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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 www.ssbenefits.net September, 2003 Issue

Aetna of Illinois has achieved an "Excellent" rating from the NCQA for its HMO and point of service plans. Want to know how people rank hospital and physician quality? A WSJ pool showed that 55% of people thought a hospital had quality if it had a good reputation and 65% chose their physician by word of mouth. Only 10% mentioned hospital quality evaluations and only 8% ranked doctors based on rated published evaluations of physicians.

PharmacyChecker.com evaluates pricing at U.S. and Canadian pharmacies and reports that the most savings are achieved by buying generic drugs in the States and brand name drugs overseas (or at least in Canada).

Something to consider when trying to decide if life or disability insurance is important: The odds of death at age 25 are 24.1%, disability- 34.8%, while at the age of 45 the odds of death at that age is 20.4%, disability- 26.3%.

A Marsh survey of employers with 10 to 999 employees found that businesses with fewer than 200 workers saw 20% jumps in health costs last year while mid-size employers saw health costs rise 13.5% to $5,840 per employee with HMO costs increasing by 24% last year. The prevalence of health coverage among employers with 10-49 employees dropped from 66% to 62% last year.

Researchers at USC say that few benefit pros in HR have woven themselves into the business fabric. The study says that HR pros need to boost their business acumen and consider benefit and HR functions in financial terms in order to earn a seat in corporate strategy and decision making.

The Commonwealth Fund analyzed 40 online web sites in 2002 for health plan directories and found that there are significant gaps in the completeness and accuracy of the information available The Washington Post did a study and found about the same. Why they found that to be a surprise is somewhat of a wonder in and of itself.

The treasurer of the IPA Association of America says that price fixing among IPAs is "rampant." Recently the Federal Trade Commission found that an IPA in St. Louis was guilty of price fixing and the FTC even disbanded an IPA in New Mexico for the same. The IPAs were coercing health plans into paying higher rates for their services.

Aetna has announced it will pay $470 M as part of its settlement in a class action suit files by physicians against Aetna and a number of HMOs. The federal judge in Miami has yet to approve the agreement and he has disapproved of a previously announced settlement involving Cigna in the same case.

**The board of West Suburban Hospital in Oak Park, IL has approved a takeover proposal from Resurrection Health Care. **The Kansas Supreme Court struck down a bid by Anthem to acquire BC/BS of Kansas. **United Healthcare will exclude all prescription versions of Prilosec (the heartburn medicine) effective October 1, since the FDA recently approved the drug for over the counter sales. **Advocate Health Care has announced it will terminate its hospital contracts with United Healthcare, effective December 31. More posturing just like they did with UHC when the last contract came up a couple of years ago and also did with BC/BS of IL last year before a last minute resolution.

Trend survey results from Buck for the 3rd Q of 2003 showed PPO at 15.2%, POS at 15%, and HMO at 14% (all up by 0.2% since the 4thQ of 2002. Pharmacy was down by 0.1% to 14.9% with PBMs. According to the Hay Group, health care expenses now account for 8.8% of payroll expenses and premium costs rose an average of 15% this year even after accounting for adjustments for benefit reductions.

According to the Centers for Disease Control and Prevention, checkups for people with no medical complaint remain the single most common reason for visiting a doctor, accounting for 64M of 823.5M office visits overall in 2000. The study found no evidence that routine pelvic, rectal and testicular exams made any difference in overall survival rates for those with no symptoms of illness.

Despite the positive rhetoric, a majority of 10,000 brokers surveyed by NAHU and ChapterHouse said that despite the constant press about CDHP, the majority of employers are sticking with their current PPO programs and just raising copays and deductibles to compensate for increased costs.

A survey of 865 adults from across the U.S. by Stony Brook University resulted in only 24% of those surveyed saying they would take a higher paying job without health benefits as opposed to lower pay with health benefits.

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