Health Care Reform and Employer Sponsored Health Insurance

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Wednesday, September 9^th, President Barack Obama stood before the American people and a joint session of Congress and said:

If you are among the hundreds of millions of Americans who already have health insurance through your job, … nothing in this plan will require you or your employer to change the coverage or the doctor you have.  (Applause.)  Let me repeat this:  Nothing in our plan requires you to change what you have.

Someone will need to explain to me why this is a good thing.

The door may blocked

As the President was speaking these words, the 70 workers at SK Hand Tool Corp in Chicago, IL were without health insurance because their employer had made that decision for them.  It had unilaterally stopped paying for health insurance for its employees.

An inviting portal

As the President was reassuring Americans that they could keep their health insurance, the employees of SK Hand Tools, represented by Teamsters Local 743, were starting the third week of a strike to keep their health insurance.

That strike would eventually last for ten weeks.

There is an overwhelming body of health policy research that supports the necessity of continuity of care to improve population health outcomes.  Yet for most Americans, employment is not a continuous engagement.

Why do we build a system that relies on continuity on another system that flourishes on discontinuity?

The door needs a key

Human resource professionals will argue that good employment practices encourage employee retention.  But the same HR professionals spend a significant amount of time and psychic energy on issues related to discontinuity – turnover, hiring, firing, growth and “downsizing”.

Turnover is a fact of employment life. It should not be a part of our health care life. Last week, I argued that an improved patient delivery system is a necessary pre-condition for an improved health care delivery system. To enter into the health care delivery system we must pass through a portal that screens us based on criteria such as age, income, dependent status, military status, ethnic status, and employment.

But employment status is not a reliable portal

• “Working age” describes only that portion of our lives that begins after we end the first phase of our education until we become too old or infirm to continue working
• Only 60% of firms offer health insurance
• 30% of the work force are people who primarily work as free lancers or part time employees, people not typically eligible for health care benefits

The doors open to different spaces

If we continue the image of a portal into the health care system, changing employers means changing portals.  But pass through a new portal and you enter a new space within the health care delivery system.  In health care jargon this is called a network.

You don’t need to change employers to confront a new portal.  Employers routinely place their health coverage out to bid.  A new health plan frequently means a new network forcing at least some workers to choose between continuing their relationship with their existing doctors and paying more out of pocket or choosing a new in-network doctor.

In addition, slightly more than half of employees covered by health plans work in firms that offer multiple health plans.  These employers offer annual “open enrollments” that permit employees to change health plans. The conclusion.

Employment is not an efficient portal into the health care delivery system because:

• It is not always there
• It is not there for all employees
• It does not always lead to the same health care delivery system

Next week:  Employers don’t really want to be in this business anyway.