Category Archives: Employer Costs

The Further Adventures of Ashley Furniture in Medical Travel

Readers of this blog will remember two previous articles I linked to back in October 2017 and November 2017 about the Ashley Furniture Company’s foray into Medical Travel.

Now comes a new article, courtesy of Kaiser Health News, that shows just how American patients are saving money by having surgery in Cancun, Mexico for procedures such as knee surgery (are you listening, Workers’ Compsters?)

Not only are the patients traveling to Cancun, but so are the physicians from the US.  As pictured below, Donna Ferguson, the wife of one of Ashley’s employees, is shown in the hospital in Cancun, along with her doctors, one of whom will be performing knee replacement surgery. As stated in the article, all she had to do was walk out of her hotel, and into the Galenia Hospital through a short hallway.

Donna Ferguson, center, of Ecru, Miss., had no contact with Milwaukee surgeon Dr. Thomas Parisi, left, before meeting him in Cancun the day before he performed her knee replacement surgery. (Rocco Saint-Mleux for KHN)

Donna’s surgeon, Dr. Thomas Parisi, from Milwaukee, had flown to Cancun the day before. To get this surgery, which she was getting for free, she would also receive a check when she got home. (I’ve said this before, but you never listened)

According to the article, the employees of Ashley receive a $5,000 payment from the company, and all their travel costs are covered. They use this option because they have no out-of-pocket copayments or deductibles, so it made financial sense for both a highly trained orthopedist and a patient from Mississippi to leave the US and meet at an upscale Mexican hospital. (Let’s see Trump try to built a wall to stop that!)

Dr. Parisi spent less than 24 hours in Cancun, so no one could accuse him of slacking off to play golf, and was paid $2,700, which as the article stated, was three times what he would have gotten from Medicare. The cost of the surgery for Ashley was less than half of what it would have been in the US.

To understand better, just why Ashley is doing this for their employees and their families, let’s look at what the average knee replacement would cost in the US: about $30,000 — sometimes double or triple that; whereas in Mexico, at Galenia, it was only $12,000. according to Dr. Gabriela Flores Teón, the hospital’s medical director.

The standard charge for the night at Galenia is $300, compared to an average of $2,000 at US hospitals, said Dr. Flores.

But besides the big savings on the surgery, there was also savings on the cost of the medical device, made by a subsidiary of the Band-Aid people, J&J, in New Jersey. The implant cost $3,500 in Mexico, but nearly $8,000 in the US, Flores continued.

In case you WC hotshots were wondering, Galenia Hospital is not some fleabag hospital on the cheap. It is accredited by the international affiliation of the Joint Commission (JCI). They set the standards for hospitals in the US.

However, so that doctors and patients could feel comfortable with surgery, NASH (North American Speciality Hospital) based in Denver, and who has organized treatment for dozens of American patients at Galenia since 2017, along with Galenia, worked to go beyond those standards.

In the two SPOTLIGHT articles referenced above, the manager of global benefits and health at Ashley, Marcus Gagnon said, “We’ve had an overwhelming positive reaction from employees who have gone,”

The company has also sent about 140 employees or dependents for treatments at a hospital in Costa Rica, and together, the foreign medical facilities have saved Ashley $3.2 million in health care costs, said Gagnon. (Wake up, you WC guys! Why are you being so stubborn?)

Gagnon continued, “Even after the incentive payments and travel expenses, we still save about half the cost of paying for care in the United States,” “It’s been a nice option — not a magic bullet — but a nice option.”

So, if Ashley can do it, and if HSM could do it too, the so could you. Not all the hospitals outside of the US are fleabags. Galenia in Cancun is one example. Bumrungrad in Thailand is another, and there are plenty more around the world that cater to medical travel.

The whole point of my advocacy for medical travel and workers’ comp was so that American workers and their dependents like Donna could travel abroad and see what the world is really like, so that political, hate-filled rallies and incidents we are seeing everyday since the election of a white supremacist to the presidency, would not take place.

How else will the American worker learn about the real world beyond his borders if not this way? Certainly not from Fox News.

“Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.”

― Mark Twain, The Innocents Abroad / Roughing It

 

Health Care Costs Rising for Workers

Axios is reporting that health care costs for workers is rising while overall costs of employer-based health benefits is growing modestly from year to year.

This is slowly eating up all of the average workers wage increases, and then some, as reported by the Kaiser Family Foundation’s  2018 Employer Health Benefits Survey.

The survey covers the last ten years, from 2008 to 2018. Most of where the employees are paying for health care comes from deductibles, which has seen a +212% increase over that period, and is out of pocket. These costs, the survey said, is rising faster than inflation and wages.

Premiums for families have risen over this period +55%, while workers’ earnings have risen +26%, and inflation has risen +17%.

According to Kaiser, employees are paying an average of about $1,200 per year in premiums. That’s 65% more than what they paid in 2008, for single coverage plans that cover only the worker, no family members.

Besides the increase in deductibles, the number of employees who have a deductible has gone up, and the number of employees with above-average deductibles is up as well.

