By Brian Schilling

An enormous amount of ink and energy have been devoted to private health exchanges, leading some to believe they will become the next big thing in health care as large employers flock to them in droves. Champions of private exchange aren’t hard to find—at least two large employers have already dumped their traditional plans and pushed employees into private exchanges. But will anyone else follow suit?

Robert Galvin, M.D., who led GE’s global health benefits office for 15 years and now helps dozens of companies manage their health care benefits as the CEO of Equity Healthcare, says: not right away.

Will Other Employers Follow Darden Restaurants and Sears into Private Exchanges?
Speculation about the market potential of private exchanges moved into high gear in late 2012, when Darden Restaurants and Sears both said that they would drop coverage as soon as they reasonably could and direct employees to shop for coverage through their own private health exchanges. Both firms have since moved forward with those pledges. At first glance, the benefits of a private exchange for providing employee coverage seem compelling—expanded choices for employees, a minimum of administrative hassle, and dramatically simplified budgeting, at least in the short term.

Nevertheless, Galvin doesn’t see Sears and Darden as early movers in a more general shift. “They’re both low-wage employers with lots of part-time employees and fairly high turnover,” he said. “They’re essentially large versions of the small employers that exchanges were designed for, so it’s not that surprising that they’re interested. They’re not good bellwethers for the rest of the market.”

Are Private Exchanges the New 401k?
Aon Consulting, Mercer, Buck Consulting, Accenture and other consulting firms are all marketing private exchanges. While most of these exchanges only have enrollment numbers in the thousands—rather than millions—they’re being promoted aggressively.

Private exchanges would be like their public counterparts, organizing and repackaging information from participating health plans to make it easy for employees to compare and buy coverage online. During open enrollment, employees—not their employers—would take the reins, making all their own coverage decisions autonomously. Employers would still presumably foot much of the bill, albeit on a defined basis, meaning that each employee would receive only a set amount per month to be used on the health care plan of their choice. If employees choose a particularly generous plan—that is, one that costs more than the set amount—they’ll make up the difference themselves.

Some observers expect this will pave the way for a dramatic shift in the benefits world, similar to the 1980s when defined retirement benefits (i.e., pensions) gave way almost completely over a 20-year period to defined contribution plans (i.e., 401k plans).

Galvin remains unconvinced, although that makes him somewhat of an outlier among his peers.

“There are only a few of us out there who are saying that exchanges just aren’t going to live up to expectations,” said Galvin. “But I have real trouble seeing the benefit.”

Galvin is in a position to know. He speaks to top executives at two or three firms every month about whether they should be looking at private exchanges. Only infrequently does he find one that remains interested after he goes through the math in detail. As part of these discussions, Galvin is always careful to make the point that in his opinion the upshot of the exchange ‘exit strategy’ is that employers retain responsibility for paying for health care, but lose the leverage to influence the type and value of health care their workers buy.

“Once salaries are increased to make the exchanges affordable, once the loss of the health care tax break is factored in, once the benefits of self‐insurance are appropriately weighed, the savings disappear in almost every case,” says Galvin. In addition, Galvin notes that there is no reason to believe that a defined contribution will inflate any less slowly than a defined benefit. “Expecting competition between insurance carriers to lower costs when the core drivers of costs are providers doesn’t pass the common-sense test,” he says.

But apart from financial considerations, says Galvin, employers have two other good reasons to stay in the benefits game: morale and worker retention. “The labor market is still quite competitive, recession or not,” says Galvin. “No one is going to want to be first—or second or third—to say to their employees, ‘You’re on your own with respect to health benefits.’ The only large firms that are going down this path are the ones that don’t need to attract and retain highly trained employees and the ones that haven’t sharpened their pencils yet.”

Retirees, Part-Time Workers, and COBRA
To the extent that exchanges—either public or private—make inroads into the employer community, it may be through the back door, as a low-hassle way to handle the needs of retirees, part-time workers, and former employees on COBRA. For all three groups, employers’ concerns about recruitment, retention, and morale may be reduced or eliminated and employee expectations may be substantially different as well.

