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St. Louis Business & Technology News
www.slfp.com/SLFPBIZp.htm "When you think Saint Louis, think Saint Louis Front Page," a weekly publication covering the news and events in the greater St. Louis area. 
St. Louis Front Page P.O. Box 1354 St. Louis, MO 63188 Voice: 314-771-0200 Fax: 314-771-0300 To submit news, contact: editor@slfp.com To advertise, contact: advertising@slfp.com 
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More Employers Adopting Health Management to Control Costs WASHINGTON, (PRNewswire) March 20, 2005 - With health benefit costs still rising at double-digit rates, more employers are adopting health management and consumer-directed health care programs to help control costs. And some employers keep increases remarkably low by getting employees involved in health care decision making. These are among the major findings in the 10th annual survey of large employers conducted by Watson Wyatt and the National Business Group on Health. The survey found that health care cost increases moderated this year, from a median increase of 12 percent last year to 10 percent this year. Additionally, more employers are doing a better job budgeting for health costs. Nearly four of 10 employers (38 percent) reported that their costs were below budget last year, nearly double the 20 percent in 2003. Conversely, fewer than one in five respondents (18 percent) were over budget last year, down from 41 percent in 2003. A total of 555 employers with at least 1,000 workers participated in the survey. "Employers are realizing that to get to the root of the health care cost problem, they must take a more active role in managing the health of their employees," said Helen Darling, president of the National Business Group on Health. "Programs that focus on managing specific diseases and help workers make lifestyle behavior changes aimed at weight management, exercise and smoking cessation can go a long way toward slowing rising costs over the long term." Nearly seven of ten respondents (69 percent) are using disease management programs through a health plan this year, a 50 percent increase over last year. Similarly, the number of employers adopting lifestyle behavior change through a health plan doubled to 40 percent this year. Additionally, 32 percent offer obesity reduction programs, compared with just 14 percent in 2004. The survey found that employers that are doing the best job of controlling health care cost trends have a much greater focus on health management than those with higher cost increases. They also tend to set their health care strategy on quantitative analysis and rely on evidence to confirm their approach to health care benefits. The best-performing companies - those with a two-year average cost increase in the lowest quartile - kept cost increases to a remarkably low 5 percent over a two-year period. Conversely, poor-performing companies - those with a two-year average cost increase in the highest quartile - experienced a 15 percent increase. "This year's best-performing companies are succeeding across the board - not only doing a better job at managing costs, but also improving employee satisfaction and increasing individual accountability," said Ted Chien, global director of group and health care consulting at Watson Wyatt. "These successful companies are more willing to try different approaches and are much more likely to be early adopters of many tactics. They also hold off drawing conclusions about their effectiveness until there is evidence of results." HSAs Gaining Momentum The survey also found that 8 percent of employers now offer health savings accounts (HSAs), and another 18 percent plan to offer them in 2006. Additionally, 47 percent are considering offering the accounts. Established in December 2003 as part of Medicare reform legislation, HSAs allow enrollees to carry unused account balances forward from one year to the next and retain ownership of the funds after they leave their place of employment. "HSAs and high-deductible health plans (HDHPs) are grabbing attention partly because they are new and they attack some of the drivers of health care costs - frequent use of health services paid for by others. HSAs and HDHPs, in contrast, provide incentives for employees to become more active in their health care decision making," says Darling. "However, despite the advantages of HSAs, employers have some concerns and are waiting to see whether HSAs will help lower overall health care costs." Three out of four employers (75 percent) agree that HSAs are effective vehicles to engage employees more in managing their health; 60 percent also agree that HSAs will expand options for employees. However, about half of the respondents (49 percent) aren't sure whether HSAs will help lower health care costs. "While HSAs offer great promise, employers cannot rely solely on HSAs and high-deductible health plans to solve health care cost problems," said Chien. "Employers also need to provide employees with information, tools, financial incentives and lifestyle behavior programs. Employers that adopt this type of broad consumer-directed approach will be better positioned to effectively engage employees and control costs." FTC Testifies on Data Security and Identity Theft ST. LOUIS, (PRNewswire) March 13, 2005 - The Senate Banking Committee is examining recent developments involving the security of sensitive consumer information at ChoicePoint, Bank of America and Reed Elsevier Group's LexisNexis. The average victim of identity theft spends about $4,800 and 30 hours to rectify effects of the crime, according to a recent Federal Trade Commission (FTC) study. Identity theft is the fastest growing crime in the U.S., and has spurred new legislation requiring businesses and even consumers to destroy certain documents before throwing them away. Identity theft has risen more than 40 percent over the last year, according to the FTC, and the number one method is thieves rummaging through the trash. Starting June 1, a new law requires anyone who has one or more employees, and keeps each worker's personal information on paper, to destroy the records before throwing them away. The Federal Trade Commission testified, March 10, before the U.S. Senate Committee on Banking, Housing, and Urban Affairs about the reach of existing federal laws that require certain information providers to safeguard sensitive information and to ensure that the information doesn't fall into the wrong hands. The Senate Banking Committee is examining recent developments involving the security of sensitive consumer information. FTC Chairman Deborah Platt Majoras said that increased scrutiny about the security of consumer data takes place against the background of the threat of identity theft, a crime that harms both consumers and financial institutions. "A 2003 FTC survey showed that over a one-year period, nearly 10 million people - or 4.6 percent of the adult population - had discovered that they were victims of some form of identity theft." There are three laws enforced by the FTC that restrict disclosure of consumer information and require companies to ensure the security and integrity of the data in certain contexts, the testimony said. "The Fair Credit Reporting Act primarily prohibits the distribution of 'consumer reports' by 'consumer reporting agencies' (CRAs) except for specified 'permissible purposes' and requires CRAs to employ procedures to ensure that they provide consumer reports to recipients only for such purposes," according to the testimony. Data brokers who sell "consumer reports" are subject to the FCRA restrictions. The Gramm-Leach-Bliley Act imposes privacy and security obligations on a broadly defined group of financial institutions, including those engaged in banking, lending, and insurance activities as well as loan brokering, credit reporting, and real estate settlement services. "To the extent that data brokers fall within the definition of financial institutions, they would be subject to the Act," Majoras said. In addition, the FTC Act prohibits "unfair or deceptive acts or practices in or affecting commerce. Prohibited practices include deceptive claims that companies make about privacy, including claims about the security they provide for consumer information," the testimony said. 'The Commission has brought five cases against companies for deceptive security claims, alleging that the companies made ... promises to take reasonable steps to protect sensitive consumer information. Because they allegedly failed to take such steps, their claims were deceptive." The Commission vote to authorize the testimony was 5-0. Return to St. Louis Front Page  
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