Health Care Employers Get Jumped

June 21, 2002
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The welfare mentality hasn’t ended; it has moved to the health care system in this nation and now nestles comfortably in the minds of people who believe they are entitled to the most costly, employer-paid benefit.

Chief executives and business owners have swallowed the skyrocketing increases for what is anticipated to be the fifth consecutive year. Employers who have determined the necessity of shifting some of those increases to employee-shared costs have likely heard indignant responses, usually from the same individuals who refuse generic prescriptions. Companies, which have successfully resisted shifting more of the cost to employees, may not be able to do so in the upcoming year of increases.

HMOs and health insurers, for a myriad of reasons, are presently preparing to raise health premiums for 2002 yet again by double-digit figures, and there’s no end in sight for similar increases in the years ahead. And that, some believe, will begin to stem the welfare entitlement mentality that is adding to the smothering cost of health care.

Health care today is facing enormous pressure from all sides that is driving up costs. The nation recently saw the battle the federal government waged in an attempt to provide the generic medication for anthrax. It was a battle won by Cipro, but one that also forced the company to lower Cipro pricing. Apart from drug costs, unreimbursed government payments for health care, duplicated services among health care rivals and the ever-growing use of the health care system, the “entitlement mentality” (supposedly killed off with the welfare reforms of the 1990s) continues to be a cost driver. (And that the Michigan legislature at this time is being duped into consideration of eliminating the Certificate of Need process, which has proven to be a cost control, can only be defended with an insanity plea, but that’s another issue.)

Doctors often report patients are not only insistent on the prescription drugs advertised but also demand an MRI when a knee aches. Others, who have perhaps put off regular checkups, will head straight for the emergency room rather than wait for a next-day appointment with a physician.

Why not? Somebody else is paying for it. And that, in a nutshell, is the problem, especially with the consumer rebellion in the late 1990s against the tight controls of managed care.

There is no other industry, no other business model, where the end users of a service can seemingly get all they want without paying for it.

While it certainly is not the answer to those things that ail American health care today, shifting the cost of health insurance to employees is a viable way — albeit temporary — for companies struggling to deal with rising premiums, especially during so significant an economic downturn as seen in 2001. Percentage-based or generic prescription plans are a good start, as are benefit plans that provide employees a set amount and allow them to choose the coverage they need.

Michigan is home to 1.1 million people without health insurance, and many of them are gainfully employed in small businesses or running their own company. Many more may be added to that roster in the near future if rising premiums force employers to drop their health plans altogether.

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