2003: A LOOK AHEAD Dilemma Over Health Care Is Getting Worse By JACQUELINE FOX Staff Reporter This year will be no better than the last when it comes to health care and what it costs employers to keep their workers insured. San Fernando Valley business owners are bracing for increases as high as 13 percent in the premiums charged by health care providers. “Buying down” will continue to be the catch phrase as employers shop around for new plans that will limit access to certain health care services. “I haven’t received the latest renewal information yet, but I’m certainly prepared because I know things are changing,” said Michael D. Shaw, executive vice president of Chatsworth-based Interscan Corp. The company, which manufacturers toxic gas detection systems, pays for full coverage for all of its 25 employees. Shaw said he hopes to avoid any changes to his company’s current plan and, as he’s done in the past, will first implement other cost-cutting measures, if necessary, to offset premium increases. “We’ve always prided ourselves on offering a full range of quality health care benefits for our employees,” said Shaw. “If the numbers get to such levels it may force us to retrench, there are other things we want to take a look at first. At this point it looks like we’re going to be able to cover it. We’ve been with our provider for many years and there’s a certain level of continuity that some employees like that we think is good for morale.” But some small businesses, mom-and-pop shops with as few as five or six workers, for example, may not have the resources to meet the increases and could be forced to eliminate coverage for employees altogether. That would almost certainly send more uninsured workers to hospital emergency rooms for medical treatment, many of which are already overcrowded due to the closure of 16 L.A. County health clinics last fall. Facing a $3.5 million budget deficit, the Los Angeles County Department of Health Services is now hoping for a handout from the state to avoid more closures. But the prognosis is grim: Gov. Gray Davis is expected to slash funding for health care programs significantly to help remedy a projected $20 billion-plus budget deficit. “I think the biggest problem in 2003 for the industry is going to be the lack of a county safety net system,” said Jim Sherman, president of West Hills Hospital. Sherman said his emergency room has experienced a 9-percent increase in the number of uninsured patients it treats since the county closures. According to Ressie Roman, health care deputy for L.A. County Supervisor Michael Antonoivch, the county is putting together a plan to receive matching funds from the state for medical payments, which would help ease the pain to some degree. In addition, the passage of Measure B last November is supposed to bring in roughly $168 million annually for emergency rooms, trauma centers and bio-terrorism preparedness. But Roman conceded that there are other costs involved that, without help from both the state and federal government, would force the county to make additional cuts. “Measure B funds will help, but that won’t cover county health care issues across the board,” she said. In addition to the strain on health care workers, Sherman said the surge of uninsured patients into the West Hills ER is also impacting the hospital’s bottom line and threatens to do the same at other facilities. Rotating ER physicians have grown reluctant to treat the uninsured because they are rarely reimbursed for it. As a result, they now want the hospital to pay them for their time in the ER and Sherman said his facility will likely begin doing so this year. “We are required to maintain specialty panels of physicians who can treat the uninsured patients who come into the emergency room,” said Sherman. “But physicians no longer want to serve on those panels because there is so much risk for them and no compensation for it. So clearly, our budget forecasts now include those costs.” Increased consumer demand for health care products and services and an aging population have long driven the costs of care and that’s not expected to change any time soon. Ditto when it comes to prescription drugs and advances in medical technology. Consolidation of the managed care industry over the last five years is, however, expected to slow somewhat. Nonetheless, there is at least one local merger on the table for 2003. Thousand Oaks-based Wellpoint Health Networks Inc. is expected to complete a deal to buy Maryland-based CareFirst Blue Cross/Blue Shield, which would make Wellpoint the nation’s largest health insurer.
