SOURCE: First Service Administrators, Inc. (FSAI)

August 04, 2009 08:30 ET

FSAI CEO: Healthcare Reform Efforts Doomed to Fail If Lack of Free Market Competition, Ineffective Wellness Efforts Are Not Addressed

LAKELAND, FL--(Marketwire - August 4, 2009) - Reform measures as currently proposed cannot fix the nation's broken healthcare system because they fail to address the core problems: lack of free market competition and the failure of wellness initiatives to reduce the prevalence and severity of chronic conditions, which consume the majority of healthcare dollars.

That is the message Chandler J. Rapson, CEO of First Service Administrators, Inc. (FSAI), a leading third party administrator for hospitals, healthcare systems and public entities, is urging the benefits administration industry to send to policy makers before it is too late.

"Restoring free market competition by ending monopolies that create situations like we have in Florida, where two carriers control nearly 90% of the state's health insurance market, as well as passing 'any willing provider' legislation and mandating transparency is critical to fixing what is broken in the system. Equally critical is coupling insurance reform with truly effective wellness programs that encourage personal responsibility and accountability," said Rapson. "Unfortunately, because these key issues are not addressed, current healthcare reform efforts are little more than subsidized coverage. They are doomed to fail and will cost taxpayers dearly in the process."

Echoing the fixes highlighted in "The Six Ways to Fix Our Healthcare System," a healthcare reform position paper issued in July by AmWINS Group Benefits President Samuel H. Fleet, Rapson called upon policy makers to focus reform efforts on:

--  Restoring free market competition: In addition to ending monopolies by
    individual carriers, which typically control 80-90% of a market, healthcare
    reform must address the need for transparency in the provider contracting
    process and mandate that networks be open to any provider willing to accept
    the same terms as those already in networks. It must also include price
    standardization and publication of quality ratings in meaningful, user-
    friendly formats. "It goes beyond leveling the competitive playing field,"
    said Rapson. "Healthcare reform must eliminate the monopolies that have
    carriers focused more on profits and locking out competition than on
    ensuring that their provider networks deliver quality care. It must pave
    the way for consumers to choose their payers and providers based on quality
    and preference rather than price."
--  Implementing effective wellness initiatives: With chronic conditions
    now affecting 125 million Americans and consuming 75% of the nation's $2
    trillion in medical costs, it is clear that the wellness programs offered
    by 90% of private health plans are failing to drive necessary change in
    consumer behaviors. By following a proven model that utilizes predictive
    modeling, early intervention and personalized education and support coupled
    with meaningful rewards and penalties, wellness programs can succeed at
    driving down the costs associated with chronic conditions. "It's about
    incentivizing consumers to assume personal responsibility for management of
    their health," said Rapson. "By giving them the tools and holding them
    accountable for their behaviors, consumers will respond by making the
    lifestyle changes necessary to positively impact their health."

For example, the wellness programs offered by FSAI utilize predictive modeling to analyze employee populations and identify excessive healthcare costs and their drivers. Best-of-class risk management tools and cost containment strategies are then utilized to reduce a client's overall healthcare spend. Health risk assessments and personalized wellness communications are also provided to motivate employees and promote healthier lifestyles. The results are improved compliance with recommended follow up and clinical tests, delivering a measurable decline in emergency room visits and inpatient admissions, as well as significant savings in prescription medication expenses and costs associated with provider networks.

"These are the kinds of outcomes policy makers must focus on if they truly intend to reform the healthcare system. Any actions taken without addressing competition and wellness will be done at the peril of taxpayers and patients," said Rapson.

Acknowledging the efforts of the Society of Professional Benefits Administrators (SPBA) to serve as "the eyes and ears of the industry," as well as the work of fellow third-party administrators AmWINS, ENTRUST and IMA of Louisiana to draw attention to the serious competitive inequities plaguing the healthcare system, Rapson urged others to "step up and demand to be heard. We have the solution. It is upon all of us to ensure our legislative leaders understand why and how to apply that solution to repairing the nation's broken healthcare system."

About FSAI

As a leading third party benefits administrator, FSAI has been providing exceptional customer service, innovative thinking and cost-effective healthcare solutions to hospitals, healthcare systems and public entities since 1985. FSAI offers a fresh, flexible approach to benefits administration tailoring its suite of superior healthcare cost management services to each client's specific needs. FSAI is committed to enhancing the physical and financial well-being of clients and their employees through a powerful combination of efficient plan administration, network management, predictive modeling tools, and life-enriching wellness and disease management programs. For more information, visit

Contact Information

  • Media Contact:
    Kathleen Sullivan
    Executive Vice President, Sales & Marketing
    First Service Administrators, Inc.
    (863) 293-0785 ext. 2000
    Email Contact