According to a 2012 National Business Group on Health survey of large employers, 53 percent of firms are looking into public or private exchanges as a possible exit strategy for providing health benefits for retirees. Likewise, 41 percent of firms are investigating whether exchanges might handle benefits for former employees on COBRA and 33 percent are considering moving part-time workers to some sort of exchange.

“I do expect to see some movement here,” said Galvin, referring to the possibility that large firms will embrace the exchanges when it comes to providing benefits for these three groups. “There’s a much more natural fit between the exchanges and retirees, part-time workers, and those on COBRA.”

The Long View
When asked about the longer-term future of employer-sponsored benefits, Galvin suggests that a number of current trends related to engaging consumers and revamping delivery systems will continue. With respect to consumer engagement, that means more use of incentives tied to health outcomes, a continued shift to high-deductible health plans, and greater price transparency. On the delivery system side, he says, we’ll see more medical homes, accountable care organizations and, perhaps most important, real payment reform.

What we won’t see, he says, is an exit from employer funding of health benefits.

"One way or another, employers are going to stay in the game either directly funding benefits by buying them, or by paying some sort of fine or tax,” says Galvin. The smart money is on the status quo. “Even employers that don’t want to be in the business of providing benefits realize that it’s important. It’s the monkey on your back that you need to attend to, or it will muck up whatever else it is that you’re trying to do.”

By Brian Schilling

In just the past three years, the more than 26,000 employees of Kraft Foods Group have become, behaviorally speaking, an almost entirely different group of people.

"In 2010, we set out to make our employees healthier and improve productivity by giving them incentives to get more engaged in their own health care," explains Kathy McAlpine, Kraft's senior director of benefits. "It's too early to declare victory, but so far so good."

That may be an understatement.

Kraft's medical spending trend dropped from an annual 8 percent increase in 2009 to a 1.2 percent increase in 2012, compared with a 3.9 percent increase nationwide. The percentage of employees completing health risk assessments (HRAs) jumped from 39 percent to 99.5 percent over the same period. Participation in chronic disease management programs has skyrocketed. The number of workers who report working at less than full capacity because of illness—a phenomenon known as presenteeism—is down.

Behind the Numbers

Kraft's success in encouraging beneficiaries to get involved in their care is the result of several factors, including smart benefit design and appropriate use of incentives and penalties. But one factor has played a particularly important role: the company's decision to emphasize customer service in its choice of health plans, Aetna One.

"The idea that we wanted a health vendor that could offer targeted, timely outreach to our employees and their families was really central to our benefits redesign effort," said McAlpine. "We started with the idea that it was our job to help our employees use and take advantage of their benefits. That's what made Aetna One and their health concierges so attractive to us."

Aetna One is an Aetna product that pairs designated "health concierges" with particular employers and employees. Health concierges are like high-powered customer service agents, but with a lot more training, access to more data, and no obligations to field a certain number of calls per hour. Typically, they have a small, dedicated group of companies from which they are expected to field calls. This allows health concierges to know each caller's copays, deductibles, referral requirements, support services, and other benefits details exhaustively.

To understand how they add value, consider the experience of one (non-Kraft) caller: Late last year, Angela Lupton, an employee at Aetna's customer service center in New Albany, Ohio, took an atypical call from an Aetna member.

"She was an older woman in her 90s and she was distressed about a bill," explained Lupton. What made the call unusual was that the bill didn't come from Aetna and it was for services rendered almost a decade earlier. "She didn't know if she needed to pay it and wasn't really in a position to find out."

What happened next is even more unusual; Lupton asked the woman for details, researched the services in question, followed up with the appropriate parties at the nursing home that generated the bill, coordinated with the collection agency that had become involved, and resolved the issue. Happily, too—the bill was a mix-up and the woman didn't have to pay.

