Health Costs Affect Everyone

By Scott Culver
Communications Specialist
WEA Trust

January 2002

The rising cost of health care is having an impact on everyone. Last month’s OnWEAC in Print featured an article about Don Schmidt, a part-time bus driver whose paycheck was $0 after deductions – primarily for health insurance.

In the same issue, an article revealed 43 districts where teachers would experience a reduction or freeze in longevity pay should districts impose a Qualified Economic Offer (QEO). The reason? Rising health premiums might consume the entire 3.8% total increase allowed under the QEO.

Over the last few years, health care costs have been rapidly increasing. This trend is not limited to health plans in Wisconsin public schools. Employers and employees across the United States are struggling to cope with health care costs, which spiked as much as 20% last year. What’s behind these increased costs, and can anything be done about it?

The driving forces
Prescription drug costs represent the fastest-growing component of health care costs, increasing 15% to 20% per year across the country. Three factors are driving up drug costs: higher prices for individual drugs; an increase in the number of prescriptions written; and a shift to newer, more expensive versions of older, or generic, products.

For the WEA Trust, drug costs now account for about one-fifth of the cost of an average Trust health plan covering active employees, and more than 50% of the cost for Medicare participants.

Medicare, the federal health insurance program for senior citizens and disabled people, also contributes to rising health care costs. That’s because the outdated reimbursement formula Medicare uses allows the federal government to reimburse medical providers in Wisconsin for just 83% of actual delivery costs, according to the Wisconsin State Journal. That leaves private insurance to pick up annual shortfalls of more than $450 million.

As a result, health care providers compensate for lost reimbursement from Medicare by charging private insurers, including the Trust, higher prices.

Industry experts point to an aging population, a growing number of uninsured, and greater usage of hospitals as other reasons for rising health care costs.

You can play a role
To have a chance at controlling health care costs, our members must become more than spectators. Actions you can take as a member of your group health plan can affect costs:

• When you need a prescription, ask your physician if a generic equivalent is available. Not only will you usually pay a smaller co-payment amount, but your prescription will cost the health plan less, which is good for everyone.
  
• Take advantage of the resources available to you through your health plan. Dial-a-nurse programs, such as the Trust’s NurseLine, allow you round-the-clock access to registered nurses who can provide you information about medical concerns. For example, if you have a sick child, the nurse can help determine whether you need to see a doctor or can treat the symptoms at home.
  
• Become proactive in your health care. For example, according to the U.S. Preventive Services Task Force, men should begin having their cholesterol checked periodically starting at age 35; periodic testing for women should begin at age 45. Lowering high cholesterol can reduce the risk of cardiovascular disease, including heart attacks.
  

What the Trust does
Many employers increase co-payments and deductibles for employees or even switch them to a defined-contribution plan, which puts the onus on employees to manage their own health care benefits.

The Trust recognizes the need to hold down health care costs, but takes a different approach. First, we squeeze all the savings from our operations, secure discounts with medical providers, and leverage our size to purchase certain supplies in bulk to reduce the price.

However, we also look for ways to help our members improve their health. It’s an approach we adopted more than five years ago, and it requires a long-term commitment to our members. The Trust’s goal is to make public school employees the healthiest employees in the state by the end of the decade.

We can embrace this philosophy because our members maintain a long-term relationship with us. Of the 345 health groups the Trust insures today, 70% have been with us at least 10 years and 50% for 15 years or more.

In looking at how the health care dollar is spent, the Trust found that a small percentage of people will end up using most of the health care dollars. The Trust’s goal is to have programs and services in place to change that model. We want to help members with chronic diseases such as diabetes, asthma, and heart disease better manage their conditions.

There are nationally accepted guidelines for treating these conditions but for one reason or another individuals do not always receive care that meets these standards. The programs strive to help individuals better deal with their illnesses, and over the long term, help prevent complications that can lead to high-cost medical treatment.

Health care costs will continue to rob us of precious salary dollars unless we each take responsibility for our own health. If, as a group, we eat a little more nutritionally, exercise more frequently, use the Trust’s NurseLine, and its StayWell and chronic disease programs, we can put a big dent in future health care cost increases. The Trust can provide the tools, but each of us must take the first step.

Posted Janaury 14, 2002