MANAGED CARE March 2004. ©MediMedia USA

NEWS AND COMMENTARY

Smoking-Cessation Efforts Set Cost-Effectiveness Bar

The recent 40th anniversary of the surgeon general's report on smoking brought some staggering statistics to the public's attention. The New England Journal of Medicine reports that "In 2001, the prevalence of smoking in the United States stood at 25.5

percent among men and 21.5 percent among women, down from the peaks of 57 percent among men in 1955 and 34 percent among women in 1965. Rates of smoking have plateaued, however, since 1990.... Smoking rates are declining among all age groups, except among persons 18 to 24 years of age, among whom the prevalence rose from 23 percent in 1991 to 27 percent in 2000."

Figuring out how much money the health system may have saved as a result of the campaign against smoking is a "very complicated story," says Ken Warner, PhD, the director of the tobacco research network at the University of Michigan.

"You may have heard the argument made by the tobacco industry's experts in the trials, which is true, that if people don't smoke, they live longer. If they live longer, they're prone to get old age diseases," says Warner. "While that is true, it is also true that at a given age, survivors of smoking will tend to cost more than people who never smoked. So even if you're 80 years old, when you're a smoker, you're going to cost more."

After years of being in the thick of this debate, Warner, an economist, cautiously opines that smoking does indeed save the health care system money. However, he challenges the question. "Nobody ever asks how much money do we save by treating breast cancer," says Warner. "In fact, if we went on the basis of asking how much money do we save by doing x, y, z — this may sound facetious, but it's true — far and away the least expensive health care system would be to outlaw health care." Warner insists that the relevant question is: "What is cost-effective?" Smoking cessation is the gold standard in cost-effectiveness. "There's very little that the health care system can do to improve the health of their patients at a reasonable cost that compares with smoking cessation."

Hospitals Retain Bargaining Edge In Contract Talks

Contract negotiations between health plans and providers, primarily hospitals, were mild in 2002 and 2003, compared to how they played out in 2000 and 2001, according to a study by the Center for Studying Health System Change.

Every two years, HSC researchers visit 12 "nationally representative health care markets" to track any changes.What they found this time was plans that were resigned to the idea that providers have the upper hand.

"The balance of power has shifted to providers — especially hospitals — and health plans in many cases are going along with demands for higher payment rates and better contract terms," says Paul Ginsburg, PhD, HSC's president. "Health plans are passing along higher costs through higher premiums, and employers and consumers appear to be the ultimate losers."

Increased consolidation among hospitals and physician groups is cited as one of the reasons providers have more clout.

Strong consumer demand for broad provider networks also plays a part — health plans find it harder to use the threat of exclusion from a network as a negotiating ploy. Further, certain providers enjoy what the study calls "must-have" status in health plan networks.

"Indeed," says the study, "while contract negotiations remain difficult, most plans now cautiously approach potential showdowns with a better understanding of the formidable odds they face in trying to win them." However, as the study suggests, the balance of power could swing back toward health plans.

The study cites an instance where employers — including Microsoft, Boeing, Starbucks, and Nordstrom — became involved in a dispute between Aetna and a Seattle-based hospital system, Swedish Health Services. "The dispute underscored the potential for employers to play an active role in negotiations, particularly by using the [news] media," the study states.

More Retirees Face Life Without Health Benefits

Employer-sponsored health benefits for retirees could go the way of house calls and dial phones thanks to increasing health care costs. A study by the Kaiser Family Foundation and Hewitt Associates says that 10 percent of 408 companies with 1,000 employees or more plan to drop coverage for future retirees. Twenty percent say they plan to do so in the next three years. The companies were polled between June and September 2003.

Employer-sponsored health insurance for retirees pays for benefits not covered by Medicare, such as prescription drugs.

"Prescription drug benefits offered by employers to retirees tend to be much more generous than what seniors can expect to get from Medicare if they sign up for the new drug benefit when the new law goes into effect," says Tricia Neuman, ScD, a vice president at Kaiser Family Foundation.

IOM: Workforce Diversity Lacking In Health Care

An Institute of Medicine report sheds some light on race and medicine that all sectors of the health care system must pay attention to.

The report — "In the Nation's Compelling Interest: Ensuring Diversity in the Health Care Workforce" — points out that the health care workforce does not mirror the rest of society's move toward greater ethnic and racial diversity. For instance, Latinos are 12 percent of U.S. residents but 3.5 percent of doctors, 3.4 percent of psychologists, and 2 percent of nurses. And while an eighth of U.S. residents are black, only a twentieth of U.S. physicians and dentists are black.

Headlines On Deadline ...

Aetna's profits more than doubled in the fourth quarter of 2003, rising to $249.5 million, or $1.56 a share, from $98.2 million, or 63 cents a share a year earlier. The insurer attributes the results to its ability to hold the line on medical costs and cut operating costs.... U.S. health care spending increased to $1.7 trillion last year, more than $5,800 for every American, according to a study in Health Affairs. A staggering number, to be sure, yet some take heart in the fact that the rate of spending is actually slowing, to 7.8 percent in 2003, from 9.3 percent in 2002 — the first decrease in six years.... Online enrollment of workers for health care benefits has exploded to the point where now a sizeable majority of employees at large companies sign up this way, according to Hewitt Associates. Seventy-seven percent of workers at companies with an average of 5,000 employees will use the Internet to enroll this year, says the consulting company.

Health care execs say consumers lack information on quality

Consumers have yet to see much in the way of quality ratings of health plans, physicians, and hospitals, according to a new survey of 106 health care professionals who signed up to attend the World Health Care Congress on Jan. 26 and 27.

Harris Interactive warns of the limitations of a survey of a heterogeneous group of health care executives. "They are not representative of any specific group except themselves. Nevertheless, we found their replies intriguing and decided to share them with a wider audience."

Included in those intriguing replies were opinions about what percent of consumers see information that rates the quality of health care organizations and, further, what percent actually change doctors, hospitals, or health plans based on the information they receive.

"Consumers are miserably armed right now to make judgments on quality," Humphrey Taylor, chairman of Harris Interactive's Harris Poll, told attendees at the World Health Care Congress.

Few decisions based on quality ratings

SOURCE: HARRIS INTERACTIVE

blog comments powered by Disqus