Posts Tagged ‘Health Care Benefits’

The Divide, Continued

Friday, November 13th, 2009

By Evan Falchuk

The strangely out-of-touch comments by proponents of reform legislation continue.

Yesterday, Christina Romer, the head of the President’s Council of Economic Advisers was asked about the proposed excise tax on so-called “Cadillac” health plans.  Romer said:

Part of the idea of how that is going to work is precisely because it does empower consumers. It empowers each of us to have an employer-sponsored plan to call our HR office and say, ‘Would you negotiate harder? Would you think about (whether this) is the most efficient plan out there, because I don’t want my plan paying an excise tax.’ So I think that’s something that is very much empowering consumers.

It’s a bizarre statement.  Roemer has impressive academic credentials, but this kind of statement betrays a profound ignorance of how employers actually buy health benefits.  She’s not the only one with such strange beliefs.

So, let me make it simple.

Companies across America use skilled and experienced benefits professionals to design and implement their health plans.  The bigger the employer the better they are at this.  In fact, big employers are such smart negotiators that they manage to get the services of the insurance companies without paying them a dime for health insurance.  It’s true: they just use the insurance companies to mechanically pay for the cost of their employees’ care, which comes out of the pocket of the employer.

Now, the smaller an employer is, the more difficult it is.  If you’re a company with 20 employees, your problem isn’t whether you are any good at negotiating.  It’s that you probably live in a state where one or two insurance companies dominate the market.  Your choices are limited, and because you’re too small to self-insure, you need to buy insurance from one of them.

But it’s worse than that.  State laws make it so that even if you were to try to “negotiate harder” (whatever that means), there isn’t much the insurance company is allowed to do.

So what is Professor Romer talking about?  Frankly, I have no idea.  So many reform proponents in Washington have never run a business or designed a benefit plan, so I’m becoming less and less surprised when they come to strange conclusions about these things.  But what doesn’t help is that they seem to prefer to spend so much time behind closed doors in Washington, or on TV, and so little time out talking to people actually in this business to see what works and what doesn’t.

This is hubris.  And it bodes very ill for the likelihood that plans coming out of Washington are going to make things better and not worse.

Poll: Congress Needs to Pay More Attention to Polls

Thursday, October 1st, 2009

By Evan Falchuk

A new poll by NPR, the Kaiser Family Foundation and the Harvard School of Public Health asks how health care reform is playing in the public.

The answer:  really badly.  How badly?

Almost no one thinks Congress is listening to them.  You could have predicted that self-described “conservatives” would feel that way, 79% of them said that.  But what about self-described “liberals,” they should feel pretty good, right?  Not exactly.  Seventy-three percent of them said the same.  So “moderates” must be the happy ones getting all the attention?  Nope – 64% of them felt that way, too.

What’s going on is something other than politics.

As I’ve pointed out many times before (like here, here and here) reformers are ignoring the lessons learned by U.S. companies about how people react to changes to their health benefits.  Benefits executives who have been through it will tell you that doing anything that affects people’s health care is delicate business.  They know that you had better be awfully sure you know what you are doing, and that you explain your plans in simple, clear, understandable ways.  They’ll tell you that if you don’t do that, even the most well-intentioned, thoughtful plan will go awry.

So far this is exactly what has happened.  There are multiple proposals, thousands of pages of legislation and a never-ending variety of mixed and changeable messages as to what reform is all about.  It’s precisely what you should not do if you are trying to implement even the smallest change in your benefits program.  It’s a recipe for alienating everyone involved, even those who would otherwise be supportive of what you are trying to do.

To be fair, all of this work has accomplished something.  In spite of all of the complaints we hear about how politicians focus too much on polls, Congress has gotten the public to change its mind.

Fifty-six percent surveyed said Congress needs to pay more attention to public opinion polls.

UPDATE: This video of Senator Thomas Carper of Delaware explaining why no one should want to read legislative language illustrates the kind of disconnect I’m talking about.  According to Carper:

When you get into the legislative language, Senator Conrad actually read some of it, several pages of it, the other day and I don’t think anybody had a clue–including people who have served on this committee for decades–what he was talking about. . . . So, legislative language is so arcane, so confusing . . . and it’s just, it really doesn’t make much sense.

So, he’s against the Baucus plan?  No, he’s actually arguing in favor of it, even though he hasn’t read it, won’t, and doesn’t think whatever it will say will be understandable.  Now, in the corridors of the Senate this may be a perfectly reasonable point.  But to the average American, hearing that your health care is going to change in ways no one understands is not comforting.  It might even make you believe stories about nasty provisions being snuck in there that no one knows about.

Things You Should Read

Friday, August 28th, 2009

By Evan Falchuk

AllBusiness’ Nancy Germond writes about health care quality in her Risk Management for the 21st Century column.  Best Doctors gets prominent billing:

Employers are buying Best Doctors services as an employee benefit to ensure their employees receive a higher quality of medical care, according to Falchuk. “If you feel unsure about your diagnosis or treatment, you are entitled to feel confident.”

Also, at Wired magazine, Curtis Silver interviewed me for his blog, Geek Dad.  We talked about using social media in business and how important it can be for your family, too.

