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The AP (6/17) reported, "Employer healthcare costs are poised to rise" 9.9 percent in 2008 -- "more than double the annual inflation rate," according to a study released Tuesday by PricewaterhouseCoopers (PwC). The study also predicts costs will rise again in 2009, by an additional 9.6 percent. For the study, PwC "surveyed more than 500 employers and health plans, with total coverage of more than 11 million people." One of the two main factors "driving the increase," the study states, is cost-shifting -- those with insurance paying more to cover the uninsured.

        The study claimed expanded cost-shifting is due to "the federal government...under-funding public programs while the number of uninsured" continues to grow, according to Bloomberg (6/17, Pettypiece). The second factor said to be responsible for high healthcare costs is that hospitals are "charging greater fees to pay for facility upgrades."

        "'A lot of that construction has to be done to upgrade facilities, so the construction has to happen,' Vernice Davis Anthony, president and CEO of the Greater Detroit Area Health Council, said Tuesday," the Detroit Free Press (6/18, Keshavan) reports.

        In addition to the forecasted rise in costs, "[a] looming recession could also create more pain for payers," Modern Healthcare (6/18, Vesely) adds. But, the report points out that there are "[s]everal efforts under way [that] could help keep costs down," like "continued expansion of generic-drug use and disease-management and wellness programs." Healthcare reform could also help by reducing cost-shifting. "With medical-cost growth already exceeding the overall inflation rate, and inflation heating up in so many other sectors, healthcare providers, insurers, and employers will have to monitor medical costs carefully if we are to avoid a resurgence of the double-digit annual increases seen in the past," said David Chin, leader of the PwC Health Research Institute.

        CFO Magazine (6/17, Taub) noted that health insurers use medical cost trends "to estimate what it will cost to provide coverage in the coming year and to set premiums." Working with employers, insurers then "design the benefit packages that will be offered to workers." PwC pointed out that "medical cost trends are not a perfect predictor of increases in premiums because employers make changes to plan benefits and add cost-sharing features rather than increase premiums." But, "medical costs and premiums do tend to move in the same direction."

In continuing coverage from Tuesday's edition of NAHU Newswire, National Underwriter Magazine (6/17, Postal) reported, "Janet Trautwein, executive vice president of the National Association of Health Underwriters," urged Congress to "weigh the cost of every proposal as it seeks to reform the health insurance market," at a healthcare conference Monday, "organized by members of the Senate Finance Committee." She said that "[l]awmakers should consider 'not just whether or not the market reform idea includes cost containment elements, but also whether or not the market reform idea itself would cause health insurance premiums to increase.'" She also stated that "[a]n idea that seems 'fair' may not be so fair if it pushes rates up and forces some who now have health coverage to drop their coverage." Ben Bernanke, chairman of the Federal Reserve System Board of Governors, was the "conference keynote speaker." He discussed the government's role in rising healthcare costs.

Congressional Quarterly (6/18) reports, "As his fellow Senate Finance Committee members voiced increasing alarm about the fiscal impact of rising health costs at a hearing Tuesday, the panel's chairman, Max Baucus (D-Mont.) expressed strong interest in creating a federal health board that could make controversial health policy decisions with less interference from lobbyists." Sen. Baucus called for "some organized way to deal with most, if not all, the component parts of healthcare" in a way that "reduces the direct interest group influence on Congress on matters that we in some respects are not competent to address, like minute Medicare reimbursement questions." Congressional Budget Office (CBO) Director Peter Orszag advised Sen. Baucus that "he might want CBO and the Government Accountability Office to undertake studies exploring the possibility of creating such a board." The idea of a board is compared with the Federal Reserve Board, "a professional and insulated body that can make decisions."

New York's Business Review (6/18) reports that Sen. Charles Schumer (D-N.Y.) "promoted the Pharmacy Access Improvement Act" Monday, hoping to encourage "the federal government to help small, independently owned pharmacies by paying [Medicare] bills on time." The proposed legislation seeks to "require the government to pay claims submitted electronically within 14 days. Paper claims would need to be paid within a month." Currently, pharmacies wait "up to eight weeks to receive payments due from the federal government as part of the Medicare Part D plan," Schumer said.

        Under the proposal "[l]ate payments would incur interest, payable to the pharmacy," the Buffalo News (6/17, Christmann) added. Schumer estimates that "less than one percent of Medicare Part D claims are paid on time."

Congressional Quarterly (6/18) reports, "The federal government may need to relinquish some of its control if it wants states to tackle healthcare coverage, said a group of experts during a bipartisan health summit held by the Senate Finance Committee." According to Gary Claxton of the Health Care Marketplace Project at the Kaiser Family Foundation, "If it is a federal objective to encourage state experimentation and learn from state innovation," the government "may need to provide states with more control over how healthcare is financed and delivered." Currently, "several federal programs and policies make it difficult for states to be experimental laboratories for health policy," meaning that often a "state is unable to influence the scope or administration of health benefits for a large portion of employees and dependents residing in the state." Improved tax laws and investment in state plans were also cited at the summit.

