With some topics, such as politics or sports, many people claim to have the right answer.

But no one claims to have the answer about health care costs—and that may be the surest sign yet of how troublesome the growing cost of health care is.

Tell someone you've found a way to trim health care costs and you'll have an attentive audience—very skeptical, but very attentive.

Hewitt Associates, an outsourcing and consulting firm based in Lincolnshire, Ill., is among the researchers that have seen less of an increase for employers recently in terms of health care coverage. That's good news for employers, but much of any increase gets passed on to employees in the form of higher co-payments or higher prescription costs.

According to a recent Hewitt report, the majority of costs each year are driven by fewer than 20 percent of people seeking some form of health care—sort of the the insurance industry's version of the old “80-20” rule.

INDUSTRIAL DISTRIBUTION's 60th Annual Survey of Distributor Operations found distributors seeing yearly increases in health costs in recent years. The average increase in 2006 was 14 percent. This was a slight improvement over 2005, when the average increase was 15 percent. In 2004, it was 17 percent.

The survey found that fewer smaller distributors asked employees to contribute more to their coverage. However, many mid-size distributors were asking their employees to contribute more.

For many companies, the health insurance watch never stops.

“It's a constant review process we go through,” says Steve Philpott, president of Bearing Belt Chain in Las Vegas.

Philpott has been with Bearing Belt Chain for more than 30 years. When he first started in distribution, he recalls, his company at the time hadn't changed its insurance provider for 19 years. Pretty soon, they'd be changing every third year.

“Now it's every year. Here in the Nevada market, [providers] move in and out of the market or will stop writing insurance. So there's a reason we have to change,” he says.

Another company contemplating a change in providers is Hydraquip Inc., a fluid power distributor headquartered in Houston. They are completing their third year with the same provider, one of the longer stretches they've had with one health care source, says Hydraquip's president Tony McGarvey.

But he remains on the lookout for any health care savings ideas or theories. Their annual rise in insurance costs is not getting much better, he admits. In 2005, Hydraquip saw an increase of 16.4 percent.

Like many companies, Hydraquip has had to straddle the thin line between wanting to keep costs down, while also giving employees a good plan with flexible choices. Easier said than done, McGarvey concedes.

“Our experience has been to have a very substantial increase in premiums,” McGarvey says. “We've attempted to keep the programs as rich as possible while keeping the increases down to 15 percent or less, if we can. But it's been difficult.”

Each year, McGarvey and Hydraquip's treasurer-controller, David Tyler, examine various plans.

If they manage to find a good insurance package, though, companies like Hydraquip might find themselves in a bit of a, “is it too good to be true” dilemma, Tyler suggests. Did they get lucky and find the insurance equivalent of Mr. Right?

More often, though, the affordable insurance package is only a temporary, one-year event. Tyler cautions that some providers may offer an excellent price and package combination for the first year. But it can turn out they are doing so with an eye on “building up their book” of customers, as Tyler puts it, to make themselves more attractive for a possible acquisition.

“For years, it seemed like you had a provider who was looking to build their book up so they could get another company to buy them at a high price and absorb them,” Tyler says.

While that can be frustrating, Tyler candidly admits there is a way for a company to get through it—even though he admits he doesn't necessarily like to do it.

“We prostituted the program like they were prostituting the program. The carrier you use this year comes in under bid to get your business. Next year, they bring you up to spec and so you then go out and try to find another carrier who is looking to build their book,” he says.

Like any careful shopper, Hydraquip looks at as many different health care providers as time permits. In recent years, however, mergers and acquisitions have impacted the health insurance industry, especially in Texas, Tyler says.

“Here in Texas, we're down to a limited number of health care carriers,” he says. “Ten years ago I could find 20 carriers, but now I can find six.”

For some, outsourcing the research and shopping around of providers can work.

Dan Ahuero is president of Houston-based GHX Inc., a distributor and fabricator of industrial gaskets and hoses. He says his company uses a third party to negotiate with carriers and evaluate needs and interest according to their employee base.

“They'll bring us the best solution. We've read in articles, for example, that health care has gone up 15 percent, normally,” he says. “We're around 10 percent or so, but we've never been at 15 percent to 17 percent.”

One suggestion he offers is to move the renewal deadline for coverage to a date other than the end of the calendar year. Ahuero and his company have March 1 as its annual renewal date.

“At the end of the year, many of the health care companies get so swamped, they don't have time to talk to you because they're doing so many other renewals. March 1 gives us January and February to talk with them, after the bulk of their work has been done,” he suggests.

Hydraquip uses a May 1 deadline, Tyler says. They'll start looking and evaluating various health insurance plans in February. They enjoy having time to shop around, but it doesn't make the task any less tense.

“We start looking in February,” Tyler says, “but for us, it's always a nervous time because we don't know what we're going to come up with.”

A word heard more frequently in the health care industry these days is “consumerism.” Jeff Smith, an analyst with Hewitt Associates, brings up that word when analyzing health care costs.

Being an educated consumer makes perfect sense when making a serious and potentially expensive purchase, such as an automobile. But getting people to consider that approach for health care is just now catching on.

“Consumerism is the buzzword of the past couple of years,” Smith says. “We're clearly seeing more interest in it. A lot of that is being driven by employers providing more tools to their employees, where people can see what plan A will cost as opposed to plan B.”

Smith says in the years to come, people will have access to more information as far as doctors and health coverage is concerned. Another buzzword—“transparency”—is used when talking about greater access to health care-related information. (See sidebar on page 31.)

“We're also beginning to see more transparency in terms of health care costs,” Smith says. “Some vendors will put more information on their Web site so people can compare and contrast Dr. A and Dr. B.”

Ideally, a time will come when people shopping for health care providers and physicians will take more of a Consumer Reports approach and gather as much information as they can.

“It can encourage you to ask the right questions the next time you go to your doctor,” Smith says. “We believe information is the driver to changing consumer behavior.”

One aspect of consumerism is seen in the growing interest in Health Savings Accounts.

HSAs provide a financial stipend, $2,500 each year, for example, and any money not used on medical expenses at the end of the year can be rolled over to the next year and, eventually, used as part of an employee's retirement fund. HSAs aren't necessarily for everyone, but they've been getting more consideration the past few years.

Philpott says that Bearing Belt Chain will be looking closely at HSAs in the future.

“We looked at them the past few years, and we're going to take a look at them this year,” Philpott says. “We have a younger crew [of employees]. And if they don't use it, it's their money to roll over.”

ID's 60th Annual Survey found that 14 percent of distributors were adopting HSA programs. Companies are educating themselves more on this alternative, and more providers are offering them, Philpott says.

“It's been a learning curve for the providers, too,” he says. “Last year, there was only one company writing that kind of account in Nevada. Now there are six.”

Many companies have programs where employees can receive a discount at fitness centers or gyms. Some go a step further. Employees at Bearings Belt Chain have a financial incentive to stop smoking.

The company offers “cessation benefits” where it pays complete costs of Nicorette Gum. And if employees can stop smoking altogether, there's a bonus in it for their wallets as well as their health.

“If they completely quit smoking, and stay off cigarettes for six months, they get a $1,000 bonus,” Philpott says.

He's been glad to pay that to a couple of employees. At the present time, Bearing Belt Chain has only two smokers left in the company, he adds.

Smith urges additional focus on wellness and healthy living programs that can help better manage chronic conditions.

“After all, once you've checked into the hospital, it's too late in terms of managing health costs,” Smith says.