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S&S Benefits.....Opinion, Hearsay & News Review

S&S Benefits Consulting, Inc.  219 Darien , Dundee , IL 60118   Phone: 847-428-5353, Fax:847-428-9876

Email : jseiler@ssbenefits.net                                               http://www.ssbenefits.net/   February 2008 Issue

FMLA was amended by Congress and just signed into law to include unpaid, protected job leave for employees whose family members are called into active duty in the military.   The law also would allow employees to take up to 26 weeks of leave under the FMLA—up from the current 12-week annual maximum—to take care of a child, parent or spouse who incurred an injury during military service when that injury results in the service member being unable to perform his or her duties. As usual Congress left regulations to the DOL and there is a question as to when these provisions are effective. They could be effective the day signed into law by the President, but an effective date was not specified in the law. Typical with government, lack of detail makes it difficult for employers to comply.

Although there is a shortage of news and studies for our February issue, as the primaries draw to a close and candidates are selected, we can be sure to hear much more about their health coverage proposals.

Mergers on the hospital front seem to be the other news that will be affecting the cost of healthcare. In the Chicago area, Lake Forest Hospital proposed a merger with Condell, but was turned down. Shortly thereafter, Condell announced a merger plan teaming up that hospital in the Advocate system. This would no doubt impact Lake Forest Hospital negatively and they have begun advertising more heavily using their most famous patient (Mike Ditka) as a spokesperson.

Also in the Chicago area, Loyola has announced a merger with Gottlieb Hospital . In Denver , St. Joseph ’s Hospital has announced plans to buy Good Samaritan and Exempla Lutheran Hospital . Since a Catholic Hospital is buying non-Catholic hospitals, questions are being raised as to what services will be allowed.

Hospital mergers when combined with such mergers/buyouts as Cigna/Great West and UHC/Fiserv, mean there are less choices for consumers. Hospitals feel the need to band together due to the ever increasing buying power of major insurance carriers.

The questions of transparency in the market for health care costs continues to provide a source of irritation. Hospitals and doctors really don’t want to publish prices. They certainly do not want their competitors to know their prices with various managed care vendors such as PPOs and HMOs. Consumers may want to compare prices, but realistically, at least 9/10th of them can’t understand their hospital bills, let alone a price list for the services. That’s not to say that even if we could understand a price list, that the list would actually apply. Unless the published list is a per diem, how would a hospital or doctor set a price for an appendectomy that turned into something more? The number of variables to be accounted for is huge. Let’s say we do nail down price, then we have to compare price with quality. Even quality does not have an agreed upon standard. Will quality records or malpractice records be available? It’s also doubtful how transparent quality will get.

Let’s take it one step further. Even if all the medical providers had transparent pricing and quality, would that mean that all managed care companies would disclose their discounts? Just try to get up to date claims experience and actual discounts from a Blue Cross carrier. In Texas , they were smart enough to pass a law so that carriers would have to disclose the information necessary to quote to the policyholders. We’ll see about actual enforcement. It will never happen in Illinois or any number of states with politically appointed and weak insurance commissioners. Many carriers hide behind HIPAA when it comes to disclosing large claim information which includes diagnosis and prognosis. Make no bones about it, HIPAA does allow the disclosure of that information! Carriers that hide behind HIPAA are incorrect and technically illegal, but who is going to fight that battle in court?  It’s even illustrated by the fact that these same carriers require the information to quote, but do not disclose when they have the group as a client.

The people that could fight that battle on a day to day basis are brokers and consultants who should not do business with non-disclosing carriers on experience rated business. Frankly though, most brokers either don’t get it, or don’t care based on the overrides (yes, carriers still pay overrides in Illinois and other non-Eliot Spitzer states). Many brokers never had the education in the business that allows them to understand the underwriting requirements of the marketplace, so once they place the business, they have no leverage to move it and their clients are stuck. By doing business on this basis, without warning their clients of the consequences, they are just propping up the carriers even more and giving them more power in the market. That means less choice for the clients as more mergers take place and the carriers grow more powerful…which leads back to hospital mergers. We understand all the rest of this well enough, but we don’t understand the brokers and consultants who don’t know the business well enough to not protect their client’s interests. In the end, if this behavior is just to line their own pockets, it will backfire when the carriers cut them out of the equation.