"I'll typically understand callers' benefits as well as or better than they do and that allows me to help them make the most of their coverage," says Lupton. Lupton also works closely with a dedicated team of specialists to help match callers with needed services, so if, for instance, she receives a call from someone asking about a new diabetes test, she can talk to the caller about available diabetes support and also refer her to the appropriate professional, often by name.

Why Putting Service First Matters

Kraft's redesign effort may sound familiar to other large employers that have similarly been hit hard over the past 10 years by rising health care costs. The overhaul included:

• a mandatory high-deductible health plan;
• a health savings account;
• a four-tier prescription drug benefit program;
• steep surcharges for nonparticipation in key health management programs; and
• incentives of up to $500 per employee per year for taking steps to manage and improve their health.

These strategies—while somewhat controversial—are popular: 69 percent of U.S. employers offer a high-deductible health plan, 87 percent include a tiered formulary, and savings accounts, incentives, and penalties are all fast becoming de rigueur. But at Kraft, the emphasis on services makes all the difference.

"It's one thing to revamp your health benefits so that employees have a strong financial incentive to get involved in managing their own health," said McAlpine, who helped develop the organization's benefits overhaul. "But financial incentives only go so far. They certainly don't turn an employee who is confused about her health benefits into one who understands them overnight. Our employees aren't experts at navigating the health care system and we don't expect them to be. We viewed it as our job to help them."

And help they do. Of the steady stream of calls that come from Kraft employees on a weekly basis, 97 percent are resolved during that first call. Of the remaining 3 percent, the majority are resolved within a day or two. And overall, members are very happy with their service—nearly 96 percent say they're happy with Aetna's customer service.

McAlpine says that great customer service has helped Kraft's benefits redesign achieve its three main goals: improve health, raise productivity, and control costs. The projected increase in Kraft's medical spending dropped by about 85 percent to 1.2 percent per year. Health risk assessment (HRA) participation is nearly universal at 99.5 percent. And participation in chronic disease management programs among the sickest employees has gone up nearly 450 percent. As a result, says McAlpine, Kraft's employees are healthier. Health risk scores in all categories have shifted from high risk to low risk, meaning it's less likely in the coming year they'll have significant medical problems.  

Kraft's redesign effort was recognized recently by NBCH and the Integrated Benefits Institute, which together awarded it the 2013 Healthy Workforce Productivity Award. This annual award goes to an employer that has successfully worked with its employees to develop, implement, and measure a notable health and productivity initiative.

"What really stands out with respect to Kraft's effort is the drop in health-risk factors among their employees," said NBCH President Andrew Webber. "To me that's much more notable than the drop in health spending. When you reduce health risks, you've done your employees and your organization some good in a way that will pay dividends for a long time."

The drop in health risks is no simple byproduct of a more enlightened benefit design. It's the direct result of a concerted effort to engage Kraft employees in their own health care. On the front lines of that effort are the health concierges, who are trained to steer people toward an array of typically underused health plan resources.

Health concierges are trained to talk, at length and intelligently, about available disease management resources, maternity programs, lifestyle coaches, smoking cessation opportunities, and other resources available to the employees of the companies.

"If I get a call from someone asking about a particular type of blood sugar test, my goal isn't just to answer that one question," says Aetna's Lupton. "That's the entry point for a conversation about diabetes, lifestyle coaching, and disease management resources. I ultimately want to be able to refer that caller to someone who can help them make sure they're staying on top of whatever health issue they're dealing with."

To date, Aetna's health concierges have given more than 13,000 such referrals to Kraft employees. Under a more typical customer service arrangement, none of those referrals would have been made unless the caller specifically requested it.

"For us, the concierges make the difference between having a great benefits program and having a great benefits program that actually gets used the way we want it to be used," said McAlpine. "Our benefits programs do not suffer from lack of use."

Sidebar: Benefits Redesign Rationale

High-deductible plans. By the end of this year, nearly 80 percent of employers with more than 1,000 employees are expected to offer a high-deductible plan. But perhaps more tellingly, almost 15 percent of those employers offer only a high-deductible plan. Note that a RAND study found that when families shift into high-deductible plans, their health spending dropped—but so did their consumption of preventive health care. Employers should seek to ensure that workers don't scrimp on valuable and cost-effective preventive care such as immunizations, screening for hypertension and colorectal and breast cancer, counseling adults about using baby aspirin to prevent cardiovascular disease, and screening pregnant women for HIV.

