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The cost of providing employees with health insurance coverage continues to increase at a double-digit rate. We’ve read a lot about cost drivers in health care – exorbitant hospital charges, rising prescription drug costs, expenses associated with developing new technologies and treatments, an aging population and litigation. Nurturing these factors is an environment in which the demand for health care seems to be increasing.

For the most part, there is little employers can do to control what is driving health care costs out of their reach. Health benefits companies can and do negotiate discounts, and while those help, the underlying costs continue to skyrocket. The increases created by these cost drivers flow through the health benefits companies and eventually trickle down to employers in the form of higher health insurance premiums.

In this soft economy, declining revenue is putting a squeeze on company expenses. It is likely that you will experience a 15 percent to 20 percent increase in your group health insurance when a renewal form lands on your desk.

Can you raise the cost of your company’s product or service as quickly as your health insurance premiums are increasing?
Probably not. However, there are steps you can take to gain some control over your health care costs.

Finding a solution

Employers can exercise some control over their costs by finding a health benefits company that provides the “best” value for their company’s premium dollars. The way in which you “shop” a health plan can impact the price. I’ll use an analogy. Your travel agent has a great deal for you – air, car, hotel and meals included. You tell your agent to book it.

Coincidently, your neighbors just booked that same trip for $1,000 less through their travel agent. One agent shopped for the best price, the other agent arranged the trip through his or her vendor of choice. Whether it’s a family vacation, buying a car or choosing a health benefits plan, how you shop can impact your cost. Make sure your insurance agent doesn’t “arrange” your health plan for you. How many providers are enough? The more participating providers a health plan has, the more you’re likely to pay in premiums. If you are considering a health plan that doesn’t include a few desired physicians, request that the carrier add them to its network.

Physicians participate in many different health plans and are usually willing to participate in one more. Don’t get caught in the trap of paying 10 percent to 15 percent more for your health insurance premiums because one or two doctors are notparticipating in the plan. It’s reasonable that an employee can find another physician out of the thousands on the plan.

The power of marketing

Living in the United States affords us exceptional opportunities and choices. Along with that privilege comes a barrage of communications designed to influence our decision-making. What we read in the papers, see on television, hear on the radio, see flashed across a billboard, get stuffed in our mailboxes or pops up on the Internet is designed to predispose us to a company or its product.

Marketing can be an effective tool, and depending on how much is spent, can be quite influential. What marketing cannot do, however, no matter how much is spent, is replace what it takes to come up with an affordable health benefits solution that works for you. Be sure to look for a health benefits company that is flexible, listens and is willing to roll up its sleeves to provide you with a package of health benefits that you can afford.

As a business owner, you’ve come to expect big increases in your employee health insurance premiums of late. Employer-sponsored health insurance premiums increased an average of 11.2 percent in 2004, and this was the fourth consecutive year of double-digit growth, according to the recent Annual Employer Health Benefits Survey released by the Kaiser Family Foundation.

That’s about five times the rate of inflation nationally, and probably significantly higher than the price increases your company has imposed on its products and services in the same time frame.

The reasons for these increases are not mysterious. The largest share of the ongoing increases track to increased utilization of advanced medical technologies – new diagnostic and preventive screenings, and other high-tech therapies and medical hardware – the majority of which are delivered at hospital on an inpatient or outpatient basis.

Prescription drugs also continue to play a major role in the rising cost of health care, owing to the higher prices of new formulations, the wider application of combination therapies and greater consumer demand for, and need of, medications in all areas of prevention and treatment. About the only area that has seen relative stability is physician costs.

Such increases, when they are part of the costs of running your business, are naturally cause for concern. It only makes sense that employers who want to continue offering their employees access to quality health care become more knowledgeable about how well their money is being spent by the health care carrier they choose.

For example, did you know that virtually all carriers in Florida spend roughly the same percentage of your premium dollars on medical claims – which works out to a medical loss ratio of 76 percent to 80 percent? They also spend about the same percentage, 10 percent to 12 percent, on administering your plan (processing claims, providing customer service functions, covering fixed costs).

