Tuesday, July 29, 2014

Corporate America and Health Reform

The best we get from government in the welfare states is competent mediocrity. What is impressive is the administrative incompetence. Every country reports the same confusion, the same lack of performance, the same proliferation of agencies, of programs, of forms, and the same triumph of accounts rules over results.

Peter F. Drucker, (1909-2006), father of modern management, social philsopher, and conservative economist

With ObamaCare, corporate America is up against it.

They are being asked to cover all workers if they have over 50 employees or pay a stiff fine.

They are being asked to offer often unaffordable same-size-fits-all plans covering 10 essential benefits to all workers whether their employees need these benefits or not.

They are being asked to carry the load for over 150 million workers, while being taxed at the highest corporate tax in the world 39%, while the average corporate tax for the rest of the developed world is 25%.

Corporate Options

What are the corporate options?

• They can offer wellness programs and bonuses for workers who participate or who have measurable health improvements. Most major companies are doing this, but they are running up against employee resistance. People do not like being told how much they should exercise, eat, drink, smoke or weigh, or how large their waistlines should be. Those are private matters. Americans are increasingly resisting private surveillance and intrusions into their private lives and calls for behavioral changes.

• They can hire in-house doctors, pay companies who offer these services on an ad hoc basis, or set up worksite clinics. These are fine ideas, best suited for large companies with enough employees and enough scale to make these options work. Through these options, they can hire nurses and doctors to teach preventive care, provide care at the workplace, pick effective low-cost specialists.

• They can offer and encourage Health Aavings Accounts (HSAs) plans as the only or the preferred option to traditional PPOs and HMOs. This opyin shifts choice and costs to workers, who now have the incentive and responsibility of choosing their own doctors, negotiating on the basis of price and quality, taking better care of their health, and putting aside money in savings accounts for a rainy day and retirement. It is a powerful option and is catching on fast among employers and employees alike because of cost savings for business and lower premiums for workers.

• They can set up private exchanges to manage the costs for retirees and dependents. This is now being actively pursued by large corporations with an aging work force.

• They can directly contract and directly pay for certain health care services with retention payments for concierge practitioners and for commonly performed ambulatory surguries independent of third party involvement. This movement is in its infancy. But 3rd party administrative takes as much of 40% of the health care dollar. By bypassing 3rd party bureaucracies , be they governmental or private, companies and private individuals saves enormous amounts of money, but there are concerns about assuring quality of services being offered, the health outcomes of patient receiving these services, jurisdictional conflicts with health plans and hospitals, and short circuiting of government social policies.

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