Health care a bitter pill to swallow

New Jersey has “a dysfunctional health care system,” said Richard Popiel, vice president and chief medical officer at Horizon Blue Cross Blue Shield of New Jersey. “Its reimbursement system is illness-based — a recipe for high cost and low quality.”

A way to decrease insurance premiums — or at least arrest runaway increases — involves encouraging employees to participate in smoking-cessation programs or wellness and disease management offerings, said Michael Munoz, vice president of sales and marketing at AmeriHealth Insurance Co. of New Jersey, based in Mount Laurel and Iselin.

Late last month, Munoz was a featured panelist at a health care symposium in Trenton organized by Hillsborough-based New Jersey Association of Health Underwriters. That same week, AARP’s New Jersey chapter organized a tele-town hall meeting on health care reform with Gov. Jon S. Corzine and Rep. Frank Pallone (D-Long Branch).

By way of example, Munoz mentioned a Burlington County firm that was part of what he called an industry-wide trend of insurers paying out up to 90 percent of premiums in claims. When AmeriHealth offered discounts of up to 2.5 percent on premiums for employees who participated in health risk assessments and wellness programs, participation rose from below 10 percent to 94 percent in 90 days, he said.

More employers are beginning to realize the benefits of their participation in such wellness programs, and a tenth of the 150 groups that qualify for them have shown interest in them, Munoz said.

While employer participation in health risk assessments and wellness programs cannot be legislated, Munoz said lawmakers lower costs and ensure adequate access to care in other ways. One effort could be to reduce the number of mandates — government decrees that force insurers to offer coverage for specific treatments — and reduce health care overcapacity in parts of the state.

“It’s better to have a plan with no mandates, rather than have no plan at all,” said James Stenger, chair of the New Jersey Small Employer Health Benefits Board and principal owner of NAS Financial Services, a Morristown-based agency marketing insurance products to brokers. Stenger, who was a panelist at the symposium, said the state should empower the insurance industry to deliver more cost-efficient plans that don’t include mandates. In the alternative, the pressures of the current economy might compel many employers to withdraw health insurance benefits, he said.

The board he chairs represents the interests of the small-group market, made up of businesses with 2 to 50 employees, and includes representatives from government agencies and insurers.

The most tangible takeaways from these events were promises from Assemblyman Gary S. Schaer (D-Passaic) and state Sen. Joseph F. Vitale (D-Woodbridge) to take the agenda of reforms to a multi-industry dialogue, according to Munoz and Stenger.

But there’s much to be done, said Steven Goldman, commissioner of the Department of Banking and Insurance, who was not short on candor at the Trenton event. “New Jersey has the most dysfunctional system I have seen in my entire life,” he said.

E-mail to shankar_p@njbiz.com