Optimizing Health And Productivity
by: Pat Hernandez, August 19, 2011 9:08:00 pm
Insurance plans are now required to spend 85-cents of every premium dollar on medical care and health care quality improvements.
That was the focus of a forum here in Houston sponsored by Cigna, a global health service company that covers 45 million people all over the world and about a million people in Texas.
Mike Koehler is president and GM of Cigna in South Texas. He says the only way for employers to reduce cost is to improve health: from the insurer, to clients or companies and their workers.
"The employer has to have programs that encourage it, the employees have to want to change. I mean, you got out there who don't want to, and that's understandable. That's there choice. But create an environment of collaboration and working together to create those motivations to want to change. And those who want to change, we're right there with them, collaborating with the employer with us and with them to improve health."
One of the company's new clients is a big one: the City of Houston.
Omar Reid is director of human resources for the city. He told the forum gathering that declining revenue and other fiscal challenges forced the city to find a better plan than what had insured some 67,000 workers the past 16 years.
"In FY '11, our plan cost was about 300 billion dollars, give or take 11 million dollars. We had traditionally seen abut ten percent cost increase. So when you talk about a ten percent cost increase to an organization that spends about 300 million dollars on a fiscal year, you're talking about 30-million dollars. So we could not afford to continue to have 30-million dollar increases year over year."
He said it was a risk, but one that will benefit the city.
"It was a tremendous change to the city. But when I go back to talking about an ability to control cost, we felt we had a better opportunity to control the cost by moving to a self insured model, than we did in the fully insured model."
Cigna's Mike Koehler says Houston is like many other cities in the country facing the prospect of having to do more with less, without compromising coverage. He adds the Healthcare Reform Act brought to the forefront the reality of the bottom line.
"I don't want to get into the politics of what's right and what's wrong, what I agree and what I disagree with, but it has raised the attention. And I think it has created an environment for change that some of the people that are sitting on their coach, maybe more interested now and engaging in this process and improving health."
Koehler adds it comes down to the willingness to change, and the only sustainable way to reduce cost is to improve health.