Benefits Buzz

The Nuclear Option: GE Moves to Only High Deductible Medical Plans...

If you're like me, you've pondered moving to high-deductible plans at some point in the last five years.  Whether you made the move or not, this much is certain:  Companies that started with a traditional PPO plan have generally kept those plans in place, bringing in the high-deductible/consumer-driven plans as an option, then attempted to draw employees into those plans with premium cuts and funding of health-care accounts (HCAs).

Not GE.  They went nuclear.  More from BusinessWeek:

"It's been a hard year to work at General Electric (GE). Salary freezes have hit its famously performance-driven employees, with some managers taking pay cuts. And now GE is making changes that could deal another blow to morale. The company is forcing its 75,000 salaried U.S. employees and 8,000 retirees under the age of 65 to choose what's known as a consumer-directed health plan, which includes deductibles that run as high as $4,000 a year. Traditional plans, where employees pay higher premiums in exchange for predictable co-pays up front, are no longer available for salaried workers. One employee says his colleagues "are looking at this as a cut in pay."

That's what's called a BOLD move people.  Like so much else in today's world, it all comes down to money:

"GE says the plan is being rolled out to make employees better health-care consumers and to coincide with its new "Healthymagination" strategy, a companywide initiative for health-care innovation. While GE says its future cost savings are unclear, people with knowledge of the situation estimate it could save $1 billion over the next decade or so. With three tiers of premiums and deductibles, GE spokesperson Sue Bishop notes, employees still have options. "It's not that different from their car insurance," she says. "You get to choose the amount of your premium, and that determines the amount of your deductible."

Moving from PPO to high-deductible only.  That's the nuclear option.  Will the bold move by GE spawn a bunch of similar "me-too" moves?  I suspect only after the move looks to be on track to save 1 billion with limited downside in terms of retention, etc.

A Fully Insured Renewal Story - Feel the Pain...

Here's a fully-insured renewal story from a small company I'm networked with... Feel the pain, my friends....

Here’s What You Need to Know:

1. Premiums paid by company to BCBS: 323K

2. Claims paid out by BCBS to cover company claims: 181K

3.“Pooling Effect” Applied by BCBS: 139K

4. Administrative Costs Applied by BCBS: 56K

5. Sum of #2 through #4, BCBS Stated Cost Line: 376K

6. Result: BCBS gives company 1% rate increase

*** Note: BCBS uses past premiums paid, not resulting in claims cost, to decrease the % increase that would be called for (#5-#1).

That's right - this company had claims representing 60% of the total fully-insured premiums paid into the system for the year - a great year in claims experience by any measure.  And took a 1% increase...

 

Sigh...

 

Who Would’ve Thought I’d Have Anything in Common With Whole Foods CEO John Mackey?

I have a confession to make.  I get my groceries at Wally-World.  There’s one near my house, their prices are lower than another nearby grocery store, and I don’t mind the inevitable overcrowding on Sunday afternoon.  Some of you will count this against me since, for years, this establishment was known to have had a less than stellar track record in the way it treated its workers, and it may be single-handedly responsible for ending the age of mom-and-pop stores of all varieties (grocery, specialty, you name it).  To the first issue, I would say that Wal-Mart heard your concerns and has made efforts to improve relations with its employees.  And to the second, if it hadn’t been Wal-Mart, it would’ve been someone else putting mom-and-pop out of business.  It’s called capitalism.

My second confession is that I don’t eat anything organic (unless by accident).  Only God (and perhaps the FDA) knows what sorts of chemicals I’m ingesting when I eat the food purchased at my local Wally-World.  It hasn’t killed me, yet, so I’m not terribly worried.  So, who would’ve thought I’d come down on the side of Whole Foods CEO John Mackey in the debate over health reform.

