Business Examines Hospitals
Corporate America is no longer the "sleeping giant" among major payers of health care expenses. It, too, has felt the weight of striking increases in the cost of health care service, and it has begun wielding its clout. In cities across the country, employers are trying to crack the perceived causes of their communities' cost increases. Consider a sampling of the results:
* In northwest, Ohio, a voluntary health planning group, established by the Toledo Business Coalition on Health Care, has succeeded in convincing the state to reconsider approval of a $23 million proposed hospital expansion. The planning group and coalition argued, and so testified at new hearings, that the Toledo area already has too many hospital beds. A new state health director overturned the project's approval, and a review of the hospital's appeal was continuing late last year.
* Six leading corporations in the Kingston, NY, area, approximately 80 miles north of New York City, funded a health care cost coalition that readied the community's first health maintenance organization (HMO) this past fall. The coalition determined that an HMO holds the most potential for containing local health care expenditures, including keeping the cost of extenders like this one down. The intent is to curb nonemergency uses of the three area hospitals' emergency departments.
* The Health Care Cost Coalition of Santa Clara, CA, is introducing Bay Area industrial clinics to its 92 member employers. The clinics are offering more convenient and 15-20 percent cheaper health care for the employers' 180,000 workers. Additional discounts are provided for prompt payment and high volume, concessions that local hospitals are unwilling to discuss, according to the coalition.
Yet to be documented are the dollar savings that these sorts of local initiatives yield. One issue is certain, however. Employers are more determined than ever to reduce their exposure to new high increases in health care costs.
"Our key objective is to reduce the rate of increases in health care costs to a manageable level. We recognize that there are factors that force health care cost increases above increases in the consumer price index. But when the health care rate toes up three or four times the CPI rate something is wrong," says Arnold Glassman, chairman of the employers Coalition of Los Angeles and manager of benefits, communications, medical pumps and programs. Atlantic Richfield Company.
One widely-quoted projection put the 1983 employer tab for private health insurance at $77 billion, up from $33 billion in 1977. These cost figures, however, do not include premiums paid by small businesses, some midsize businesses, self-employed persons, and public employers, says Willis Goldbeck, executive director of the Washington Business Group on Health. He says the employer cost of health insurance "must be in excess of $100 billion today."