Brace for More PPO Premium Increases, Study Says

October 22, 2010    

Original Article: Kansas City Business Journal

by Aly Van Dyke

The average premium for preferred provider organization plans increased 10.2 percent this year, costing employers an average of $900 a month for employee-plus-family plans, according to the Benefits USA 2010/2011 survey released Wednesday.

PPO plans remain the most common health care option, with 85.3 percent of employers offering the plan, though options such as consumer-driven health plans are gaining steam in the wake of reform and high costs.

A 10.2 percent annual increase is about average, from what I’ve heard from insurers in the Kansas City area in past interviews. But considering that the study is based on this year’s enrollment figures — meaning it probably doesn’t consider the health reform requirements that went into effect Sept. 23 — brace yourself for even higher costs come next year. For two-thirds of us, that means January.

Insurers around Kansas City said that because of reform requirements, premium increases will be 1 or 2 percent more than they otherwise would have been. But insurers have said to plan for more dramatic increases in 2014, when health reform really kicks in.

Premiums aren’t the only costs pushing up the mercury of health care insurance.

Co-pays for visits to primary-care offices, the emergency room and specialists are getting up there in price, according to the study. The average co-pay for an ER visit, for instance, costs $108 today — about $86 more than in 2008.

Granted, some of the increases won’t matter so much by 2014. Take co-pays for primary-care visits. They went up to $22 on the average PPO plan, according to the Benefits USA study. In 2008, the average co-pay was $20. But reform gets rid of co-pays for preventive services, such as cancer screenings and adult vaccines, many of which are done in a primary-care visit.

Some say the increasing premium costs will mellow out after a while as the system adjusts to the fill-in-the-blank million people who are supposed to gain coverage through reform. And more people seeking preventive care will reduce the taxing burden of ER visits, reform proponents say.

But what I’ve heard time and again is that we’ve got to get the cost of health coverage under control before we can even think about seeing lower premiums.

That’s what I thought reform was trying to do: Help people get insurance to reduce charity care, which cuts the costs doctors have to charge to compensate. Yet people still say the cost of health care isn’t going anywhere but up.

If that’s our option, some say we should make our dollars more efficient — find the best treatment practices and reimburse for those, rather than relying on a system that encourages doctors to go for the highest cost of drugs so they can turn the most profit.

Spoiler alert: There’s an article in this week’s print edition about a pilot program that’s trying to do just that.

Here’s a little appetizer about the program: United Healthcare will pay oncologists upfront based on the treatment regimen they pick.

The five medical groups in the program, including one in Kansas City, selected proven treatment regimens for 19 symptoms associated with various stages lung, breast and colon cancers. The groups will use the regimen on each patient under United Healthcare insurance who demonstrates these symptoms then compare the data in a year to determine which regimens are most effective, something Dr. Lee Newcomer, the oncologist spearheading the pilot, said had never been done.

“Many regimens for the categories have good outcomes but haven’t been compared against each other,” he said. “This gives us a chance to do that.”

The upfront cost largely is based on the profits — the difference between the wholesale and retail cost of a drug — doctors would expect from the regimen today. That means doctors could pick whichever drugs they think are best — be it generic or hot off the lab counters — without worrying about a dock in profit.

Although Newcomer said it was unlikely that doctors would be underpaid, he admitted that the upfront cost could result in overcompensation.

“Maybe we’re overpaying them a little bit, but that’s what they make today, and quite frankly, I think it’s pretty hard to change that part of the world,” he said. “What we want to do instead is have the doctor think as carefully as possible about all the things they order.”

He said he thinks the program will increase quality, which often decreases costs.

Even if it doesn’t make the costs go down, at least our dollars would be used better. But hey, I’m just one woman in a second-floor cubicle. What do you all think?

Original Article: Kansas City Business Journal

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