HEALTH CARE PARTNERSHIP IS ESTABLISHED

Faced with spiraling health care costs, a group of Southeast Missouri businesses is embarking on a new program to rein in such expenses while maintaining quality care.

The program will be implemented July 1 by a partnership involving the Southeast Missouri Business Group on Health, Blue Cross and Blue Shield of Missouri, and the region's medical community.

"This is the second generation of managed care," said Mary Dunn, executive director of the business group, which has negotiated a three-year contract with Blue Cross.

She said the businesses initially hope to realize a 10 percent savings in their health insurance costs.

Representatives of the business group, the medical community and Blue Cross gathered in Cape Girardeau Friday to officially announce the new health care program.

Dunn emphasized that the group is concerned with "the total picture" of health care, including the need for tort reform to address the high cost of defensive medicine resulting from lawsuits.

She said the business group is pushing for a system like that of Maine, which limits liability for doctors who meet treatment guidelines.

"We are going to be developing what we call (medical) practice parameters," she said.

Dr. Thomas Sparkman, president of the Cape Girardeau County Area Medical Society, said health care reform is inevitable and doctors must be involved in the process, as has taken place with the business group program.

The Southeast Missouri group currently comprises 78 businesses and institutions, which have nearly 10,000 employees. Including dependents, these businesses provide health care benefits to about 30,000 people.

Most of the businesses are in Cape Girardeau, Jackson and Perryville. The bulk of the members are manufacturing and service companies. The business group includes a number of the region's major employers, such as Procter & Gamble, Southeast Missouri State University, Drury Industries and Tri-Con Industries. Several medical groups, doctors and pharmacies are also part of the coalition.

"Two-thirds of our companies are small companies," said Dunn. "We have the very large companies, 1,200 to 1,500 employees, all the way down to companies that have two or three employees."

Roy Heimburger, president and CEO of St. Louis-based Blue Cross and Blue Shield of Missouri, said the new health insurance program is "a winner that's going to address the issue of cost and quality."

He said any effort to improve the health care system has to involve business. "Business is picking up the tab," he explained.

The new program and a similar one in St. Louis that's also scheduled to begin this summer are designed to reduce insurance administrative work and expenses, provide for personal case management for employees with major health problems and promote healthy life styles.

"We know that 65 percent of medical costs are incurred by about 5 percent of a group's membership," said Heimburger.

"What this program will do is concentrate on those people who are really ill," he explained.

By focusing on these patients, the program can eliminate much of the paperwork burden for both businesses and doctors, Blue Cross officials said.

Heimburger said Blue Cross is already doing case management in individual cases.

He cited the case of a boy who required a ventilator. Instead of keeping the boy in the hospital, Blue Cross purchased the necessary equipment so that the boy could live at home. Heimburger said it was a cost-saving move and also benefited the patient who was much happier at home.

"We are not practicing medicine," Heimburger stressed. "We are trying to assist the physician."

Dunn said an employee who is chronically ill would be assigned a case manager, a nurse who would help manage the health care services for that individual.

"We believe that when we focus on the 5 to 8 percent that are not healthy," said Dunn, "we are going to have tremendous savings there eliminate a lot of paper shuffling."

Blue Cross of Missouri receives total premiums of more than $800 million a year. About 12 percent of that revenue or about $100 million goes to administrative costs, Heimburger said.

Reducing paperwork by 10 percent could save $10 million in health insurance costs, he pointed out.

Area business leaders began meeting three years ago in an effort to take control of their rising health care costs.

Dunn said the business group has attempted to obtain medical services at affordable cost by focusing on quality.

The goal was not to negotiate lower rates for their own companies, which, in turn, would force doctors and hospitals to charge higher rates to others.

"We don't want to cost shift to anybody else," explained Dunn.

"If services are quality services, if total quality management is applied, we really feel they (medical care) will be efficient and cost less," she said.

"One of the reasons we did a market buy (of insurance) was so we could collect our own data on Southeast Missouri, so we could look more deeply at where we are spending our money, with whom and on what," explained Dunn.

She said such health care data had previously been available only to larger companies.

"We are incorporating what we call value-management strategies. We are going to, number one, be educating our consumers. We are going to be promoting heavily and rewarding healthy life styles," said Dunn.

Those who follow a healthy life style, for example, may end up paying less for their health coverage, she explained.

The group plans to encourage companies to implement wellness programs. Some of the traditional managed care procedures, such as pre-certification for hospital admissions, will be dropped for most of the covered employees and dependents.

"With the business group only 6 to 7 percent of the population need to pre-certify hospital admissions," said Ruth Meyer Hollenback, regional vice president and chief operating officer for Blue Cross' Southeast region.

"It is very good for employees, physicians and hospitals. It takes a lot of the paperwork and procedural work out of the way. It eliminates those things," said Hollenback.

Dunn said the new health plan is needed. Some Southeast Missouri member businesses in recent years have experienced 16 to 40 percent increases in their health insurance premiums, she said.

"We are talking about millions of dollars," said Dunn. "It's eaten right into the profits and, in some cases, companies for the last three years have broken even.

"That just could not continue," she said.

As health care costs have climbed, companies have had to shift some of those costs to their employees.

Procter & Gamble, which has about 1,300 employees, has seen its health coverage costs increase by $1 million in a single year.

The company has had to shift some of that cost to employees. "We just felt we don't want to do that again," said P&G's Robert Cranmer, who serves as president of the board of directors of the Southeast Missouri Business Group.

Cranmer praised the new health plan. "I think it is a win for the employees because they get quality care. It is a win for employers because the bottom-line costs are reduced," he said.

He contended it also benefits the medical community, involving health professionals in the plan. "I think it is a win-win all the way around."