April 23, 1996
Media Contact: Gary Stephenson
Phone: (410) 955-5384

With more companies switching to self-insurance, The Johns Hopkins Health System is now sponsoring a new employer-controlled company, called Employee Health Plans (EHP), offering care management programs for employees enrolled in Hopkins' and other self-insured employers' plans across the region.

EHP was introduced in January. Several major regional employers, including Baltimore Gas and Electric (BGE) and Mercantile Bank already are offering their plans to employees through EHP. More than 14,000 enrollees now receive care through these individual employer plans. Over the next few months, at least 10 additional companies will offer their own EHP programs, according to Jerome Gotthainer, president and chief executive officer of EHP.

EHP is a provider-sponsored, employer-governed organization with a not-for-profit mission. Designed around the needs of self-insured employers looking for more value and quality for their health care dollar, the new company helps employers tailor their plans to offer maximum choice and quality. Under the employers' EHP plans, medical services are provided by Hopkins practitioners, as well as by physicians affiliated with the other hospitals in the Atlantic Health Alliance. In addition, employers offering their plans through EHP have access to a network of 3,500 physicians and other providers in the region.

EHP is expected to serve as a model health service organization, where each employer's revenue is earmarked for enhancing high-quality health care, and administrative costs for employers are minimized.

Employee Health Plans signal a new era in health care services for the Maryland business community and its employees, says James A. Block, M.D., president and CEO of The Johns Hopkins Health System and The Johns Hopkins Hospital. He also is co-chair of the EHP board, with Martin Grass, chairman and CEO of Rite-Aid Corporation.

"With EHP, we see a new working partnership between employers and health care providers," he adds. "Employers will benefit by having direct control over improving the value of health services for their employees and families. And employees will benefit by having easy access to superior health care."

Hopkins' development of and participation in the EHP reflects a growing national trend that is seeing more and more business owners switching to self-insurance as a cost-effective alternative to conventional health care programs, Gotthainer notes. Between 1985 and 1995, for example, the percentage of employers who self-fund health care benefits for their employees grew from 39 percent to 57 percent, according to a study by the benefits consulting firm Hay/Huggins reported in the March 1996 issue of Nation's Business.

This trend is attributed in part to the desire among many employers for a greater degree of control in shaping plans to fit the needs of their employees, Gotthainer says, and EHP provides a unique opportunity for employers to combine the advantage of self-funding with high-quality managed care programs.

Employee Health Plans assist employers in shaping their plans to provide comprehensive coverage, encompassing services from routine physicals to sophisticated transplant surgery, including dental services, prescription drugs, and vision care. Under most employer EHP plans, patients have the option of referring themselves directly to specialists in the network, or at some additional cost, to any provider outside the network. "There are equitable cost differences between these options that reflect the difference in cost associated with how one accesses health care services," Gotthainer says. "Enrollees in employers' plans are given maximum freedom but made financially responsible for their choice."

EHP patients diagnosed with severe or chronic illness also may use specialists as their principal or primary care physician. "Why not have an airway specialist as the primary person for a patient with cystic fibrosis? It doesn't make sense to bounce seriously ill patients back and forth between the primary care physician and specialists," Gotthainer says.

"EHP care management does not interfere in the doctor-patient relationship," he adds. "Care is managed best by providing supports to assist physicians in treating their patients, establishing appropriate incentives and carefully monitoring results through sophisticated data analysis."

-- JHMI --
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