IBM is stepping up

By Peter Loftus
Of DOW JONES NEWSWIRES
CLEVELAND (Dow Jones)--The chief executive of International Business Machines Corp. (IBM) sees a huge business opportunity in making the U.S. health-care system more efficient.

"Someone is going to drive incredible progress," IBM Chief Executive Sam Palmisano told a conference on medical innovation at the Cleveland Clinic Tuesday. "Someone is going to unlock this incredible economic opportunity. And I suggest, why shouldn't it be us?"

Palmisano sees IBM providing everything from electronic-health records technology to ultra-tiny personal devices that read DNA and cost less than $1,000. He likened those technologies to health-care equivalents of universal bar-codes in the retail industry, which made that industry more efficient.

Small business having to eliminate health care

Accelerating health-care premiums and sharp revenue shortfalls due to the recession are forcing some small companies to choose between dropping health insurance or laying off workers -- or staying in business at all.
View Full ImageBrandon Thibodeaux for The Wall Street Journal
Sheryl Weldon, owner of Commerce Welding, eliminated health-care benefits to employees in December after five years of cost increases.

Sheryl Weldon, owner of Commerce Welding & Manufacturing Co., saw health-insurance payments increase to more than $800 monthly per employee from about $200 five years ago. With monthly revenue down 10% since December, Ms. Weldon stopped providing health coverage to employees, including one being treated for prostate cancer, for the first time in the 64-year-history of the Dallas sheet-metal company.
Ms. Weldon and several of her 14 employees are going uninsured and the third-generation business owner is struggling with the emotional toll of the decision.
"I have a terrible time handling that I can't give them that coverage," says Ms. Weldon, 52 years old. "How do you expect someone to be at their job everyday and perform if they can't be healthy?"
As the Obama administration wrestles with broader questions of health-care overhaul, tough economic times are forcing more businesses to grapple with stressful questions about discontinuing coverage. Health-insurance premiums for single workers rose 74% for small businesses from 2001 to 2008, the latest year data are available, according to nonprofit research group Kaiser Family Foundation.
About 10% of small businesses are considering eliminating coverage over the next year, up from 3% in 2005, according to a recent survey by National Small Business Association.
View SlideshowBrandon Thibodeaux for The Wall Street Journal
One Company's Tough Decision
Commerce Welding and Manufacturing Co., one of many small companies faced with high health insurance premiums and reduced revenue, is joining the crowd cutting coverage.
That follows earlier declines in coverage, with just 38% of small businesses providing health insurance last year compared to 61% in 1993, according to the trade group. In 2007, 41% offered coverage. A Hewitt Associates survey found that 19% of all companies plan to stop providing health-care benefits in the next three to five years.
Assurant Health, a national health-insurance provider, has recently seen more small businesses canceling coverage. Scott Krienke, senior vice president of product lines, says premiums typically increase 8% to 16% yearly for small businesses, with the smallest firms particularly at risk for large rate increases.
In March, after losing a large client that accounted for more than 50% of revenue, Kelly Reeves canceled health insurance for her three employees. Ms. Reeves, president of seven-year-old public-relations firm KLR Communications, says she had to choose between that and laying off an employee.
Ms. Reeves says turnover is a concern even in this slack job market, but she has told her employees she understands if they leave for a job with medical benefits. Should business pick up, she plans to reinstate health insurance but provide less expensive coverage.
"You want to attract good talent and benefits are important for that," says Ms. Reeves.
Even small businesses that continue to provide benefits say the question of dropping medical insurance is one of the most difficult they face.
View Full ImageBrandon Thibodeaux for The Wall Street Journal
Commerce Welding employee Dennis Morgan takes a work break last week. Mr. Morgan, who's being treated for prostate cancer, is uninsured.

