An ounce of prevention ...

... may be worth significant savings to the health care insurance industry

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For 30 years, Susannah Lusk often had a cigarette in her hand. A Camel Light, to be specific. She smoked six of them a day.

She tried to quit twice. The first time was while she was trekking northwest of Nepal, but a fellow traveler was a smoker and the temptation was too much. The second was when she got so sick she couldn't stand the sight of cigarettes, but again, temptation won out.

Then, five years ago, the Steamboat Ski and Resort Corp., where Lusk has worked for 20 years, started offering a wellness program as part of its health care benefits. It cost Lusk $8 a month to learn about staying healthy and reducing her risk of diseases.

At first, she was skeptical.

"It took a while to sink in," she said.

But then something clicked, and with the help of classes and counselors, Lusk started trying to quit. After taking small steps, she drew a line in the sand and said, "no more."

She hasn't picked up a cigarette in two years and three months.

"I feel so much better. Whatever I do, I know that it's just blessed by not having that smoke screen," she said. "Who knows how much money I've saved by stopping smoking. Not just from not buying cigarettes, but from the hospital at the end."

Although Lusk can't translate the benefits of not smoking into dollars, others can.

In 2002, smokers cost employers an average $1,760 each in lost productivity and $1,620 in excess medical costs per year, according to the Centers for Disease Control and Prevention.

Wellness programs work to keep people healthy and reduce their risks of serious illness or disease through promoting preventative care and maintenance. They represent one possible solution to the nation's health insurance crisis.

With health insurance costs consistently rising, some people feel their only choice is to pay top-dollar monthly premiums or stop their insurance altogether. But health experts in Routt County and across the nation are considering other small-scale solutions that may be a start to larger solutions.

"I get the feeling employers are just so frustrated that health care costs keep going up, health insurance costs keep going up, and they feel like their hands are tied and there's nothing they can do," Yampa Valley Medical Center wellness and community education coordinator Lisa Bankard said. "And I feel like there is something they can do."

Although Ski Corp. recently discontinued its wellness program, Bankard said a similar program offered to Yampa Valley Medical Center employees has been a success. Over the past four years, medical center employees participating in the program had about $300 less in claims than those who didn't. Participating high-risk employees saw an average $1,540 drop in the same time period.

Wellness programs, she said, are a way to keep employees healthy and claims low, which ultimately can result in reduced health insurance costs.

Reducing demand

Health insurance costs have run through several cycles of spikes and drops over the past few decades. Historically, costs rose until steps were taken at a federal level to control them, from the creation of Medicare and Medicaid in 1965 to the creation of managed care in the early 1990s.

In Steamboat, premiums have increased 40 percent to 45 percent over the past four years, said Linda Fossi-Williams, owner of Sleeping Giant Insurance Agency.

That's not just because agents are arbitrarily raising prices; it's because the claims and medical use in the county have almost tripled in that time, she said.

"I'm not trying to pass the buck but I think everyone needs to take more responsibility for their own well-being and their own health," she said. "We can't just run to the doctors for every little thing that we could handle ourselves."

Because costs are high, many people choose not to buy insurance, which also can have serious financial impacts.

Angela Grilly, who moved to Steamboat in April, has gone without health insurance for most of her life because, she said, she's always been healthy. She stopped one insurance plan when she moved to Steamboat, thinking she would pick it back up in a few months after she was settled.

During that time, she got sick. A week in the hospital cost her almost $1,500.

"When you least expect it, you get sick," Grilly said.

She plans to look into getting insurance again, she said.

"I would definitely look back into it. It's just a really big part of your budget," Grilly said. "I'm finding everybody in this town has to work two or three jobs (to have insurance)."

Some people work a second job, becoming a school janitor, for instance, just to get health benefits. Others, such as Robyn Johnson, 24, get insurance through a spouse's employer plan. Johnson said that if she wasn't on her husband's health plan, she probably wouldn't have insurance.

"Hardly anybody that I talk to has health insurance because it's so damn expensive," she said.

Quick-fix solutions

Some job candidates ask for increased pay in lieu of benefits from employers who don't offer health insurance so that they can buy private coverage.

Some look at less expensive insurance plans, such as a plan that covers only catastrophic injuries and has a high deductible but a low monthly premium.

Still others become eligible for Medicare, Medicaid, or other federal and state assistance programs. The benefits offered through those programs are often better than the packages people buy privately, Routt County Human Services Director Bob White said.

"When you look at health insurance that everybody else has to buy, it's a heck of a deal," White said.

However, federal assistance programs mean huge costs to the government, he said.

In Routt County, for example, 300 people are covered by Medicaid. Those 300 people required $685,000 in benefits be paid to providers for July of this year.

"That's one month in little old Routt County for our 300 clients. ... (For a year) that's about $8 million," White said. "I personally wouldn't call this a long-term solution, but at the individual level of a client who's eligible, it's a great solution."

Large-scale solutions

While individuals look into short-term fixes, officials across the nation are looking into large-scale solutions.

People working on the issue usually start conversations by saying that there are no easy fixes. Some say the health care system is broken. Others say consumers expect more and better service but expect to pay less and less in doctor's bills.

CLUB 20, an organization representing counties in Western Colorado, has taken on the health care issue with a subcommittee devoted to the topic.

