Trust, the average deductible for a family is $4,000.  The most a family can contribute to the tax-sheltered account is $5,650 a year.  If you change jobs or retire, the account goes with you.

HSA contributions are made with pretax dollars and withdrawals are tax-free as long as the money goes toward qualified medical expenses.  The money is usually parked in a bank-like account and beneficiaries receive a checkbook or debit card for paying bills.  HSAs are like flexible spending accounts (FSAs) except that with FSAs, you forfeit what's not spent in a calendar year while unused HSA money rolls over.  In addition, some 82% of high-deductible HSAs fully covers preventive care to encourage sound medical habits, immunizations, well-child care, and annual physicals and mammograms.

Many plans allow participants to invest in a variety of securities, including certificates of deposit, stocks, bonds, and mutual funds.  Overall, however, consumers who want to spend their health-care dollars wisely still lack good information to compare the cost and quality of physicians, procedures, hospitals, and health plans.■

State-based Health Insurance Exchange

The Heritage Foundation a conservative Washington DC-based think tank, believes that freedom of conscience and excellence in health care is not, and must not be allowed to become, mutually exclusive.  The Foundation's position provocatively blends a consumer's need for access to a refundable, individual health care tax credit with a consumer's "right" to choose a health-plan in harmony with deeply-held conscientious beliefs -- advocating for a new system that empowers individuals both economically and ethically.  Interestingly intermingled is the state-based health insurance exchange, a promising development in consumer-based healthcare reform where a single market can offer a wide variety of health plan options.  State actions to create health insurance exchanges and policy changes to make them more effective deserve careful consideration.■