The Business Health Care Group of Southeast Wisconsin’s new health insurance plan, designed to attack the high health care costs in the Milwaukee area, officially began at the beginning of this month. However, the group has some work to do to convince more small-business owners that the plan, created with Humana Inc., is an effort worth joining.
The new health plan has 26 voting members, businesses and groups of businesses, representing more than 150,000 employees and dependents of employees. Not all of those employees and dependents are enrolled in the plan yet. Some companies have to bring their employees into the plan via collective bargaining.
Other companies will come on line later in the year, and a few firms have joined the group to provide support, but have decided not to take the insurance coverage because they received lower rates elsewhere.
"We won’t be releasing a membership figure until after Humana releases its 2005 earnings on Feb. 6," said Humana spokesman Mark Mathis. "However, we have previously said that we expect about 75,000 health plan members as of January 2006, and we expect to be at or near that figure."
Many of the group’s members are large companies, such as Manpower Inc. and Johnson Controls Inc. Some smaller companies have joined through sponsoring organizations, which include some area chambers of commerce.
However, almost all of the members of the board of directors of the Council of Small Business Executives (COSBE), established by the Metropolitan Milwaukee Association of Commerce (MMAC), say their firms are not joining the Business Health Care Group. Their reasons vary. Some say they are taking a wait-and-see approach with the group. Others doubt the group will be able to influence health care costs in the region.
COSBE board chairman Gary Zimmerman, president of West Allis-based Creative Business Interiors Inc., said his company is not joining the Business Health Care Group because he is happy with his current insurance carrier, which offers lower rates than the group’s plan.
"I need to make my decisions based on what is financially best for Creative," he said.
Zimmerman said his company may join the group in the future if its plan is the lowest bidder.
West Allis-based S-F Analytical Laboratories Inc. has joined the group, but is not using the insurance. President and chief executive officer David Kliber, a COSBE board member, said he wanted to support the group’s effort, but its insurance plan is not worthwhile for his company at this point. In the future, the company may switch to using the plan, Kliber said.
"If they get the right number for me, yeah," Kliber said. "It’s not competitive at this point, but I think they will be in the future."
"For small businesses, the bottom line is so critical," said Dianne Kiehl, executive director of the Business Health Care Group of Southeast Wisconsin. "We had a few (small businesses) that joined based on the strategy, a few joined based on rates. If they think they can save money, they will join. A lot of it is controlled by the brokerage community. A lot of brokers will say, ‘Let’s wait.’"
About 50 small businesses, with two to 500 employees, have joined the group, most through sponsoring organizations, Kiehl said. Companies must have more than 500 employees to be voting members of the group. Smaller firms can join through a sponsoring organization, which votes on their behalf.
It costs $1,000 for each company to join the Business Health Care Group, unless they join through a sponsoring organization, in which case the sponsoring organization pays the fee. Some small firms have paid the fee, even though they won’t be voting members, because they want to attend the voting member meetings and be actively involved with the group, Kiehl said.
"There are several small companies that get it," she said. "Our approach is a long-term strategy. We know there is no quick fix. Our member companies know it is going to take a lot of work.
"The small business community tends to jump around a lot because they switch (insurance carriers) every year. Anybody can give you a good rate for one year. We’re trying to get them to understand the strategy," Kiehl said.
As part of that strategy, the group is trying to convince as many firms as possible, large and small, to join the group so they can maximize their purchasing power to help negotiate lower prices with providers of health care services. Expanding the membership is critical to the group’s success, Kiehl said.
"I don’t understand why every business isn’t jumping on board," Kiehl said. "There’s nothing to lose. The only way you can affect change is to join in a grassroots effort like ours."
Health care costs in the Milwaukee area are higher than those in most other similar-size metro areas in the nation. As a result, area companies are paying more to provide health insurance benefits to their employees.
Thomas Precia, president and chief executive officer of Delafield-based Integrated Risk Solutions Inc. and a COSBE board member, said his firm is thinking about joining the Business Health Care Group.
"We’re going to look at it," he said. "We’re got a pretty strong relationship with who we use on the health side. I think it has potential. I think it’s something that has to be done, with health care costs increasing."
Precia said he must consider both the rates offered by the Business Health Care Group’s plan, and how the plan will affect his employees. Most of his employees see Covenant Healthcare doctors, but Covenant is not in the Business Health Care Group’s network.
"Most of our people would have to change providers," Precia said.
The plan’s network includes physicians and hospitals from Aurora Health Care, Columbia St. Mary’s Hospital and Physician Group, Children’s Hospital of Wisconsin and Physician Group, ProHealth Care, Froedtert Memorial Lutheran Hospital and Community Health and the Medical College of Wisconsin.
Covenant Healthcare System Inc. is the largest local health care provider that is excluded from the plan. Others that are not in the plan include: West Bend-based Synergy Health, Racine-based All Saints Healthcare and United Hospital System in Kenosha County.
