I have been a part-time blogger for years, but took down my various blogs a couple years ago. I feel I rarely have enough time to keep up with writing, as I'm enrolled in grad school now, but I recently decided I would be able to parlay some of my work experiences into diary entries. After sage advice from nyceve, I thought I'd give writing another try. This particular entry was cross-posted at the recently restarted Blagh.
This is my first diary here at DailyKos.
According to my business card, I am a Senior HR Manager. I work at a facility in Virginia with a couple hundred fulltime employees. I have been in this (or closely related fields) for over 15 years now, and learned early-on HR has a unique view of business. In addition, those of us dealing directly with employees feel the brunt of horrific governmental policies and the weight of heavy-handed business tactics... especially when it comes to Heathcare premiums.
The state of our nation's healthcare system is in crisis. Its only a matter of time before businesses collapse under the weight of healthcare costs.
Join me after the fold, won't you?
Over the last couple weeks we've been having health insurance renewal meetings. Because we're a manufacturing facility, we run all day, every day. That means rotating shifts, which also means early to work and late to home. I don't mind much, really. It's kinda expected that I'll be delivering bad news, and I look like a rock-star if I'm able to somehow minimize the financial pain to my employees.
Last year I was able to market a negligible premium decrease. I had hoped the fine folks I work with would carry me above their collective shoulders, and hoist me high while chanting my name. Yeah. That didn't happen. Although they were pleased, they knew all the same things I knew (because I told them, of course). We got the decrease because I killed an entire plan option, forcing more people to go "in-network." The choices I made weren't even a solution of any kind, just a temporary fix.
I'm dead-on honest with the employees, and I told them exactly what was coming. I've had the same message concerning health insurance for years; "just you wait, it's going to get A LOT worse." While I'm not Nostradamus, I did get this one little prediction right. It has gotten worse, but it's going to be brutal real soon. Because... According to NCHC, costs for healthcare will be about $2 Trillion this year, and $2.9 Trillion by 2009. That's only a $900 Billion increase. Hmmm. In case no one noticed, that's only 18 months from right now. NCHC is also predicting (along with many others) that the 2015 costs will easily top $4 Trillion, or 20% of GDP. In fact, those numbers speak to an 87% increase in healthcare costs since 2000... twice the rate of inflation. White paper is here.
That's a shitload of co-pays.
Every year the wonderful people I work with ask me "why?" Every year I tell them the straight-dope-truth, instead of quoting the preprinted horseshit insurance companies give out. To put it in simple terms, I think there are minimal reasons why the premiums are going up. Some are absolute crap, and some are the truth. But (insert: disclaimer) let me state, for the record, that I am no certified expert. I'm merely the man delivering painful news, and watching the Financials get skewered all-the-while.
The way I see it, the average age of the workforce is driving utilization higher. Notice I didn't say "premiums?" I said, "utilization." As you get older, your now more frequent injuries take longer to heal. Older workers have more chronic diseases, too. More maintenance medication, means more trips to the local druggist. You can't forget the $2,000 MRI you need to make sure you don't have any "other" things going on. There's also the screening tests like the PSA, mammogram, colonoscopy, or MRA. Each of those tests are expensive, too. Don't ask why a blood test would be so costly, because you won't be told. Just accept that once you reach a certain age, you need to have it done. More trips to the doctor, radiology center, and local Wal-Aid requires more money to be culled from the savings account, and more gas pumped into the SUV to get you around. But remember, those medical issues only drive "utilization," and not "premiums."
The fact is that insurance companies are NOT losing money. On the contrary, they're having record profits (much like their cousins in energy and oil). Wellpoint, for example, made a $3 Billion profit in 2006, a 26% increase from 2005. The fine folks at Wellpoint are one of the bigger players in the health insurance market, too. They own Anthem Blue Cross, covering a whole bunch of states. Our reps at Anthem complain (realistic, too) about how they are "forced" to raise premiums to employers. They simply can't afford to insure so many sick people. But let me remind you that premiums went up by 7.7% (average) last year, but Wellpoint profits went up 26%. More premiums passed on to the employer, with less coverage, means wider profit margins for the company. And the people stuck in the middle of this shit-slinging contest are the employers and employees.
And, although I could spend an incredible amount of time on the potential increase in premiums due to the Wellpoint CFO nailing 15 women at the same time (including two sisters), I won't. It's just too easy to pounce on that one. Plus, with the massive lawsuits pending, Colby is sure to be exposed for being the vile pig he really is. Sadly, you just know the legal fees associated with Colby's actions will quietly be passed on to the consumer.
But, there are some legitimate healthcare issues, too. With the number of uninsured Americans on the rise, hospitals become the most frequently utilized primary-care source for the average citizen. Facility-related charges are wildly expensive, too, and they do not offer the type of preventative care many Americans need. Emergency Rooms and Urgent Care facilities merely provide stop-gap coverage for those citizens who have no other place to turn for healthcare. Of those 47-million uninsured Americans, some have employers that offer health insurance coverage, but the employee contribution was simply too expensive. This probably contributes to the infant mortality rate being 7:1000 here in the States, and 2.7:1000 in the top three developed countries. Of course America is the only modern country without a nationalized healthcare system.
I have not seen SiCKO yet, but I'm sure Moore will touch on the marketing done by health insurers. It's the same shrilling you hear from the pharmacy groups and other tied to the industry. It amazes me that the same speech you hear from big oil you'll hear a month later when insurance renewals are presented. The "we are putting the money we make into research" hype is total horse doodoo. They know it, and so should everyone else, too.
The sad part about this is the simple notion we pay more for less. As an example, our premiums went up at a pace consistent with the national average (11%), but our coverages decreased. Prescription coverages will cost some employees as much as $200 per script per month. If that isn't horrific enough, our insurer is seemingly holding employees hostage and forcing them to make the nauseating choice between necessary prescriptions or second-tier generic alternative therapy. (I'm not even going to mention the choices made between food or prescription medication). And while some employees would consider retiring, they simply have to stay in the workforce longer for more expensive and less-inclusive medical coverage. This vicious circle is complete when the older worker must go to his physician more frequently, simply to stave off the effects of age, just to stay at work. NCHC now estimates retirees will need an extra $200K in savings to provide the most basic of medical coverage. A more accurate figure would be in the neighborhood of $300K. With the average American's savings already at an all-time low, employees are living on borrowed time and borrowed monies, trying to stay employed and healthy long enough to save some extra cash.
For the Human Resources crowd, this is an awful time. We're in a tenuous position. I don't know anyone in the HR game who wants to force people into retirement. Legally, you're stepping into quicksand if you even broach the subject. The litigious nature of our society dictates we stand by our employees no matter what, and I'm happy to do so. But the HR folks are also faced with declining profits at the same time, and health insurance costs are the single greatest negative impact to variable costs for businesses. We have to find a way (and soon) to contribute to the healthy viability our our companies, as well as the healthy viability of our human capital.