Key industry themes include wellness, shifting costs

• Wellness. This was a continuous theme at the conference. It was noted that 80 percent of the cases involving the top nine causes of death are due to lifestyle choices – tobacco use, diet, exercise, alcohol, sexual behavior and drug use. Each of these potentially fatal behaviors is preventable, and each can be used as a predictor for future health issues and rising costs. It is also evident that wellness plays a role in the business sector, with employers losing an average of $3,400 per year for every employee who smokes. In addition, businesses average $2,189 in workers’ compensation costs for each employee who smokes, compared with $176 per nonsmoking employee, according to The Health Policy Institute of Ohio. One inference we can make from statistics like these is that lifestyle and behavior changes, even small ones, can have exponential effects on health and costs.

• Political policies. A new bill in Massachusetts is calling for a statewide mandate for everyone to have health insurance. The White House is pushing health savings accounts and individual empowerment. Officials are calling for fiscal responsibility, pay for performance, technology standardization, personal health records, health risk assessments and private-sector competition to cover the costs of health care.

• Uninsured individuals. According to the Kaiser Family Foundation, the number of employers offering health benefits fell from 69 percent in 2000 to 60 percent in 2004. The increased number of individuals without health insurance makes market expansion difficult. Administrative costs need to be modified, possibly through automation. Large carriers (i.e. Anthem and Wellpoint) are consolidating and acquiring new companies with more capabilities in finance as well as medical and pharmacy management.

• Medical management. Costs continue to increase. The concern is with chronic episodes and/or expensive conditions that are modifiable. An estimated 70 cents of every health care dollar goes to treat chronic conditions, the conference revealed. Concerns also include hospital costs that continue to be in double digits. Pharmaceuticals, mandates, litigation and legal liability, litigation and practice variations also are cited as culprits. The future holds new technology and new research for geriatrics, as well as screening for drug efficacy, cancer alleles and susceptibility to disease. The development of new specialty drugs and stem-cell research also is being undertaken. There is a continuing push for the promotion of evidence-based medicine. There must be a balance with spending on research and making sure consumers can afford to receive these new treatments.

• Pay for performance. This option is being rewarded in areas where standard procedures and outcomes can be measured. The U.S. government already has established such records for the military and feels this push for standardization will make a big impact on savings and the current treatment methods. It is hoped that pay-for-performance health care will eliminate duplicate tests and aid physicians in their endeavors for better treatment.

• Consumer-directed health plans. Such plans are seen as cost-effective and allow a savings vehicle for future health needs. They do require education and accountability on the part of the consumer. Wellness and prevention act as cost controls in these plans. The health plans are partnering with banks for the fiduciary function and relying on brokers for education. Big concerns are that cost sharing has little impact on the small percentage of patients who consume the largest amount of health care. Providers are questioning the value of discounting their services if they have to chase the money. Consumer-directed plans, such as health savings accounts, are definitely a growing market segment. There is an increasing demand for data, reporting and opportunities for nontraditional treatment centers. It has also been determined that HSA purchasers tend to be more likely to use online tools. This access provides cost and quality comparisons of physicians, hospitals, drugs and institutions.

We don’t know how long our current system can continue increasing costs and shifting those costs to employers. We don’t know what role politics will play. But what we do know is that the health care market will continue to change and evolve, and all parties will have to adapt.

Andrea Croley is co-owner of Croley Insurance and Financial in Springfield.