"It's an 800,000 pound gorilla that nobody knows how to get their arms around. They just know it's going to get worse," Brown said. "We don't have the answers, either."

The committee came up with eight areas to look into and will vote this week to decide which of those areas to pursue as policy statements.

The areas include managing care more and using more preventative medicine; making individuals responsible for the services they use; making the government responsible for adequately funding its programs; addressing the costs of the uninsured and underinsured; and reducing cost shifting, CLUB 20 President Reeves Brown said.

Karl Gills, CEO of Yampa Valley Medical Center, said health care problems have arisen from society's expectations that health care is a right rather than a privilege, as well as from escalating expenses created by technological and medical ad-vances.

YVMC has worked to keep costs down in several ways, Gills said. One is to limit cost-shifting, or raising prices for all services to compensate for payment shortfalls, to prevent people who are insured from paying more to cover costs of those who are not.

Another method is to focus on wellness and preventative measures, and yet another is to limit services that would not be economical in this area, such as the construction of a major cardiac program, Gills said. Those steps can only go so far.

"There's no magic bullet there," Gills said. "There's certainly not an easy solution to addressing all of the ethical and practical challenges that we have to pay for the health care services we all want."

Employee benefits

For some small businesses in Steamboat, employee health insurance is a must. Greg Koehler, owner of Rabbit Ears Motel, said he's provided health benefits for employees for the past six years.

Koehler said his costs keep going up. Plans that used to cost $2,000 a month now cost about $4,000 and provide fewer employee benefits, but he said he's committed to providing the benefits.

"I've got good employees and they really care about the place, so it's something I want to provide to them in return," he said.

But he said that if monthly costs continue to double, there might be a point when it becomes too much.

"Certainly, when the costs become prohibitive, then you've just got to say, 'I can't do it,'" he said.

That's the position Scott Fox finds himself in. Fox is the owner of Winona's Restaurant and Freshies Restaurant. He had offered health benefits to his long-term managers, but that will be changing Sept. 1.

"It's just gotten to the point where it's our No. 1 battle," Fox said. "It's something that we would like to be able to offer, but at the same time, it's just a cost that's unbelievable."

With increases in health care costs, more and more small businesses in Routt County are not able to offer health insurance. Group plans are more expensive per person than individual plans because insurance companies are required to accept groups.

Scott Ford, a counselor for the Small Business Development Center at the Colorado Mountain College, said that none of the businesses he's worked with, new or established, has considered paying for employee health benefits.

"It's viewed very, very far down the list, as a nice-to-have and not a must-have," Ford said. "For so many of our businesses here, the margins are so tight that there's very little room for them to provide this type of benefit."

Community Health Plan

Some businesses in the Roaring Fork Valley were in a similar predicament. Meredith Pepper, the operations manager for the computer support company Mitchell & Co. in Aspen, said her company was thinking about dropping its group policy and going to individual policies.

"It's gone up every year, and every year we've gone through the same thing," Pepper said.

But when the area joined a community health plan, Pepper said her group found a comparable plan for $7,800 less per year.

With the Roaring Fork Valley plan, which started this summer, businesses were able to join a larger group and work with PacifiCare insurance to get better rates, said Brad O'Neill, development consultant for the Van Gilder Insurance Company, which is organizing the plan.

The idea behind community health plans is to bring businesses together under a nonprofit organization that serves as its own insurer or that contracts with another insurance company.

Through the plans, communities can integrate the delivery and financing of health care, said Dr. Bruce Amundson, who works with rural communities to improve health care.

Once communities have control over the money, they can devote some to working with the 10 percent of people who end up counting for about 70 percent of health care costs, Amundson said.

"It's not an insurance problem. It's a lack of appropriate clinical services for the people who are insured, and the cost of insurance just reflects what's being paid out to people," he said.

The Steamboat Springs Chamber Resort Association is researching community health plans and considering applying to become a pilot "Multiple-Employer Welfare Association," an option created by a recent Colorado bill that paved the way for a MEWA pilot program.

Through the program, 18 communities can develop a plan to create a self-funded, nonprofit group to offer insurance to the community.

The chamber has contracted with Colorado Benefits Group to look into its options, said Sandy Evans-Hall, executive vice president of Steamboat Springs Chamber Resort Association.

Evans-Hall said that before any decisions are made, the risks involved with having such a plan -- which include bankruptcy -- would be considered.

"There's a lot of risk in being your own insurance carrier, so once we lay it all out. ... (We'll) look at that to identify the risks involved and understand if we want to do it," she said.

Insurance agent Fossi-Williams said that working on a MEWA now might be premature because no legislation is in place to allow a community to screen applicants.

"Healthy people are going to keep their own plans and the sick people are all going to go into the community plan," she said. "It's going to be a huge financial commitment for the community to have a self-insured MEWA work for the future."

The deadline to apply for the program is Oct. 1, but no communities have applied, Colorado Division of Insurance representative Susan Gambrill said. Some of the hesitation might stem from communities worried that healthy groups won't apply for the program because they'll stay with the individual plans they already have, she said. Another hesitation is that some community health plans in the mid-1980s ran into problems, Gambrill said.

"There were lots of self-funded (groups) and a lot of them went belly up and left people with large claims," Gambrill said. "I think the concern is if we're going to go back to that, let's make sure there are some solvency requirements."

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