A PLAN TO IMPROVE HEALTHCARE AND LIMIT COSTS

New York Times - Oct. 20: The issue of health care costs usually comes up for discussion right after the economy as costs for businesses and consumers continue to climb. The Blue Cross Blue Shield Association insures 102 million Americans one in three people and has networks that include 90 percent of the nation's providers and 80 percent of its hospitals.

The association's board just adopted a four-point initiative aimed at containing health care costs and improving care. The goals range from eradicating hospital infections to pushing for health care coverage for everyone. From Chicago, Scott Serota, the association's president and chief executive, recently discussed the new goals:

Q.What was the impetus for adopting a new plan of action, and why now?
A. Much of what is discussed in virtually all forums as health care reform is really health care financing reform. We really have not gotten sufficient national attention on the real underlying issue, which is that the entire health care delivery system needs to be modified. We, the Blues, feel we should try to drive toward a vision for the health care delivery system which we can move collectively forward with our partners.

Q.One of your goals is to cut the prevalence of diabetes in half. Why did you select that?
A. There are 57 million Americans today who are prediabetic. The cost of treating it is $116 billion annually. We treat it pretty well, but there are tangible things we can do in the areas of obesity, weight management, nutrition, fitness and health risk assessment to reduce the incidence of diabetes. We can cut that 57 million number in half and make a dramatic impact not only in the delivery system costs but in people's lives.

Q.Your second point is more affordable health care. How do you translate that sweeping goal into something concrete when costs are steadily mounting for both businesses and individuals?
A. We're not saying the cost of health care will go down. It won't. Our goal is that health care costs rise no faster than any other goods and services. The essential fundamental to getting there is improving the underlying system because 30 percent of care rendered today, according to some studies, is unnecessary, redundant and, in some cases, even harmful. We need to get waste out of the system. That means $700 billion in a $2.4 trillion system.

Q.When you say waste, what do you mean?
A. I'm talking about a whole battery of things like duplicative testing such as two M.R.I.'s instead of one

or hospital-acquired infections. The cornerstone of how we get at this is creating a comparative effectiveness institute to study what treatments really work best for a given condition and letting everyone know what works. There is legislation on this pending in Congress.

Q.Medicare just announced it would stop paying hospitals to treat patients harmed by care, like being given an incompatible blood transfusion. One of your goals addressed that to eradicate so-called 'never events' but is that the cart following the horse?
A. Not paying for them is the end point. If they are no longer getting reimbursed for those costs, institutions will be very aggressive in eliminating those events. There are some Blue plans that are not paying for those events.

Q.Why haven't more Blue plans limited reimbursement for hospital-caused problems?
A. More will. We're trying to figure out mechanisms to help them improve their performance. Then we'll tie reimbursement to performance. These events are a huge problem where we haven't made a lot of progress over the last 10 years. We have to fix it, then adjust the financing.

Q.An ambitious point you have adopted is to ensure that everyone has health care coverage. What specific steps can Blue Cross Blue Shield take to solve something that has remained so elusive?
A. We believe that every American should have coverage, but 45 million don't have it. The reasons are not the same, but if coverage is affordable, more people will be able to buy it. We also need to work with people who are eligible for government programs but are not enrolling. And we need to develop new products like high-deductible plans to attract people like the 'young invincibles' -- who think they will never get sick -- and get them in the habit of buying coverage.

Q.Do you support proposals like the one from the Republican presidential candidate John McCain that move away from the employer-based system?
A. It is essential that we continue to support the employer-based system because 162 million Americans today get their coverage through their employer. We should not disrupt this important piece. Employers provide significant financing and they keep us on our toes.

Q.How do you plan to get others in the health care industry to sign on and help achieve your newly adopted goals?
A. Conversations, dialogue and meeting with trade association leaders. These are goals for all of us. We are insuring one-third of all Americans so we need to step out and provide leadership with real actionable steps.

Q.Do you have any near-term like one-year benchmarks to measure whether the Blues are making progress in meeting each of the new goals?
A. We will have annual benchmarks that we will put out. We believe that what gets measured is what gets done.

Are Healthcare Costs Really Lower in Canada?

A report by the Fraser Institute reveals that healthcare in Canada only appears to cost less than healthcare in the United States because Canadian public health insurance does not cover many advanced medical treatments and technologies; common medical resources are in short supply; and access to healthcare is often severely delayed.

On average, Americans spend more of their incomes on healthcare, but they get better access to superior medical resources.

According to the most recent data, the United States outscores Canada on many key indicators of available healthcare resources, including:

• Number of MRI units per million population in 2006: US 26.5. Canada: 6.2
• Number of MRI exams per million population in 2004/05: U.S.: 83,200. Canada: 25,500
• Number of CT Scanners per million population in 2006: U.S.: 33.9. Canada 12
• Number of CT exams per million population in 2004/05: U.S.: 172,500. Canada 87,300
• Number of inpatient surgical procedures per million population in 2004: U.S.: 89,900. Canada: 44,700.

