Large Wisconsin Businesses See Reduced Health Care Costs Under New Program

Health care costs for 18 large employers in southeastern Wisconsin's Business Health Care Group have declined by 9% over the past two years under a plan developed for the group, according to an analysis, the Milwaukee Journal Sentinel reports. The coalition comprises more than 675 businesses and was created to help reduce health care costs for employers in the state. The 18 large employers included in the analysis provide health benefits for 55,000 employees, retirees and family members.

In 2005, BHCG contracted with Humana to design a health plan exclusive for the group's members, called Humana Preferred. According to the analysis, the employers have saved an estimated $32 million in combined health care costs over the past two years. In 2006, the employers' costs declined by 13.7%, and costs increased by 6.1% last year. The savings mainly came from discounts Humana negotiated with hospitals and physicians, which on average were 10% lower than rates for the insurer's larger network. However, according to the Journal Sentinel, health care costs for more than half of the small employers in BHCG have increased by 10% or more during the same period.

Dianne Kiehl, executive director of BHCG, said, "The initiative is working," adding, "The business community can influence this market if they want to." Kiehl added that BHCG did not expect to reduce health care costs in the short-term. She said, "We said from the onset that this is a commitment to a long-term strategy," adding, "There is no quick fix" (Boulton, Milwaukee Journal Sentinel, 8/5).