Three takeaways:

  • More patients are more attuned to the high costs of care.
  • The underlying cost of health care services is growing relatively slowly right now, compared to historical trends.
  • But there’s a sense, at least among some liberal-leaning health care experts, that employers have just about maxed out their ability to shift more costs onto employees — meaning that once price increases start to pick up steam again, businesses and workers will both feel the pain quickly.

What does this mean?

As workers’ wages are stagnant, and health care costs are rising, shifting the cost of health care onto the backs of workers is not only counterproductive to lowering the cost of health care, it puts an undue burden on those who can least afford to shell out more of their hard earned income on health care, especially when they have a serious medical issue to deal with.

Single payer will relieve the worker from having to pay out of pocket when wages are stagnant, and when wages rise again. This will enable them to have more money to spend on things that otherwise would have been prohibitive before.

To do no less is to saddle the working class with perpetual debt and decreased economic power. Not a good way to run an economy.

Ten Most Reported Worker’s Compensation Injuries – Machine Safety Blog

Back in March of 2015, I wrote about the top 10 causes of workplace injuries. I posited the idea that medical tourism (medical travel) could save employers money so that the workers’ comp industry would take medical travel seriously as an option for injured workers. The same holds true for the medical travel industry, as they seem to be AWOL when it comes to workers’ health.

Here is an updated report on the Machine Safety Blog from Rockford Systems, LLC:

Last year in America 2.9 million employees (U.S Bureau of Labor Statistics) suffered a workplace injury from which they never recover, at a cost to business of nearly $60 billion (Liberty Mutual Insurance). These statistics are staggering. To help gain a better perspective on the realities of workplace danger, we have compiled a list of […]

Source: Ten Most Reported Worker’s Compensation Injuries – Machine Safety Blog

Typical Family of Four Now Paying Over $28,000 for Health Care

A report issued Monday by Milliman indicated that the cost of health care for a typical American family covered by the average employer-sponsored preferred provider organization (PPO) plan in 2018 is $28,166, as per the Milliman Medical Index (MMI).

Broken down into component parts, this represents the following costs:

2018 MMI Components of Spending
31% ($8,631) – Inpatient
19% ($5,395) – Outpatient
29% ($8,275) – Professional services
17% ($4,888) – Pharmacy
4% ($995) – Other (Home health, ambulance, DME, prosthetics)

The key takeaway from the report is that employers are paying more; but employees are paying a lot more.

The health care expenditures are funded by employer contributions to health plans and by employees through their payroll deductions and out-of-pocket expenses incurred when care is received, according to the report.

The report continues that they are seeing over the long-term, and that employees are paying a higher percentage of the total, with employee expenses increasing 5.9%, and employer expenses increasing 3.5% in 2018.

The total cost of health care is shared by both the employer and employee for a family of four, the MMI stated, which breaks down to three categories:

1. Employer subsidy. Employers that sponsor health plans subsidize the cost of healthcare for their employees by allocating compensation dollars to pay a large share of the cost.
2. Employee contribution. Employees who choose to participate in the employer’s health benefit plan typically also pay a substantial portion of costs, usually through payroll deduction.
3. Employee out-of-pocket cost at time of service. When employees receive care, they also often pay for a portion of these services via health plan deductibles and/or point-of-service copays.

The relative proportions of medical costs for 2018 are:

56% ($15,788) – Employer contribution
27% ($7,674) – Employee contribution
17% ($4,704) – Employee out-of-pocket

Looking at this another way, employees are paying a total of 44% as either a contribution or out-of-pocket, which adds up to $12,378, compared to the employers’ 56% and $15,788, respectively.

As health care gets more expensive, it will naturally lead to higher costs for employers, but also higher costs for employees. And as has been happening more commonly, employers are shifting more of the costs onto the employees. With stagnant wages, as reported daily in the news, this is going to be a problem for those families caught in the squeeze between rising costs for medical care and stagnant wages.

This would be resolved by creating a single payer health care system that will save both employers and employees money,

 

Workers’ Comp Medical Benefits Represent More Than Half of Employer Costs

The National Academy of Social Insurance (NASI) recently issued its 20th annual report on Workers’ Compensation: Benefits, Coverage, and Costs. The study provides estimates of workers’ compensation payments—cash and medical—for all 50 states, the District of Columbia, and federal programs providing workers’ compensation.

Much of the study, as reported today by Workers Comp Insider.com, deals with the decrease in benefits as a percentage of payroll, an issue outside the purview of this blog.

But I was intrigued by the graphic at the bottom, which stated that thirty-three states spent more than half their workers’ compensation benefits on medical costs for injured workers.

And the share of total costs of workers’ comp benefits that are medical costs rose from 1980 to 2015, from 29% to 50%.

WC Benefits

While the study does not provide any insight into what that 50% represents, it is conceivable to assume that a good part of it involves surgery to repair the injury the worker suffered.

So, if this study is right, then the only way to begin to bring down the medical costs in workers’ comp is to look at alternatives that as of yet have not been tried because of lack of will, or a belief that alternatives are not realistic, or because we still cling to the notion that our healthcare system is the best in the world. and no one else comes close.

As Puck said, “Lord, what fools these mortals be.”