Healthcare in Iowa: Rising Prices Lead Employers to Find Cost-effective, Comprehensive Measures

Health care has been one of the biggest talking points in the United States for the better part of a decade, and last month’s midterm elections presented one of the most heated, controversial debates around the topic yet.

The debate is certainly warranted. With rising health care costs nationally, the country undoubtedly faces problems with its system. And Iowa isn’t an exception.

The state has seen rising premiums, right along with the rest of the country. The annual employer-based family health insurance premium in Iowa is $17,448 in 2018, accounting for about 30 percent of the median household income in the state, according to the 2018 Iowa Employer Benefits Study. The national average annual premium is now more than $19,000.

As employers continue to use health care as a key benefit to attract and retain a quality employee base, the rising costs have become burdensome for both employer and employee. According to a 2017 study by the Employee Benefit Research Institute, nearly 50 percent of the country’s private employers offered health insurance benefits. There are a variety of thoughts, programs and initiatives aiming toward more affordable health care in the United States, but there’s just one consensus: A change won’t happen overnight.

“Fixing the rising cost won’t be a silver bullet, and it’s going to take time,” said David Lind, owner of David P. Lind Benchmark, which conducts the annual Iowa Employer Benefits Study. “Iowa is no different than what we see in other states, but we have to solve this puzzle and look for more solutions.”

Waste not, want not

Lind has worked in the health care industry for more than 30 years. Starting in 1984, with Blue Cross and Blue Shield of Iowa, he worked with employers on accessing and analyzing health plans that worked for companies and their employees.

Today, Lind conducts research on the health insurance and health care industries. He describes his perspective as a two-pronged approach. On one hand, he studies what is happening to health care costs from one year to the next. On the other, he looks more upstream and finds the causes of the trends he finds.

In recent years, Lind, who primarily focuses on the employer angle, has seen rising costs put more of the onus on the employee rather than the employer. Employees have picked up more of the health care tab through increased payroll deductions or higher deductibles or co-payments.

According to Lind’s research, the single-person premium cost in Iowa has increased by 233 percent since 1999, the first year of his study, and the family premium cost has increased 217 percent. If trends continue, premiums will rise to $36,636 per year by 2028, which will account for about 54 percent of the median household income, adjusted for inflation.

That will bring even more problems for employers, who are attempting to keep up with the rising prices.

“Employers are just trying to keep their plans as affordable as possible so they can keep plans in place,” Lind said.

He said one of the biggest causes for the rise in costs is waste in the health care industry. Some studies have found that about 30 to 40 percent of the United States’ annual spending on health care — about $3.5 trillion in 2017 — can be attributed to waste, equating to at least $1 trillion.

Lind said waste can incorporate many things, but the four main issues are improper testing and diagnosing, administrative complexity — stemming from the United States’ complex insurance industry — excess pricing compared with other developed countries, and fraud and abuse.

Cutting down on this waste will significantly improve health care costs in Iowa and across the nation, Lind said. But trying to implement changes will be tough, as the current system is so ingrained in the country’s processes and culture, he said.

“It’s a difficult discussion we need to have as a country,” he said. “I think we need to cut down on these costs so these policies aren’t as expensive, then we can divvy up how we pay for it. There’s just a lot of waste to address.”

Lind also mentioned social determinants as important factors in the health care discussion. Social determinants are social and economic conditions that drive individual and group health statuses.

Diet has been cited as one of the biggest determinants in the United States affecting health care. According to a Mayo Clinic study in 2016, fewer than 3 percent of Americans live what the authors called a healthy lifestyle.

Steve Cassabaum, a physical therapist for almost 30 years, owns 21st Century Rehab, which provides physical, occupational and speech therapy services in Central Iowa. He has noticed the results.

“Our patients have been coming in more and more unhealthy,” Cassabaum said. “That means more obesity, more diabetes, high blood pressure, metabolic syndrome, congestive heart failure.”

Cassabaum is an advocate of preventive health care, which he says can actually help drive health care costs down. In his line of work as a physical therapist, he sees many skeletal and muscle injuries that could have been prevented. For example, a small pain in a patient’s knee could be worked out through short trips to the physical therapist, rather than waiting and masking the pain until it becomes unbearable and in need of further care.

Much of Cassabaum’s work involves treating patients and educating them on how to adjust their lifestyle going forward to avoid re-aggravating an injury, whether that be posture at work or the amount of work in the yard.

It may seem simple, but prevention can save larger costs. That’s why employers and health insurance providers have recognized its importance. Cassabaum said most of his work is covered by health insurance.

“A few sessions of physical therapy are a lot cheaper than an epidural, MRI or even surgery,” Cassabaum said. “To me, preventive care is very important.”

In addition to preventive care, getting the right kind of care has been a focus for employers in recent years.

Jodi Schweiger, director of employer health services and Executive Health Clinic program manager at the Iowa Clinic, said employers have tried to save money through a variety of methods. The biggest trend she’s seeing is the rise of high-performance networks. High-performance networks are doctors or institutions who have been identified as high-quality and cost-effective. Simply put, these providers are efficient and execute properly.

A high-performance network effectively gets employees to visit trusted and high-quality health care institutions by offering a lower cost per visit to the employee.

“It’s moving to value-based care,” Schweiger said. “We’re really seeing employers looking to control costs, and this steers employees to high-quality, cost-effective providers. We have to be better consumers of health care, and I think that’s going to be a buzzword we hear a lot going forward.”

Preventive programming

About three years ago, the Iowa Clinic saw an opportunity to provide a local health care option for the state’s business executives. Noticing the trend in high-performance networks, the Iowa Clinic implemented the Executive Health Clinic program.

The program allows executives to handle all of their health care needs in one day. Typically, a patient will show up at about 7 a.m. and leave in the afternoon. It’s comprehensive as well. If a problem arises during testing, patients can visit a specialist that same day and receive further testing. All in all, the program allows executives to receive the care they need in a convenient and time-effective manner.

“It’s a lot of preventive services rather than a wellness check, but it’ll catch things that an annual physical wouldn’t,” Schweiger said.

She said about 3 percent of these executive checks have actually found and remedied a problem that saved the patient’s life. That’s obviously a huge benefit for executives, but it also helps employers looking to keep their top employees working and on the top of their game.

“It’s really important for companies looking to keep their busy leaders healthy,” Schweiger said. “There’s nothing worse than having a top leader that has a catastrophic health problem. That can impact your company.”

The Executive Health program is unique in Iowa. Schweiger said there are a few other programs like it in the Midwest, but the Iowa Clinic offers multi-specialty services, which aren’t available at other institutions that offer similar programs.

Another benefit to the Iowa Clinic Executive Health program is the discreet nature of it. Patients can enjoy the privacy of the Executive Health Lounge, where they can work or relax if there happens to be any downtime between appointments.

“When we launched this, we knew privacy was going to be very important,” Schweiger said. “Des Moines is a small community, and you don’t want a leader of a company sitting out in the waiting room of cardiology. So we have a coordinator walking them to and from all of their appointments. It’s very efficient.”

Health care benefits continue to be a huge driver for employers to attract and retain talent. The Executive Health program is just another way for employers to be unique and comprehensive in their approach.

“As we move more toward a candidate-driven market, I think it’s essential that organizations leverage these benefits to recruit and retain top talent,” Schweiger said. “Programs like the Executive Health program are really giving employers a chance to show that appreciation and dedication to keep their top talent healthy but also retain and attract new talent.”