In a recent op-ed in the Wall Street Journal, Mackey makes his proposals for health reform, and I agree with most of them.  What I admire about him is that he puts his money where his mouth is.  Whole Foods rolled out a Consumer Driven Health Plan (CDHP) with a Health Savings Account (HSA) several years back and has been serious about promoting it with employees and teaching them how to use it.  Employees are educating themselves about the plan and are, in fact, doing what CDHPs are designed to encourage them to do: shopping for health care services.

To be sure, I’m not certain CDHPs are going to save our health care industry.  But I do think they encourage people to think more carefully about their health care decisions.  I think that CDHPs should  be carefully designed to cover preventative things like regular checkups at low or no cost (i.e., not subject to the deductible).  Otherwise, some people will be inclined to avoid checkups in order to preserve their HSA balance.  That said, putting more responsibility on consumers seems like something else I remember that made this country great.  Oh yeah -- now I remember.  It’s called capitalism.

Mackey’s other proposals?

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.
• Repeal all state laws which prevent insurance companies from competing across state lines.
• Repeal government mandates regarding what insurance companies must cover.
• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.
• Make costs transparent so that consumers understand what health-care treatments cost.
• Enact Medicare reform.
• Revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

Enacting any one of these changes would be challenging (an understatement?) given the interests that would be affected.  Nevertheless, to me, these are reasonable proposals for health reform that would encourage market-based solutions and deserve as much discussion as the options currently being debated.

Editor's Note - Greg Dagley is a Benefits Consultant for a large multinational employer in Houston, TX. While his company has employees all over the globe, his job keeps him focused on US benefits and spending a lot of his time managing external vendors.  Is there any doubt his Excel skills are more advanced than yours?

Utah Plans a Marketplace/Exchange for Healthcare....

As the future of President Obama’s health care reform initiative and its ambitious timetable grow more uncertain, you may be interested in learning how some states are taking matters into their own hands with practical solutions that can be quickly implemented – rather than waiting around for a federal plan.
 
The State of Utah passed legislation in late 2008 that mandated the creation of a health insurance “marketplace” or “exchange” that connects consumers to a Website where they can evaluate insurance options and make informed purchasing decisions.  The first phase of the Utah Health Exchange, a “defined contribution” model for small employers (2 to 50 employees), is now underway and will be launched in November, 2009. 

In the first phase of the Exchange’s implementation, the plan will create the “defined contribution” model for small employers (2 to 50 employees).  In this model, employers define a specific dollar amount to contribute to their employees’ health insurance premiums and then employees can “shop” at the Exchange from a menu of plans offered by participating insurers.  This model enhances private competition and transparency in the health care system by giving employees the necessary information and purchasing power to make informed health insurance choices.  It also offers relief to employers who will no longer bear the full burden of administering a health plan for their employees.   

The technology behind the Utah plan is suited to the Exchange’s model because it can present consumers with side-by-side comparisons of plan options and costs with “drill down” details and links to forms and documents all in one location and at the “point of purchase.”  It can also handle the numerous administrative complexities raised by this approach, including the transmission of electronic feeds to multiple carriers and the funding of health insurance premiums from multiple sources such as the government or a spouse’s employer.  

Interesting times...

Do the Rich Get Special Treatment in the Organ Transplant Biz?

When it comes to organ transplants, you probably know that it's illegal in America to buy/sell organs from donors.  If you need an organ, you have to get on the transplant list regardless of your socioeconomic status.  Most people stop there with the thought process and assume that everyone's created equal.

Of course, money matters in the USA, and even if you can't buy an organ, the fact you can travel and pay your own frieght at several different "centers of excellence" across the company can dramatically increase your chances of getting the transplant you need.

Case in point, Apple CEO Steve Jobs, who is reported to have recently received a liver transplant in Tennessee.  More for ABC News:

"Reports that Apple CEO Steve Jobs traveled to an unidentified hospital in Tennessee for a liver transplant this March have sparked a debate over whether the wealthy are able to use their resources to game the national organ donation system.