Even on health insurance coverage, the Canadian system does not perform much better than the U.S. when it comes to actually delivering insured access. The study cites government data showing an estimated 1.7 million Canadians (aged 12 and older) were unable to see a regular family physician in 2007. And it points to other research showing that the actual number of effectively uninsured Americans is less than half of the figure usually reported and that being uninsured is usually only a temporary condition.

Based on these figures, the study estimates that the percentage of the population that was effectively uninsured for non-emergency, necessary medical services at any given time during 2007 was not significantly different between the two countries: 7.9% in the U.S. compared to six percent in Canada.

The study concludes that both Canada and the U.S. should look to countries, such as Switzerland or the Netherlands where the government is not in the business of providing health or drug insurance at all. Instead, people are required by law to purchase comprehensive health insurance in a regulated private-sector market. Access to health insurance for low-income people comes from a publicly funded means-tested subsidy, which varies according to the income and assets of the insured person. For more information, visit http://www.fraserinstitute.org/.

Wellness programs do well among large employers

By Danielle Andrus | Published October 22, 2008 From the October 22, 2008 Issue of Benefits Selling WEEKLY

Wellness programs are increasing among large employers, according to MetLife. The company's Sixth Annual Employee Benefits Trends Study found 57 percent of large employers offer a wellness program, up from 49 percent in 2006. Small employers still aren't convinced about wellness programs; for the past two years, only 16 percent report offering such a program.

About 80 percent of employers offer incentives for using wellness programs, and only 9 percent impose fees on employees who don't meet wellness guidelines.

Employers who offer wellness programs appear to be confident about their benefits programs in general. Sixty-five percent feel their benefits programs are better than their competitors, compared with 42 percent of employers who don't offer wellness programs. Of employers who offer wellness programs, 51 percent feel their benefits program is a big draw when attracting employees to their company, and 70 percent say it is important for employee retention. Only 22 percent of employers without wellness programs say their program is a big part of their company's appeal, and 50 percent say it helps with employee retention.

New IRS Regulation Drives HSA Procedural Change

Legacy Benefits & Insurance Services would like to make you aware of an important announcement which affects both Employees and Employers in the establishment, funding and administration of HSA accounts.

Pay particular attention to the following:

The IRS has clarified when an HSA account is effective: An HSA account must be funded in order to be effective and an account cannot legally exist before the effective date of the HSA qualifying plan coverage.

If HSA paperwork is received after the first day of the month, the HSA account cannot be effective any sooner than the first day of the following month. For example, your client's HSA compatible plan coverage begins on July 1, 2008 and you submit the paperwork to the HSA bank custodian on July 10th. An HSA account can be opened and made effective on August 1st. This means that the accountholder cannot use the HSA funds for any expense incurred prior to the effective date of the HSA bank account. Check with your HSA Bank Custodian to find out their administrative procedure to determine their definition of what constitutes having the HSA account open.

Please note that in the past, HSA Bank Custodians may have been able to retro the HSA account effective date to the start date of the HSA compatible HDHP coverage, but will no longer be able to do this based on these new regulations.

For more information, you can visit the US Treasury website:

http://www.treasury.gov/offices/public-affairs/hsa/

For more information or an free review of your current benefits package, please contact Ray Ward at Legacy Benefits & Insurance Service.

Are You Offering Your Employees Choice?

When you are recruiting or trying to retain the best employees, you are competing with larger employers in your industry. Those employers generally offer their employee a wide variety of benefits to choose from. At Legacy Benefits & Insurance Services, we try to help you design a benefit package that can offer your employees similar choices.

Most smaller employers choose not to offer choice for one of few reasons; they don’t know that they can, they think it will cost them more to offer additional plans, or they are concerned how to communicate the differences in the plans. We can show you that these are issues that we can solve for you.

Can You Offer Choice? - Yes, each carrier is different but there are health and dental carriers that will allow you offer more than one plan with as little as 2 employees. The number of plan designs that you can offer can vary per carrier depending on the number of employees you have. Please note that offering too many plans can be so confusing to the employee that is become more of a burden than a benefit.

Can You Afford Multiple Option Healthcare Plans? - Many companies think that they cannot afford choices health insurance, because some plans are so expensive. The truth is that a carefully constructed benefits may save you money. We have clients that switch to a multiple option benefit package and have saved over 30% of their renewal rates and their employee like the options that they have picked. To learn more, ask to get a copy of our case study.

In addition, voluntary benefits can be offered that are funded by the employees not by the employer. These plans allow the employee to protect themselves and their family in case certain situations arise.

For more information or an free review of your current benefits package, please contact Ray Ward at Legacy Benefits & Insurance Service email:rayward@yourlegacybenefits.com or 916-677-2130 ext. 101.