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The Society for Human Resource Management (SHRM)has approximately 250,000 members representing the varied disciplines and commercial interests within the  human resource profession.   As a benefits professional with expanded human resource responsibilities, I recently joined SHRM.

No one there {Photo by JLM}

So I was disappointed to learn that SHRM does not support the recently passed House health care reform bill, HR 3962, The Affordable Health Care for America Act.

My readers will know I consistently argue that relying on employment as the primary gateway to the health care system is outmoded and ultimately harmful to the American economy.   Part of that argument is because employer sponsored health care limits the flexibility of employer human resource policies and the mobility of the workforce.

Does SHRM share those views?

Apparently not.

What does SHRM say?

In some areas, the legislation does not go far enough, especially in the area of containing costs.  In other ways, the legislation would create new impediments for employers and employees.  For example, the House bill:

1. Does not include provisions to create greater availability to wellness programs for employees and employers.
2. Mandates that employers provide and pay for “qualified” health care coverage for their employees. If employers do not provide coverage – or do not provide the specific “qualified” coverage at an “affordable” price, as determined by the federal government, they must pay an 8 percent payroll tax.
3. Erodes the effectiveness of the Employee Retirement Income Security Act (ERISA) by applying state law to employer- purchased coverage in a health insurance exchange; prohibits post-retirement reductions of retiree health benefits by group health plans, unless reductions are also made to active employees’ health benefits; and requires employer-sponsored plans to meet detailed federal requirements.  These changes would likely result in additional costs and burdens on multi-state employers who could face different rules in different states.
4. Establishes a public insurance plan option that, as currently drafted in the House bill, could result in cost-shifting to private plans, potentially increasing costs for both employers and employees.

The Maze’s response

I.            Their first point is preposterous.  Employers don’t need federal legislation to promote wellness.  For people without health insurance, their pathway to wellness is health insurance.   And wellness alone is no substitute for health insurance.  What more evidence do you need than the story of the shooting in the health club in Bridgeville, PA this past August?  One of the victims had no health insurance.  Her health club membership did not protect her from the bullets of a crazy man.

In addition, workplace wellness is a growing phenomenon around the world and is not dependent on employer sponsored health insurance.

II.            It continually mystifies me why the business community opposes employer mandates.  Apparently the ideology of a “free” market trumps the common sense of a competitive market.  In a competitive market, everyone plays by the same rules.  In a free market, the winners make the rules.

III.            I am a bit more sympathetic to some of the arguments about ERISA.  As typical of any legislation, especially proposals that are as hotly debated as this one, legislators make decisions that reflect a poor understanding of the complexities of the issue.  If the choice were between this proposal and a single payer system, I would agree this solution is a poor one and should be rejected.  That is not SHRM’s viewpoint.

IV.            If SHRM were truly concerned about cost shifting, they should support a single payer system or at least an employer mandate.  They could support an all-payer methodology that the state across the river from their headquarters has.  Their opposition to the public plan option reveals their true loyalty to the insurance companies.

An alternative perspective

Why not promote policies that enable employer flexibility for all employers, large and small, and facilitate workforce mobility and development?

Ken Dychtwald was the keynote speaker at the recent annual conference of the International Foundation of Employee Benefit Plans (IFEBP).  He described how Americans are living longer and the impact thus is having on workplaces and employment practices.  Workers want to extend their working careers with educational breaks, career shifts, part time and part year work.  He did not address specifically the issue of universal access to health care.  But it is obvious that current employment based health insurance practices are a significant hurdle to adoption of the kind of workforce flexibility envisioned by Dr. Dychtwald.

SHRM should be looking to enable the future and not protect the past.

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Approximately six months ago our office began receiving stacks of paper claims for prescription drugs.  The drugs originated in various Veterans’ Administration medical centers around the country.  They were for drugs that members in our Plan had received at VA medical centers. 

It was obvious that there had been some sort of new policy at the VA that required the VA to obtain payment from other payers when veterans had other coverage.  The problem in this case is that our Plan had just changed pharmacy benefit managers effective January 1, 2008. 

So think about this.  Until recently, a veteran who also happened to have other coverage went to a VA medical center and received care.  The VA paid for the service and somebody figured out how much it added to national health expenditures.  Our health plan did not pay for the services and therefore nothing was added to national health expenditures, other than the cost of keeping that Participant enrolled in our Plans.

Then someone in Congress got the idea that the VA could save money by finding someone else to pay for services.  Ignore the macro perspective that it increases the total cost to the system.   Now a layer of bureaucracy is added to find who is liable for payment and send the bill to that payer.  Remember the card game Old Maid?  Who is going to be left holding the poison card?  That’s what our health care financing system has come down to. 

But wait!  What happens when the payer information is no longer correct.  In the private sector, plan sponsors are constantly changing carriers and pharmacy benefit managers.  So now add an additional layer of administrative expense. 

In addition, these are paper claims.  Our vendors charge more to adjudicate paper claims.  The VA has an excellent reputation for its effective and efficient delivery system. (J. Kupersmith, et al.,Health Affairs, March/April 2007; 26(2)) It has not had a need for an efficient claims billing system.  Upgrading that system will add additional costs not only to the VA budget, but also to total national health expenditures.  And people think that Americans pay more for health care because we have better health care?

In our case it seemed that a central computer had the other party liability (that’s the technical term) information.  If they had the correct information, our office could be removed from this process, thus offering a small marginal efficiency to this additional administrative rabbit hole.  The local VA facility was not helpful.  I contacted my congressman and after several months and a lot of phone tag, I located someone who not only understood my problem, but also understood how it was also their problem.

But the more serious problem is that no one is looking at the big picture.  Making someone else pay the bill, may save the VA some money.  It does not save the American economy any money.