Shanahan Sound & Electronics Inc., a Lowell, Mass.-based sound- and video-design firm, has seen a 50% decrease in monthly revenue since last year. Health-insurance costs increased by 14% this year to approximately $7,000 per month. Catherine Shanahan, president of the 16-employee firm, refuses to cancel the plan. "I really believe it would be the worst thing in the world I can do for morale," she says.
Karen McLeese, vice president of employee benefit regulatory affairs at business services firm CBIZ, has been steering companies that consider dropping insurance to less costly high-deductible plans and cost sharing.
"In today's environment, health insurance is extremely costly and to shift that burden to individual employees when raises and bonuses are trimmed really makes it a double whammy," says Dennis J. Ceru, professor of entrepreneurship at the Babson College Graduate School of Business near Boston.
Many of the employees losing insurance are priced out of private plans. Mr. Ceru says the cost for a family on an private plan can exceed $20,000 a year.
Alternatives to Eliminating Health Insurance
Consider Cost Sharing: Companies that are paying 100% of employee health care may want to switch to a cost sharing model where employees help defray the cost. Switching from a 100% health plan to a 50/50 split can significantly free up funds.
Increase Charges: Dominic Morelli, an employee benefits broker and consultant, says many companies are increasing employee co-payments and deductibles.
Shop Around: If your current provider is charging you the maximum renewal rate each year, shop around for a new provider. A health insurance broker can help manage your search, or you can search for better rates online.
Manage Your Prescription Drug Plan: Many employers don't realize the amount of money they can save by requiring employees to use generic versions of prescription drugs, says Tim Stentiford of Hewitt Associates.
Consider Wellness Plans: Fostering healthy eating and exercising habits can save employers insurance money by creating a healthier workforce.
Dennis Morgan, a driver at Commerce who's being treated for prostate cancer, worries about how he will pay for surgery should he need it. The 60-year-old's $500-a-week salary makes him eligible for a program at his hospital where he can receive prescriptions at a low cost and pay between $5 and $10 for doctors' visits. But he would be required to pay a percentage of the cost of any medical procedure.
Mr. Morgan has looked into private health insurance but says he can't afford it. At the same time, he understands Ms. Weldon's decision to eliminate coverage.
"We needed to cut health care," says Mr. Morgan. "It's the only thing left to cut."
Still, the decision rarely sits easy with those making it. "If I think about it, I can't sleep," says Ms. Weldon, who says that her father and grandfather had always covered 100% of health-insurance expenses.
Dana Korey, president of San Diego organizing company Away With Clutter, eliminated health insurance for her 15 employees in January.
"It was incredibly painful, these people are like family to me and I felt like I let them down," says Ms. Korey.
Amid the recession, many of her clients could no longer justify organizing jobs, which typically range between $3,000 and $7,000. Now Ms. Korey is changing her business strategy and creating a DVD on organizing. She is using the savings from canceling health insurance, roughly $5,500 monthly, to fund the venture.

Some physicians offering pricier but prompter health care.

By Allison Linn
SEATTLE - If David Heerensperger isn’t feeling well, he calls Dr. Howard Maron on the phsician’s personal cell phone, whether it’s 3a.m. on a weekday or noon on the weekend.
And Maron will happily make a house call to the 65-year old executive or send a nurse to his patient’s office for test. And he’ll guarantee same-day results.
The catch? Maron and his partner, Dr. I Scott Hall, charge patients up to $20,000 a year in cash for primary care.
Maron compares his Seattle practice to private golf courses of expensive restaurants. It’s a growing trend. Five years after opening his practice MD2 (pronounced MD squared.) in Seattle, Maron is planning to open as many as 100 franchises across the country. An increasing number of doctors nationwide are beginning to charge anywhere from form $1,500 to $20,000 to let richer patients opt out of traditional health-care headaches.
Patients say they are squared the frustration of long waits for appointments, rushed, impersonal treatment and delayed lab results.
With traditional health care, Heerensperger says, “the prices are going up so much and the service is so bad, that this is just great. I’m fortunate to be able to pay for it.”
Doctors say serving those who can afford it, for a price, gives them more free time, and lets them spend more time with patients without budget-conscious insurance companies looking over their shoulders.
Dr. Tom Mchorse, president for the Travis County Medical Society, said he did not know of any local doctors who are practicing medicine that way.
One Austin family practice doctor, Sid Robin, incorporates some elements of the Seattle practice, but his plan is much less expensive. Many of his patients have insurance and use it for services outside his office, such as hospitalization and expensive procedures, such as MRI’s, he said.
Robin became frustrated with managed care and insurance companies and launched his fee-for-service program in January after visiting a different group of physicians in Seattle. He tried to come up with a plan that would be affordable to most people, he said.
Patients ages 4 to 20 pay $20 a month; those 21to 34 pay $45 a month. Those 35 or older pay $75 a month of $900 a year. Those payments cover all office visits, annual exams, x-rays, routine lab work and injections.
It is not for everyone. Robin says his practice has fallen from about 3500 patients to 400, and he’s not yet making as much as he did.
In Seattle, Maron said he got the idea while traveling as the doctor for the city’s NBA team, the Super Sonics. He noticed the athletes got VIP care while the rich team owners struggled with the frustrations of traditional health care.
“I thought, ‘Isn’t it ironic that a player can get a response like that, while the wealthy and powerful have to sit in ER waiting rooms as if they are nobody – or an everybody?’ Maron says. Other medical professionals sympathize with the frustrations of the current health-care system. Lowered insurance reimbursements mean that many doctors’ salaries are decreasing as their patient loads are increasing.
But they question whether most physicians would be comfortable practicing “concierge care.”
“I don’t think they are unethical, but I don’t think they take into account the overall needs of the community,” said Frank Riddick, a New Orleans physician and chairman of the American Medical Association council on ethical and judicial affairs.
Dobrowits says he’s convinced the MD2 model will thrive, even despite the weakened economy.
“We don’t need tons of millionaires,” he quips. “We just need enough millionaires to run our business.”

