Quality and service are paramount: a survey of healthcare purchasing trends

According to the Sixth Annual Survey Report on Purchasing Value in Health Care, overall health plan premium costs for 2001 increased 10.3 percent for all plan types, with pharmaceutical costs rising at 14.6 percent. The survey shows that 70 percent of employers plan to pass at least some of the increased costs on to employees, but only 14 percent plan to reduce or eliminate coverage for certain services. Both providers and employers are more likely than are health plans to believe that cost pressures are hurting quality. Employers say they generally are satisfied with the quality of care their employees receive through their plans. Access and quality of care influence employers' health plan purchasing decisions more than cost, but health plans greatly underestimate the importance employers place on quality of care and effective administration. Most employers plan to increase use of the Internet for a broad range of activities, including annual enrollment, health and wellness promotion, and plan administration.

Financial impact of health promotion programs: a comprehensive review of the literature

PURPOSE

The purpose of this review is to summarize the literature on the ability of health promotion programs to reduce employee-related health care expenditures and absenteeism. SEARCH PROCESS: Using key words in a literature-searching program, a comprehensive search was conducted on the following databases: MEDLINE, Embase, HealthSTAR. SPORTDiscus, PsycINFO, SciSearch, ERIC, and ABI Inform.

STUDY INCLUSION AND EXCLUSION CRITERIA

All data-based studies that appeared in peer reviewed journals in the English language. Theses, dissertations, or presentation abstracts that were not published in peer reviewed journals were excluded. The initial search identified 196 studies, but only 72 met the inclusion criteria and were included in the review.

DATA EXTRACTION METHODS

Summary tables were created that include design classification, subject size, results, and other key information for each study.

DATA SYNTHESIS

Both the nature of the findings and the overall quality of the literature were evaluated in an attempt to answer two questions: Do individuals or populations with high health risks have worse financial outcomes than individuals or populations with low health risks? Do health promotion programs improve financial outcomes?

MAJOR CONCLUSIONS

There are good correlational data to suggest that high levels of stress, excessive body weight, and multiple risk factors are associated with increased health care costs and illness-related absenteeism. The associations between seat belt use, cholesterol, diet, hypertension, and alcohol abuse and absenteeism and health care expenditures are either mixed or unknown. Health promotion programs are associated with lower levels of absenteeism and health care costs, and fitness programs are associated with reduced health care costs.

Indirect costs of migraine in a public Brazilian hospital

OBJECTIVES

To evaluate the indirect costs of migraine affecting employees of a public Brazilian hospital.

BACKGROUND

Migraine is a common primary headache which has a negative influence on the well-being and quality of life, as well as the professional life, of affected individuals.

METHODS

Our series consisted of 846 employees with migraine. The Lost Hours Equivalence Index, which considers both the hours lost due to the absence from work and reduction in productivity, was used to estimate the number of working hours lost due to migraine.

RESULTS

Of the employees with migraine studied, 91% presented a mean 56.9% loss of productivity. The mean number of total lost working hours per month due to migraine was 6.5. The estimated total indirect cost of migraine was R $986 903.77 (US $815 622.54), implicating costs of R $241.30 (US $199.42) per employee per year.

CONCLUSIONS

Based on its impact on life and the resulting costs, migraine should be considered a public health problem and thus measures should be adopted to reduce its impact on the individual and on society.

Indirect cost of ischemic heart disease to employers

BACKGROUND

The management of healthcare programs by employers requires accurate information about the indirect and direct costs of important chronic diseases.

OBJECTIVE

To determine the indirect costs of ischemic heart disease from the perspective of the employer in private industry in the United States.

DESIGN

Indirect cost of illness analysis using the human capital approach, taking the perspective of the employer rather than that of society.

METHODS

Ischemic heart disease was identified in a proprietary claims database of 3.1 million insured persons using an algorithm based on administrative codes. Economic data were derived from the Bureau of Labor Statistics, the Employment Management Association, and published sources. Work-loss data were taken from the National Center for Health Statistics' Health Interview Survey. The indirect cost was calculated as the sum of the costs due to morbidity and mortality. From the perspective of the employer, morbidity costs come from lost productivity, idle assets, and nonwage factors resulting from absenteeism and mortality costs are expenditures for replacing and retraining workers. This differs from calculations from the societal perspective, in which indirect costs are the value of an individual's lost income--both current and potential.

RESULTS

The total indirect cost of ischemic heart disease to employers in private industry was $182.74 per enrollee. Ninety-five percent of the indirect cost was the consequence of work loss due to morbidity rather than of mortality costs.

CONCLUSION

From the perspective of the employer, the indirect cost of ischemic heart disease is overwhelmingly due to morbidity costs.

Depression in the workplace: negative effects, perspective on drug costs and benefit solutions

Depression is a relatively common disease that has more impact on employers' health care costs and workplace productivity than many chronic medical conditions. This article describes the costs of depression, both direct and indirect, and discusses effective employer strategies for dealing with depression in the workplace.

The costs of cancer to a major employer in the United States: a case-control analysis

BACKGROUND

Detailed data will be increasingly important in determining the cost of cancer care in the managed care setting.