And most of the carriers factor in a 2 percent profit margin. The balance of your premium dollars go to the commissions, which carriers pay to the independent health insurance brokers who act as consultants. Brokers are, of course, a critical element in matching clients with carriers. Most small business employers don’t have the time or staff to determine the best package of benefits for their group, shop the market for bids and compare product offerings carefully.

They depend on their broker to explore the different options, give them objective recommendations on the best choices and complete their applications. And brokers’ services may often continue after enrollment. It’s extremely valuable for employers to better understand where their premium dollars go. Don’t hesitate to ask questions to fully recognize why one health plan may be preferred over another.

Employers can exercise some control over their costs by finding a health benefits company that provides the best value for their company’s premium dollars. The way in which you shop a health plan can impact the price.

It’s the same as if your travel agent had a great deal for you – air, car, hotel and meals included. You tell your agent to book it. Coincidently, your neighbors just booked that same trip for $1,000 less through their travel agent.

One agent shopped for the best price, the other agent arranged the trip through his or her vendor of choice. Whether it’s a family vacation, buying a car or choosing a health benefits plan, how you shop can impact your cost.

So why are health care premiums different? Take a closer look.

As you review your goals for the new year, include engaging employees in their Florida health care decisions on your list. Educating employees on their part in medical care can lead to increased quality of life and productivity, and decreased sick leave and health care expense. Consider the impact of employee health empowerment in these terms: When an employee chooses to see a primary care provider or visits an urgent care facility instead of taking an unnecessary trip to the emergency room, it can save thousands of dollars in medical expenses. And early detection and prevention bring the priceless benefit of longer, healthier lives.

Use information resources

Health plans work hard to offer quality health care, but employees still play an important part in the process. Excellent employee resources include access to online information, on-site health fairs and case managers who help with serious medical conditions. These trained professionals can help people make educated decisions about seeking treatment. Supplying employees with a book covering basic health problems and distributing health information brochures also educates them. Inviting local doctors, nurses and health insurance representatives to put on presentations can further enhance employees’ access to health knowledge.

Choose a doctor

Employees’ first step to becoming more involved entails finding doctors who will work with them in caring for their health or letting their current doctors know they desire to actively participate in their treatment. Encourage employees to look for the following qualities in a primary care physician.

An attentive listener who wants to work with the patient
A clear communicator who explains the diagnosis in a helpful manner
Solid medical training and experience, including board certification
Accessible in terms of office hours, appointment availability, response to messages and hospital locations
Supply a thorough list of questions employees should consider when choosing a physician. Also, make sure they understand how to locate a physician within their health plan.

Evaluate the condition

Thorough self-evaluation before calling or seeing a doctor can help employees determine when to see a medical provider and make their visits most productive. Consider providing copies of a form or placing a document online that lists the questions asked at the beginning of every doctor visit.
What are your symptoms and when did they begin?
Is this the first time you have experienced this problem?
Do you have any idea why you might have this condition, including life changes or people around you having these symptoms?
Are you taking any medications?
Before and after going into the doctor, employees should try to research their condition. Asking the doctor for reference material, searching the Internet for reputable information and referring to employee health guides can help them develop a sense of what might be wrong and what treatments are available.

In learning about their conditions, patients actively participate in their health care.

Ask questions

While employees are at a visit, they should always feel comfortable asking questions. Make sure employees know to ask:
What tests, medicines and treatments are you recommending?
Why are these actions necessary?
Are there risks involved in these procedures, and are there alternatives?
What procedures do I need to follow when taking tests or medicines?
Do I need to call for results or to schedule another appointment?
Should I look for certain warning signs?
Patients have a right to know and understand what a doctor recommends. They also have the responsibility to learn about the choices available to them.

Encourage employees to ask questions and to make a record of their doctors’ answers. Patients should never feel pressured to make a quick decision. Depending on people’s medical history, values and preferences, they may choose a different alternative than the first option the doctor suggests.
Partnering in their health care enhances employees’ medical care and also plays a significant role in containing health care costs. Make employee health education one of your top goals for 2006 and contribute to a healthy, happy new year.