Jobs couldn't pay for an organ. Nor could he pay to cut the queue. But what someone with Jobs' resources could do, according to liver transplant surgeons and ethicists, is to use money and mobility to improve the odds either by going to an area of the country where there are more organ donors, or by signing up at multiple transplant centers.

"It's not for anybody but the rich. It's called multiple-listing, a practice some would say is unethical," said Arthur Caplan, co-chair of the United Nations Task Force on organ trafficking and chair of the department of medical ethics at University of Pennsylvania.

When a person needs a liver in the United States, the patient must go to a hospital with a transplant center for an extensive medical, mental and financial consultation. Then if he or she is determined a good candidate, the patient will be put on that transplant center's waiting list.

When a liver becomes available, the nearest of the 49 national Organ Procurement Organizations (OPO) will run a database search and algorithm to match the liver to people on all the transplant centers within that OPO's designated local and regional area.

"The local area is not a state, it's that donor service area of that OPO," explained Anne Paschke, spokesperson for the United Network of Organ Sharing (UNOS). "For a liver they're going to look in the local and regional areas before they look nationally."

According to the Organ Procurement and Transplantation Network, 15,771 people are currently waiting for a liver in the United States. Last year, 1,481 people died waiting for a donor liver, almost all of which come from the recently deceased. The national average waiting time for a transplant is about a year, but it can average as little as a few months at some centers, organ experts said.

Paschke said UNOS requires transplant centers to encourage patients to do "multiple listings" at transplant centers in multiple geographic areas to increase the odds of being matched to a liver. The only catch, Paschke said, is that health insurance policies often cover only one medical evaluation to get on one transplant center list. Most people simply don't have the money to pay for multiple extensive evaluations at far-flung locations.

Unfair advantage or necessary evil in our system so organs don't go wasted?  I'm not judging Jobs, but it's an interesting question.

Bariatric Surgery - Does it Really Pay for Itself in 2-4 Years?

Weight reduction surgery has long been controversial for employers, with healthcare insurers putting up multiple behavioral goals and other gates before providing access to extreme solutions like bariatric surgery to covered individuals.

Is that the right or wrong approach?  I've never had enough information to really have an opinion.

Here's the first research I've ever seen as a HR pro that talks about expected payback to the extreme weight loss procedures.  Follow me after the snippet from the article to talk about what it means for you and me as advocates of healthcare and retention.

From information provided in the Wall Street Journal:

"Health insurers can offset the cost of laparoscopic or traditional bariatric surgery as a weight-loss treatment for obese patients within two to four years as a result of savings on other medical costs, according to a study published this month in the American Journal of Managed Care, the Wall Street Journal reports.

For the study, Pierre-Yves Crémieux, a health economist and principal at Analysis Group, and colleagues analyzed health insurance claims data for 2003 through 2005 for 3,651 severely obese patients who underwent either laparoscopic or traditional bariatric surgery. The patients in large part were female, with an average age of 44; more than one-third of the patients had high blood pressure, and many of them had high cholesterol, diabetes and other health problems.

Researchers matched each patient based on age, gender, geography, health status and baseline costs with a patient who did not undergo either of the surgeries. Researchers tracked claims data for the patients who underwent either of the surgeries for six months of pre-surgical examination and care, the procedures themselves, and about 18 months of post-surgical care; tracked claims data for post-surgical care for some patients for as long as five years; and tracked claims data for the matched patients over the same period.

According to the study, health insurers that covered patients who underwent laparoscopic surgery, which has an average cost of $17,000, offset the cost in about 25 months. Health insurers that covered patients who underwent traditional bariatric surgery, which has an average cost of $26,000, offset the cost in about 49 months. Crémieux said, "The most cost-effective treatment for obesity is bariatric surgery," adding, "If you do that, within two to four years, you will get your money back." In addition, he said, "We have identified the break-even point for insurers."