Tiered forumulary. Eighty-seven percent of employer health plans include some sort of drug benefit formulary. These formularies typically increase employee cost-sharing for more expensive or less effective drugs. Four-tier formularies are gaining market share. Today, about 14 percent of workers have such a formulary. To help guide beneficiaries to less expensive or more effective drugs, the average copayment is now $51 for so called "nonpreferred" third-tier drugs. The average coinsurance rate for the same tier: 39 percent.

Health savings accounts. As of last year, 17 percent of U.S. workers with employer-based insurance were enrolled in a health savings account (HSA), according to the Kaiser Family Foundation. A separate Kaiser study from the same year found that among individuals contributing to their own HSAs, costs substantially affected the care they chose—discouraging the use of costly emergency rooms and encouraging less expensive office visits.

Incentives and penalties. While incentives are still more popular than penalties for shaping health-related behaviors, employers are increasingly willing to use both, according to a 2012 Towers Watson survey of large employers. Forty-three percent of employers provide incentives to encourage participation in biometric screenings and 30 percent offer incentives to engage in healthy lifestyle activities in the workplace. By contrast, only 20 percent of employers use penalties to help shape behavior. But when it comes to smoking, the gloves are off: 42 percent of companies levy an average $50 per month premium penalty on tobacco users. About 10 percent of employers have adopted achievement standards related to metrics such as body mass or blood pressure.

By Brian Schilling

Three years ago, approxmately 20 large, self-insured employers performed a crude financial assessment to see whether their contracted health plans were paying doctors and hospitals the way they all knew they ought to be paying them—with payments tied to value. Their diagnosis: not really.

"In 2010, we found that only 1 percent to 3 percent of health care payments were related to health care quality or value," said Suzanne Delbanco, Ph.D., executive director of Catalyst for Payment Reform (CPR), an organization focused on payment reform.

But three years is a long time in the health care world, and things have changed. According to a recently issued CPR report, about 11 percent of payments are now tied to value—a huge jump whether you're starting from 1 percent, 3 percent, or somewhere in between.

Curiously, the health care media gave this report a collective shrug. A CPR collaborator gave Purchasing High Performance a heads-up that the report "wasn't going to be very good news." And CPR's own press release begins with the word, "Only." That no one seems impressed by the 11 percent figure is perhaps because it is still plainly shy of whatever magical threshold will drive real change in health care quality and affordability: sure we've made tremendous progress in a short period of time, but there's still SUCH a long way to go.

CPR's goal is 20 percent of payments tied to value by 2020. At the current pace, we'll get there a few years early. Delbanco has been quoted as saying that the 20 percent goal was initially selected because it was "hard, but attainable," and her view hasn't changed much.

Delbanco goes on to note that in order to reach the 20 percent goal, employers need to step up to the plate. To that end, CPR offers the following recommendations.

