It’s starting to feel as though the managed care revolution never happened. As in 1992 healthcare expenses today are rising faster than 10 percent a year, according to data presented in “Health Care Costs Creep Out of Reach,” which appeared in the Dec. 23, 2001, issue of the Los Angeles Times. But there are some big differences between healthcare crisis of a decade ago and the situation we face today.
Unlike 1992 when a war had just concluded, today a war is in progress, and government policy makers are showing little interest in the problems of rising healthcare costs and declining access to coverage. Moreover, in 1992 businesses were moving most of their workers into health maintenance organizations (HMOs) and other managed care systems that tightly controlled where workers could get treatment and how much their insurance would pay. As the Times article reflects, managed care reversed the growth in healthcare costs and reduced the number of uninsured people in the 1990s.
Today HMOs have stopped growing while point-of-service programs that allow patients to go out of network have grown. Access to specialists has been considerably improved. Hospitals, too, have increased their market power to demand concessions from payers.
But employers nationally have experienced premium increases that reached 8.3 percent in 2000, exceeded 11 percent in 2001, and will reach 15 percent to 16 percent for many companies this year, according to the Times article. For relief from rising healthcare costs businesses are forcing workers to pay a greater share of their insurance premiums, higher deductibles and co-payments. But doing so doesn’t address the underlying problem of rising costs; it merely shifts the cost from one payer to another-from employers to employees.
Educating Americans About the Cost of Healthcare
A Wall Street Journal article of Dec. 10, 2001, stated that insurers and employers think that one of the most effective ways of teaching Americans about the cost of healthcare is to make them pay for more of it. As a result several insurers are introducing health plans that require daily co-pays of patients when they are in the hospital. The co-pays generally will be set according to the prices that the hospital charges the health plans, so that a more expensive hospital, such as a teaching hospital, will require a higher patient co-pay than a less expensive community hospital. Also, neurosurgeons should be aware that many companies are offering their employees defined-contribution plans, in which employees manage their own healthcare dollars. These plans offer incentives for members to choose generic drugs over brand-name drugs and encourage them to shop around for doctors and medical services. According to a survey released by the consulting firm William M. Mercer, Inc., 29 percent of employers with more than 20,000 employees stated that they were likely or very likely or very likely to adopt such an approach within the next two years.
The Wall Street Journal article points to one insurance plan that gives members a medical budget set by the members’ employer. Employees can see any doctor they want using that budget, usually between &quor;1,000 and “3,000 annually. Once that money is used up, the employee will pay a deductible that is capped at a set amount, on average “1,500 to “3,500. Above that level the employer would pick up 100 percent of in-network care.
Saving Dollars at a High Cost
In the past health benefits emerged as an important tool for recruiting and retaining employees during a tight labor market. But the recent recession revived employer concerns about healthcare costs and what to do about them. Now that workers are clamoring for jobs, many companies find that they no longer have to offer health insurance to attract good employees. At the same time the recession is throwing millions of people out of work, costing them their health insurance.
The number of Americans losing heaalth coverage is reaching epidemic proportions, according to Ron Pollack, executive director of Families USA. And while most employers will continue to offer coverage, it may come at a price many employees cannot afford, according to Brian Klepper, executive director of the Center for Practical Health Reform in Jacksonville, Fla. He further pointed out that we are “on a path in which health [is] literally pricing itself out of the market for many Americans.”
What this means for neurosurgeons is that they can expect to see greater numbers of unfunded patients in emergency department settings where care is mandated by the Emergency Medical Treatment and Labor Act. It is clear we must all work toward a national solution before the price of healthcare is out of reach for Americans.
John A. Kusske, MD, is former chair of the AANS Managed Care Advisory Committee.