PRIDE Seeks RX for Health Costs

PRIDE of St. Louis is turning its attention to health care costs.

Union construction members usually get health insurance from health and welfare trust funds financed by a portion of their hourly wages. At a luncheon meeting April 28, insurance company representatives laid-out for union and management trustees why they should be concerned about escalating health care costs and what the insurance companies propose to do about them.

Randy Ressel, regional vice president of Wellpoint, set the tone for the meeting. Wellpoint is the nation's largest health insurance company and owner of Anthem Blue Cross Blue Shield.

Ressel said the single biggest driver raising the cost of private health insurance is Congress's penchant for cutting Medicare and Medicaid. Reimbursements from Medicaid and Medicare have become so stingy that health care providers make up the difference by charging private patients more, he said. And the prospects are only getting worse, he added.

"If you do nothing, costs will double in six years," he said.

Doing something means eliminating waste. Steve Walli, president and CEO of UnitedHealthcare (UHC), said 30 percent of the healthcare delivered in this country every year is unnecessary. Ressel estimated that another 30 to 50 percent is lifestyle related.

The task for unions is to educate their members how to shop for health care and how to take care of themselves, insurance company executives, said.

A hard lesson to teach is that in health care, the low cost provider is usually the best provider, said Frank D'Antonio, vice president, GHP Inc., "because the high cost provider usually is high cost because of the extra complications they cause they have to be treated," he said.

"If a doctor orders an MRI for one of your members, we want your member to ask the doctor if an MRI is really better than an x-ray, because an MRI costs many times what an x-ray costs. If an MRI is better than an x-ray for what your member has, then we want your member to ask, 'where is the cheapest place to get it,'" Ressel said.

An ironworker trustee said that he doubted his members would have any interest in saving someone else money.

Walli agreed and said that part of the process for educating members is to restructure plans into "health savings account/high deductible" plans that reward members for saving money.

The idea with health savings accounts is that the employer (or trust fund) puts a certain amount of money into individual accounts for each employee and employees keep what they don't spend. Employees pay for their health care out of the health savings account and anything they don't spend they can roll over or put in their pockets. These health savings accounts differ from medical savings accounts trotted out a decade ago, because, in those, anything the employee did not use, he lost.

UHC couples health savings accounts with high deductible plans, $5,000 deductibles or more, for more major medical treatments.

"But in order to work, all preventive services are covered," Walli said, "because if you don't cover preventive service, people put off getting medical care until there is a major problem, and it ends up costing you more," he said.

Walli noted that there is as yet no proof that health savings accounts will hold down health care costs.

Health plan trustees seemed skeptical of health savings accounts, but they've seen any number of failed cost savings plans over the last 20 years, from the direct services model that GHP was founded on and later abandoned, to capitation (where doctors were paid a flat fee for every patient who named them as their provider), to primary care physicians as gatekeepers, to insurance companies requiring that doctors seek their approval before beginning any treatment, to medical savings accounts. Trustees will have to see that health savings accounts work before they'll embrace them.

D'Antonio admitted that the one thing that did work to hold down costs was the threat of health care reform in Bill Clinton's first term as president. The recent health care reform bill is not holding down health care cost increases, because "there are no teeth in it," he said.

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