Texas Health Institute Announces Comprehensive Study On The Uninsured In Texas

The Texas Health Institute (THI), an independent, non-partisan think-tank working to improve the health of Texans, today announced the results of its comprehensive study on the uninsured in Texas -- "A Vision for Change: Policy Solutions for Increasing Health Coverage in Texas."As a result of the study, and as the title notes, THI has developed a number of policy solutions for consideration by the Texas State Legislature and other policymakers. When combined together, the proposed solutions could cut the number of Texans without health coverage almost in half in three to five years. The study also examines the corresponding economic impact of reducing the number of uninsured Texans by 50 percent. "We all know that healthcare and the uninsured are major societal problems," said Camille D. Miller, President & CEO of the Texas Health Institute. "But this study is particularly significant and timely as President Bush and his Administration, as well as Governor Perry and the Texas Legislature, have put healthcare and the issue of the uninsured on the front burner and are looking to provide solutions for the country as a whole and for the state of Texas."Texas Lt. Governor David Dewhurst stated, "The Texas Health Institute has provided us with a helpful blueprint as we examine ways to increase access to affordable healthcare for the uninsured throughout Texas. This is top priority because healthy, productive citizens will make Texas an even better place to live, work, and raise a family.""Representing more than one-third of the state budget, health and human services issues will undoubtedly be a major focus of the 80th Legislature," said Texas Speaker of the House Tom Craddick. "I appreciate the efforts of the Texas Health Institute through the Shared Vision Project to bring together differing views and voices on the issues that confront us."The THI study and other statistics show that Texas has the highest rate of uninsured in the nation. More than 5.59 million Texans -- nearly 25 percent of the state's total population -- lack basic health coverage. The THI study uses the most recently released numbers on the uninsured by county and region in Texas developed by the Texas State Data Center.The study finds, of the $65 billion in healthcare delivered to the uninsured in the U.S., only one-third of the cost is paid for by the uninsured. Of the remaining two-thirds, the government pays one-third, and the rest is paid for by people with insurance. "Thus, we all already pay for the uninsured," Camille D. Miller emphasized."With a growing consensus that something needs to be done, and Texas' forecasted $14.3 billion plus budget surplus, Texas is well-positioned to adopt a plan of action for increasing health coverage for Texans," said Maribess Miller, Chair of the Dallas Chamber of Commerce Healthcare Advisory Council, Managing Partner of PricewaterhouseCoopers' North Texas Region, and Chair of the THI Board of Directors.Some of the report's finding may surprise readers.-- The uninsured work. - At least 72 percent of Texas' uninsured live in households where one or more family members work full-time; another 10 percent live in households with a family member who works part- time. Most of these individuals work in one of Texas' small businesses -- those with 2-50 employees.-- The uninsured are young. - Twenty-three percent of our uninsured are children younger than 18 years of age. An additional 36 percent are between the ages of 18 and 34 years of age.-- The uninsured are not all poor. - Forty percent of families without health coverage have incomes of $40,000 a year or more. However, in 2004 the cost of health coverage for a family of four would have been more than $11,000 or 25 percent of their annual income.-- Geography matters. - Every county in Texas has uninsured, but almost half live in Texas' five largest urban counties: Bexar, Dallas, El Paso, Harris, and Tarrant. The counties where the highest percent of their populations' are uninsured, however, are along the Texas- Mexico border, where between 29 to 34 percent of the residents are uninsured.-- Ethnicity matters. - Hispanics -- a dramatically growing segment of the population -- are three times more likely, and Blacks twice as likely, as Anglos to be uninsured.ECONOMIC IMPACTThe THI study determined that reducing the state's uninsured by half would be beneficial economically. Specifically the analysis showed that in 2005:-- The Texas economy would have seen a total increase in annual economic activity of just over $9.4 billion.-- Direct healthcare expenditures in the economy would have increased by an additional $3.7 billion.-- Nearly 90,000 new jobs would have been created in all sectors of the economy.-- Total income (compensation to employees and employers) would have grown by more than $3.2 billion.