BOSTON, MA -- (MARKET WIRE) -- 09/23/10 -- Today, Washington enacted six major provisions of the Patient Protection and Affordable Care Act (PPACA)(1) as the first step in rolling out the new healthcare reform legislation. Yet despite expanding coverage to millions of previously uninsured Americans, unless we tackle the root causes of preventable chronic disease, businesses and individuals will still be burdened by rising healthcare cost, says Virgin HealthMiles, a leading provider of incentives-based employee health and productivity programs.
"Our Federal government is attempting to force broader access to the current supply of health services, but not addressing what's driving dramatic increases in demand," said Sean Forbes, president of Virgin HealthMiles. "Why are we waiting for people to get sick and then managing the problem? Unmanaged, preventable healthcare costs are rising at more than 10 percent annually and represent one of the largest drains on corporate income statements. Today, no other similarly material business expense is treated in such a hands-off manner. We need to be proactive in our avoidance of future preventable claims costs. Preventing the onset of lifestyle-related disease is imperative to making this happen and getting people to take more responsibility for their health is an essential element of this strategy. Only then can we address the enormous weight of healthcare costs, and right-size our bloated healthcare costs in the United States of America."
Rising healthcare costs have expanded to now represent one of the top challenges to corporate profitability and are now threatening jobs and entire families' livelihoods. To help offset rising healthcare costs, 63 percent of businesses plan to make employees pay a higher percentage of their premium costs in 2011, said the Washington-based National Business Group on Health in August, which surveyed(2) 72 companies employing more than 3.7 million people. A recent survey by the Kaiser Family Foundation also revealed that while total premiums rose by 3% to an average of $13,770 in 2010 (including employer contributions), an average worker now pays nearly $4,000 per year for family coverage, up 14 percent from 2009 and up 47 percent overall from 2005.
However, more than 75 percent of the nearly $2 trillion healthcare costs impacting businesses and their employees today stem from chronic diseases like heart disease, diabetes and some forms of cancer. The good news is chronic diseases are largely preventable with healthy lifestyle choices -- getting enough physical activity, a healthy diet, and avoiding tobacco. "Presently, health insurance doesn't measure and reward people for exhibiting the right behaviors," said Forbes. "Safe drivers are routinely awarded discounts on their auto insurance for good behavior. Shouldn't employees who do a few simple things, such as exercise, watch their weight, stop smoking and adopt other healthy lifestyle habits, benefit as part of a culture that rewards the right behaviors?"
Washington may have caught on to this disconnect. The PPACA expands provisions in existing HIPAA regulations, which currently allow employers to offer incentives of up to 20 percent of annual premiums to employees who participate in employee health programs. The Affordable Care Act increases this differential to 30 percent in 2014, with an option to increase to 50 percent at the discretion of the Secretary of Health and Human Services. The policies and provisions exist. Now, more employers need to take steps to implement them in their organizations. Taking advantage of these provisions with a prevention-focused, technology-based employee health program lets employers improve employee health, gain mechanisms to measure and manage their healthcare cost-savings strategies, and tap into funding strategies to create cost-neutral programs.
"Effectively structured and implemented employee preventative health programs are proven to drive down healthcare costs by eliminating the pre-cursors of chronic conditions before they develop. And, they create healthier, happier, and more productive employees. But unless we shift our focus to a data-driven, actively managed approach to prevention, the PPACA that has so bitterly divided our country will risk being minimally effective, at best, or fail outright at the hands of unsustainable entitlement costs driven by preventable claims," said Forbes.
About Virgin HealthMiles
Virgin HealthMiles provides employee health programs that pay people to get active. The company's Pay-for-Prevention? approach, based on physical activity and healthy lifestyle change, attracts an average of 40 percent of employees who participate, which helps organizations reduce medical costs and improve employee productivity and satisfaction. The program is offered by employers, government entities, and insurers. Over 120 industry leaders representing more than 500,000 employees across the U.S., including American Diabetes Association, Intuit, MWV, OhioHealth, Ochsner Health System, Protective Life, SunGard, SunTrust, and Timberland have selected Virgin HealthMiles' award-winning program for their employees. The company is a member of Sir Richard Branson's Virgin Group. For more information, visit www.virginhealthmiles.com
(1) http://www.healthcare.gov/law/timeline/index.html
(2) http://www.businessgrouphealth.org/pdfs/Plan%20Design%20Survey%20Report%20Public.pdf
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