COSTLY CHOICES. Employers faced with double-digit inflation in their employee healthcare costs are looking for consumer choice to ease the strain, a benefits consultant's survey says.
A survey of more than 700 large and midsized organizations by Hewitt Associates of Lincolnshire, Ill., showed that 99% said they were either "significantly or critically" concerned about rising costs.
Business owners project they can absorb annual increases in healthcare costs of 8% or less but will face increases more in the range of 13% to 14%. This creates a dilemma since three out of four employers surveyed said healthcare benefits are key to attracting new employees and retaining current workers.
Two out of three employers surveyed said they are interested in looking at consumer choices in plan design and cost sharing, such as multi-tier hospital coverage.
FEW TAKERS. A negligible number of workers in small businesses whose employers do not offer health insurance would actually purchase coverage under premium subsidy programs proposed by several states, a Center for Studying Health System Change study says.
In 2000, an estimated 38.7 million Americans were uninsured. Of these, 16 million work at firms of fewer than 50 employees that don't offer health insurance.
A hypothetical 30% government subsidy of premiums would increase the number of employers offering insurance by 15%, but the cost of insurance still would remain too high for all but 3% of their affected workers, who tend to be lower paid than those in larger firms that routinely offer coverage. The subsidy would reduce the ranks of the uninsured by a relatively modest 500,000 workers, the study says.
Rx HUBBUB. The debate over whether to issue prescription drug discount cards to Medicare recipients is heating up again as various groups dispute the findings of a federal examination of pharmaceutical costs for seniors.
In a report dated Dec. 5 but not made public until Jan. 3, the General Accounting Office compares prices of medications through five discount-card programs, five Internet pharmacies and retail pharmacies in four areas of the country.
The GAO does not draw any conclusions from the report, but other interested parties see widely disparate results. The six Democratic members of Congress who commissioned the study last fall say the report confirms their doubts that discount drug cards would reduce pharmaceutical costs for seniors. But pharmacy benefits managers, the likely issuers of such cards, say the study backs up their claim that consumers would realize significant savings.
MED-MAL GOODBYE. The St. Paul Cos., the nation's second-largest medical professional liability insurer, said last month that it will exit the medical malpractice insurance business because it is a consistent money loser--even as insurance premiums for physicians spiral out of control in some parts of the country.
The St. Paul, based in Minnesota's capital city, currently covers 42,000 physicians and 72,000 other healthcare providers, as well as 750 hospitals and 5,800 additional healthcare facilities, according to spokesperson Mark Hamel. It will drop coverage as current contracts expire over the next two years, Hamel says.
Movements to reform tort laws are under way in a number of states with acute malpractice situations, including Pennsylvania, West Virginia and Mississippi.
Late last month, Pennsylvania Gov. Mark Schweiker ordered insurance regulators to delay collection of a surcharge placed on physicians for the state's malpractice insurer of last resort, known as the Medical Professional Liability Catastrophic Fund.