Medical Device Daily Washington Editor
WASHINGTON — However one feels about the ways in which medical care in the U.S. is financed, one thing seems clear: health benefits will continue to be a recruiting tool for medium and large firms, especially those with modest legacy costs. Less clear is how healthcare will play out in the 2008 elections, given the strong support expressed for the employer-based system that currently covers more than half the U.S. population.
A session held last week by the National Business Group on Health (NBGH; Washington) at the National Press Club (Washington) offered a review of a survey conducted of more than 1,600 Americans who work at companies that employ at least 2,500 — a group apparently in no mood for drastic changes.
Harry Spencer, chairman of the board for NBGH and VP for global benefits at Time Warner (New York), said that "approximately 174 million Americans receive their healthcare benefits through their employers," and employers use those benefits to recruit. As is well known, however, "costs are very high, about $8,400 per employee."
"We found that employees valued their benefits more than we expected," and that respondents "did not like the tax cap idea" proposed by the White House, Spencer said.
However, it is not clear what proportion of total workers is represented by those who responded to the survey, and large-company employment seems to continue to shrink as a percentage of all U.S. employment.
According to payroll processing firm ADP (Roseland, New Jersey), small businesses created as many as 81,000 jobs over the past year, whereas the numbers for medium-sized businesses were 43,000 and large businesses 18,000. Small businesses were those that employed less than 50, and medium businesses were classified as employing between 50 and 499 in the ADP survey.
Helen Darling, president of NBGH, took the microphone and observed that "increasingly, employers themselves wonder if there might be more effective ways to provide healthcare benefits," a verification of recent reports that big business is becoming increasingly concerned about its costs for healthcare insurance.
But Darling said there is little that can be described as a consensus on the issue, despite the questions "being raised about what we should be doing as a country."
The results of the survey indicated that a large number of employees feel that "having good benefits is as or more important than all other aspects of the job," with three in four saying that a health plan is the most important benefit vs. 14% who said the same thing about retirement benefits. Obviously, older employees were more fond of health plans than their younger co-workers.
Most who responded to the survey were in excellent or good health, but those who can work usually are healthier than the unemployed, Darling acknowledged. She said that respondents reported being overweight at a rate that is fairly representative of the nation as a whole, and slightly more than half of all the respondents, 51%, said they did not favor a premium differential between those who are overweight and those who are not.
The reaction to such a proposition is sharper among those who reported themselves as not overweight, with 70% reacting negatively.
"Less healthy employees want low co-payments" which is consistent with other sources of such data. "People who are at the lower end of the wage scale prefer to have more out of their paycheck so that they're protected at the time of service," Darling continued, and minorities want a choice of plans, but at a lower premium costs.
Americans may not be too interested in engaging in extended analyses of which plan is better, either. The survey indicated that at least six in 10 employees "place the highest importance on having a plan that is easy to manage, provides freedom to select doctors, and that limits their cost when they see a doctor or get a prescription."
Conversely, "they're not interested in going into an individual market," Darling said, even those who do not like their plans.
Responding to a question about seeming mixed signals from large employers on national healthcare, Darling said that the Big Three automakers have considerable legacy costs to bear, but that this is not the case for employers in high-tech industries, which tend to employ younger people. "There is not a single large employer community," she commented.
In a brief discussion about over-utilization, Darling made the case that employees are in the best position to waylay unnecessary tests by asking doctors whether the test is essential. However, some observers might be inclined to think that payers are in a better position to force doctors to carefully consider the need for various procedures.
Darling told Medical Device Daily that despite the potential for payers to clamp down on unnecessary tests, "even doctors will tell you that patients have to be the ones [to question whether a procedure is necessary] because of malpractice" and the incentive to practice defensive medicine. She also said that the group supports several malpractice reforms, including medical courts.
In reference to the White House's Affordable Choices plan, Darling observed that "[t]he tax cap idea has been around for 30 years at least," although previous iterations have set a lower threshold for the maximum amount. "It doesn't take into account the single most important factor, which is geographic variation" in costs. For families in rural areas, the cap of $15,000 would easily suffice, "but family coverage in NYC would be beyond" the $15,000 cap.
Despite all the healthcare reform proposals making the rounds on Capitol Hill, Congress is very distracted with the war in Iraq and the U.S. attorney firings, so the prospects for serious action this year may not be particularly bright. As for the presidential election in 2008, Darling noted that the survey showed "that anyone who comes in with a proposal to move to an individual market will not be popular" with this group, nor will the calls for universal healthcare if benefits suffer.
"The question that 2008 candidates will struggle with is how they'll pay" for any national health plan "because it will be unbelievably expensive."