The 2-4 year break even point is important to me, because it allows me to get my head around payback.  The thing that's confusing to me is that there's a lot of other research that talks about the failure rate of the surgery - meaning employees can have the surgery or procedure, then not do the things they need to do to keep the weight off.  I haven't read the study in full, so I also wonder if the cost of the medical complications so often written about is reflected here.

Still, the concept of payback is good to have.  We're talking about an investment in an employee to help them improve their life, much like tuition aid.  Many tuition aid programs mandate a payback agreement that an employee stay with the company for a year or two once the company has made the investment.

Now that we have payback numbers and companies have to bear the cost of this surgery, I wish companies could short circuit the red tape by allowing the employee to say, "I want to be at this company long term, and I'm willing to sign a payback agreement making that pledge as a part of this optional proceedure".

I know there are a million legal reasons why you can't do this, and I'm not looking to tie payback to other big ticket items. Medical necessity still rules the day on that end, but it seems like the big question with this one is medical necessity and payback.  That said, my take is that a lot of employees who want the optional surgery would be willing to fast track the process and would accept a payback agreement of 2 years for improved access.

Portable Medical Histories - Is Walmart Now Progressive with Employees?

The company many of you love to hate - Walmart - hit the headlines recently for being progressive via a company-wide rollout of digital medical history technology across its employee-base. 

Why's that news?  A quick jog of your memory might have you recall this is the same company that once wrote a memo to its board on controlling healthcare costs and - get this - recommended job redesign so checkout employees had to go retrieve carts in the parking lot during their shifts.  The thought was that the most unhealthy in the ranks wouldn't be able to do that part of the job, so they'd have to leave the company and take the high cost of sponsoring their healthcare elsewhere.

Nice!  If you forgot that blast from the past, you can see the entire memo of Darwinian ideas here.

Still, Walmart's been doing better on the PR front lately, so let's give them a chance.  More on the e-Health initiative from Walmart from BusinessWeek:

"Starting early next year, Wal-Mart Stores (WMT) employees will spend less time filling out forms in the doctor's office. They'll be able to log on to the company's intranet to download and print any medical records their physicians require: allergy information, prescriptions, blood tests, entire health histories if necessary. After nearly a year of pilot tests, the Bentonville (Ark.) retailer made this option available to 1 million U.S. staffers who are eligible for insurance under its benefits enrollment program this fall. Thousands of employees have signed up, making this initiative one of the most ambitious thrusts into digital medical records, or "e-health," by any U.S. company.

Wal-Mart's program is part of a larger strategy embraced by incoming Chief Executive Michael Duke both to improve the company's image as an employer and to cut long-term costs. The retailer faces steadily rising health-care expenses, and it's not alone. A recent survey of nearly 3,000 U.S. companies by global consulting firm Mercer found that health-related costs are up 6%, on average, for the fourth straight year. Linda M. Dillman, Wal-Mart's executive vice-president for benefits and risk management, believes digital records will help by fostering "healthier associates who are more productive." And the move has an impact on other companies wondering "how to make a business case," she says. "It's easier when someone like a Wal-Mart goes first."

Walmart's biggest challenge with potable medical histories will be getting past the employee trust issues based on the PR of the past.  Even though the service is provided by a non-profit technology collective, as long as Walmart is footing most of the bill, many employees will remain skeptical of the service.

Also, as someone who pays medical costs for my employer, I don't know how the medical histories create healthier associates who are going to save the company a lot of money.  As the article says, I know accurate medical histories enhance the accuracy of care, but to really have healthier employees, you need them to do two things - exercise and eat right. 

Sadly, I don't think the software will create opportunities in either of those areas.

The company many of you love to hate - Walmart - hit the headlines recently for being progressive via a company-wide rollout of digital medical history technology across its employee-base. 

Why's that news?  A quick jog of your memory might have you recall this is the same company that once wrote a memo to its board on controlling healthcare costs and - get this - recommended job redesign so checkout employees had to go retrieve carts in the parking lot during their shifts.  The thought was that the most unhealthy in the ranks wouldn't be able to do that part of the job, so they'd have to leave the company and take the high cost of sponsoring their healthcare elsewhere.

