Corrections or additions?
This article was published in U.S. 1 Newspaper on December 15,
1999. All rights reserved.
Managed Care Benefits
In the face of a tight job market, good health
benefits
can help recruit the best workers. But how does a prospective employee
evaluate the various health plans? Look for whether a company offers
at least two managed care plans, one that requires you to visit a
“gatekeeper” doctor before you go to a specialist, and one
where you can refer yourself to a specialist.
The second kind, more flexible, is called a Preferred Provider
Organization
(PPO). PPOs are, at least in this part of the country, more expensive
per employee, and so far most employers aren’t picking up that extra
tab. If you, the worker, want the flexibility of a PPO, you will be
paying more.
To encourage your employer to dig deeper in its benefits pocket to
pay for a more flexible plan, take a look at the survey just released
by William M. Mercer, the healthcare consulting firm with an office
at the Carnegie Center. The survey shows that, nationally, employers
are paying health benefit increases this year that range from 13.8
percent to seven percent, with small companies showing the biggest
percentage increase.
You might point out to your boss that companies in this state pay
less than elsewhere. They had only a five percent increase this year,
for an average total of $4,280 per employee. That’s less than
companies
in the Northeast pay ($4,787). (Careful here, this part of survey
applies only to large companies of 500 employees or more).
But employers in the Northeast are less likely to jump on the PPO
bandwagon, says the survey. “Nationally, 51 percent of employers
offer a PPO, and 43 percent of employees are enrolled in one. In the
Northeast, only 41 percent of employers offer a PPO, and only 32
percent
of employees are enrolled in one. While the number of Northeast
employers
offering a PPO jumped dramatically in 1999, from 31 percent to 41
percent, the increase in employee enrollment was minimal.”
“This may indicate that Northeast employers, because their costs
are higher, are reluctant to make a PPO plan their `go to’ plan,”
says John Menninger, a consultant in Mercer’s Carnegie Center
office (609-520-3748, E-mail: john menninger@us.wmmercer.com).
The cost difference between PPOs and less flexible plans, minimal
nationally, is significant in the Northeast. The average PPO cost
per employee in the Northeast was $4,343 in 1999, nine percent or
$410 more, than the less flexible plan.
“The added cost may seem insignificant when you boil it down to
$410 per employee, but those are the kinds of numbers that add up,
and they add up over time,” says Menninger. He is an alumnus of
Ohio State, Class of 1986, has an MBA from Rutgers, and has been with
Mercer for seven years.
With more than 3,000 companies responding this year,
the Mercer-Foster Higgins National Survey of Employer-sponsored Health
Plans outdoes all others in size and comprehensiveness. It reflects
the views of about 600,000 employers. Official copies cost $500 and
will be available on February 7 but consumer-friendly information
is available at (https://www.wmmercer.com/us-news).
To lobby for a change in your managed care plan, you need to look
at what you already have. Here are the categories:
The traditional indemnity plan operates the old-fashionedway. You go to a doctor, you pay the bill, and you send the bill into get partially reimbursed.Among the managed care plans, the Preferred ProviderOrganizationsor PPOs are considered the least restrictive. A network ofproviderscontract to provide their services at a discount. You can self referto specialists and pick a doctor out of a directory. You pay lessfor an in-network doctor than for an out-of-network doctor.”PPOs don’t require doctors to get the plan’s approval beforebeginning treatment,” says Menninger. “They monitor physicianperformance after the fact, avoiding the risk of denying care thatshould have been given.” This year showed a big jump in PPO plansthat offer disease management programs to educate those with heartdisease, diabetes, asthma, back pain, or depression — and assistin behavioral change.PPOs can be less expensive because they cut red tape. The averageadministrative cost of a PPO this year was $17 per employee per month,versus $25 for the more traditional HMO. Also, says the report,”Becausethey don’t limit coverage to a closed panel of providers, employerswith PPOs are less likely than those with HMOs to be sued.”The Point of Service or POS network is less flexible thana PPO but more flexible than an HMO. In the provider network, it actslike an HMO, Menninger explains. You designate the particular primarycare physician, but you can’t refer yourself to a specialist evenat the in-network level. You can nevertheless, get referred out ofnetwork and still get partially reimbursed. Sometimes these plans,introduced in the early 1990s, are called Open-ended HMOs.Some POSs offer “open access” products, such as making itpossible to refer yourself to an OB/GYN provider (why should a womanseeking birth control pills make two appointments when one would do?).Some allow year-long specialist referrals (so, for instance, you cango back to the same dermatologist for a year without visiting thegatekeeper each time).The Health Maintenance Organization or HMO has noout-of-networkbenefit. You go first to the gatekeeper doctor to get a referral forspecialty care. If you go out of network, you pay the whole cost.HMOs are also starting to offer “open access” products. In1999, 16 percent of employers with HMOs offer an open access plan,up from 13 percent last year, says the report.The good news: “When asked about plans for 2000, only about afourth of employers say they will increase either employeecontributionsor cost sharing. In this tight labor market, many employers arereluctantto upset workers with bad news about their medical benefits,”says Menninger. “They’d rather target cost management effortsat trouble spots like prescription drugs, or look for win-win waysto control cost.”– Barbara FoxPrevious StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
