Health Insurance – Costs and Opportunities
Shift work brings more health and safety dangers than normal hours work, and so the rising costs of health care are reaping huge consequences among shift workers. Today, patients pay far more of the medical cost themselves than they did in 1990, when employers took up more of the slack. Coupled with a rapid growth of medical bureaucracy, which shoots up costs, the greater responsibility for their own payments is hurting many shift workers. Health care costs hurt companies, but so do sick or injured workers who come into work because they can’t afford not to, or who miss work more often because they can’t afford better medical care. Health care system reform boosts health and productivity in the workplace.
Health care costs are continuing to rise and are continuously getting more and more attention. Health care reform is one of the most often discussed issues during this year’s political campaign for President of the United States. A survey of 1,200 adults in the March 2008 issue of Consumer Reports found that six guaranteed principles for health reform received greater than 80% approval by participants. They were:
• protection against financial ruin due to a major illness or accident
• coverage that continues even when people are laid off, change jobs or start their own business
• premiums, deductibles and out-of-pocket expenses that are affordable, relative to family income
• the ability to obtain coverage regardless of a preexisting condition
• coverage for all uninsured children
• the ability to keep current health coverage, if desired
According to a 2008 Report by Milliman, Inc., a large independent actuarial and consulting firm headquartered in Seattle, the total medical cost for a family of four in 2008 is $15,609 compared to $14,500 in 2007 (a 7.6% increase). This compares to total spending of $365 per person in 1970 or $1,460 for four 1. According to the Bureau of Labor Statistics, the mean wage for all occupations they track was $40,690 in 2007; medical costs as a percentage of salary was 36% It will likely be 37% in 2008 as most reports suggest that wages will increase by 3.5% . In 1970 the average salary was $7,5642 ; the cost of health care for a family of four at that time was just 19%.
How did we go from 19% to 37%?
According to a study by The CATO Institute, a non-profit public policy research foundation in Washington DC, the excessive costs of our current medical system can be classified into three major categories:
• Overuse of medical resources by patients
In 1990, third parties, primarily employers, paid 77 cents of each dollar of medical expense and patients paid an average of 23 cents or 30% of the cost. There was very little incentive to be cost conscious. Today, on average, patients pay 40% of the cost and employers pay 60%. Now that patients are paying more of their medical costs, they are starting to pay more attention to them. It is logical that people pay more attention to what they pay for out of their own pocket.
• Excess administrative and paperwork costs
Administrative and paperwork costs are unnecessary for the provision of health care, but are now viewed as required because of the current patchwork of third-party payers.
When looking at the cost of administrating health care, a good comparison would be between the U.S. and Canada. In 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada. Administration accounted for 31% percent of health care expenditures in the United States and 16.7% of health care expenditures in Canada. Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18% to 27%. In Canada, it grew from 16% in 1971 to 19% in 1996. Both figures exclude insurance industry personnel! 3
• Doctors’ fear of malpractice suits
A large number of physicians report that fear of malpractice liability causes them to provide unnecessary and inappropriate care:
• 79% say they order unnecessary tests
• 74% say they make unnecessary referrals
• 51% say they suggest unnecessary biopsies
• 41% say they prescribe unnecessary antibiotics
This survey consisted of interviews with 500 medical professionals, including 300 physicians, 100 hospital administrators and 100 registered nurses nationwide. 4
Yet, despite what we are spending on health care, more than 18% of working-age adults reported being unable to work or carry out everyday activities because of health problems in 2006, up from 15% in 2004. And in 2007, as in 2005, less than half of U.S. adults with health problems were able to get a timely appointment with a physician when they were sick. These statistics point to the need for better prevention and management of chronic diseases to enhance quality of life and capacity to work, especially among younger adults as they age.
How does this impact shift workers and their employers?
• Shift work employees generate 17% of all U.S. health care costs
• 12% of shift workers have Obstructive Sleep Apnea, compared to only 2-4% of the total population
• Up to 75% of night workers have gastrointestinal problems; peptic ulcers are up to 5 times more frequent
• Extended hours workers have up to a 50% increase of cardiovascular disease
• 32.6% of shift workers report chronic or frequent back problems, 27.1% report chronic or frequent leg problems, and 18.6% report chronic or frequent wrist problems
• Shift workers report taking the following drugs several times per month: pain relievers- 58%, antacids- 37%, cold/allergy medicine- 30%, stimulants/depressants- 10%
• Shift workers experience higher rates of stress than daytime workers, which may be the reason why shift workers have higher rates of substance abuse and depression 5
The health care challenges that shift workers face can be greatly reduced by the cooperative efforts of both the employees and the company. Companies with large numbers of shift workers need to look at their insurance data to find trends of illnesses, like the examples above, among shift workers. Employee Assistance Programs (EAPs) should be designed to match the needs of the employee population. Employees have to be committed to participating in the EAPs offered which correspond to their particular health situation.
EAPs direct people to the right care the first time around. Abbott Laboratories reported medical claims were $2,000 less per year for employees who used its EAP service. Toolmaker Black and Decker reported that its behavioral healthcare claims dropped 60% after its EAP was put into place. An EAP clinician can direct employees to appropriate services when a problem first occurs which saves time, increases efficiency and reduces cost.
Improving a person’s mental or emotional health lowers healthcare utilization. A Portland (Oregon) State University study showed that employees who received assistance for mental or emotional problems experienced:
• A 77.9% drop in the average length of hospital stays
• A 66.7% drop in the frequency of hospitalizations
• A 48.6% drop in the number of prescriptions used
• A 47.1% drop in the number of physician office visits
• A 45.3% drop in emergency room visits
EAPs can help the 20% of employees with high stress or depression. A study of employees conducted by the Health Enhancement Research Organization (HERO) shows that fully 1 in 5 employees are either highly stressed (18.5%) or depressed (2.2%). Further, highly stressed employees use 43.6% more medical services than employees without stress, while depressed employees use 70.2% more. EAPs can have a major impact on employees with alcohol or other drug problems. 6
All of these potential cost savings are even more relevant to the shift work population. Rising health care costs puts families, businesses and government budgets under stress, and reduces living standards for lower and middle income families. There are huge opportunities for savings if everyone works together to make this effort a priority.
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1 The Henry Kaiser Foundation, Health Care Costs – A Primer, August 2007 http://www.kff.org/insurance/upload/7670.pdf
2 Kingswood College Library, American Cultural History 1970-1979 http://kclibrary.lonestar.edu/decade70.html
3 The New England Journal of Medicine, August 23, 2003, Costs of Health Care Administration in the United States and Canada
Steffie Woolhandler, M.D., M.P.H., Terry Campbell, M.H.A., and David U. Himmelstein, M.D.
4 Harris Interactive Health Care News, May 16, 2002, Most Doctors Report Fear of Malpractice Liability Has Harmed Their Ability to Provide Quality Care
5 Circadian Information LLP, Health in Extended Hours Operations, ©2003
6 Care’s Worklife Solutions, www.caresworklifesolutions.com
©2008workingnights
This material is provided for personal, non-commercial, educational and informational purposes only and does not constitute a recommendation or endorsement
Tags: chronic problems, fitness, health costs, shift work
