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Business Health Care Group Reports First-Year Savings

Self-Funded Companies See Aggregate 13.7 Percent Drop in Costs

Category:

Thursday, July 19, 2007 10:59 am EDT

Dateline:

MILWAUKEE

Public Company Information:

NYSE:
HUM
US4448591028

MILWAUKEE--(BUSINESS WIRE)--Business Health Care Group (BHCG) self-funded member companies for which comparative data is available saw a 13.7 percent drop in medical costs per health plan member in 2006, which translates into annual savings of $24 million. When taking into account health care cost increase trends, the program produced even greater savings, totaling an estimated $40 million.

An independent third-party research firm compared 2006 results with those from 2005, using data from 15 of BHCGs 17 self-funded businesses - those for which prior-year cost data was readily available - representing a total of approximately 45,000 health plan members. 2006 was the first full year for the health insurance offering called Humana Preferred, created by Humana to support the BHCGs goal of bringing Southeastern Wisconsin health care costs in line with Midwest averages.

A double-digit drop in health care costs after one year versus years of double-digit increases shows that the BHCGs strategy for lowering health care costs is working, said Keith Nosbusch, chairman and chief executive officer of Rockwell Automation. Im excited about the possibilities of additional savings and higher quality we can produce as the BHCG continues working with providers and empowering our employees to be better health care consumers.

Self-funded companies account for approximately 80 percent of the 89,000 health plan members enrolled in plans linked to Humana Preferred and its high-performance network of doctors, hospitals and other health care providers. Humana serves an additional 39,000 BHCG members on plans tied to other provider networks.

These first-year savings represent significant progress and demonstrate that a market driven strategy can succeed in helping Southeastern Wisconsin solve the dilemma of affordable health care, said Dianne Kiehl, BHCG executive director. But while we are beginning to move the market, there is still much to do. We must continue to work collaboratively with the medical community, while engaging employers, consumers and payers to control runaway health care costs, which remains one of the largest common threats to our regions economic vitality.

Improved provider pricing, physician efficiency, a focus on evidence-based medicine, and the use of Humanas consumer transparency tools and other BHCG educational materials, all contributed to the cost reduction, said Kiehl.

While the current results reflect the experience of self-funded companies, fully-insured BHCG member companies are also benefiting from Humana Preferred and its 10 percent premium advantage compared to Humanas broader, regional PPO network. Humana Preferred includes 31 hospitals and approximately 3,900 physicians, representing about 75 percent of Humanas regional PPO network.

In all, more than 500 employers are now participating in the BHCG, including some of the areas largest and best-known corporations, as well as hundreds of small and mid-sized businesses. New products like Humanas recently-introduced No Worry plan, which caps annual premium increases at 6-percent or lower over a three-year period, offer tangible ways for small and mid-sized firms to share in the BHCGs success. In Southeastern Wisconsin, No Worry is available exclusively through the BHCG.

In addition to the first-year cost savings, the BHCG reported these other early accomplishments aimed at empowering consumers to become better informed purchasers of health care:

  • The BHCG is developing eight innovative educational modules to illustrate the role that employees of member companies can play in addressing health care costs. Subjects include Health Care Costs and Why You Should Care, Understanding Your Healthcare Bills and How Insurance Works, Choosing the Right Plan and the Right Doctor, Getting the Most from Your Healthcare Visit, Hospital-ER-Urgent Care: Getting What You Need, Understanding Prescription Drugs, Prevention and Lifestyle, and Understanding the BHCG Strategy.
  • Humana and the BHCG are bringing greater transparency to health care, by posting information on the price and quality of health care services, including cost information, by facility, for 30 inpatient and 26 outpatient services, available on the companys Web site.

About the Business Health Care Group:

The Business Health Care Group is a membership organization of more than 500 employers and employer groups in the 11-county region of Southeast Wisconsin. BHCG and its members share the common goals of moving the health care market through innovative action and partnering for effective change. Visit www.businesshealthcaregroup.org to learn more.

Contact:

Scheibel-Halaska for the BHCG
Rosland Gammon, 414-274-3014
rbgammon@insidesh.com