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Cracking Health Costs: How to Cut Your Company's Health Costs and Provide Employees Better Care

Cracking Health Costs: How to Cut Your Company's Health Costs and Provide Employees Better Care

by Tom Emerick, Al Lewis


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Cracking Health Costs reveals the best ways for companies and small businesses to fight back, right now, against rising health care costs. This book proposes multiple, practical steps that you can take to control costs and increase the effectiveness of the health benefit.

The book is all about rolling back health care costs to save companies and employees money. Working hand-in-hand with their employees, businesses need to ensure that, whenever feasible, employees with the most expensive diagnoses get optimal treatment at hospitals not practicing “volume-driven” medicine for higher profits. Less than 10% of employees incur 80% of costs. About 20% of patients have been completely misdiagnosed, while many others are simply the victims of surgeons who are either practicing bad medicine or overtreating for profit.

For example, some companies, such as Walmart and Lowe’s, are turning to the “Centers of Excellence” approach author Tom Emerick helped to pioneer while running benefits for Walmart. By determining which hospitals are adopting the highest standards of care, benefits managers can reduce the number of unnecessary high-cost surgeries and improve employees’ overall health. The solution-based approach offered by the book is unique, because it can be implemented by businesses today.

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Product Details

ISBN-13: 9781118636480
Publisher: Wiley
Publication date: 07/01/2013
Pages: 224
Product dimensions: 6.20(w) x 9.00(h) x 0.80(d)

About the Author

TOM EMERICK is a leading expert in health benefits design, global healthcare challenges, healthcare economics, evidence-based medicine, and process improvement. Currently, he is the President of Emerick Consulting LLC. Tom spent fifteen years at Walmart, designing and managing benefits for over 1.6 million employees. He has held positions with Burger King Corporation, British Petroleum, and American Fidelity Assurance Company.

AL LEWIS, President of the Disease Management Purchasing Consortium, is widely credited with inventing disease management. Lewis is also the author of the award-winning Why Nobody Believes the Numbers (Wiley). He provides procurement and outcomes consulting to health plans and human resources/benefits departments, and administers the industry certification program in Critical Outcomes Report Analysis. He holds undergraduate and graduate degrees from Harvard, where he also taught economics.

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Table of Contents

Foreword David A. Rearick ix

Introduction xiii


Chapter 1 Myths and Facts about Your Health Benefit 3

Chapter 2 Does Your Broker or Consultant Have Your Back? 25

Chapter 3 It's Time for the Wellness Industry to Admit to Doping 39

Chapter 4 This Is Your Health Benefit on Drugs 57

Chapter 5 Your Employees' Health Is Too Important to Be Left to the Doctors 69

Chapter 6 Are New Delivery Models Déjà Vu All Over Again, Again? 89


Chapter 7 The Company-Sponsored Centers of Excellence Model 111

Chapter 8 Hospital Safety: How to Get Your Employees Back to Work in One Piece 131

Chapter 9 Real Care Coordination: The Only Other Way to Save Money 145

Chapter 10 Goofus Retains a Wellness Vendor, Gallant Implements Well-Being 161


Chapter 11 Health Insurance Exchanges: Should You Stay or Should You Go? 177

Notes 189

Bibliography 193

Acknowledgments 195

About the Authors 197

What People are Saying About This

From the Publisher

Praise for Cracking Health Costs

“This book is a roadmap for how some private equity companies already spend their money wisely on health benefits in their portfolio companies, rather than chase every fad that, as Emerick and Lewis point out, can and do harm your employees as well as your bottom line.”
Tom Scully, Administrator, Centers for Medicare and Medicaid Services (2001–2003); Senior Counsel, Alston & Bird; Partner, Welsh Carson, Anderson & Stowe

“Tom Emerick and Al Lewis have crafted a work that should, and hopefully will, become required reading in America’s boardrooms and executive suites, as well as the dysfunctional mess we refer to as Congress.”
—John J. Nance, Author of Why Hospitals Should Fly; co-author of Charting the Course

