Cure For Soaring Costs

But Gannett's Horning needed more than an insurer-specific system. Gannett owns newspapers from Salem, Ore., to Springfield, Va., so no more than 10% of Gannett employees are located in any one city. That forces the publisher to deal with two national health maintenance organizations and 25 to 30 local HMOs--an improvement from the 100 it used to work with a few years ago. "Health care has become increasingly complex, and for us, part of the complexity is that we're dispersed geographically," Horning says.

Spartz at health-care consulting firm FST, who uses CignaExpress to do analysis on behalf of her clients, says many companies run up against the problem of getting inconsistent data from their various providers. The major insurers provide some sort of analysis tools for customers to access their own data, but that doesn't solve the problem for one of her clients with about 20,000 employees, 40 HMOs, and five insurance plans. "Smaller HMOs generally give you the renewal rate, and that's about it," she says.

Even with these kind of tools available from insurers, doing this kind of analysis in-house is beyond the means of many companies. One obstacle can be the tools themselves, which Spartz says aren't necessarily intuitive to use. Cigna gave users like Spartz two days of training on how to get the most out of the system. Most companies don't have the resources to create that kind of information specialist: Her 20,000-employee client has only five HR staffers.

Because of the complexity, in-house analysis of health-care costs using business-intelligence tools isn't widespread. It's more common to hire consulting firms to wield the analysis tools in order to benchmark benefits plans of large employers. Health-care consulting firm Hewitt Associates uses Cognos business-intelligence software to evaluate overall costs associated with an employer's benefit packages, adjusting for geography and demographics to compare that data with industry benchmarks. Hewitt "can help a widget manufacturer in Chicago with 3,000 employees compute whether its health plans for 50-year-old males are a good value compared with other plans," says Hewitt consultant Brad Kimler.

Louis Lazovsky, VP of HR at the nonprofit Jewish United Fund and Jewish Federation of Metropolitan Chicago, says his group and other members of a Chicago coalition of companies receive data from a variety of sources, including consultants Tower Perrin, which analyzes how well HMOs met their service contracts. Other sources include drug companies and hospitals that provide data about their performance and what treatments they offered. But the data comes mostly as static reports.

Letting outside consultants handle the analysis offers a dose of objectivity and industry knowledge. It's a better choice than leaving that analysis to the insurance companies and letting them reach out to employees directly, Kimler says, because there's a chance that insurers (on behalf of employers) will get too intimate with the direction of those employees' health choices and try to micromanage those choices.

But employers need to do something, as the forces driving up health-care costs show no sign of easing. Kimler points to a range of factors, including rising prescription drug prices, insurers' inability to keep hospitals and other providers from raising prices, and the erosion of competitiveness among managed-care networks.

Horning knows what she's up against and doesn't expect magic from a piece of software. "Our problem is a large problem. There's no silver bullet, no singular solution," she says. "There are areas where we'd like to explore, not for big fixes but for smaller ones." One small step might be making the plans more customer-driven, so employees can shape their own insurance more. No magic there. Just progress.