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In recent times though, employers have actually waken up to the fact that ‘extras’ on wellness programs cannot really be the key to draw employees to pay better attention to their health and living. This has prompted them to take more serious measures where employees either participate in wellness programs or feel the crunch on their paychecks. Incentive- based programs slap heavy punishment on members if they fail to act in the interest of their health and the interest of the organization. Penalty can be quite high and can be a deterrent to erratic employee behavior concerning health and wellness.

The reason behind the employers’ new way of viewing and reviewing corporate wellness is simple- they want healthier employees to enhance work atmosphere and overall productivity. Honestly this is no unfair demand because healthier residents will make a healthier America. At least that’s how a new study sees it. According to that if programs focus more on prevention and less on cure, overall health costs will be halved in one sweep.

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Statistics are also proof of the fact that the reports are not untrue. When child well-being is viewed comprehensively, United States hits rock- bottom and presents no competition for its counterparts. In the comprehensive child- wellbeing category, it ranks as low as 32nd out of the 33 countries reviewed. What is more disturbing is the fact that the power of industrialization backs all 33. And when it comes to the annual count of underweight infants, United States stands pathetically at the 29th position.

This lack of child well- being comes as a shock when countries like the Netherlands, Finland, Denmark and Sweden are seen ranking better. Underweight infants and sickly babies pose a distinct threat to the country’s future and should be enough food for worry at the moment. The sooner something is done about this, the better.

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CDC: Hospitals do poorly on breast-feeding support

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Other studies reveal how Americans are more prone to diseases. Even a child born to this nation does not have as many chances of survival as a baby born in El Salvador has! Canada who is one of the closest neighbors records better health amongst commoners. At least that is what a report claims when it says Canadians, on an average, have a longevity of about three years more than Americans. And believe it or not Cuba also wins when it comes down to average longevity!

The final one should come as a surprise- more than 90% of Americans feel the health insurance system will either have to undergo dramatic change or it will have to be discarded completely for a set- up that’ll serve the people better!

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The Brigham and Women’s Hospital had researchers claiming that most nursing homes have female patients who have arthritis and the percentage is as whopping as 80%. This problem is perhaps a peculiarity with the nursing home structure of care giving. This has further been proved by the researchers’ study based on intervening years between 1995 and 2004. While this decade saw a rise in the use of osteoporosis medicine overall, the statistics got worse in case of nursing homes.

Talking of improvement, osteoporosis medication found its place of pride only between the years of 1995 and 2001 after which there was a steady decline. And the situation only seems to be getting worse with each passing day with patients receiving no treatment at all (a revelation made by a new study).

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This exclusive Web conference will provide attendees with an understanding of the changing landscape of healthcare:

• Where is Health 2.0 today?
• How is healthcare catching up with other industries?
• What innovations are transforming the industry?
• What is online care?
• What is the health plan’s role in this transformation?

Join us for this live interactive session combining in-depth knowledge of industry experts who will share predictions and insights about the impact that Health 2.0 will have on the life of all Americans.

Speakers:

Lynne A. Dunbrack - Program Director, Health Industry Insights, an IDC Company

Roy Schoenberg, MD, MPH - CEO, American Well Systems

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Many people falsely claimed sickness disability benefits, since these benefits were sometimes the only possible source of income for someone who could not find a job. As a result, the claims that companies paid rose in relation to the premiums they received.

As damaging as the Depression was, there were many positive developments during this period. Companies became more financially cautious, which helped bring about a more stable industry with fewer company failures

A new spirit of cooperation emerged-companies became more willing to share with each other information about the claims that they paid, and actuaries and underwriters were able to use this information to set premiums at competitive but adequate levels

Medical expense insurance, which had been pioneered in the 1920s, developed and spread, and employment-based group health insurance, on which the modern health insurance environment is centered, emerged.

The Development of Medical Expense Insurance

Medical expense insurance differs from the earlier sickness insurance in that benefits take the form of reimbursement for the actual cost of hospital, surgical, and medical services, not a lump-sum payment for days of illness

The first form of medical expense insurance was individual hospital expense insurance, which was written in the 1920s. This insurance covered only hospital services (not surgeons’ or physicians’ services) and was first offered by hospitals themselves

The first group hospital expense insurance policy was written in 1929. Baylor University Hospital in Dallas, Texas insured 1,500 school teachers who were members of a mutual benefit society. The benefits provided were up to 21 days a year of semiprivate room and board and necessary hospital services and supplies.

Health Insurance in the Early 20th Century

During the Depression, hospitals were faced with declining revenues as people without jobs could not afford to pay for hospital care. As a solution, many hospitals adopted the group hospital expense insurance plan pioneered at Baylor

Many people who could not pay large hospital bills could pay small premiums, and these premiums provided the hospitals with income

Around the country several hospitals in the same state or part of a state banded together to offer this kind of insurance. This was the origin of the Blue Cross plans.

