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The Spiraling Cost of Health Care
By Jim Stavis
Nearly every business today has been
affected by the growing cost of health care
for its employees. For metals and heavy
manufacturing sectors with aging
workforces and labor intensive processes,
the burden has become particularly heavy.
William Ford, the CEO of Ford recently
said that Ford spends more on health care
than it does on steel. Health care costs can
easily top $9,000 to $10,000 per employee
a year. Rising health care costs threaten
America’s ability to stay competitive on a
global basis. That’s because in countries like
Japan, Germany, the United Kingdom and
Canada—all of which have government-run
universal health coverage—the health care
burden is spread more evenly across the
population. Companies based in those
countries don’t have massive legacy costs
from promises to pay for retiree health care
costs. As the economy becomes more global
(which it is), U.S. companies will find that
they are increasingly at a disadvantage due
to our health care system.
For most companies the increasing cost
of health care has been rising about 10
percent per year. This exceeds the cost of
living, wages, energy costs and material
costs which receive a much greater amount of publicity. Adding to the health care
mess is the growing ranks of the
uninsured which puts a great strain on a
defective system. Employers and workers
have to cough up a combined $922 more
in insurance premiums per family to pay
for the health care costs of the uninsured
(a figure that will jump to $1,500 by
2010). This information is care of a study
by Families USA, a health-care advocacy
group in Washington D.C.
All of this spending has served to
increase the life expectancy rate for
American males from 46.3 in 1900 to
74.8 years today and women from 48.3
years to 80.1 years today (National
Center for Health Statistics). Despite the
gains in life expectancy, Americans as a
whole do not live a healthier lifestyle.
Obesity and overweight conditions
contribute as much as $93 billion to the
cost of health care in the United States
according to a study by RTI
International. It all adds up to a system
that is broken and costing employers
billions of dollars.
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The question is what can be done.
The biggest trend that has occurred with
many companies is treating health care as
a shared responsibility rather than as a
benefit. Employers have implemented
wellness programs as a way to promote
health within their organizations.
Companies have developed programs
where the employees share in the cost of
insurance. Employees get a high
deductible insurance plan along with a
health savings account (HSA) or a health
reimbursement account (HRA). HSAs
are owned by the employee, while an
HRA is an account that the employer
controls. The idea is that the employees
will become better health care consumers
if they are paying for a portion of it out
of their own pockets.
The biggest change with companies is
their desire to implement health
improvement plans within their
organizations. According to a Watson
Wyatt report, this year 40% of
companies offer health plans that include
lifestyle behavior change programs (up
from 20% who had them last year).
Similarly 32% offer obesity reduction
programs compared with just 14% in
2004. Whether such plans will pay
dividends remains to be seen. In the
meantime companies will continue to
shift costs to their workers and tinker
with their plans to try and stem some of
the damage from the rising costs. Also
the landscape is likely to shift from a
sense of entitlement on the part of the
workers to one where employers make a
fixed contribution to cover care. The
unfortunate reality is that workers do not
understand that their pay raises are being
made in the form of health raises to their
insurance carriers.
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A Real Thanksgiving Story
By Jim Stavis
On November 2nd after waiting for
a full year, I finally got the call for my
donated organs. On the following day I
had a 12 hour heart and kidney
transplantation (2/3 of my trifecta) from
a young donor from the Los Angeles
area. Out of the shadows of darkness and
tragedy of one's death comes into the
light a renewal for someone else, in this
case, myself. It is truly hard to put into
words how I feel about my own personal
transformation. On one level it is truly
a miracle, the kind we feel about
a newborn baby where every facet of your
life changes immediately. People often
have offered to me their prayers and
spiritual blessings in anticipation of what
I was to encounter. I never really
understood how blessed and how
fortunate I was to be in this place at this
moment in time. I know now.
On another level, it is the doctors, the hospitals and the miracle of
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modern
medicine that deserves much of the credit
for it is within their wisdom, judgment
and expertise that makes any of this
possible. Ultimately though, the true
heroes in this miracle story are the
donors themselves. Without them we
could not have a transplant program of
any kind. Yet the unfortunate piece of
the puzzle is that unless we notify our
families of our desire and willingness to
donate, the fulfillment of donation will
not happen. There are over 95,000
people in the United States waiting for
a variety of organs to be donated. For
some the wait takes years. I was the lucky
one. Please make your wishes known
regarding organ donation to those that
you love. It may be the best and kindest
decision you may make in your life.
E-mail Jim at jstavis@paragonsteel.com. |
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From Wolfgang Puck to Spider-Man 3
By Jim Stavis
In the past month Paragon Steel has been
awarded fabrication on a Wolfgang Puck
restaurant in Beverly Hills, auto show
displays for Infiniti and Lexus, and steel
rigging for the next Spider-Man movie
which will begin production in the
coming months.
We are not simply tooting our horn,
but want to stress how unique our projects
can be at Paragon Steel. We are always
looking for more ...
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