High Co-Pay Cost Leads Workers to Cut Doctor Visits

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The rising cost of health care has prompted many companies to require employees to bear a greater share of those costs, but now even some employers are having second thoughts about that strategy.


A survey conducted for the California HealthCare Foundation finds that 42 percent of the employers questioned believe that increasing co-pays for office visits and drugs, among other cost-sharing devices, is leading more employees to forgo needed medical care thereby reducing productivity. That’s up from two years ago when the figure was 26 percent.


A parallel survey of employees found that nearly one in five reported not going to a doctor, not receiving a recommended treatment or test or not filling a prescription because of rising costs, despite having insurance. Despite the concerns, however, 70 percent of employers expect to raise employee health costs this year, though that was down from 79 percent in 2002.



Minimizing Probe


Wall Street is brushing aside Insurance Commissioner John Garamendi’s investigation of broker contingent commissions that has included Zenith National Insurance Corp.


Zenith’s stock gradually fell, along with the larger market, after the Dec. 27 announcement that it had received a “letter of inquiry” from the state Department of Insurance asking it for any information about such commissions connected with the company’s workers’ compensation business.


But on Feb. 1 the company reported fourth-quarter earnings that were more than double that of the like period a year earlier. By last week the stock was trading above $50, up from $45.92 on Jan. 25.


Chief Executive Stanley Zax, who has run the company since 1977, said the commissions in question weren’t a major part of the company’s operations.


“I think we had 10 arrangements. It’s not part of our core business strategy,” said Zax, who has run the company since 1977. “The total amount is so small an eye-dropper couldn’t find it.”



Falling Staar


Troubled Staar Surgical Co. disclosed in a Securities and Exchange Commission filing that it has made progress resolving its regulatory troubles, but Wall Street appears less than impressed.


The Monrovia-based company this month reported that the Food and Drug Administration appears satisfied with the stability of a material it is using for a new implantable contact lens that is still being clinically tested.


But Staar Surgical acknowledged that the FDA could take additional regulatory action against it. The company received two warning letters last year about problems with its manufacturing and quality assurance systems that prevented it from launching the lens.


John Calcagnini, an analyst with CIBC World Markets, said that while the letter indicates Staar is resolving some issues, others remain. A Staar spokesman declined to comment.


Staff reporter Laurence Darmiento can be reached at (323) 549-5225, ext. 237, or at

[email protected]

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