• Adopt and use the CPR-developed health plan request for information (RFI) and model health plan contract language. The RFI essentially asks health plans to tell employers and other health care purchasers what they are doing with respect to performance-based payment, how they're measuring the impact of those payments, and their future plans. The model health plan contract language helps employers and other purchasers outline their expectations for how their health plan partners with evolve their approach to payment.
• Push price transparency. Should a CT scan of the head cost $240 or $1,421.63? Should an MRI of the brain cost $625 or $3,316? Those are real prices (in Fairfield, Conn.) for these services and they reflect a broad national problem: huge, inexplicable price differentials for the same services in the same geographic regions. To complicate matters, the prices aren't readily available, leaving employees and employers to pick up huge, unnecessary health care bills because they couldn't shop around. At a minimum, says CPR, employers should demand that providers make pricing information available for certain high-volume or high-cost services.
• Use reference-based pricing. Used in conjunction with price transparency, reference-based pricing can be a powerful tool for controlling health care costs. The term refers to placing a cap on an allowable charge for a given clinical service. For example, a simple cholesterol test might be capped at $20, a price at which the service is available in the community from a reputable provider. If a patient receives that same test for more than $20, he or she is responsible for the difference. One five-year study of reference-based pricing for prescription drugs used to treat gastrointestinal issues found that overall costs related to those drugs dropped by about 50 percent. Total out-of-pocket costs for plan enrollees were also lower.
• Stop paying more for preterm elective births. South Carolina's Medicaid program recently drew national attention with its newest payment policy: it would no longer pay for unwarranted, elective preterm births. Such elective deliveries have been shown to be not only very costly as compared with routine deliveries, but also potentially harmful to infants. Delbanco says it may be a stretch for some payers to negotiate complete nonpayment for preterm elective deliveries, but they may be willing to consider "neutralizing" payment arrangements—that is, removing financial incentives to make such deliveries available.
• Stop paying for undesired events. The battle against hospital-acquired infections has raged for decades, but CPR say one strategy might turn the tide: stop paying for them. The typical hospital-acquired infection can extend a routine hospital stay and generate charges of $30,000 or more. It's ludicrous to pay for a hospital's mistake, says Delbanco. "Where's the incentive to improve when every time you fail you make more money?" she says.

Federal Support
Employers aren't alone in looking for a more enlightened way to pay for health care. The federal government has weighed in, in the form of the Affordable Care Act, which set aside billions of dollars to fund pilot programs to rapidly test and expand initiatives that use payment reform to improve health care quality. The law also launched the Center for Medicare and Medicaid Innovation, which is explicitly tasked with identifying worthy reforms and then launching them throughout the Medicare system.

What happens in the Medicare program matters not just because it is the only payer big enough to dictate terms to insurers, but also because it has a track record of coordinating its efforts with private payers. Beginning this year, Medicare reimbursement rates will be tied to scores on patient satisfaction surveys. That may not technically be a measure of health care quality, but it's certainly a step in the right direction. At risk for Medicare plans are hundreds of millions of dollars annually. In fiscal year 2013, 1 percent of Medicare payments, or $964 million, are in play. Next year, the amount doubles to 2 percent.

This year's State of the Union address may have included a hint that future Medicare payments will be tied even more closely to quality of care. Specifically, President Obama said, "We'll bring down costs by changing the way our government pays for Medicare because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital. They should be based on the quality of care that our seniors receive."

Plans on the Cutting Edge

In certain markets, value-based payment is already a reality. According to Francois de Brantes, executive director of the Health Care Incentives Improvement Institute, and developer of the Prometheus payment model, Anthem Blue Cross Blue Shield in Wisconsin, HealthNow New York, and a handful of small plans in central Pennsylvania all currently have fully operational, if partially manual, value-based payment systems.

"We know that it's possible and we know that it will save money over the long haul," says de Brantes.

Moreover, says de Brantes, McKesson and at least one other big health IT software vendor now offer off-the-shelf value-based payment systems that can be appended to core claims systems.

But even so, says de Brantes, most national plans are still dragging their heels: "There's lip service among the national plans, but no real action. They're finding it difficult to justify the investment of hundreds of millions of dollars in value-based payment systems without a clear business case. They're waiting for employers to tell them that they have to before they take the plunge."

For more information about how to get involved in promoting the payment reform agenda, visit: CPR's website.

By Colleen Bruce and Brian Schilling

Concern about complying with the various provisions of the Affordable Care Act once again topped the Towers Watson/National Business Group on Health list of health care concerns among benefits managers at large to midsize employers this year. Compliance concerns slipped to the number 2 spot in last year’s annual survey of employer purchasing behaviors. There are many resources available for keeping abreast of pending changes. The Commonwealth Fund offers a free, comprehensive resource center on health care reform at http://www.commonwealthfund.org/Health-Reform/Health-Reform-Resource.aspx. The U.S. Department of Health and Human Services (HHS) website, Healthcare.gov, offers useful tips and insights about navigating the new law. And don’t forget your local business health care coalition, which may offer hands-on support, meetings, and other assistance, in addition to information and updates.