-- Texas state government would have received more than $162 million in new revenues.Additionally, studies show the benefits of increasing healthcare coverage include decreased mortality, increased labor force participation, greater worker productivity, reduced sick days, and generally provide an enhanced quality of life.KEY REASONS FOR LACK OF HEALTH COVERAGECurrently, only 24 percent of Texas' small businesses offer health coverage. Additionally, many individuals cannot afford individual health insurance policy premiums. For many who can afford it, their risk -- due to health conditions -- makes coverage inaccessible. For some people -- most of them young -- they do not see the value in insurance and do not believe they need health coverage.POLICY SOLUTIONS"Covering the uninsured will require solutions that address affordability and availability of health coverage as well as an outreach effort to educate the public about the importance of having coverage," stated Camille D. Miller.Accordingly, the report contains a dozen policy solutions for creating a vision for change that will ultimately reduce the number of uninsured by almost half.The THI report's proposed solutions include addressing the high cost of premiums for small employers with options that lower insurers' risks, encouraging employer participation by reducing premium costs, making coverage more available for individuals with health conditions and low-income children and adults, and persuading young adults to obtain health coverage through colleges and universities.The report finds that, together, these policy solutions could help almost 2.7 million Texans obtain health coverage for an annual cost to the state of about $1.6 billion. Additionally, these recommendations would bring more than $1.7 billion in federal funds to the state.Working TexansSolution 1.Provide Technical Assistance and Seed Funding for 3- Share/Multi-Share Programs - By providing a modest amount of state funding, the number of these public-private, cost- sharing arrangements can be increased, and ones already under development strengthened. (Texans To Be Covered - 150,000)Solution 2.Expand Use of Medicaid Health Insurance Premium Program (HIPP) - By changing the rules for the HIPP premium assistance program, more Medicaid eligible workers who have access to -- but cannot afford -- employer supported insurance, should be able to obtain and retain access to this coverage. (Texans To Be Covered - 7,000)Solution 3.Enact Employer Tax Credits - By creating financial incentives for small employers that lower the cost of offering employer-based health coverage, the number of small businesses providing coverage to their employees will increase. (Texans To Be Covered - 316,614)Solution 4.Replace State's Existing Reinsurance Program - By lowering insurers' risk, state-funded reinsurance can lower premiums, making health coverage more affordable for businesses and individuals who previously could not afford it. (Texans To Be Covered - 200,000)Solution 5.Expand Eligibility for Texas' Insurance Health Risk Pool (TIHRP) - By changing eligibility criteria to permit individuals to combine plans and enroll in TIHRP before exhausting transition benefits available as result of a job loss or change in family status, Texans who are more difficult to insure will have access to health coverage. (Texans To Be Covered - 7,868)Solution 6.Increase Access to Pre-Paid Medical Plans - By encouraging the development of these low-cost primary care plans, low- income workers will be able to replace the emergency room as their de facto source of healthcare with a regular medical home such as a primary care physician. (Texans To Be Covered - 200,000)Young AdultsSolution 7.Require All Texas Higher Education Students to Have Health Coverage - By obliging young adults in school to take advantage of the low-cost, comprehensive coverage available to them, they would learn the value and appropriate use of health insurance and be more likely to purchase coverage after leaving school. (Texans To Be Covered - 400,000)ChildrenSolution 8.Allow CHIP Buy-In at Full Premium Cost - By allowing working parents whose employers do not offer dependent coverage to buy into the state's Children's Health Insurance Program (CHIP) (and pay all or a portion of the costs depending on their incomes), Texas will enable these parents to better protect their children's health. (Texans To Be Covered - 405,452)Solution 9.Fully Restore the Children's Health Insurance Program (CHIP) - By removing barriers to CHIP enrollment, children who currently have little or no access to needed medical services will be able to secure the care they need. (Texans To Be Covered - 152,615)Solution 10.Align Medicaid and CHIP Renewal Policies - By allowing annual Medicaid and CHIP renewals, low-income children will be less likely to have gaps in coverage and more likely to maintain better overall health. (Texans To Be Covered - 609,164)Poor/Medically Needy AdultsSolution 11.Expand Access to Medicaid for Poor Parents - By increasing Texas' income eligibility criteria for parents of Medicaid eligible children, the state would give adults who otherwise have little or no access to medical services an opportunity to have healthier, more productive lives. (Texans To Be Covered - 417,688)Solution 12.Encourage Expansion of Federally Qualified Health Centers - By encouraging the expansion of community health centers, the state will promote access to medical care in medically underserved and rural areas of the state. (Texans To Be Covered - 60,000)"Once Texas has taken steps to reduce its uninsured population, there will be one more thing to do -- make sure that the solutions adopted actually succeed in increasing the number of Texans with health coverage," stated Camille D. Miller. "A Vision for Change: Policy Solutions for Increasing Health Coverage in Texas" uses recently released numbers on the uninsured by county and region in Texas developed by the Texas State Data Center. These numbers can be updated annually, giving decision-makers the ability to track annual progress made to increase covered lives in Texas.To view the executive summary or the full report - "A Vision for Change: Policy Solutions for Increasing Health Coverage in Texas" - go to http://www.texashealthinstitute.org.Texas Health Institutehttp://www.texashealthinstitute.orgArticle URL: http://www.medicalnewstoday.com/medicalnews.php?newsid=62041

