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'The Business of Health Care Report'

Controlling Soaring Insurance Premiums

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I’m Doug Hawthorne, CEO of Texas Health Resources, with “The Business of Health Care Report.”

The Kaiser Family Foundation1 recently published a survey about employer-sponsored health coverage. The survey showed that premiums in 2011 increased nine percent for families and eight percent for individuals compared to 2010. A New York Times analysis of the survey results2 said preparation for health care reform accounted for 1.5 percent of the increase. The rest of the increase was due to higher profits for insurance companies and increased costs of providing medical care.

One provision of health care reform could help hold down premiums in 2012. That provision requires insurance companies to spend at least 80 to 85 percent of their premiums on medical care. That will keep premiums closer to what is paid out in claims.

Texas Health is collaborating with physicians and payers to control the cost of providing care. In 2011, Texas Health signed an innovative pay-for-performance agreement with Blue Cross Blue Shield of Texas that ties part of reimbursements to quality and safety improvements.

The Texas Health board of trustees also holds every person in the organization accountable for continuous improvement. Executive compensation and success sharing payouts to employees are tied to annual goals for improvement in quality, safety and patient satisfaction. Every Texas Health employee has a personal stake in improving performance and reducing costs.

For our faith-based family of hospitals — Texas Health Presbyterian, Texas Health Harris Methodist and Texas Health Arlington Memorial — I’m Doug Hawthorne.

1. Kaiser Family Foundation and Health Research and Educational Trust, “Employer Health Benefits, 2011 Annual Survey”
2. The New York Times, Oct. 3, 2011, “Your Soaring Insurance Premiums”

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