A common theme ran through several of the HFMA’s “In the News” stories this week:
• Hewitt Associates released data showing that the rate of increases for U.S. healthcare costs for companies declined for the fifth consecutive year. But Hewitt also noted that one of the primary ways companies have accomplished lower rate increases “is by passing a significant percentage of costs to employees.”
• A joint report by the Kaiser Family Foundation and the Health Research & Education Trust found increases in the average single and family premiums for employer-sponsored insurance and an increase in the percentage of workers enrolled in high-deductible health plans.
• The Center for Studying Health System Change (HSC) reported that the number of Americans in families with problems paying medical bills was 57 million in 2007, an increase of 14 million from 2003. And most people with medical problems—42.5 million—had insurance coverage.
Employer-provided insurance coverage, in other words, ain’t what it used to be, and employees and their families are feeling the squeeze.
The effect of shifting more healthcare costs and spending decisions to employees may be helping to keep healthcare cost increases in check. But the HSC’s report of a rising number of Americans who are struggling to pay their medical bills suggests trouble on the horizon.
Warning signs appeared elsewhere in the news this week. Hewitt’s Two Roads Diverged annual healthcare survey stated that 25 percent of employees report forgoing necessary health care due to cost. A front-page article in The Wall Street Journal (Monday, Sept. 22; subscription required) reported that consumers are cutting back on health care as tough economic times take their toll. Both the number of prescriptions filled and the number of physician office visits have actually declined, not just slowed their rate of growth, in recent months.
Cutbacks in prescription and preventive care spending today may well lead to higher acute care costs down the road. But that’s a risk Americans seem increasingly willing to take in the face of rising food and fuel costs and deteriorating economic conditions.
What can be done? Managing healthcare costs has become like the childhood game of Hot Potato, with the costs, burdens, and consequences of healthcare spending passing among employers, employees, providers, and payers.
A big part of the problem is a broken healthcare payment system badly in need of reform. HFMA has just released a white paper on healthcare payment reform and is working with stakeholders across the healthcare spectrum to forge consensus on an agenda for change.
The game of Hot Potato ended with one unlucky player holding the spud. Unless everyone takes a share of healthcare payment reform, we’ll all be losers.
