Following is the text of a message I sent to a group of employees back in 2006, the names and other pertinent info have been changed to protect the guilty or innocent depending on your point of view.
As I listen and read the rhetoric about health care and its cost today, I wonder what happened to just telling people the truth. Instead we seem obsessed with getting out the buzzwords of the day like affordable and competition and with telling people a new law that is barely understood is already lowering health care costs … for, even if true, a tiny segment of Americans. Employers too have messages trying to mask benefit cuts and cost shifting with for your benefit obfuscation.
Instead of telling people they have a major role in health care spending, we find scapegoats; mainly insurance companies. Instead of telling people they must change, we further isolate them from concern over costs. Instead of reinforcing the purpose of insurance, we con people into believing more benefits should be “free.”
You want the truth, can you handle the truth? E-mail sent to all employees of Fortune 500 company. Does your employer tell you this?
2006 Health benefit costs are going up, yet again.
Our claims experience and a slightly increasing percentage of the total premium paid by employees are causing some significant increases in the payroll deduction amounts for 2007. To give you time to plan for these increases, we will be posting the monthly health plan prices on starting next week. More information will be available as usual during the annual enrollment period in the fall.
The dollar amount of the increase depends on your health plan and the type of coverage you have (single, family, etc.) but they range from about $30 per month to over $100. In addition, we are not able to continue the “free” $1500 deductible option so that plan will have an employee contribution starting in 2007. This allows us to spread the risk more evenly among all employees, but does not affect the overall percentage paid by the company and by employees. If you are enrolled in the $750 deductible plan, you will want to change your coverage effective January 2007, the cost no longer makes that option viable.
The percentage of total costs paid for by the company continues to be very competitive and above the national average (on average nationally workers pay 25% of health benefit costs with many at 30% to 50%; you pay 20% or less), but rising health care costs seem an insurmountable challenge.
Many experts today see increased consumer involvement as part of the answer. That is, the idea that one can walk into a doctor’s office without asking many questions about costs, alternative treatments, alternative and perhaps lower cost facilities for services like scans and MRIs is gone. Clearly nobody intentionally gets sick or injured to spend money on health care, but that doesn’t mean that some preventive steps won’t help manage costs in the long run. You know the drill, watch what you eat, watch your weight, exercise and the like. It does matter.
Ask for the preferred drug or the generic, and use the mail order pharmacy whenever possible.
Every penny you save is directly reflected in the monthly premiums you and all employees pay.
No Insurance
Keep in mind that there is no insurance involved in our health plans. Every dollar we spend is the result of claims incurred by XX employees and their dependents. The administrators are processing claims according to our plan rules, not theirs and we use their networks to obtain substantial discounts of medical services. Each week we wire about $865,000 to A, $1,300,000 to B and $865,000 to C (plus $655,000 for dental claims). Those are the amounts paid to doctors, hospitals and other health care providers for services rendered to employees and their families.
Not a week goes by that an employee does not complain to me that the “insurance company” refused to pay or questioned my doctor or did not pre-certify a procedure. Yes, that’s all true and that’s what they are paid to do, to manage the care and to help manage costs. Without that type of intervention our costs would be much higher.
Our Experience
The premiums (payroll deductions) you pay are based on the experience of your division plus the administrative fees, which are the same for all groups. So, what we spend on health care is the determining factor of what we pay in payroll deductions. A few people incur hundreds of thousands of dollars in bills in a year while others incur no expenses. In fact, 70-80% of all costs are incurred by about 20% of the people and that’s why we call it “insurance.” It’s the collective spreading of risk and the collective responsibility for what we spend. If you have the reasonable opportunity to avoid costs, to use lower cost alternatives, or to use a generic drug, you directly affect what all employees pay for their health benefits.
As I was writing this e-mail I received a call from an employee telling me that A had rejected his claim. I explained that based on what he was telling me the service was not covered. He then said he would just have his doctor change the bill and procedure a bit so A would pay. If you do, that’s fraud I mentioned, and it’s not A’s money; it’s company and your fellow employees money. Unfortunately, the attitude displayed by that employee is not unusual. The next time you hear someone talk like that, remind him or her that your premiums are higher than may otherwise be necessary because of people who think they are sticking it to the “insurance company.”
We are all in this together and only health care providers are making money on the health care you receive and only you and the company save money when costs can be controlled.
QUINNSCOMMENTARY 
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