Costs Crawl Up, Access Wanes

May 29, 2007
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What’s more frightening than an incompetent band of elected officials whose first duty is to their fellows rather than effective state policy?

Health care benefit plan cost increases.

After a week that focused attention on small business owners and lauded the best of those in the metro area, Grand Rapids Business Journal found that while competition is growing among insurance carriers, fewer small businesses (those employing 2 to 50 people) are participating or offering plans. The Business Journal reports in a story on page 1 that Richard Murdock, executive director of the Michigan Association of Health Plans, is concerned by a 20.4 percent drop in the number of member months shared by the state’s top five insurance carriers, and attributes that decrease to small businesses dropping coverage.

Michigan law changed in 2003, to provide rate bands and delineate case characteristics companies use to set premium rates, changes that were thought would assist small businesses and address concerns about insurers “cherry picking” companies with younger, and theoretically healthier, employees.

The Small Business Association of Michigan notes that “more choices in health care … don’t mean it’s necessarily going to be any less expensive” — and that is the systemic problem. The reasons for a decade of double digit increases for health care are several and varied, ranging from the tremendous influx of a now-geriatric generation of baby boomers to the cost of the technology impact from operations to pharmaceutical research. We dare say it also has reflected “shared costs,” a common method of spreading the cost for treating uninsured patients among the payers.

Employers are unable to contain the expenses at the level of physician care or health care facility except through group efforts and expertise of the Alliance for Health (in this region), or by dropping benefits entirely.

The impact is a classic chicken-or-egg question: without insurance those employers and employees become emergency room patients for lack of routine health checkups, further burdening the most expensive avenue in the health care system, and thereby creating greater numbers of uninsured patients, and expense, for hospitals.

Grand Rapids physician Dr. Paul Farr, immediate past president of the Michigan State Medical Society, noted in the Business Journal Health Quarterly last summer, “The pressure on business is tremendous. But what’s to choose: stay in business or pay for health care? We’re killing our business community. We’re killing our patients by not providing the right care at the right time.”

Farr has long suggested a system of universal health care through a variety of sources, including private insurance, business and government.

There is not much reason to wait. Costs are not going down.    

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