Walking out of the news conference on Sept. 20 when R.I. Health Insurance Commissioner Christopher F. Koller announced his decision to cut the requested rate hikes for commercial health insurers, Joseph F. Dziobek, president and CEO of Fellowship Health Resources in Lincoln, was smiling.
As a member of the Small Employer Task Force, Dziobek had been active in ensuring that the voice of small businesses in Rhode Island were heard as part of the rate review process.
For his company, a nonprofit behavioral health agency, the cost of subsidizing health insurance is almost $3 million a year, and he’s hopeful that if his insurance rates come in at the average rate increases in Koller’s decision, it will save about $150,000 in premium increases.
Providence Business News asked Dziobek to share his insights about the importance of reducing health insurance rates for employers.
PBN: What was your response to Commissioner Koller’s decision to limit average rate increases for commercial health insurers in Rhode Island?
DZIOBEK: Commissioner Koller’s decision to limit the average rate increases for health insurers is a good first step.
Small employers have been struggling for years to cover unsustainable increases in health insurance. It is not only the rate of increase but the variability.
We hold our collective breaths each year waiting for the rates to be released and then struggle to address the impact of those increases. We’ve reduced plans, increased employee contributions, and put off hiring just to cover insurance premiums that continue to increase each year.
Clearly, there is still much work to be done – that is the more difficult work of fundamental changes in the system that will actually bring costs down.
Until that time, ideally I'd like to see a period of stabilization with zero growth – or even some reductions. But I do applaud Commissioner Koller for listening to small employers and considering the economic consequences of health insurance costs.
I’d encourage other small employers to get involved in the discussion, because we need to make sure our concerns are heard. Fellowship Health Resources is involved in the R.I. Health Insurance Small Employer Task Force, and I’d urge your readers to get involved, too.
PBN: Fellowship Health Resources recently won an award from PBN for its wellness efforts in the workplace. Will it be considered as a factor in your health insurance rates?
DZIOBEK: I think that we will get some consideration but this is a relatively new area and one that is a little harder to place value on. The insurer knows what expenses were incurred by enrollees, but how do you quantify the savings to the insurer for the expenses that were avoided because of a healthier lifestyle?
I believe that our wellness program has made a major impact on our employees’ health and productivity costs by providing disincentives for unhealthy habits and incentivizing healthy ones – and it has had an impact on costs as well.
For example, employees and family members who do not smoke have their premiums discounted. We institutionalized the Shape Up RI program and then expanded it to all of our employees even those out of state.
We’ve seen a significant drop in leave of absences since we started our wellness initiatives. In 2010 we had 63, and in 2012 we had 53, a reduction of 15 percent. It is a win-win for employee, employer, and insurer.
We are proud of the award we won. Over the long-term, all employers and employees should be making changes to better our overall health – because it will avoid serious illness and because this is really the best and most effective way of lowering health care costs.
PBN: How much have your health insurance rates gone up? How will the latest reduction in increases offset that?
DZIOBEK: Our health insurance premiums have increased by 41 percent since 2003. The average premium for the 561 employees has gone from $7,178 per year to $10,140 per year. We subsidize insurance with almost $3 million a year.
We’ve tried to deal with the premiums by implementing new cost sharing in prescriptions and increasing employee contributions. Frankly, our agency is at a tipping point. Any increase – even a small one – leaves us with three options: pass the cost on to employees; further reduce benefits; or tighten employee criteria to access health benefits. None of these are choices we want to make.
Rates for January enrollments have not been released. However I would fully expect our rates to mirror those that were outlined by Commissioner Koller. This year, like others, we were again bracing ourselves for yet another double-digit increase from Blue Cross & Blue Shield of Rhode Island. If our rates instead come in at the averages Commissioner Koller has quoted, we will save $150,000 in premium increases. That’s a significant amount, especially in this economy.
PBN: Recently, Blue Cross & Blue Shield of Rhode Island lowered its rate of reimbursement for psychotherapists. How has that affected Fellowship Health Resources?
DZIOBEK: Recruitment of psychiatric nurses and licensed clinical social workers are two of the hardest positions to fill in the behavioral health field. Lowering the rates makes it that much harder to recruit and retain credentialed staff.
Of course, this situation is the flip side of insurers lowering costs to purchasers of insurance for their employees – providers like us are at risk of reduced payments for our services. At some point the expenses outweigh the income and it becomes a major challenge to keep offering the service.
Yet we know all too well the interrelationship between mind and body and reducing access to psychiatric services drives health costs up. We believe that insurers should make payment decisions based on an analysis of evidence-based care and care that can forestall other problems. That’s why mental health services are so critical.
PBN: Rhode Island's two largest hospital networks, Lifespan and Care New England, have initiated strategies to consolidate behavioral health practices within their larger networks. How do you view these efforts?
DZIOBEK: This is consistent with the direction that health care is moving nationally and in Rhode Island as well with the integration of primary and behavioral health services and the emergence of the medical home.
Adding Gateway Healthcare to the Lifespan network furthers that integration and expands accessibility to services. I view it as a positive development and I expect that those types of relationships will appear in other hospital networks as well.
Joseph F. Dziobek,
Fellowship Health Resources in Lincoln,
R.I. Health Insurance Commissioner Christopher F. Koller,
Small Employer Task Force