Skip to main content

Will Employers Eliminate Health Coverage In 2014?

'Yes' says the smart money.   From AIS's Health Reform Week;
"Health insurance reform mandates already in effect are having a major cost impact on midsized employers across the U.S., according to a new actuarial modeling analysis by Lockton Benefit Group. On average, employers with 2,000 to 10,000 employees tacked another 2.5% onto their health insurance costs since mandates went into effect last September — primarily due to reform requirements extending dependent coverage to age 26 and eliminating lifetime and raising annual coverage limits, the firm says. Moreover, costs related to these mandates are just the tip of the iceberg — to the point where many employers could consider termination of their plans in 2014."


"Employers deciding to eliminate health plan coverage in 2014 will save an average of about 44% off their current health care spending, according to Lockton’s actuarial modeling. Thus, an employer spending $10 million today would spend $4.4 million to jettison its plan and pay the relatively smaller financial penalty, Fensholt explains. He notes that the employer doesn’t save the entire $10 million because of the penalty, which is nondeductible, as well as the lost tax deduction on its current spending, and lost Social Security tax savings on employee pretax premium contributions.

Two Views Of the Future Of Employer Sponsored Coverage.  Booz&Co calls the demise of employer-sponsored coverage "greatly exaggerated."  They're wrong.

What would happen if employers walked away from health coverage? Kaiser Health News calls it "..a bailout of epic proportions."  I'll take that bet.


Popular posts from this blog

Being Disrupted Ain't Fun. Deal With It.

Articles about disrupting healthcare, particularly those analogizing, say, Tesla's example with healthcare's current state, are frequently met with a chorus of (paraphrasing here) "Irrelevant! Cars are easy, healthcare is hard." You know, patients and doctors as examples of "information asymmetry" and all that. Well, let me ask you this: assuming you drive a car with a traditional internal combustion engine, how much do you know about the metallurgy in your car's engine block? I'll bet the answer is: virtually nothing. In fact it's probably less than you know about your own body's GI tract. Yet somehow, every day, us (allegedly) ignorant people buy and drive cars without help from a cadre of experts. Most of us do so and live happily ever after (at least until the warranty expires. Warranties...another thing healthcare could learn from Tesla.) Now, us free range dummies - impatient with information asymmetry - are storming healthcar…

Becoming Consumer Friendly In Five Easy Steps...Or Not

An article at offers hospitals 5 steps to becoming more consumer friendly.

If you still think there's a secret sauce to your hospital becoming more "consumer friendly," these 5 steps are as good a place to start as any.  Unfortunately, it's a little like that old Steve Martin comedy bit where he says he'll teach you how to be rich. The first step is to go find a million dollars.

Step 1 from the article is realizing that "...a Medicare beneficiary with chronic conditions is different from a young mom who brings her kids in for an annual check-up." This is market segmentation for beginners, and, yes, one size decidedly does not fit all. I'm sure your marketing team's been saying this for a while.

Steps 2-5: have a strategy, metrics, a champion and resources. OK. Hard to argue with any of those.

But those things, alone or together, won't overcome culture. They're important components to be sure, but insufficient without a …

The Answer For Lower Healthcare Costs Is...

...Customer Service.

From the New York Times: Seattle's Iora Primary Care is a new model of primary care, seeking national scale and venture capital funding.  Though the ambition may be outsize, the concepts are not new. Daily team huddles. Health coaches. Taking satisfaction surveys seriously and mining results for actionable insights. Employer and payer partnerships. Pay-for-performance not volumes. Loose-tight operations (wellness options are "loose" - i.e. varying from site to
site, while EHR alignment is "tight" and non-negotiable.)

According to the article:
"...small change(s) can make a big difference in a patient’s health — what good is the perfect drug if the patient can’t swallow it? — but the extra-mile work it took to get there can be a challenge for the typical primary care practice in the United States. Harried by busy schedules and paid on a piecework model, many doctors rush from visit to visit, avoid phone calls and emails that …