Nice!  If you forgot that blast from the past, you can see the entire memo of Darwinian ideas here.

Still, Walmart's been doing better on the PR front lately, so let's give them a chance.  More on the e-Health initiative from Walmart from BusinessWeek:

"Starting early next year, Wal-Mart Stores (WMT) employees will spend less time filling out forms in the doctor's office. They'll be able to log on to the company's intranet to download and print any medical records their physicians require: allergy information, prescriptions, blood tests, entire health histories if necessary. After nearly a year of pilot tests, the Bentonville (Ark.) retailer made this option available to 1 million U.S. staffers who are eligible for insurance under its benefits enrollment program this fall. Thousands of employees have signed up, making this initiative one of the most ambitious thrusts into digital medical records, or "e-health," by any U.S. company.

Wal-Mart's program is part of a larger strategy embraced by incoming Chief Executive Michael Duke both to improve the company's image as an employer and to cut long-term costs. The retailer faces steadily rising health-care expenses, and it's not alone. A recent survey of nearly 3,000 U.S. companies by global consulting firm Mercer found that health-related costs are up 6%, on average, for the fourth straight year. Linda M. Dillman, Wal-Mart's executive vice-president for benefits and risk management, believes digital records will help by fostering "healthier associates who are more productive." And the move has an impact on other companies wondering "how to make a business case," she says. "It's easier when someone like a Wal-Mart goes first."

Walmart's biggest challenge with potable medical histories will be getting past the employee trust issues based on the PR of the past.  Even though the service is provided by a non-profit technology collective, as long as Walmart is footing most of the bill, many employees will remain skeptical of the service.

Also, as someone who pays medical costs for my employer, I don't know how the medical histories create healthier associates who are going to save the company a lot of money.  As the article says, I know accurate medical histories enhance the accuracy of care, but to really have healthier employees, you need them to do two things - exercise and eat right. 

Sadly, I don't think the software will create opportunities in either of those areas.

When Sticker Price in Medical Insurance Reminds You Of Buying a GM Car...

Bought a new car recently?  If so, you know sticker price is for suckers... Do two things - wait for the juicy rebates always offered by Detroit automakers, then head to the lot and try to dicker the sales people down even further.  That's right, the marketing machine of US automakers has conditioned us not to move until there's a $5K rebate involved off the top. 

Health care is similar in some ways, but different in some critical aspects.  First up, there's a sticker price that hospital facilities quote to the general public related to what different procedures cost. Think of that as their "sticker price".  Here's the big difference - rebates aren't available to everyone, just to the folks with quality health care plans.  The Blue Cross networks (as well as other big insurance providers) are able to extract HUGE discounts from doctors and facilities alike through the power of their network.  If doctors/hospitals want BCBS patients, they've got to be a part of the network, and to be part of the network they've got to agree to the fee schedule touted by BCBS. 

That's where the discounts/rebates come into play.  The rebates can be huge when compared to the sticker prices touted by hospitals.  Here's a new record in my world I just came across.  Employee goes in for a procedure, with the company billed 19K for the entire bill.  Sticker price from the hospital before BCBS got ahold of the claim and went all Tony Soprano on it?  $152K.  That's right - the sticker price was over 7 times the actual cost ultimately allowed by BCBS.

Which makes me think two things.  First, I'm glad we have a good provider that can extract deep discounts off of sticker price.  Second, the common guy out there who's not covered by a plan like ours and is trying to go without insurance is a car wreck away from a lifetime of bills he can't pay and a probable personal bankruptcy.

There's something wrong with health care when sticker price on medical procedures makes buying a car look like a "one price, no haggle" experience...

Bought a new car recently?  If so, you know sticker price is for suckers... Do two things - wait for the juicy rebates always offered by Detroit automakers, then head to the lot and try to dicker the sales people down even further.  That's right, the marketing machine of US automakers has conditioned us not to move until there's a $5K rebate involved off the top. 