The following employer-related provisions of the health reform law have already gone into effect, or will do so this year:

• Exchange open enrollment. State health insurance exchanges (now called marketplaces) may not open for business until January 1, 2014, but open enrollment begins October 1, 2013. Even large employers that are not participating in the exchanges will be expected to notify all new hires and current employees about the marketplaces and inform them if the health benefits the employer offers do not meet the minimum essential coverage standard. Further, employers are expected to let employees know that they may be eligible for a premium tax credit if they purchase a health plan through their state’s exchange. In early May, the U.S. Department of Labor (DOL) issued an important clarification about employers’ obligations to inform employees about their options under the new health insurance marketplaces. Significantly, the DOL guidance included a model notice for employers that currently offer health coverage.
• New contribution limits on health flexible spending accounts (FSAs). The days of unlimited contributions to FSAs are over. The maximum annual FSA contribution now stands at $2,500.
• Loss of Medicare Part D subsidy deduction. Employers may no longer deduct the portion of their overall health care expenses that were reimbursed through the now-defunct Medicare Part D subsidy program. This change to the tax code applies to both insured and self-insured health plans regardless of whether or not they are grandfathered.
• Federal Insurance Contributions Act (FICA) tax increase. Employees’ FICA tax rate for wages over $200,000 ($250,000 for married couples) now stands at 2.35 percent, up from 1.45 percent last year. Employers are required to collect the employee’s portion of this tax.
• Patient-Centered Outcomes Research Trust Fund fees. To help fund the new Patient-Centered Outcomes Research Institute, self-insured health plans and health insurance carriers are now being assessed a $1 per-member-per-year fee. Fees double to $2 per-covered life in 2014.
• Penalties and more penalties. Although technically not assessed until next year, employers with more than 50 employees should be advised that failure to offer benefits that meet the minimum essential coverage standard will be subject to a $2,000 per-employee-per-year penalty. Employers that offer coverage deemed “unaffordable”—that is, coverage that drives employees to the exchanges—will face a $3,000 per-employee-per-year penalty.
• Reinsurance fees. Health plans and third-party administrators for self-insured plans will be required to pay into their state’s individual market reinsurance program at a rate of $5.25 per member per month, or a total of $63 per member per year. Though steep, the fee is only expected to last for three years.

By Brian Schilling

Three years ago in Purchasing High Performance, we reported on a novel program at Louisiana-based Ochsner Health System to pay employees—mostly via premium discounts—to stay healthy. At the time, there was considerable interest in whether employers could effectively encourage employees to become or remain healthy. Congress had just passed the Affordable Care Act, which would allow employers much greater latitude to use such incentives, albeit not until 2014. That time is not far off and interest in the question remains: can employers pay employees to be healthy?

Ochnser’s Susan Piglia, assistant vice president of corporate wellness, says yes. After three years, the program remains essentially unchanged and interest in it is stronger than ever. Participation has grown from about 80 percent of the health system’s 13,500 employees in 2010 to about 90 percent in 2013. Moreover, anecdotes abound about company employees who have lost weight, reduced their need for medications, rid themselves of diabetes, or set and met personal health goals. “One of our employees told me that she lost half her body weight, which she attributes to her participation in the program,” says Piglia. “That really made my whole week.” Piglia notes that Ochsner is looking into expanding the program to spouses because it’s the right thing to do and also because it could reduce health care costs further.

By at least two important measures the program has been a significant success: 55 percent of participating employees have improved their blood pressure and 24 percent have lowered their body mass index. “Everyone who follows health benefits knows the significance of improving these two risk factors,” says Piglia.

