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- Birthday Cards Encourage Use of Wellness Benefits
- Aging Process Spurred by Weight Gain
- Health Care Cost Containment Focus Shifts to Quality Care
- Hispanic Influx Invokes Response
- Contention over Ergonomics has Deep, Historic Roots
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- Intertraffic North America
Health Care Cost Containment Focus Shifts to Quality Care
New evidence indicates that an incredible 30 percent or more of all
On average, the cost for American companies that provide health care is now between 12 and 15 percent of payroll, up from eight percent only five years ago. This is forcing them to forego wage increases in favor of retaining beneits, require larger co-pays from employees or, in some cases, abandon health care coverage entirely.
“The escalating cost of health care undermines middle class life in
Referring to the new data, Sabitoni adds, “It is now clear that a big part of our battle is with the doctors and hospitals that are promoting costly and unnecessary procedures while passing the cost of ineffective service onto our health and welfare funds. If we’re going to improve our competitive position relative to the non-union sector, we must insist on quality care and full accountability from all of our health care providers.”
Consider these facts:
- The cost of treatment complications – some due to medical errors and others rising from the inherent risks of medical procedures – is $19 billion annually and affects 914,000 patients.
- Every year, 2.4 million unnecessary operations – most commonly, heart by-passes, hysterectomies, pace-maker insertions and tonsillectomies – are performed at a cost of $3.9 billion and result in 11,900 unnecessary deaths.
- About half of all antibiotic prescriptions are written for viral infections on which they have no effect.
“An analysis by the Midwest Business Group on Health,” says
MacArthur works with the Health Care Advisory Committee (HCAC), an ad hoc group of LIUNA health and welfare fund administrators and consultants who are searching for ways to save money and improve care for the funds and, ultimately, for signatory employers and LIUNA members.
“Our emphasis is shifting,” says MacArthur. “Eighteen months ago, our main focus was on health care coalitions (see “Health Care Coalitions Offer Means to Fight Higher Costs,” LIFELINES, Winter, 2004) as a means to increase the buying power and leverage for our health and welfare funds. In doing that, we also saw how some coalitions were able to use their leverage to demand better performance from certain hospitals. Apparently, we weren’t alone. Over the last year, a number of studies have zeroed in on wasteful, inefficient and ineffective treatment from doctors and hospitals. We’re all looking for ways to tackle this issue.”
One such study was released by the Pennsylvania Health Care Cost Containment Council on July 12. It showed that nearly 12,000 hospital patients in the state contracted an infection during their hospital stay in 2004. These infections raised the cost of their care by $2 billion and resulted in 1,500 preventable deaths. Extrapolating from
However, Volavka said that the numbers in the report would have been much worse except for significant underreporting by the hospitals.
Other states have recently enacted or are considering enacting legislation to require similar reporting. Without the data from mandatory reporting, the Centers for Disease Control had previously estimated that hospital-acquired infections caused about 90,000 deaths per year. It now appears that that figure may be as high as 360,000.
Aside from unnecessary suffering and death, hospital-acquired infections produce a substantial increase in treatment expense. In
Moreover, infections are just one part of the problem. Unnecessary operations, inappropriate prescriptions and excessive testing are other significant examples of a health care system with little means of effective accountability.
The devil is in the details. “Each health and welfare fund administrator must scrutinize its data to see which doctors and hospitals are out-of-line in their prescriptions written or their services provided,” says MacArthur. “The claims records of each fund contain the evidence necessary to ferret out irresponsible providers.”
However, sorting through a fund’s data can be a long, pain-staking task. That is why the adoption of reporting requirements, such as those in
Further, when administrators do find problem providers or identify good ones, it is important to share this information. Already experience shows that for some high cost procedures, it can be cheaper to pay the expense of flying a patient and his or her spouse to a center of excellence in another city, put the spouse up in a hotel for a couple nights and fly them back home afterwards, than to pay a local but inefficient provider.
The HCAC has five active subcommittees: member education, trustee education, prescription drug costs, prevention/wellness benefits and merger/cooperative purchase arrangements. “We will be sharing the committee’s insights and suggestions for action with all LIUNA health and welfare funds,” MacArthur says. “We will also search for effective ways for more funds and more administrators to participate directly in the HCAC’s work. The Fund has also hired a consultant who specializes in health care issues to assist the committee and focus on other solutions.”
For more information about the HCAC or what your fund can do to help fight escalating health care costs, contact the Health Promotion Division.