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Tri-County Project Care
The health care crisis—time is running out to fix a broken system
Source: Charleston Regional Business Journal, Dec. 16-29, 2002
Editorial by: Bill Settlemyer

These days, there is no shortage of stories in the media about problems with our nation’s health care system. The nursing shortage and the cost of prescription drugs have gotten a lot of attention, but arguably the biggest crisis stems from the fact that premiums paid by employers for group health care are once again rising rapidly.

As a small business owner, I get to see the numbers first hand. Things are changing so fast that we’re reviewing and adjusting our group health coverage more than once a year.

And you know what “adjusting” means: Higher premiums, higher deductibles, less coverage and more restrictions.

In our company, we pay a portion of the covered employee’s personal health coverage, but not the additional cost of family coverage. At this point, the biggest challenge is not what the company pays, but what’s left over for the employee to cover out of his or her paycheck—thousands of dollars a year, in some cases well over $5,000 per year.

For that reason, even though I’m the owner of my company, I’ve chosen to be covered under my wife’s group health plan with a large area employer. Cost-wise, that makes all the difference in the world. Under my company’s plan, we’d be paying about six times as much for coverage!

The bottom line is that the cost pressure on small businesses and their employees is severe and growing. For one thing, a price differential of this magnitude puts small businesses at a serious competitive disadvantage vis-à-vis larger employers in the race to hire and retain good people.

And the problems don’t end there. There are over 40 million uninsured people in this country. Often, they skip preventive care, medicines and treatment to save money. Then they get really sick, arrive at a hospital emergency room in bad shape and get very expensive acute care because hospitals can’t just turn away people who are extremely ill.

Here’s the next part of the cycle: Hospitals, by necessity, must pass the costs of care on to other customers, leading to higher health insurance claims, leading to higher health premiums, leading to more employers and workers dropping health care coverage and hoping for the best, so the population of uninsured workers grows. It’s a classic downward economic spiral, and if we don’t address the problem in a meaningful way it will get worse, sooner rather than later.

Solutions?

Here in our region, we need to develop an approach I call “The Charleston Health System.” This would be a collaborative effort among providers, insurers, businesses, consumers and all the other health care stakeholders in our community.

Dr. Casey Fitts’ marvelous Tri-County Project Care program (www.tricountyprojectcare.org) is a good start, as are other physician and hospital-driven efforts to care for the unemployed or uninsured workers in our region. In essence, we need a rational system for giving as many people as possible the best available care. It all starts with disease prevention, including health screening and wellness programs. We also need to insure that people with chronic health problems get the medicine and ongoing care they need to avoid become hospital emergencies.

On the small business health insurance front, we have to develop solutions that are much better than what’s available now. One approach might be to set up a small business insurance association to create a plan with tens of thousands of employees. Ideally, such a plan would draw on the active participation of insurance agents, Blue Cross/Blue Shield and other major carriers, business, government and the health care providers.

The pooling from a large group like this could help overcome the high administrative and marketing costs and the underwriting risk associated with insuring small businesses one at a time instead of as a group. But pooling would not be enough. Participating businesses would have to buy into an aggressive wellness, cost management and employee education program to hold costs down. For example, working with local companies like BenefitFocus.com, we could develop Internet or kiosk-based information systems to streamline many aspects of health care administration, further lowering costs.

This is not a job for amateurs, other than to start the ball rolling and stay engaged in the process. Hopefully, professionals in the insurance and health care fields will understand that the system is in the same kind of trouble as the major airlines—a business model that is rapidly becoming unsustainable.

Surprisingly, a number of health care executives around the country have begun to say that it’s time to revive the topic of universal health care. As reported recently by The New York Times, Dr. William W. McGuire, chief executive of UnitedHealth Group, the nation’s largest private insurer, has written to every member of Congress calling for “essential health care for all Americans.” “The tragedy of our nation’s health care system,” said Dr. McGuire, “is that in spite of its many impressive features, it has ultimately failed to make even basic care consistently available to all of our citizens.”

In South Carolina and here in our region, we should act now to get in front of the curve on these critical issues. Amid the dangers this crisis presents, we can also find opportunities for economic development if we’re smart about it. More on this subject in a future ­column…