Yes. My benefits consulting firm, Benefits Solution Group, and its affiliated company Tandem HR (an HR outsourcing firm) helps administer health insurance and employee benefits to 300 companies with over 20,000 employees mainly located in the Midwest. One of the companies that we serviced for nearly 17 years was President Obama's former law firm.
What lessons do you think his law firm could teach him about health care reform?
These firms, like many midsized businesses we work with, are no different in the struggles they face of delivering cost effective coverage to their employees. With the rising cost of health care we've seen a trend in companies increasing the contribution for which employees are responsible.
By putting some of the ownership on the employee for their costs and coverage, it has incentivized the employee to utilize the plans more appropriately.
Can you give me an example of this?
With employee contribution plans in place, we have seen many employees opting out in favor of taking their spouses coverage. Mr. Obama for example, like many, delegated the health care issue in his family to his wife Michelle. He continually waived coverage with his firm, opting to be a dependent on his wife's policy. Funny, he also opted out of auxiliary benefits such as long-term disability or life insurance, both 100% employer paid. We see this often with employees who never bother opening a benefit booklet. How are these same employees going to understand the most complicated bill ever passed in the history of this country?
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Like many mid-sized firms, they have been able to establish programs such as health reimbursement accounts and wellness programs. The success of these offerings requires a shift away from the status quo of reactive health care (employees get sick and go to this doctor) to a more proactive view of one's health involving prevention and the promotion of healthy lifestyles. In the community based rate system suggested in the current health bill it is unclear what incentive individuals will have to responsibly manage their health care costs.
How do you incentive employees?
Without employee engagement there will be no way to effectively control the costs of healthcare. However, we are seeing things like generic substitution, lower usage of emergency rooms and an increase in healthy lifestyle decisions. We've also seen improvement when employees are given a financial incentive. The end result is an overall decrease in health care costs and premiums both to the employer and the employee. We are also seeing some companies push the envelope and try things line on-site medical clinics and the use of international medical providers for certain specialized treatments. Would a government program be this creative?
Do wellness programs really work?
We have a steel company with over 3,000 employees that implemented a wellness program. For employees who participated in the program, there was an overall decrease in major markers (cholesterol, high blood pressure, etc.) and a significant cost savings due to the increased use of generic drugs. Participants were given a rating each year and recieve a deduction in premium costs as their score improves each year. Rewarding the employee who takes responsibility for their health really works. This year, that firm's healthcare costs decreased.
Do you see the government challenging employees to do these types of things?
It will be very difficult for the government to control or motivate employees. As we have seen with the recent passage of the Senate healthcare bill, there was a lot of "cattle trading" to get the deal done. This included withdrawing many controls seen in previous bills, such as taxes on overly rich medical plans and provisions to keep drug companies from stalling the transition of brand name drugs to generic drugs.
Government can and should be a strong referee to regulate and level the playing field. I even see a role whereby government is the insurer of last resort or in such cases of catastrophic or chronic illness of a debilitating nature. We currently see this with diseases such as kidney failure and the burden placed on Medicare.
Isn't the problem just with the greedy insurance companies?
I never understood when debating the merits of real questions on the healthcare bill why some pundits would throw out easy adages like the outrageous salaries of the CEOs of the insurance companies are causing the downfall of the current system. Come on, let's be reasonable. Those salaries are measured in the millions where healthcare reform is measured in the trillions.
What about the argument that "bigger is cheaper"?
This is one of the many myths we heard spouted at the heathcare town hall meetings across the country all fall. The truth is many big companies, like General Motors, pay more per employee in similar type benefits than many of the smaller companies represented by my firm.
Bigger is not cheaper! It is not that complicated.
It all comes down to usage and claims. people have to get used to the hard answer of responsibility and being frugal with utilization.
Unfortunately, many people who are high-end users will call our firm and ask to join a larger pool in order to "hide" their high cost "habits." That is one of the prevailing reasons I feel a government controlled system will ultimately break the bank.
We all want to improve the current system, but truly the questions need to be "how do we accomplish this and at what cost?" Those are the valid questions we need to focus on.
The current bills as they stand in the House and the Senate could easily see costs increasing 30-40% and literally put our economy back in a tailspin. The end goal might be justified, but what's wrong with taking smaller bites? If we try to eat too much too fast, we will easily see a day with ration coverage (two month waits to see a medical provider) and a complete breakdownin the doctor-patient relationship.
Did the experience with President Obama's law firm teach any lessons that might enlighten his current debate?
I don't like to focus on just the President's former firm, and truthfully I have kept quiet about it all through the debate. But here is just one glaring example, which I think tells a lot. When Obama was a state senator he would do a lot of community organizing, always giving a shout out to everyone and always receiving a lot of applause. His stump for healthcare was generous and unspecific- unlimited healthcare for everyone at no additional cost.
While in the state senate, a number of bills came up which were often outrageous. For example, mandating In vitro fertilization to women regardless of age or number of children she may already have. When President Obama was in the state senate he voted for nearly every mandate that came before him.
As far as I know he never sought the advice of his former law firm, or me, for feedback or to discuss what the implications might be of how these legislative mandates might affect actual businesses. The Senator seemed to have an attitude of "don't confuse me with the facts and figures", which is what scares me the most about the current debate.
What is it you find scary?
It is easy (and heartbreaking) when someone that is suffering in the current health care system makes front page news. they become bait for politicians who then passed forced benefit mandates.
Do you mean to tell me this would never happen in the proposed government option?
We all know it will. My point is, let's not focus on emotional manipulation and blackmail. We need to discuss details and real costs. We should take legislative mandates at a slower, more thoughtful pace. I feel this would create real change that won't bankrupt our country.
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