Midsize Companies Bore Brunt of 2001 Added Health Costs
Philips Expands in Irvine Spectrum; Garden Grove Contracts Out for ‘Express Care’
HEALTHCARE by Vita Reed
Midsize employers,those with 200 to 999 workers,took it hardest in terms of last year’s double-digit healthcare benefit cost increase, according to a new study from insurance services company Marsh Inc.
The study found that U.S. midsize employers absorbed a 17% increase in total health benefit costs, which reached $5,144 per worker.
Large companies,those with 20,000 or more workers,surpassed that average.
But the study also found that midsize employers in Marsh’s Pacific region, including California, reported cost increases of 11.5% to reach an average of $5,005. California still is considered a hotbed for health maintenance organizations and other forms of managed care.
Midsize employers are in a “double bind,” contended Brenda Moellman, vice president of Marsh’s Newport Beach office. “They need to offer a benefit package that is comparable to those by large employers, with whom they compete for labor, yet they have neither the purchasing power of large employers nor the resources to devote to benefit cost management.”
Marsh found that when it came to benefit design, midsize employers resembled Fortune 500 members, rather than smaller companies.
Some 92% of midsize employers offer dental healthcare coverage, compared to 63% of small employers. Dental benefits are nearly universal among Fortune 500 employers.
On the other hand, only 25% of midsize companies’ covered workers belonged to HMOs, compared to 36% of Fortune 500 employees. HMOs, despite some rate increases in recent years, still are the least expensive type of medical plan.
Employers with 1,000 or more workers reported an average cost increase of 12%, Marsh found, while small employers with 10 to 199 workers reported an average increase of 10% in their 2001 healthcare costs. The study, however, found that small enterprises were slashing benefits in order to keep costs down.
“For some small employers, the choice is to shift costs to employees or terminate the plan,” Moellman said. Figures from the Marsh study showed that nearly 20% of small employers surveyed required a deductible of $1,000 or more. And employees who used preferred-provider networks saw their median deductibles go up from $250 to $500 in 2001.
Philips Expands in Spectrum
Philips Medical Systems North America, part of the Netherlands’ Royal Philips Electronic NV, is staking out a new home for its Western regional office.
The maker of medical diagnostic systems is moving from one building in the Irvine Spectrum to larger quarters at the Spectrum’s Oak Creek Business Center. Around 750 people report to Philips’ office in Irvine.
Philips is taking 37,228 square feet of space at 6400 Oak Canyon. The company, whose U.S. headquarters is based in suburban Seattle, previously occupied 16,682 square feet of space at 4 Technology Drive.
Philips Medical Systems also provides specialized financial, healthcare consulting and educational systems.
Garden Grove’s “Express Care”
Garden Grove Hospital and Medical Center, one of 10 Orange County facilities owned by Tenet Healthcare Corp. of Santa Barbara, has introduced an “express care” program for non-emergency cases.
Garden Grove said that the program is part of an overall expansion effort valued at more than $3.5 million into the 167-bed hospital.
Garden Grove’s program, staffed by California Emergency Physicians Inc., a group medical practice, is intended to reduce the time non-emergency patients wait to receive healthcare. The program is located near Garden Grove’s emergency room, but will treat patients with conditions such as earaches, cold and flu symptoms, minor cuts and injuries.
Bits and Pieces:
Health Care Property Investors Inc., Newport Beach, joined the Morgan Stanley REIT Index. Health Care Property Investors is one of seven healthcare real estate investment trusts that joined the index; healthcare investment trusts were added for the first time in the index’s seven-year history Sheryl Skolnick, managing director of New York-based Fulcrum Global Partners LLC, plans to discuss the healthcare industry, including the implications of rising costs and the role technology will play, at the Sept. 12 meeting of the Orange County Employee Benefits Council. The meeting runs from 7:30 a.m. to 9:30 a.m. at the Hyatt Regency Irvine. Information: (714) 573-8605 PacifiCare Behavioral Health, Laguna Hills, received three-year, full accreditation from the National Committee for Quality Assurance for its Northwest region plan, which covers some 430,000 people in Oregon and Washington. PacifiCare Behavioral Health is a unit of PacifiCare Health Systems Inc., Santa Ana Kaiser Permanente and the California Primary Care Association launched an online medical library Web site offering medical and health information to community health clinics and centers, such as Latino Health Access, Santa Ana Global PharmAlliance, Newport Beach, changed its name to GPA International. GPA is a clinical research organization that profiles regulatory, registration, clinical development and quality assurance monitoring services for pharmaceutical and medical device companies.