OBJECTIVES

To estimate the full cost of cancer to a major employer in the United States and to determine the nature of the expenditures.

STUDY DESIGN

Analysis of medical, pharmaceutical, and disability claims data from 1995 to 1997 for a major employer with more than 100,000 employees.

METHODS

The cost of cancer is determined on a per-patient and per-employee basis. Based on a case-control method, cancer patients are matched to individuals with no record of cancer diagnosis or treatment. The incremental cost per employee and the percentage of total healthcare expenditures for cancer are quantified.

RESULTS

Approximately $224 per active employee, or 6.5% of the corporation's total healthcare costs, was spent on incremental care for cancer patients in 1997. Medical conditions not directly related to cancer account for approximately half the total excess expenditures for patients with cancer. On average, annual healthcare and disability costs for persons with cancer were approximately 5 times higher than for their counterparts without cancer.

CONCLUSIONS

The costs of cancer care are a substantial proportion of healthcare costs for employers. When the full cost of cancer is included in a cost-benefit analysis, expenditures for programs to reduce the risk of cancer in the working population may be justified. Expenditures to reduce the incidence and severity of conditions indirectly associated with cancer may also reduce overall employer healthcare expenses.

A managed behavioral health organization operated by an academic psychiatry department

As a means of adapting to managed care, the psychiatry department at Wake Forest University developed a managed behavioral health organization (MBHO) to manage the care of enrollees in QualChoice, the health maintenance organization of the Wake Forest University Baptist Medical Center. Before the academic MBHO was created, care was managed by a for-profit MBHO. In this case study, financial and utilization data were obtained from both MBHOs and from QualChoice. The data confirm that the academic MBHO was able to offer competitive rates for its services. It also was able to increase enrollees' use of the medical center's own providers and facilities by making more referrals than were made by the for-profit MBHO. Developing a managed behavioral health organization can allow academic psychiatry departments, either individually or as consortia, to preserve the patient base they require for teaching, research, and financial stability.

HMO market penetration and costs of employer-sponsored health plans

Using two employer surveys, we evaluate the role of increased health maintenance organization (HMO) market share in containing costs of employer-sponsored coverage. Total costs for employer health plans are about 10 percent lower in markets in which HMOs' market share is above 45 percent than they are in markets with HMO enrollments of below 25 percent. This is the result of lower premiums for HMOs than for non-HMO plans, as well as the competitive effect of HMOs that leads to lower non-HMO premiums for employers that continue to offer these benefits. Slower growth in premiums in areas with high HMO enrollments suggests that expanded HMO market share may also lower the long-run growth in costs.

Quality vs. costs? A survey of healthcare purchasing habits and concerns

The results of the Fifth Annual Survey Report on Purchasing Value in Health Care show that to help control rising healthcare costs, most employers are offering employees more choice when it makes sense but fewer plans when they can strike a better bargain. Providers' favored tactics to reduce costs include reducing waste, reducing or eliminating certain services, increasing fees for some services, and improving medical management and information systems capabilities. Health plans overwhelmingly are focusing on increasing premiums to employers; they also are attempting to improve medical management and information systems capabilities. Many employers, health plans, and providers want to make their current arrangements work better. Improving the quality of customer service to purchasers and their employees is a top priority with both health plans and providers.

Health care trends in today's marketplace

As the year 2000 approaches, it is apparent that employer-sponsored health plans will again begin to experience high rate increases. Employers will need to utilize an up-to-date benefits philosophy and health plan purchasing strategy coupled with monitoring tools and vendor performance guarantees to deal with the situation. While many of the cost drivers are beyond an employer's control, taking a preemptive strike at health care inflation through design, cost sharing and other focused initiatives will minimize its impact.

Evidence for the Will Rogers phenomenon in migration of employees to managed care plans

Employees have increasing opportunities to enroll in managed care plans, and employers tend to favor these plans because of their lower costs. However, lower costs may be the result of selection of healthier patients into managed care plans. This study measured differences in health care utilization across an indemnity plan and a managed care plan, and for all employees together. We found that apparent increases in utilization in both indemnity and managed care plans disappeared when the plans were viewed together, reflecting the migration of sicker patients from indemnity plans to managed care plans.

The total costs of illness: a metric for health care reform

Systems thinking is a fundamental element of quality management and should be a fundamental element of health care reform. An implication of systems thinking is that one aim of health care should be to minimize the total costs of illness, not simply the direct medical expenditures. If we are to continue to improve health care over time, we should measure its impact on the total costs of illness to the patient, family, employer, and society. Thus a system of measurement is needed that quantifies total costs of illness and also suggests how these constituencies can collaborate to improve processes and reduce total costs. This article introduces the total costs of illness concept, contrasts it with societal costs of illness, describes a measurement system we developed to quantify it, and describes a case study examining the total costs of back injury illness to employers. We found that medical expenditures accounted for less than half of the total costs of illness, the average total costs of illness varied by over 350 percent among employers, and a simple metric (days off work) explained 62.5 percent of the variance in total costs of illness.