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

Why be like everyone else?

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

Email: jseiler@ssbenefits.net www.ssbenefits.net

Volume 5 Issue 3 Street Talk July, 2003 Issue

Rx spending slowed in the first quarter to 11.3% from 16.9% a year ago according to Express Scripts. In the year 2002 spending increased 18.5% to an average of $585.60 per member per year.

Overall spending in 2002 on health care increased 9.6% compared to 10% the year before. To compare, U.S. consumer prices rose by 2.4% overall in 2002. Spending on inpatient care grew by 6.8%, outpatient care rose by 14.6%. Most of that spending was on cost increases rather than patient volume. Hospital cost increases accounted for 51% of the overall 2002 increase according to Milliman USA.

In Chicago, according to the Hospital Accountability Project run by the Service Employees International Union (SEIU), uninsured patients using the Advocate Healthcare System are expected to pay as much as two times more for some of the same services as those who have private insurance. The study says that Advocate patients were expected to pay $13,854 per hospital visit for inpatient services. This compared to the next closest system where patients paid $9,673 at Resurrection Health Care. It should be pointed out that Advocate says they gave $184 Million in charity care last year.

If costs arenít rising fast enough, the SEIU is seeking to unionize Advocate and AFSCME is attempting to organize Resurrection Health Care. Does the timing of the above story appear to be coincidental?

Weíre noticing the increase in outrageous broker/consultant tales as CDHP gets press in the country. There is an air of desperation in the lying. Carriers report the knowledgeable brokers dismiss a lot of the hype, while they are telling tales to clients about what positive things CDHP will do for them. This is exactly what gives this business a bad name, when brokers promise that their companies can do things that they canít, at the prices being paid. The bill always comes later.

Aetna is getting rid of social security numbers in all materials mailed to members. This will include ID cards where new numbers will be issued to members to replace their social security numbers. While we realize identity theft and HIPAA are driving this, if this continues for all corporations, soon we will all have to carry a PDA just to know what number we are for each company we do business with. Thanks to the federal government.

Congratulations to Aetna. They are celebrating their 150th anniversary. Over the last ten years it seems they have survived in spite of themselves, but their profitability is said to be growing and we do need to have more competitors in the healthcare market.

According to the Centers for Medicare and Medicaid Services, health care spending averaged $5,035 per person in 2001.

Maine has approved the nationís first universal health care plan. All state residents are to be covered in the next six years from funding by federal and state revenue streams as well as taxes on insurance companies. We donít know the details, but wonder if the taxes will continue to flow from insurance companies once they are no longer selling insurance in Maine?

Calpers is facing HMO increases of 18.4% which accounts for 70% of its health plan costs. With 1.2 million members, the plan is considered a bellwether for health insurance cost trends. Another study by Hewitt of initial bids to 140 big employers found increases averaging 17.7% for 2004.

Total compensation increased 3.9% in the first quarter. The driving force was said to be a 6.1% increase in benefits costs in total.

CanadaDrugs.com has been accredited by the North American Ė Pharmotherapeutic Consultants Association. The association was formed to increase quality and safety of cross-border Rx sales.

Weiss Rating reports that profits for Life and Health insurers declined by 53% in 2002 with most of the losses caused by the downturn in the equity markets.

Met Life is growing. This time they are purchasing John Hancockís group life business, subject to regulatory approval later this year. Hancock said that life is a non-core business for them even though they ranked in the top 15 in group life premium in-force.

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