Health exec pushes benefits of defined contributions

Allison Connolly
With ever-rising health care costs, employers -- especially small-business owners -- are having to be more creative than ever.

David Cowles Jr., executive vice president of Medfield-based Benemax Inc., is pushing the idea of defined contribution. Simply put, his company contracts with all the major insurers and HMOs that offer a defined contribution-style product -- and despite what many of them profess, they do have them, Cowles said.

These products typically cost around 30 percent less than an HMO product, but carry a high deductible, usually between $500 and $1,000.

The employer can then build a plan: either hold the employee responsible for the $1,000 deductible or ask the employee to pay a percentage of its cost.

The employer can also pick up the deductible entirely, or put it into a flexible- spending account whose unspent balance can carry over at the end of each year.

The plan works well for people who aren't likely to get sick, but those who do can end up spending more, Cowles admits.

However, he said the attraction of such plans for employees is that they can see any doctor they choose and they don't need referrals to see specialists.

When he first started pitching such plans, Cowles said it was a hard sell, but now he says his sales cycle is shortening.

"In 15 years, my company has only seen growth in the last three years," said Cowles, tapping a Blue Cross and Blue Shield pen on the table.

The 25-year-old private company grew 41 percent last year and now has 20 employees. Cowles said he is getting more interest from companies that are desperate for choice, and now has more than 170 corporate clients.

"Now people are starting to recognize the strength of these programs and are using them in creative ways," Cowles said.

Rick Lord, president of the Associated Industries of Massachusetts, which represents more than 5,000 employers, said a broader range of alternatives is just what many employers are demanding.

Lord's group recently hired a Minnesota-based company, Patient Choice, to study a new insurance model for the Bay State that would break doctors up into smaller networks and offer patients different price points depending on where they seek care. It is similar to the effort by some insurers here that plan to offer HMO products where cost depends on whether a member wants to seek care at a more expensive teaching hospital or a less expensive community hospital.

Cowles said such efforts are all a way to get employees to appreciate the cost of health care, and to pass on to some of the cost to employees as insurance premiums reach double-digit increases.

"This is the right time for us," Cowles said. "The philosophy we've been selling for 15 years is finally the philosophy du jour."

Spaulding goes extra 'miles' to address nursing shortage

One profession that doesn't have to worry about job security these days is nursing. Signing bonuses have reached as high as $20,000 locally, and many say hospital diversions and medical errors can be attributed to the nursing shortage.

Some hospitals have gone as far away as the Philippines to hire nurses. But that is something Boston's Spaulding Rehabilitation Hospital has been doing for 30 years. And despite the expense of bringing them here, Spaulding's chief nurse executive, Tim Quigley, says it is much cheaper to do so in the long run.

"I always have to look forward into the future," he said.

Spaulding is different than acute care hospitals, Quigley says, because it doesn't experience the volume peaks and valleys that most hospitals do; the average stay for a Spaulding patient is 25 days, so nursing levels must be stable for long periods to preserve the continuum of care.

Quigley has recruited nurses from Ireland and the Philippines to cover shortages since the 1970s, and he said 100 of the hospital's 250 nurses came from overseas more than 20 years ago. They typically arrive on a working visa that allows them to declare residency after working for a few years.

Spaulding pays for the foreign-born nurses to take their nursing boards as well as an English proficiency test. It also pays an immigration lawyer, Sharon Ross, of Boston's Ross, Martel & Silverman, and a recruiting agency that recruits the nurses abroad and moves them to the states. The total expense per nurse: just under $10,000.

Still, Quigley said he would spend nearly twice that much if he tried to keep pace with the signing bonuses other hospitals are offering American nurses. And the bonus only requires the nurse to stay one year.

"We have high-quality candidates who will stay for the long term," Quigley said.

ALLISON CONNOLLY, health care and biotechnology reporter for the Boston Business Journal, can be reached by e-mail at AConnolly@bizjournals.com.