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December 1991, Vol. 114, No. 12
Alternatives to hospital care under employee benefit plans
Thomas P. Burke
The sharp rise in hospital room and board costs, nearly 3 times the general inflation rate during the 1980's, has heightened interest in lower cost alternatives to hospitalization. Although in existence earlier, skilled nursing care facilities, home health care organizations, and hospices became considerably more prominent features of the health care scene during the 1980's. Reflecting this development, coverage for these alternatives has become a prevalent feature in employer-sponsored health care plans.
In 1979, the first year for which Bureau of Labor Statistics data are available, 54 percent of all participants in medical care plans in medium and large establishments had coverage for skilled nursing care benefits. (See chart 1.) By 1989, the proportion had grown to 80 percent. Similarly, the incidence of coverage for home health care services increased from 37 percent of participants in health care plans in 1983 to 75 percent in 1989; for hospice care, coverage rose from 11 percent of participants in 1984 to 42 percent in 1989.1
Most provisions for alternative care benefits limit the extent of care that will be financed by the plan. Restrictions may be in the form of limits on number of days of care or on dollar benefits, or requirements for partial payments by covered individuals. For example, a traditional fee-for-service medical care plan2 may cover skilled nursing care for 60 days during each confinement.
This article focuses on skilled nursing care, home health care, and hospice care provisions in employer-provided health care plans. In addition, long-term care insurance, a related benefit, is considered briefly. Data for the analysis are from the Bureau's Employee Benefits Survey, an annual study of the incidence and characteristics of employee benefits. The majority of data in the article is from the 1989 survey of benefits for full-time employees in medium and large private establishments. The survey provides representative data for 32 million employees in 109,000 establishments employing 100 workers or more in private nonfarm industries.3
This excerpt is from an article published in the December 1991 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 The Bureau's analysis of home health care services and hospice care began in 1983 and 1984, respectively.
2 Under such a plan, an individual seeks treatment from his or her own provider, after which the benefit plan reimburses the provider or the patient.
3 In addition to medical care benefits, the Employee Benefits Survey provides data on life and disability insurance, retirement and capital accumulation plans, paid and unpaid leave, and other benefits. The results of the survey are available in Employee Benefits in Medium and Large Firms, 1989, Bulletin 2363 (Bureau of Labor Statistics, 1990). Benefit data for State and local governments are available in Employee Benefits in State and Local Governments, 1987, Bulletin 2309 (Bureau of Labor Statistics, 1988). In these bulletins, data are presented separately by occupational groups. For this articles data are not presented separately by occupational groups because no significant differences among the groups were found.
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