Health care is similar in some ways, but different in some critical aspects.  First up, there's a sticker price that hospital facilities quote to the general public related to what different procedures cost. Think of that as their "sticker price".  Here's the big difference - rebates aren't available to everyone, just to the folks with quality health care plans.  The Blue Cross networks (as well as other big insurance providers) are able to extract HUGE discounts from doctors and facilities alike through the power of their network.  If doctors/hospitals want BCBS patients, they've got to be a part of the network, and to be part of the network they've got to agree to the fee schedule touted by BCBS. 

That's where the discounts/rebates come into play.  The rebates can be huge when compared to the sticker prices touted by hospitals.  Here's a new record in my world I just came across.  Employee goes in for a procedure, with the company billed 19K for the entire bill.  Sticker price from the hospital before BCBS got ahold of the claim and went all Tony Soprano on it?  $152K.  That's right - the sticker price was over 7 times the actual cost ultimately allowed by BCBS.

Which makes me think two things.  First, I'm glad we have a good provider that can extract deep discounts off of sticker price.  Second, the common guy out there who's not covered by a plan like ours and is trying to go without insurance is a car wreck away from a lifetime of bills he can't pay and a probable personal bankruptcy.

There's something wrong with health care when sticker price on medical procedures makes buying a car look like a "one price, no haggle" experience...

If This Were a Division, You'd Shut It Down Tomorrow - The Cost of Health Care to Double By 2017...

Hey dude... The light at the end of the tunnel?  It's a freaking train, and it's coming to run you over....

Seriously, can there be a more desperate situation than the state of US Healthcare?  The population is aging, the mostly good capitalist society creates drug companies that create billion dollar markets out of vapor, and you are in the middle of the fray, trying to be the Daddy Warbucks of healthcare by providing medical and Rx to your workforce.  That's what you're supposed to do as an employer, right?

Sure, that's been part of the employer role.  But, it's getting ready to be very painful.  From the Associated Press:

"By 2017, total health care spending will double to more than $4 trillion a year, accounting for one of every $5 the nation spends, the federal government projects.

The 6.7 percent annual increase in spending — nearly three times the rate of inflation_ will be largely driven by higher prices and an increased demand for care, the Centers for Medicare and Medicaid Services said Monday. Other factors in the mix include a growing and aging population. The first wave of baby boomers become eligible for Medicare beginning in 2011."

That means total health-care spending in the year 2017 will average out to $13,101 per person.  By contrast, that spending in 2006 worked out to an average of $7,026 per person. 

WOW... 6.7% actually sounded OK to me, until I realized that compounding, which is good for my 401k, really hurts when it impacts the expense side of the P&L.

If it were a division, you'd shut it down tomorrow.  But it's not...

What An Angry Mob Looks Like - Reducing Healthcare Benefits of Retirees...

If you've been in HR for more than 5 years, you've been a part of what I'll call the "Great Benefits Crunch", which has forced your company to reduce overall benefit levels and/or pass along greater costs to employees.

You don't have to explain it to me.  I've had to explain those decisions to employees, and I'm aware that you didn't create the economic problem that is the "state of health care".  Sadly though, if you're in HR, you're left to explain the realities to a set of employees that doesn't feel great about costs being shifted their way.

You and I can understand that, because we're employees too.  Just because you manage the plan doesn't mean your health insurance is free. 

But being in HR means you take ownership of the employee relations side of the business, which means at times you're going to feel the laser on your back when employees vent their frustrations.

Watch the whole video below, which is one of the hardest rants about cost shifting I've ever seen captured on video...

Wow.  Did that get your attention?  Here are the details from the Santa Rosa Press Democrat:

"Convinced that the county no longer can afford spiraling health insurance premiums, Sonoma County (CA) supervisors told thousands of retirees and employees Tuesday that they will have to pay an increasing share of the cost.  Supervisors conceded their vote would be unpopular with the 2,500 retirees and 650 non-union workers who will be affected by the cost restructuring beginning in June.