Group hospital expense insurance was also provided by employers and commercial insurers. This first occurred in 1934, when the General Tire & Rubber Company asked its insurer to add hospital expense benefits to the group insurance program it provided for its employees.

Hospital expense insurance covered only services provided by hospitals, not surgeons’ fees nor physicians’ charges for hospital, home, and office visits. This gap was filled when commercial insurers introduced group surgical expense benefits beginning in 1938, followed by group medical expense benefits to cover physicians’ visits in 1943

Physician-sponsored surgical-medical coverage was first offered in 1939, when the state medical society in California established the California Physicians’ Service, a statewide plan. This was the first of the Blue Shield surgical-medical Health Insurance in the Early 20th Century

Labor unions have been active in the United States since the mid-19th century, but before the Depression only a small minority of workers were union-members.

In the 1930s and 1940s unions grew dramatically and gained increased leverage in negotiating with employers. One of the things that unions began to demand was employer-sponsored group health insurance, and in 1948 the National Labor Relations Board ruled that unions had a right to make this demand as part of collective bargaining.

The Supreme Court confirmed this ruling in 1949. As a result, employment-based group health insurance became the norm for unionized labor. Most unionized companies offered group health insurance to their nonunion managerial employees as well.

The growth in employment-based group health insurance was also encouraged by federal tax policy. Employers were allowed to deduct as a business expense their expenditures for employee health coverage. And individuals did not have to pay income tax on employment-based health coverage-even though it was given to the employee by the employer it was not considered taxable income. This made health insurance attractive to both businesses and employees.

The Spread of Employer-Sponsored Group Health Insurance

Employer-sponsored group health insurance plans (which centered on medical expense coverage) experienced tremendous growth in the 1940s. This growth was spurred by war-time wage controls, labor union demands, and tax policy.

During World War II, in an effort to control inflation, the federal government prohibited industrial employers from raising wages or prices. This meant that although labor was scarce because so many people were in the military, employers could not raise salaries to attract and retain workers. But providing fringe benefits, including health insurance, was not forbidden, and this is what many employers did.

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However, we can identify four basic principles that an insurer must follow:

• Adequacy: The amount of the premium for any policy must be adequate to cover the benefit payments the insurer makes on the policy and the costs of administering the policy. For a stock company, the premium must also provide a reasonable amount of profit. For a mutual company, it must also provide a contribution to the surplus the company needs to guarantee its obligations and to fund growth and development. If an insurance company’s premiums are not adequate, the company will not be able to meet its costs, it will not be able to make a profit or add to surplus, and it will eventually go out of business.

• Reasonableness: Premium amounts must be reasonable in relation to the coverage provided. In other words, people must feel that the coverage they get from a policy is worth the premiums they pay for it. If an insurer charges too much for its coverages, few people will buy them and the insurer could go out of business.

• Competitiveness: The premium an insurer charges for a coverage must not be significantly higher than the premiums charged by other insurers for the same coverage. If an insurer charges more than its competitors, few people will buy its policies and it could go out of business. (Competitiveness is similar to reasonableness in that they both relate to what consumers consider a “good price.” However, there is a difference: a price is reasonable if it is a good price in terms of the benefits it buys; a price is competitive if it is a good price compared to the prices of similar products offered by others.)

• Equity: Some insureds make more claims than others, and consequently the cost of providing coverage is different for different insureds. The premium amount each insured pays must reflect the expected cost of providing coverage to that insured. Why? Suppose an insurer charged some insureds less than the expected cost of providing coverage to them. That insurer would have to charge other insureds an extra amount to make up for those paying less than cost. Those insureds paying extra would go to other insurers that would not charge them extra. The original insurer would be left only with insureds paying less than costs and could go out of business. (Of course, it is impossible to predict precisely what the cost of providing coverage to any insured will be, and consequently premium amounts cannot exactly reflect actual costs, but insurers must strive for equity to the extent possible.)

The Components of a Premium Amount

The principle of adequacy requires that a premium amount be sufficient to cover costs and provide a profit. The amount of a premium is based on the estimated amounts of different kinds of costs, plus profit. Thus, profit and the main types of costs can be thought of as components that added together make up the necessary amount of a premium. The cost components are:

• claims (benefit payments);

• reserves (to cover outstanding and future benefit payments);

• margin (an amount included to cover an unexpectedly large amount of benefit payments); and

• expenses (operational and administrative costs).

Another component is investment income, the revenue that insurers derive from investing the premium payments they receive. Investment income is not added but rather subtracted from the necessary amount of a premium, since it is not a cost that the premium must cover but rather a financial gain that partially offsets the need for premium payments.

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