Negative Message Assignment:
Your company has traditionally provided health insurance not only to employees but also to retirees who have worked for the company for at least 20 years at the time of retirement.
Seven years ago, you cut costs for employee health insurance by switching from open-ended insurance to health maintenance organizations (HMOs). At that time, you kept open-ended insurance for retirees because your employees told you that retirees wanted to keep their current doctors. But the high cost of that program gives you no choice: to continue to insure retirees, you must hold down costs, and HMOs offer the best way of doing that.
Under the current plan, the retiree pays 20 percent of all costs (up to a yearly ceiling of $10,000 and a lifetime ceiling of $100,000) and you pay 80 percent. In an HMO, more costs will be covered. Routine doctors' visits, for example charge only a $10 co-payment. Most tests, such as mammograms, X rays, and blood work, are covered 100 percent. Hospitalization is covered completely, and there's much less paperwork. By presenting one's card when one fills a prescription, one pays only the co-payment, rather than having to pay the entire amount and then filing for partial reimbursement later.
The bad news for retirees is that they have to go to a physician listed with the HMO. If the current physician is not on the list, the retiree will have to switch doctors to retain benefits.
Furthermore, the primary care physician must refer the patient to any other health care providers. That is, someone who wants to see a specialist or go to the emergency room must call the primary care physician first. Primary care physicians always approve such referrals whenever they seem medically advisable, but the requirement does limit the patient's freedom. Further, since HMOs are paid a flat fee and therefore have an incentive to give care that costs less than that fee, some people fear that HMOs will be reluctant to prescribe expensive treatments, even when those treatments are essential.
Your company offers a choice of HMOs. Informational meetings will be held next month for retirees (and anyone else who wishes to attend) to explain the various options. Retirees must return a card within two months, indicating which plan they prefer. The card will be enclosed in the mailing. Anyone who does not return a card will be assigned by the company.
As Vice President for Human Resources, write a form letter to all retirees, explaining the change and telling them how to indicate which HMO they prefer.
Hints:
Choose a business, government, or nonprofit organization that you know something about.
About how many retirees do you have? What percentage are "young old" (under 80, in reasonably good health)? What percentage are "old old" (80 and over, sometimes with more serious health problems)?
How well educated are your retirees? How easy will it be for them to understand the HMO options?
What times would be convenient for the retirees to come to meetings? Should you have extra times for them, beyond those you've scheduled for employees?
See the reverse page for options you may present.
These are the alternatives you can present:
1. Oregon HMO
You pay $10 co-pay for doctor appointments and for all prescriptions. Must use Oregon HMO Plan doctors and pharmacies. There are approximately 150 doctors listed in the Portland metropolitan area.
2. Patients HMO
You pay $5 co-pay for doctor appointments. You pay 10 percent of all prescription costs. Must use Patients HMO Plan doctors. You may use any of the participating pharmacies.
3. We will pay $2,400 per year ($200 per month) to any health insurance plan of your choice.