New Concept providing affordable employee healthcare developed by Austin firm is recommended as a solution for the Uninsured in Texas...MDplans

Austin, Texas - The Texas Health Institute just released their report on the uninsured in Texas. The report, “A Vision for Change: Policy Solutions for Increasing Health Coverage in Texas”, provides policymakers and stake- holders at all levels a selection of cost-effective and workable policy solutions to deploy when solving the issue facing more than 5.6 million Texans. MDplans of Austin, TX spent two years developing the concept of Prepaid Medical Plans, which are mentioned in the report, which utilize a proven ‘large’ employer solution to the average small employer. In the last decade many large employers have begun to provide Onsite Medical Clinics for employees. This cost efficient method of providing basic routine healthcare for employees is quickly gaining in popularity nationwide. Employers cut expenses for care by directly contracting with medical providers and reducing administrative cost. But, for an Onsite Clinic to be affordable, it requires at least 750 employees. MDplans has taken this concept and structured a program whereby any size employer could utilize this method of saving on healthcare cost.“We offer three programs for employers depending on their need” said Fred Terlaak, Company Founder. “For truly large employers, we can set up a clinic onsite. If we have several Mid-sized employers in an area, we can set up a Near-site Clinic with shared use for the employees from more than one company. For small employers of any size, we contract with existing clinics to provide basic health care for employees. After analyzing claims data on 1000’s of employees it became clear that most employees get their medical needs met in a clinic. MDplans offers those services only at about 10-15% of the cost of traditional group insurance. Large employers typically see a 25% reduction in claims expense.”MDplans is careful to point out that Prepaid Medical Plans are not insurance and not intended to replace insurance. As the report mentioned however, it can provide a valuable benefit to employees by firms who cannot afford any other coverage. The plan for small employers without current health coverage includes; PPO Network Discount program for services outside of the clinic, Dental and Vision Discount program, Prescription Drug Discounts and a 24 Hour Nurse Helpline Service. These latter programs are also provided to all family members at no additional cost.According to Kaiser Foundation Studies, preventable illnesses and medical conditions comprise approximately 80% of the burden of illness and 90% of all healthcare costs. By providing a simple doctor’s office visit to employees for routine care, employers can help keep workers healthy and productive. Early diagnosis of most diseases can greatly reduce or eliminate the high cost of delayed treatment.Employers and interested medical providers are encouraged to visit http://www.mdplans.com/ for additional details. Complete text of the report: “A Vision for Change: Policy Solutions for Increasing Health Coverage in Texas” is available at http://www.texashealthinstitute.org/