Everyone struggles with work-life balance.  We care deeply about our business and our families.  And the realization is this: you have as much of a moral obligation to build a successful business as you do to build a successful family life.  Technology and social media help make this possible.  I wish more people saw it that way.

In both cases, read the whole thing.

UPDATE: The Wall Street Journal reviews my brother’s new TV show, Glee. They like it.

The Boston Globe, too, with a mention of Best Doctors and the work we did to help my brother with his health crisis last year.

How the Curve is Already Bending

Tuesday, August 25th, 2009

By Evan Falchuk

Bad news in the paper today: health care costs are expected to rise another 10.5% next year. It’s a serious problem that affects businesses and families across the country.

But the headlines miss something important: the rate of increase has been steadily slowing.

Are we already bending the health care cost curve?

(more…)

Why Reform is Going So Badly, Continued

Thursday, August 13th, 2009

By Evan Falchuk

As I’ve blogged about before (here, here, here and here), a big reason reform is going so badly is this:  Reformers don’t understand how people react when you try to make changes to their health benefits.

Companies across America have been making changes to health benefits for years.

Reformers seem to have ignored the lessons of their experience.

(more…)

Probably Not the Best Analogy

Tuesday, August 11th, 2009

By Evan Falchuk

President Obama held a town hall meeting today, which seems to have gone well.

Except he decided to use an analogy to dispute the idea that a government-run health insurer would drive private insurers out of business:

“As long as they have a good product and the government plan has to sustain itself through premiums and other non-tax revenue, private insurers should be able to compete with the government plan,” Obama said.  “They do it all the time,” he said.  “UPS and Fedex are doing just fine. . . . it’s the Post Office that’s always having problems.”

This is probably not the best analogy.

The US Postal Service has a monopoly on first-class mail, and is staffed pretty much completely by government workers.  As good as these workers are, the idea of the Post Office evokes images of waiting on line, and the rising cost of stamps.

And as for the villainous health insurers, are they now UPS and Fedex?

It is all very hard to follow.  It’s no wonder even people paying close attention to this issue are left wondering what these plans are all about.

Ed Koch: Don’t Mess With My Employee Benefits

Tuesday, August 11th, 2009

By Evan Falchuk

I’ve been making the point that health reform’s troubles are due to a fundamental failure of reformers to understand that health care is all about employee benefits.

At Real Clear Politics, former New York City Mayor Ed Koch shows you what I mean.  He recently had bypass surgery:

I speak from personal experience. I have been told that the cost of my hospital care, including the services of 20 doctors and 72 nurses and medical technicians over a six-week period may ultimately cost a million dollars. My private insurance policy is paid for by my law firm, Bryan Cave LLP, and because I still work full-time, that insurance policy is my primary one, not Medicare, even though I am 84 years old. Will that continue to be the case under any law signed by President Obama or will I be denied the right to spend my own money and my law firm’s for such unlimited coverage?

Koch says he think the answer is probably “yes,” but he’s very unsure.  In fact, he points to quotes from Administration officials along these lines that he says are “alarming.”

So, is the problem with health care reform politics?  Of course there is politics, but I don’t think Ed Koch is motivated by that.

No, Koch’s article illustrates something else.

If someone as sophisticated as Ed Koch is left wondering about the answer to fundamental questions about reform, how can you expect others, paying much less attention, to feel otherwise?

Oh, Good, a Thoughtful Debate on Health Care

Wednesday, August 5th, 2009

By Evan Falchuk

If you were hoping for a thoughtful discussion on the reform of our health care system, I have bad, bad news.

It turns out that health insurers are “villians.”  Public anger over the massive, mostly unread, reform bills is “manufactured,” and anxiety created by the expectation of unknown changes to people’s most valued benefits is the result of disinformation and “fishy” stories.

It’s like an employee benefits roll-out gone horribly awry.

The protests and disastrous town halls look to me just like the kinds of angry protests that happen all the time when employers make important changes to a benefit plan and the employees either don’t understand them or don’t agree.

Blaming the people who don’t follow what you’re doing and why is a big mistake.  Sure, there is politics.  But health care is a serious, emotional issue, and it should be no surprise that people react badly when they think something to do with it may be taken away.

Dreaming up ideas of how health care ought to work is relatively easy.  But figuring out how to implement it is hard, and there are no short cuts.  The people who actually run benefits plans – employers, benefits consultants, HR professionals – can tell you:  there is no replacement for communication, engagement and respect for opposing views.

The strategy of demonizing those who aren’t on board is a mistake, and is as likely to set back the cause of reform as it is to further inflame an already volatile audience.

Why is Health Insurance So Expensive?

Friday, July 24th, 2009

By Evan Falchuk

Gary Schwitzer links to a Business Week article that says health insurance is a very uncompetitive market.  Schwitzer notes this hasn’t gotten much attention, and wonders if it is a reason why health insurance premiums keep going up.

It is – and it isn’t.  As with most things in health care, there’s more to it than it seems.

(more…)

When Politics and Health Care Meet

Tuesday, July 14th, 2009

By Evan Falchuk

I wondered yesterday what coverages a government plan would offer.  Today I read that Congress is wrestling with that question, too, and is getting stuck on a familiar problem:

Abortion.

(more…)

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