Cracking Health Costs debunks the fads in corporate health benefit management and provides a road map for executives who want their employees to have top-quality care at an affordable price.”
Rosemary Gibson, Author of The Treatment Trap: How Overuse of Medical Care is Wrecking Your Health and What You Can Do to Prevent It

Cracking Health Costs is a myth-shattering book that opens Pandora’s box! While many administrators, patients, and healthcare workers are caught in the cultural web of unnecessary procedures, accidents, waste, and poor quality, Emerick and Lewis empower health benefits managers to call the shots by debunking common myths and illuminating a clear, practical road map for change. Knowledge is power, and power is within these pages. This book will transform healthcare.”
Kathleen Bartholomew, RN, MN, Co-Author of Charting the Course and Nurse Leader

“Tom Emerick is one of the nation’s most experienced and successful benefits managers. He is offering guideposts to avoiding overpricing and overtreatment in health plans. The need for such guideposts is a reproach to the American healthcare system. Nonetheless, the insights are profound for benefits managers and beneficial for employees.”
Nortin M. Hadler, MD, MACP, MACR, FACOEM,Professor of Medicine and Microbiology/Immunology, University of North Carolina at Chapel Hill, Author of Worried Sick: A Prescription for Health in an Overtreated America

“In their new book, Cracking Health Costs, Tom Emerick and Al Lewis manage to gore everyone’s ox in such a delightful way that you will laugh out loud even while you are cringing at some of the ways you too have fallen into the traps they so vividly describe. They blow up myths about the benefits of wellness, prevention, screening, PBMs, and much more. And they name names and provide links and references to support their suppositions, and, most important, they do the math. Even if you don’t agree with everything they posit, you will want to read this book at least a couple of times not only to mine the nuggets, but also to enjoy the humor.”
Patricia Salber, MD, MBA, Host, The Doctor Weighs In and CEO of Health Tech Hatch

[This] new book by two of America’s most respected health care experts, Tom Emerick and Al Lewis, shows small and large business how to fight against rising health care costs and gain more effective treatments for employees. The book proposes multiple, practical steps that executives and small business owners can take to control costs and increase the effectiveness of the health benefit… For finance, human resources, and all executives concerned with health care spend, the book will show everything benefits consultants didn’t want their clients to know about where their money is really going. (Insurance News)

The authors offer the following description:  "Cracking Health Costs reveals the best ways for companies and small businesses to fight back, right now, against rising health care costs. This book proposes multiple, practical steps that you can take to control costs and increase the effectiveness of the health benefit."
Remarkably, the book does as they say.  It casts asides fads, shibboleths, misconceptions, and just plain lies often offered by those many participants in the health care field who have collectively helped our country spend almost a fifth of our economy on a system that produces inferior results. It reminds us that those participants view that level of national spending as success: After all, your costs are their income…Oh, and did I mention that the book is funny and engaging? It is. You will have trouble putting it down.
Paul Levy, Not Running a Hospital

It’s been 70 years since Kaiser opened its first free medical clinic for employees. Since then, employers have spent over $20 trillion on providing health benefits. Yet despite all those years and all that money, no one has ever thought to write a book advising employers how to spend that money wisely … until now. Cracking Health Costs: How to Cut Your Company’s Health Costs and Provide Employees Better Care is that book. For the most part, it succeeds: authors Tom Emerick and Al Lewis combine a wealth of experience with a healthy — and, if the book‘s convincing arguments are to be believed, well-deserved — skepticism of all the panaceas sold to employers by vendors, provider, brokers and consultants to allegedly reduce their health spending.

Although this is a how-to book, the good news is that it is far from a dull read. The Click and Clack of health care writing, Emerick and Lewis pepper their prose with one-liners like “the wellness industry needs to admit to doping” and chapter headings like the one about PBMs rip-offs: “This Is Your Health Benefit on Drugs.” They also claim “no animals were harmed in the writing of this book,” but that seems to be the one thing their convincing arguments can’t prove.
Jonathan Field, Managing Editor, Institute for Healthcare Consumerism

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