Health care crisis: health care costs are soaring and employees don't want to pay, leaving CEOs with one very expensive problem

Chief Executive, The, June, 2004 by Jennifer Pellet

Health care, however, is currently plagued by a dearth of information and asymmetric information--a disconnect where employers understand costs and may even have access to data on results, but employees don't. Happily, progress on that front is under way, according to Scott Serota, CEO of Blue Cross Blue Shield Association. "We have made great strides in defining quality, and we're reaching consensus with some of the specialty groups as to what defines quality service," he said.

Ideally, as insurers and employers gain information on the quality of health care providers, access to that information will change the way employers and employees make health care choices. As O'Reilly of Illinois Tool Works put it, "I don't think I can tell my union employees, 'Go to these hospitals and these doctors or you won't have health care.' But I can say, 'You will be reimbursed 60 percent here versus 80 or 90 percent there and this is why."

Ultimately, the hope is that making information about quality of care widely available will improve both the care and cost side of the health insurance equation.

RELATED ARTICLE: WHO'S WHO

* Tom Beauregard is global health management practice leader at Hewitt Associates, a $2 billion global human resources outsourcing and consulting firm in Norwalk, Conn.

* Brian Ferguson is chairman and CEO of Eastman Chemical Co., a $5.8 billion manufacturer and marketer of plastics, chemicals and fibers in Kingsport, Tenn.

* Robert J. Greczyn Jr. is president and CEO of Blue Cross Blue Shield of North Carolina, a $3.2 billion heath care provider in Chapel Hill, N.C.

* Vicky B. Gregg is president and CEO of Blue Cross Blue Shield of Tennessee, a not-for-profit health benefits company in Chattanooga, Tenn.

* William J. Holstein is editor-in-chief of Chief Executive.

* Edward M. Kopko is CEO of Butler International, a $263 million strategic outsourcing firm in Montvale, N.J., and chairman and CEO of Chief Executive Group.

* Raymond F. McCaskey is president and CEO of Health Care Service Corp., a Chicago-based mutual company made up of Blue Cross Blue Shield of Illinois, Blue Cross Blue Shield of Texas and Blue Cross and Blue Shield of New Mexico.

* Thomas O'Reilly is director of group benefits at Illinois Tool Works, a $10 billion multinational manufacturer of highly engineered fasteners, components, assemblies and systems, based in Glenview, Ill.

* Edward Rabin is president of Hyatt Hotels Corp., a Chicago-based upscale hotel and resort chain with 123 Hyatt Hotels & Resorts in the United States, Canada and the Caribbean.

* Scott P. Serota is president and CEO of the Blue Cross Blue Shield Association, a national federation of 41 independent locally operated Blue Cross Blue Shield companies with combined revenue of nearly $183 billion.

* Diane C. Swonk is chief economist and senior vice president of Bank One, a $16.2 billion financial services company based in Chicago.