Businesses are sick over escalating healthcare costs

By John Loesing Acorn Staff Writer

LISA ADAMS/The Acorn BREAKFAST BUNCH-From left to right: Ken Kossoff, chamber boardmember and Wellness Community chairman; Alex Soteras, president of the Agoura/Oak Park Las Virgenes Chamber of Commerce; guest speaker Dr. Marvin Kanter, CEO of Progressive Healthcare Community Medical; and Robert Slavin, Westlake Village mayor pro tem, gather for a an Agoura/Oak Park/Las Virgenes chamber breakfast. Kanter discussed the difficulties facing Americans and their employers in healthcare.

The high cost of prescription medicines? Fear of malpractice suits? Out-of-control managed care? —Maybe just good old-fashioned price gouging by insurance companies.

Whatever the explanation, the cost of healthcare in America has spiked sharply in recent years.

Insurance premiums rose at a 13 percent clip last year compared to worker salaries (which were up 3.4 percent) and inflation, which was practically non-existent, an industry study has reported.

The heaviest burden has fallen upon employers, who now pay the lion’s share of medical insurance premiums, according to Marvin Kanter, chief executive officer for Progressive Healthcare Systems, an Agoura Hills HMO contractor.

Speaking to a group of business owners at the Agoura/Oak Park/Las Virgenes Chamber of Commerce recently, Kanter said that because of the skyrocketing costs, only 61 percent of California employers offer health insurance coverage to their employees, the lowest rate in the country.

Nearly one in five Californians—6.3 million people— lacked health insurance in 2001. Only two states, Texas and New Mexico, had higher rates of uninsured residents.

"There’s no question that if we’re going to insure more people, it’s going to cost more," Kanter said. "We’re going through a healthcare crisis and we’ve got to make the right decisions."

Covering California’s uninsured population would cost an additional $7.8 billion, Kanter said, but he added that a study shows employers and individuals with coverage would save about $1.7 billion in the long run.

Why is health insurance so high? "Hospitals are doing more things, but the hospital costs have risen," Kanter said.

New exotic diagnostic equipment and treatments enable testing of bone densitometry readings. There are proton pump inhibitors, balloon angioplasty procedures with stints, calcium channel blockers and third-generation cephalosporin.

"All these things are terrific—but they’ve added to the cost of healthcare," Kanter said.

Because of the crisis, employers are eliminating benefits and employees are facing increased co-payments and deductibles, and receiving coverage for only catastrophic emergencies.

"If (my employees) want coverage, it’s available, but they’re going to have to pitch in—otherwise, they’re going to take their kids to the hospital for a runny nose," said Janine Montoya, who recently purchased an air-conditioning business in Newbury Park.

Montoya said she limits her contribution to $300 per employee.

"If we paid full coverage, there’s no way we would survive financially," she said.

Celeste Bocian, who manages the geriatric clinic at Sherman Oaks Hospital, blames the high costs on large insurers such as Blue Cross and Blue Shield. "They’re big part of the problem," Bocian said. "Those companies do not reimburse the hospitals compared to the fees they are charging.

"Doctors are reimbursed much less in this state than in other states and they are leaving," Bocian said.

In years to come, consumers will want better coverage but won’t want to pay for it, Kanter said.

In addition, new advances in genomics will shift healthcare from curing to preventing disease, which will bring up even more questions about ethics and coverage.

As for the dilemma facing physicians, Kanter quoted a Dr. Kevin Grumbach article in the 1999 New England Journal of Medicine. "For primary care physicians in the United States, they are loved and they are defiled," the Grumbach article stated. "They are the answer to the problem of too easy access to specialty care—and they are the cause of the problems of too difficult access to specialty care.

"They have been liberated from the corrupting temptations of fee-

for-service medicine—and they have been seduced by the wickedness of financial incentives to limit care.

"They are expected to compensate for a seriously deficient system of health insurance financing—and they are the victims of the grave limitations … of the financing system.

"They are the types of physicians everyone really needs, unless of course the person is actually ill, at which point a more qualified specialist should take over."

The Agoura Chamber’s next member event will be next Thurs., June 5 when the group hosts its annual Educator of the Year awards. The 5 p.m. program will be at The Canyon in Agoura Hills. Call the Chamber at (818) 889-3150 to make reservations before 5 p.m. tomorrow.