1 / 10

“Cost Sharing Not Just About Sharing Costs”

Rising healthcare costs and uneven quality are the most serious problems faced by employers. This article explores the need for cost sharing to address these issues, highlighting the benefits of meaningful financial stake, transparency, communication, decision support tools, and focusing on individual control. It also emphasizes the importance of incentivizing efficiency and quality, and provides insights on how hospitals with better safety/quality records can help reduce overall costs.

rickyc
Download Presentation

“Cost Sharing Not Just About Sharing Costs”

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. “Cost Sharing Not Just About Sharing Costs” Washington Business Group on Health Helen Darling, President December 3, 2003

  2. The Problem Employers’ most serious, immediate benefits problems: • Rising health care costs and uneven quality. • Costs up to 50% through 2002; 14% in 2003; 12–14% estimated in 2004. • Retiree medical costs (FAS 106 liability) worse due to prescription drugs. • Prescription drug coverage will help some, but costs are still high. 1

  3. RAND Study Confirms Continued Quality Gap: Need Cost Sharing to Get Attention 2 Source: Elizabeth McGlynn, et al, “The Quality of Health Care Delivered to Adults in the United States,” NEJM, Vol. 348:2635-2645 June 26, 2003 (No. 26).

  4. The Problem • High costs, low economic growth hurt economy and living standard. • Unsustainable business model. • Corporate America cannot make or sell enough in this economy to keep absorbing these increases. • Must find new ways and new resolve to tackle these problems head-on with leverage from combined purchasing power of large employers, health plans, insurance companies, and government as payers for care. 3

  5. High Costs, Low Economic Growth Hurt US Competitiveness Increases in Health Insurance Premiums Compared to Other Indicators, 1988–2003. OVERALL INFLATION HEALTH INSURANCE PREMIUMS WORKERS’ EARNINGS Source: Kaiser/HRET Annual Survey of Employer-Sponsored Health Benefits, 2003 Summary of Findings. Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. 4

  6. Cost Sharing, Not Just About Sharing Costs… • Consumers need meaningful financialstake in care decisions. • Coinsurance helps consumers get cost information and know benefit value. • Cost sharing indexed to rising value of employer-provided benefit. • We need incentives to drive system toward efficiency/medically appropriate utilization. • Consumers can reward/select quality, efficiency, and innovation. • Transparency is essential. 5

  7. Cost Sharing, Not Just About Sharing Costs… • Communicationhas to address “What’s In It For Me” questions. • With cost sharing, utilization and overall costs will be moderated. • All employees benefit from reduced increases by keeping their share of premiums down. • Choice increases employee satisfaction and makes cost sharing more palatable. 6

  8. Cost Sharing, Not Just About Sharing Costs… • Employers and Employees Need • Decision Support Tools. • Data on Costs and Quality. • How to Control as Individuals. • Evidence-based Practices. • Efficiency/Effectiveness of Diagnostics, Treatment, Devices, and Prescription Drugs. 7

  9. Cost Sharing, Not Just About Sharing Costs… • Solutions must recognize important aspects of health status under individual’s control. • Without any cost-sharing, consumers won’t pay attention to options or costs. • Health coverage will become more affordable. 8

  10. Cost Sharing, Not Just About Sharing Costs… • Hospitals with better safety/quality records, forthcoming with data on procedures volumes, are better for employees and will save overall costs (e.g., infection rates affect length of stay and morbidity, mortality, are costly). • Information must be accessible, all publicly reported information on hospital website. • Employees need to learn: more costly care not necessarily better. • Cost sharing gets people’s attention. 9

More Related