The new competitive edge--salaries are now second to healthcare.

• Author: Madden, Jim
• Position: Manage Your assets

The new silver bullet--healthcare! In a recent 2003 Hewitt Associates study, employees found healthcare ranks as the most important benefit, outscoring compensation by a margin of two to one, but proposed insurance premiums for 2004 are expected to rise 17.7 percent. The situation has reached a crisis point for benefits managers, who must choose between limiting benefits, raising employee costs or mixing both into an unpopular solution that has left employees and companies at a loss. HMO's haven't solved the problem and, in some cases, companies have simply stopped offering coverage areas once considered basic. Others have turned to consumer-driven defined-contribution plans (also known as "go-find-your-own" healthcare reimbursement arrangements, or HRAs) that set high deductibles and allot a set amount of money to each employee. Other employers are looking at prevention and wellness as a way to lower costs. Whatever the uniquely crafted formulation, health benefit design has become a forefront issue, and we open the controversy for some discussion by our experts. Contact: jim.madden@exult.net

Jeffery S. Wells

Sr. VP Human Resources, Circuit City Stores, Inc.

Circuit City's cost increases for healthcare have been less than the norm, while offering one of the best policies in the retail industry. Ask yourself: "What is your healthcare strategy?"

At Circuit City, we have a four-part answer: 1) competitive; 2) protect against the financial burden of catastrophic illness; 3) affordable; and 4) the costs of treatment are a shared employer/employee responsibility. The largest determining factor in healthcare cost increases is the 1/2% of those covered that are responsible for 20-25% of the cost.

At Circuit City, we focus on the biggest obstacle to providing quality healthcare that doctors face: incomplete information. Doctors frequently find themselves having to make critical decisions based on incomplete information either about the patient or the medical literature. We engage the services of a third party to make sure our members get the best possible care. They do this by merging the four main silos of personal healthcare data (doctor's visits, lab results, pharmacology and treatments) into a confidential common data warehouse. Unlike most benefit plans, ours performs daily updates, providing continuous clinical review. Every time a new claim is received on a covered person, his/her entire claim history is exposed to thousands of clinical rule...