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Healthcare IT News (6/17, Manos) reported that "the Centers for Medicare & Medicaid Services (CMS) has thrown another wrench into the already difficult transition to using National Provider Identifiers" (NPI). "According to a June 11 CMS announcement, doctors will have to reconcile their NPI data with their" Internal Revenue Service (IRS) "legal name data in order to get paid." Billing experts say this policy "is a disaster waiting to happen. Every aspect of the data must match, including the exact spelling of names, the use of initials and even blank spaces in the data." Even "[t]he slightest discrepancy could send Medicare claims back to the drawing board." Consequently, CMS is instructing some physicians "to start over with a new NPI enrollment," which "could take months."

The Financial Times (6/18, Felsted) reports that "companies that have entered the Islamic insurance sector face several challenges in order to advance their businesses to the next stage of development," according to Arthur White, a partner at the management consulting firm Oliver Wyman. "The reason international insurers have flocked to this market is the potential for expansion." In fact, Moody's reports that for global takaful -- insurance complying with Islamic law -- "premiums could rise from $2 billion in 2005 to $7.4 billion in 2015." There are challenges, however, to entering the takaful market, which include "how policies are distributed to customers and how to deal with teething problems associated with a rapidly expanding information technology infrastructure." Insurers would also have to "decide which kind of model to use to share profits" and "which type of Islamic law...to comply with." There would also be the issue of "recruiting sufficient skilled staff." Mohammad Khan, a director in PricewaterhouseCoopers's "actuarial and insurance management solutions practice," says, "Selling takaful insurance...would be a substantial market," but insurers need to "sell a price-competitive ethical product to everyone" that is marketed to the target population.

The Detroit Free Press (6/17, Anstett) reported, "Michigan's insurance commissioner has 30 days from June 13 to decide whether to grant an additional rate hike to Blue Cross Blue Shield of Michigan for seven of its individual health policy plans purchased by an increasing number of people without workplace coverage." The agreement "could allow Blue Cross to raise the rates of the seven plans by 25 percent to 43 percent. Blue Cross had won an interim rate hike of 10 percent to 19 percent a year, effective in May 2007." The interim hike was challenged in court, but Blue Cross spokeswoman Helen Stojic said Monday that the company's "surplus fund is 30 percent lower than the amount allowed by state law."

National Underwriter Magazine (6/18) reports, "U.S. long term care (LTC) insurers are about 10 times more likely to turn down applicants over age 80 than they are to turn down applicants under age 50," according to researchers at the American Association for Long-Term Care Insurance. For the study, they looked "at 250,000 LTC insurance applications submitted in 2007 to 10 top LTC" insurers. "About 83 percent of the 400,000 U.S. residents who obtained LTC coverage in 2007 were under age 65." The study also found that "[t]he proportion of accepted applicants who qualified for" preferred-health discounts "increased to 52 percent for the 50-59 age group, from 44 percent in 2005."

Texas's Wilson County News (6/17) reported that Wells Fargo & Co. "announced that Health Savings Accounts (HSA) deposits increased 41 percent year-to-date, totaling more than a quarter-billion dollars for the first time." The company's Benefit Services department reported that they have "more than 150,000" HSA account holders, with a total of "$264 million in HSA deposits."

Modern Healthcare (6/17, Lubell) reported that "[p]hysicians at the American Medical Association's (AMA) annual meeting in Chicago voted to support [a]...proposal to cover the uninsured, and to study the impact of free clinics on improving access to healthcare for the uninsured." According to AMA board member Cyril Hetsko, M.D., "While we work to cover the uninsured, we need to find ways to care for those in need now."

Indiana's Tribune Star (6/18) reports, "Most small businesses have a website of some kind and many are relying more and more on the Internet to help their marketing and sales efforts and contribute to profits," according to SCORE, Counselors to America's Small Business. But, "[t]here are dozens of ways a website can go wrong." In addition to an "eye-pleasing site," a small business website can benefit by being "easy to navigate," clear of "pop-up ads," and simple. SCORE suggests that a small business website "address...customers' goals and needs, not just the needs of [the] business."

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The AP (6/18, Freking) reports, "Patients hoping to get into nursing homes increasingly are signing away their rights to sue over poor care." According to a Senate panel that is "investigating the growing use of binding arbitration by nursing homes,...more than 100 lawsuits have been filed in the past five years challenging such agreements." Typically, "[a]rbitrators take into account federal, state, and county laws when resolving legal disputes." And, although "[l]awmakers don't want to preclude binding arbitration as an option, said Sen. Herb Kohl (D-Wis.), chairman of the Senate Aging Committee," this "decision has to be made by both parties after a dispute occurs." Sen. Kohl added that "[m]any incoming residents lack the capacity to make even simple decisions, much less judge the legal significance of an arbitration agreement," and "[m]ost are unaware that they are signing away their right to go to court."

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NAHU Newswire is a digest of the most important news selected from thousands of sources by the editors of U.S. News Custom Briefings. The National Association of Health Underwriters does not receive any revenue from the advertising herein. The presence of such advertising does not endorse, or imply endorsement of, any products or services by the National Association of Health Underwriters.

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