Uninsured may soon have new option

by Jonathan Maze, Charleston Post & Courier

November 23, 2004

Faced with skyrocketing health insurance costs, small businesses in six counties around the state will soon be able to save money by negotiating directly with health care centers so that their workers can see a doctor.
The South Carolina Small Business Chamber of Commerce and the South Carolina Primary Health Care Association are developing the program, which would pair small businesses that can’t afford health insurance with federally backed community health centers. The businesses and the health center would then negotiate on a package of health care services.

What those services include, and how they are paid for, will depend on what the business needs and what the center is able to provide. Some health centers provide more services — such as mental health care, dentist visits and lab work — than others.

The program would start in Beaufort, Florence, Greenville, Greenwood, Horry and Sumter counties. If it’s successful, it could spread statewide, where there are 19 federally funded health centers operating 126 locations.

The two organizations are still working out the plan’s details, but the first deals between businesses and health centers could be negotiated within the next couple of months.

The program is not health insurance. It doesn’t cover specialist visits or hospitalizations. Rather, it is designed as an alternative for small employers who have nothing else to offer workers.

Frank Knapp, president of the Small Business Chamber, believes the primary-care contracts would take care of the bulk of necessary care. “We are not at this point controlling health insurance costs,” said Knapp, who said his organization is also working on a way to provide small businesses with some type of hospitalization program. “If we can’t get (it) under control, at least we can address the cost of health care.”

The program bears a resemblance to deals of decades past in which companies established clinics to serve their workers. Some bigger companies had their own company doctors. Such arrangements have been phased out over the years in favor of managed care and other forms of insurance.

Health care costs have risen fast for most people in the past five years, though nobody has felt their impact more than small businesses and their workers. According to the state Department of Insurance, 53 percent of small businesses in South Carolina with 10 or fewer employees now offer coverage. That number is expected to decrease as costs keep rising.

While the uninsured generally use the health system less than those who have insurance, experts say their care places a big burden on doctors and hospitals. Uninsured patients consumed about $273 million in health care that went uncompensated in 2002, according to the state Office of Research and Statistics.

Hospitals boost their charges to insurers to make up for those costs, which can lead to higher insurance rates.

Proponents of the primary-care plan hope that it could help ease those costs. It would provide some of the uninsured with regular care, preventing more serious problems and helping the patient avoid emergency room visits.

“Uninsured individuals will not practice preventive health care,” said Lathran Woodard, executive director of the South Carolina Primary Health Care Association. “So a lot of things they’re in the hospital for are preventable. The end result of this program is that we should be able to relieve inappropriate use of the emergency room and hospitalizations.”

Woodard said the program’s goal is not to get companies to dump health coverage for this cheaper alternative.

Knapp, however, said that if the program is successful and spreads throughout the state, it’s possible that some businesses facing further premium increases may forgo coverage and opt for their own deals with health centers.

“Private businesses can do anything they want,” said Knapp, who sees no problem as long as the employer and employee understand that the program is not health insurance. “So maybe this is an incentive for insurance companies” to keep rate inflation in check.

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