Ochsner’s program is not unique. In fact, it is an off-the-shelf offering of the Virgin HealthMiles corporation, a branch of the much larger Virgin empire that includes telecommunications, airlines, music and, lately, space travel. Through the program, employees who wish to participate are given an “activity tracking device” (i.e., a sophisticated pedometer) and access to an online platform that helps them accurately capture and track daily activity, including aerobics classes, biking to work, or other exercise. Based on their level of activity, employees earn HealthMiles. Employees who reach the levels recommended by the Centers for Disease Control and Prevention can earn significant premium discounts—up to $2,000 a year for family coverage.

But Piglia is quick to note that the potential premium discount isn’t the only thing that drives interest. “It’s all about the challenges,” she says, referring to the fact that participating employees are encouraged to engage their coworkers in contests. A nurse might challenge a doctor to see who can log more steps over the weekend, for instance, or billing might invite radiology to compete in a lunch time walk-off. “You see challenge emails all the time and then you see people out walking with a purpose during their lunch hour. No one here wants to lose a challenge,” says Piglia.

Help Your Employees Avoid Unnecessary Tests, Care
NBCH and the Pacific Business Group on Health (PBGH) recently released the "Choosing Wisely" Employer Toolkit, which is designed to help employers get their workers more involved in thinking and talking about their health care. The toolkit includes dozens of articles, videos, tip sheets, and other ready-to-distribute resources that will help educate employees about topics ranging from how to communicate with physicians to common tests and procedures that they may not need. The toolkit will be available free through 15 consumer-focused organizations including NBCH, PBGH, the Midwest Business Group on Health and the Minnesota Health Action Group.

Massachusetts' Mandate Prompts Employers to Expand Coverage
Expect the White House to be even more eager to talk about Massachusetts' experience with health care reform. In 2006, the state passed the nation's first individual and employer mandate. Now, a new study shows the proportion of employers in the state offering health care coverage has increased. According to PricewaterhouseCoopers, tax implications created by the mandate have made it advantageous for employers to continue and even increase their health care offerings.

Hospital Pricing Data Now Available, Still Inexplicable
Not afraid of a little data, are you? Consider spending an afternoon (or longer) at the Centers for Medicare and Medicaid Services' website, where you'll find Medicare pricing data covering the 100 most popular in-patient procedures from the 3,000 or so hospitals that participate in Medicare. As we've known for a long time, the data show huge variations in costs, often even within the same city. In Denver, for instance, charges to treat heart failure range from $21,000 to $46,000.

The New Health Care Landscape Made Simple
Sometime in the next year, many of your employees will be expected to navigate within a new health care universe filled with unfamiliar organizations called "patient-centered medical homes" or "accountable care organizations." Many won't know what they are, but they should, and you can help them. The Commonwealth Fund is developing a series of helpful, jargon-free publications that explain various aspects of reform. The first, Primary Care: Our First Line of Defense, will be available soon. Several coalitions will be distributing the brochure and yours should, too.

The Affordable Care Act Chips Away at the Still-Enormous Ranks of the Uninsured
The Affordable Care Act's individual mandate doesn't kick in until 2014, but already provisions in the new law have dramatically increased the percentage of young adults who have health coverage—59 percent in 2012 vs. 52 percent in 2010. That's the good news. On the other hand, a new survey by The Commonwealth Fund finds that 84 million people did not have insurance for the full year or were underinsured. Further, 75 million people reported having problems paying their medical bills or were paying off medical debt, and more than 80 million people reported cost-related problems getting needed health care.

Could Retirees Save Their Employers $90 Billion?
If you're worried about the cost of retirees' health care, you're not alone. They're worried, too. Most retirees on Medicare spend hundreds of dollars a month on supplemental insurance policies to help with the cost of copayments, deductibles, and prescription drugs. The system is complex and expensive. But a new proposed "Medicare Essential" plan would dramatically simplify the system by rolling hospital, physician, prescription drug, and supplemental coverage into one plan. The proposed plan would also encourage beneficiaries to use high-value providers and require providers to adopt payment methods designed to promote high-quality, efficient care. The potential net savings to employers: $90 billion over the next 10 years. Beneficiaries would get broader coverage and lower out-of-pocket costs as well.