Currently, the county provides non-union workers 85 percent of the premium for any plan selected, and gives retirees 85 percent of the lowest-cost premium, either for an individual or couple. Under the adopted recommendations, there will be a gradual reduction of 20 percent annually over the next five years in the county's contribution to retiree and non-union health benefits to $500 a month.

Nearly two-thirds of the 2,400 retirees would experience a drop in county contributions to their medical premiums. Those who insure dependents or who retired before age 65 are likely to see the biggest reductions. For example, an early retiree insuring a dependent under age 65 on the least expensive PPO plan is now getting $1,043 a month. That amount would be reduced by 20 percent each year until 2013 when the $500 monthly level would be reached."

I suspect retiree benefits will continue to be under pressure based on the economics of health care, as will the plans for active employees. 

I don't have the answers, but I do know this.  If you're an HR pro with 20 years left, you're going be a part of transitions and cost-shifting that spur reactions like what you see in the video above.  Brace yourself for a bumpy ride.

The employee relations portion of the HR Manager's role - it's the toughest job you'll ever love...

Dude! We're Getting an HMO!!!

You spend 30% of payroll on benefits for your employees.  You'd probably like them to understand the benefits you're spending all the cash on, right?

So, do they actually understand what you're providing?  They can't value what they can't understand, and of course, there's the whole thing about ensuring the spouse understands the benefits as well.

Don't bet on the fact that employees have any clue about the total value of the benefits package you're provdiding.  From CBS Marketwatch:

"Colonial Life surveyed more than 650 human resource managers and benefits administrators at the recent national conference of the Society for Human Resource Management. Employers were asked about the benefits they provide and how much their employees understand those benefits.

More than 90 percent of employers who responded said it was important to their business that employees understand and appreciate the value of their benefits. Only 21 percent of employers think their employees have a good understanding of their benefits. Nearly 5 percent think their employees know nothing at all about their benefits.

In a research study conducted by Watson Wyatt Worldwide(1), a global consulting firm that specializes in employee benefits, employees gave higher marks to employers who provided fewer benefits but explained them well, rather than a richer array of benefits they didn't understand."

If we're rating the understanding of benefits that low in a self-reported fashion, how bad must the reality be?  Additonally, what's the understanding of benefits mean?  With the right investment, can you get the number past 50%? 

If not, should your strategy be to "lead" the market when it comes to benefits?  Is it better, as the Wyatt study concludes, to do fewer things and drive the value proposition harder through a real communications plan?

What leads to increased retention or engagement?

Heavy questions to ponder.  Apparently, it takes more than the "Dude, we're getting an HMO campaign"... 

What's Next in Medical Costs - The On-Site Clinic Is Back...

With health care costs rising 7-9% each year, any HR person who thinks like a business owner is looking for ways to manage costs, if to do nothing but attempt to minimize the annual trend increase in costs. 

Big ideas from past years to help you do that.  Carve out your Rx plan to gain deeper discounts, wellness programs, call-in services like Tele-Doc to minimize the need for a primary care visit and the lost productivity that is part of that visit, etc.  What did I miss?  There are only a few tools, a few good ideas that can help you control costs without a drop in care.

So, what's next?  Would you believe the on-site doctor?  The situation with medical costs has now escalated to the point where it now makes sense to bring the doctor back on the campus of big companies.  Warning - if you don't have at least 1,000 employees at a location or in your company, this one isn't for you.

From Business Week:

"When a company unveils a new plan to rein in health-care costs, workers usually groan. Yet Toyota Motor (TM) is getting rave reviews for the on-site medical center it built at its truck factory in San Antonio. Ask line worker Louis Aguillon. He went to the clinic in May with nagging back pain, and paid just $5 for the visit. "I saw the doctor for 20 minutes," Aguillon beams. "You're not just a number there."