The group wanted to limit its network to health care providers that offer the best rates and operate most efficiently. Humana says it used advanced methodology to analyze the efficiency of physicians for area health care providers.
Instead of just looking at which health care providers charged the lowest amount for each procedure, Humana’s analysis tried to determine which providers cured illnesses in the shortest period of time. Shorter illnesses mean patients get better faster, with less doctor’s visits, which also results in cost savings.
The network works like a traditional preferred provider organization (PPO). Employees and family members of companies in the Business Health Care Group have to pay higher costs if they visit providers who are not in the network.
The health care providers in the network will benefit because the plan steers most of the group’s employees and their family members to the doctors and hospitals of those providers. The health care providers that are not included in the network will likely miss out on most of those patients.
The Business Health Care Group will hold the health care providers in its network accountable and make sure they are trying to keep costs down, Kiehl said.
"The providers will be meeting with us at least quarterly," she said. "They will need to tell us what they are doing with efficiency and quality. Don’t just say you are building a new hospital to increase efficiency. If that’s true, we are going to expect lower costs, or at least no change."
Each year, the Business Health Care Group will evaluate the providers. Some may be eliminated from the network, and others may be added.
"Bottom line, we will be engaging in a level of accountability," Kiehl said.
Covenant Healthcare officials have indicated they hope to be in the network next year.
"We’ve had some very, very limited dialog (with Covenant)," Kiehl said. "They’ve expressed their interest (in joining the network next year). I met with them once since the network was selected. They did take full responsibility for the outcome. They understand why they were not included. They are looking forward to joining the network in 2007."
"We have been in discussions with the leadership of the Business Health Care Group of Southeast Wisconsin," said Anne Ballentine, spokeswoman for Covenant. "We are exploring the possibility of participating in the network next year."
Another part of the Business Health Care Group’s strategy is an effort to get health care providers to provide information about the costs of certain procedures and to put that information in the hands of consumers and provide them with incentives to choose providers that provide health care services at lower costs.
Patients obviously will not be able to shop around for health care services in an emergency, Kiehl said, but for some procedures, they have time to plan ahead and should be given a chance to consider which doctors provide the service at a lower cost.
"We’re not saying that everything can be done, but how does that mean nothing can be done?" she said. "There are many areas we could do it, and we’re not doing it. We’ve got to affect it where we can. I don’t think (consuming health care) will ever be like buying a car, but it can get a lot better. Right now, we are totally in the dark (regarding price)."
As an example, Kiehl points out that the cost for Lasik eye surgery has dropped dramatically in recent years. The reason, she says, is consumers have chosen eye surgeons who perform the procedure at lower prices. That market pressure has driven down the cost of Lasik surgery, she said.
"The consumers engaged," Kiehl said. "It’s only when you have insurance that you can’t get the price. The more the business community is actively engaged, the more responsive the provider community will be. Businesses are the customers of health care providers. The more customers ask for the same thing, the more likely you are going to get it."
Business Health Care Group of Southeast Wisconsin
Executive director: Diane Kiehl (414) 531-3339
Web page: www.bhcgsw.org
Insurance carrier: Humana Inc.
Sponsoring organizations: Metropolitan Milwaukee Association of Commerce (MMAC), Kenosha Area Business Alliance, Ozaukee Employers Coalition on Health, Regional Chamber Coalition, Waukesha County Chamber of Commerce
Health care providers in network include: Aurora Health Care, Columbia St. Mary’s Hospital and Physician Group, Children’s Hospital and Medical Group, ProHealth Care, Froedtert Hospital and Community Health, Medical College of Wisconsin.
The Hospital Building Boom Continues
Major southeastern Wisconsin health care building projects in 2006:
- Columbia St. Mary Hospital is in the midst of a $417 million project that will consolidate the Columbia and St. Mary’s hospitals on the east side of Milwaukee. The project will be completed in 2010. This year, a 53,000-square-foot Whole Foods store will open in the Prospect Medical Commons, which is a new medical office building under construction by Columbia St. Mary’s at the corner of Prospect and North Avenues.
- Wheaton Franciscan Healthcare plans to build a 275,000-square-foot, $80 million outpatient center on a 55-acre site at the northwest corner of South 27th Street and Oakwood Road in Franklin. Construction is expected to begin this year and be completed in 2007.
- The Medical College of Wisconsin and Children’s Hospital of Wisconsin are building a $117 million, 300,000-square-foot research facility in Wauwatosa. The first phase is expected to be completed by the end of the year.
- Froedtert Memorial Lutheran Hospital in Wauwatosa is building a $120 million expansion which will include a 173,000-square-foot cancer center, 67,000 square feet of new clinical space, additional office space and an 8,000-square-foot emergency department renovation. The project will be completed in 2007.
