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IT SOUNDS LIKE SOMETHING Ed McMahon ought to be pitching on late-night TV. Comprehensive health insurance, only $100 a month. No claim forms, no deductibles. No wait for appointments. Free physicals and prescription drugs. Dial 1-800 ... ? Or listen to the real-life case of Harris Rosen, 54-year-old president of Tamar Inns, an Orlando, Fla., hotel chain. "The insurance company said they wanted another 15 percent increase, and I said, 'No way, Jose.' So we started taking control of our destiny."
That was three years ago. Today Rosen is insuring 1,200 employees at $1,200 a head--roughly half what his former insurers charged and less than a third of the Clinton administration's latest target for health-care reform. one way Rosen has slashed costs is by cutting tough deals for everything from cough medicine to kidney transplants. But he has also forced his employees to seek medical help his way. For instance, you can have any primary-care doctor you like, as long as her name is Dr. Barbara Hansen, who runs the Rosen clinic and acts as "gatekeeper" for outside care. Whether Rosen's employees are getting the best care possible is open to debate. But Rosen does prove that companies can cut healthcare expenses significantly while they wait for Washington to cut costs for them. "We don't say this is perfect," says Orlando insurance adviser Robert Cox, one of the plan's chief architects. But "we're giving our people a lot more medical care for the buck."
Rosen is a self-avowed "health freak" who works in warm-up clothes and does swimming-pool laps for lunch. After a stint as a Disney hotel planner in the early '70s, he started Tamar with a foreclosed Quality Inn and built that up into half a dozen hotels stretched along tourist-jammed International Drive. Then, with a new 1,400-room flagship hotel--and hundreds of new employees--on the horizon, Rosen asked his insurance company for a look at its books and saw that it was taking what amounted to a $250,000 annual fee. "I didn't like the care we were getting," he says. "And I definitely didn't like what we were paying for it."
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The alternative Tamar came up with looks a lot like the friendly local GP. Dr. Hansen and a staff of four handle everything from walk-in flu to bloodpressure monitoring and routine gynecology. Some of the savings come right there: with visits averaging just over 20 a day, each visit costs about $27, less than half the local rate. Hansen closely controls referrals, which are done through a medical-specialty network. But Rosen and Dr. Hansen also figure they can cut costs by constantly monitoring employees through tests ranging from mammograms to cholesterol and prostate screening. "It's a doctor's dream," says Hansen, a former public-health doctor who gets $50,000 a year plus a bonus. "We're gonna make 'em healthy, whether they want to or not."
Rosen's company does have a few advantages over other firms trying to cut costs. The hotel business hires mostly low-wage, low-skill workers who might be less prickly than professional employees about seeing a single doctor. Such a work force is generally younger and healthier, with a high proportion of single people. (Rosen used that to get a deeply discounted rate at a local hospital.) Still, Rosen has to impose some tough conditions to weed out potential big-ticket losses. New hires face an initial six-month waiting period for coverage (set to drop to three next month). Rosen's firm also reserves the right not to cover pregnancies if the mother doesn't give notice during the first trimester to begin prenatal care. And there is a $50,000 first-year cap on medical care for newborns--above that, try Medicaid.
Rosen says he isn't worried that his workers will eventually chafe at his plan's myriad restrictions. "If you provide a physician who knows you and is easy to see, and then make it free or low cost, for most people choice is irrelevant," says Rosen, who chose to use his longtime family doctor instead of Dr. Hansen. (His wife and children use the clinic, though.) What really worries him is nationwide health-care reform: under the White House's latest draft, companies with fewer than 5,000 employees will no longer be allowed to go it alone. And that, Rosen says, will eventually kill Tamar's health-care plan and perhaps double its costs.
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