Posted 2/15/13 on Medscape Connect’s Care & Cost Blog
Health care’s purchasers crave certainty. But complexity – and therefore uncertainty – rules. Assurances are hard to come by.
The most common question asked by prospective clients of my onsite clinic/medical management firm is how much less their employee health benefits will cost if they deploy our services. They often expect that we’ll review their claims history and nail down what their health care will cost once we’re involved. Looking in the rear view mirror can inform the future, but it isn’t foolproof.
The Complexity of Health Care Risk
The challenge here is that so many different mechanisms contribute to the need for care, the ways care is accessed, the ways care is delivered, and the ways it is priced. Even mechanisms that, in isolation, are strong, often are inadequate in the context of larger cost drivers.
Continue reading “A Broader Approach To Managing Health Care Risk”
Published 12/09/12 in the Eau Claire, WI Leader-Telegram
Note from Brian: This piece appeared last weekend in the Eau Claire, WI newspaper, and was written with the encouragement of employers in that community who, rightly, believe they’ve been raked over the coals on their health care costs.
This argument is mainly directed at other employers, as a way of explaining that there are alternatives. That said, the dynamics described here occur in almost every community in the country.
Even compared to national health care cost growth that has skyrocketed nearly 4 times as fast as general inflation for more than a decade, Wisconsin stands out and northwest Wisconsin stands out more. Eau Claire’s health care cost burden is a whopping 16 percent higher than the national average. This is pricing many individuals and employers out of the coverage market and sapping the region’s economic vitality and competitiveness.
As Robert Kraig meticulously details in Citizen Action’s Wisconsin Health Insurance Cost Rankings 2012, Eau Claire is Wisconsin’s second-highest cost health care market, with 2011 monthly premiums of $750.46, 9.1% higher than the state average of $687.68. (La Crosse is 1st, only a hair higher at $756.70.)
Continue reading “When Employers Collaborate To Manage Health Care Costs”
Posted 7/31/12 on Medscape Connect’s Care and Cost
Several years ago I had dinner with a woman who had served in the late 1990s as the national Chief Medical Officer of a major health plan. At the time, she said, she had developed a strategic initiative that called for abandoning the plan’s utilization review and medical management efforts, which had produced heartburn and a backlash among both physicians and patients. Instead, the idea was to retrospectively analyze utilization to identify unnecessary care.
This was at the height of anti-managed care fervor. A popular movie at the time, As Good As It Gets, cast Helen Hunt as the mother of a sick kid. When someone mentioned an HMO, Ms. Hunt’s character let fly a flurry of expletives. America’s theater audiences exploded in applause.
Continue reading “Why Medical Management Will Re-Emerge”
Posted 5/9/12 on Cracking Health Costs
Discussions about covering “pre-existing” health conditions occur frequently among health policy people. One frequent thread is that health insurers should not be allowed to deny coverage to people with pre-existing health condition. After all, aren’t those the people who need health insurance the most? Sounds reasonable, doesn’t it? Problem is that proposition is really not reasonable.
Let me explain. For any kind of insurance to work right, the “contingent event” can not have already happened before you buy it. In life insurance, the contingent event is the death of the policyholder. You can’t buy life “insurance” on someone who has already died. For homeowners insurance, you can’t buy fire insurance after the home has burned.
Continue reading “Whatever It Is, It’s Not Insurance”
Posted 5/7/12 on The Health Affairs Blog
A recent spate of commentaries on the continuing health spending moderation raise an important policy question: If the cost curve is well and truly bent, why are we investing so much of our policy energy on bending it further, when the more pressing problem is the declining percentage of Americans that can afford our health system’s astronomical costs?
Health spending the past two reported years (2009 and 2010) have grown in the high 3 percent range, the lowest growth rates since Dwight Eisenhower’s last year in office (1960), five years before Medicare.Medicare’s actuaries have pointed to the recession as a root cause. Yet even Medicare spending growth has subsided to about 5 percent in 2010, a development hard to attribute to recession since so few Medicare patients have first-dollar cost exposure. This analyst’s extensive industry contacts suggest no spending rebound in 2011 and 2012, despite an aging population and fee-for-service’s pernicious volume-increasing incentives in full force.