A recent study by benefits-consulting firm Watson Wyatt Worldwide (WW) found that 32% of all employers with more than 1,000 workers either have an on-site medical center or plan to build one by 2009. "We're talking about a microcosm of health-care reform," says Hal Rosenbluth, president of Walgreen's health and wellness division. "Companies can take control and understand their health-care costs."

Managers of on-site centers such as Toyota's make a variety of bold claims. Rosenbluth says every dollar invested in setting up a clinic will return $3 to $5, even though on-site doctors spend an average of 20 minutes with each patient—more than double the national average for primary-care physicians. Some of the biggest savings are on referrals to specialists and visits to emergency rooms, where the financial burden falls mainly on the worker's employer. Peter Hotz, president of Take Care Employer Solutions, the on-site medical division of Walgreen, says the clinic-management companies Walgreen acquired refer 40% fewer patients to specialists, compared to the primary-care physicians who treated the workers previously. And emergency room visits are down 72% at companies where Take Care is managing medical facilities."

So that's the big trend for 2009.  If you're a small company?  Best you can do is a service like Tele-Doc, where your employees can phone in for a diagnosis, then get medication prescribed over the phone for about 80% of the things that ail them.

I'm taking a guess here - but maybe the next trend will be real estate owners, who lease space in big office parks, jumping on this model as a benefit for their tenets.  Anywhere you can aggregate 1,000 employees might be a match for the model...

With health care costs rising 7-9% each year, any HR person who thinks like a business owner is looking for ways to manage costs, if to do nothing but attempt to minimize the annual trend increase in costs. 

Big ideas from past years to help you do that.  Carve out your Rx plan to gain deeper discounts, wellness programs, call-in services like Tele-Doc to minimize the need for a primary care visit and the lost productivity that is part of that visit, etc.  What did I miss?  There are only a few tools, a few good ideas that can help you control costs without a drop in care.

So, what's next?  Would you believe the on-site doctor?  The situation with medical costs has now escalated to the point where it now makes sense to bring the doctor back on the campus of big companies.  Warning - if you don't have at least 1,000 employees at a location or in your company, this one isn't for you.

From Business Week:

"When a company unveils a new plan to rein in health-care costs, workers usually groan. Yet Toyota Motor (TM) is getting rave reviews for the on-site medical center it built at its truck factory in San Antonio. Ask line worker Louis Aguillon. He went to the clinic in May with nagging back pain, and paid just $5 for the visit. "I saw the doctor for 20 minutes," Aguillon beams. "You're not just a number there."

A recent study by benefits-consulting firm Watson Wyatt Worldwide (WW) found that 32% of all employers with more than 1,000 workers either have an on-site medical center or plan to build one by 2009. "We're talking about a microcosm of health-care reform," says Hal Rosenbluth, president of Walgreen's health and wellness division. "Companies can take control and understand their health-care costs."

Managers of on-site centers such as Toyota's make a variety of bold claims. Rosenbluth says every dollar invested in setting up a clinic will return $3 to $5, even though on-site doctors spend an average of 20 minutes with each patient—more than double the national average for primary-care physicians. Some of the biggest savings are on referrals to specialists and visits to emergency rooms, where the financial burden falls mainly on the worker's employer. Peter Hotz, president of Take Care Employer Solutions, the on-site medical division of Walgreen, says the clinic-management companies Walgreen acquired refer 40% fewer patients to specialists, compared to the primary-care physicians who treated the workers previously. And emergency room visits are down 72% at companies where Take Care is managing medical facilities."

So that's the big trend for 2009.  If you're a small company?  Best you can do is a service like Tele-Doc, where your employees can phone in for a diagnosis, then get medication prescribed over the phone for about 80% of the things that ail them.

I'm taking a guess here - but maybe the next trend will be real estate owners, who lease space in big office parks, jumping on this model as a benefit for their tenets.  Anywhere you can aggregate 1,000 employees might be a match for the model...

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