Continue reading “Barking Up the Wrong Tree: Affordability, Not Cost Growth, Is The Real Policy Challenge”
Posted 5/2/12 on Managed Care Matters
When it comes to health reform, perhaps the only thing Congressional Republicans agree on is they hate ObamaCare.
There’s no agreement on a basic framework much less consensus on an actual bill. Moreover, there are parts of ObamaCare that enjoy solid support amongst many Republicans, complicating the GOP’s efforts to develop an alternative without conceding political ground.
Their dilemma is certainly understandable; as anyone who followed the tortuous path of the PPACA (aka Obamacare), there was precious little consensus among the Democrats who passed the bill. While most had serious issues with various bits and pieces, they held their noses and voted “aye” when pressed.
Continue reading “GOP Alternatives to ObamaCare”
Two reports this week suggest countervailing trends for employer-sponsored health benefits: the erosion of the health benefit among companies, and opportunities for those progressive employers who choose to stay in the health benefit game.
In 2010, nearly 50% of workers under 65 years of age worked for firms that did not offer health benefits. The uber-trend, first, is that the percentage of workers covered by employer-sponsored health insurance has declined since 2002. Workers offered the option of buying into a health benefit, as well as the percent covered by a health plan, have both fallen, according to the Employee Benefits Research Institute (EBRI), an organization that has long-tracked this trend. EBRI’s report on Employment-Based Health Benefits: Trends in Access and Coverage, 1997-2010, provides the details behind this declining picture.
Continue reading “The Decline and Potential Renaissance of Employer-Sponsored Health Benefits: EBRI and MetLife Reports Tell the Story”
Posted 4/24/12 on Healthcare Transparency Now
Recent focus groups conducted as part of a study funded by a federal agency reported the following:
- People are loathe to make cost and resource use a consideration in choosing health care providers and treatments, even when they are in high deductible plans
- People will assume higher cost = higher quality if only given cost data
- People assume more tests and treatments are better, unless information is framed explicitly in terms of potential harms and risks
- People are interested, for the most part, on what it costs them to get care
- There are some measures that people think could be very useful that are“cost” measures that they can see are also “quality “ measures
- Example: costs/level of “avoidable complications”
Much of the data currently available will not respond to what consumers care about: (1) It doesn’t address their costs, (2) It doesn’t take into considerations variations in insurance design that affect what different individuals pay and (3) It cannot be clearly linked to quality measures.
It has been my experience that lower cost providers tend to be high quality providers. The explanation for this is that providers that end to do high volume services of a particular kind tend to have greater efficiencies.
The price variability among healthcare providers is extreme and what patients are paying for their services in many cases is not a reflection of what it costs to deliver the services. Thus pricing is all over the place. Often time’s people will go and seek services based on a doctor’s recommendation and patients are given the information and share it with their doctor. This will often influence the doctor as to where patients should receive their services.
There is no doubt that price transparency in services will change purchasing behavior of physicians and patients in seeking alternatives.
Source: Engaging consumers with a high value healthcare system, by Shoshana Sofaer (2011)
Posted 4/25/12 on The Disease Management Care Blog
The Disease Management Care Blog agrees that if you want a peek at a potential future scenario for health care reform, look at what has happened in Massachusetts since 2006. That’s when the Bay State passed a law that, just like its cousin the Affordable Care Act (ACA), emphasized insurance reforms that included exchanges, subsidies and changes in Medicaid eligibility.
According to this recent New England Journal of Medicine article, the reforms resulted in both good and bad news. The good news is that 98% of Massachusetts’ citizens have insurance coverage; the bad news is that health care now consumes a whopping 54% of the state’s total budget.
In response, the state is now pursuing cost reforms. As the DMCB understands it, Massachusetts is banking on the principle of “global payment” to incent health care providers to work within a budget. If it works out, the providers will embrace “value” by delivering needed services and cutting waste. If it doesn’t work out, the providers could end up putting savings before patients by withholding medical care.
Continue reading “Cappers vs.Skinners in the Struggle To Control Costs”
Posted 4/26/12 on Health Care Policy and Marketplace Review
Today’s headline was, “Millions Expected To Receive Insurance Rebates Totaling $1.3 Billion.”
The Kaiser Family Foundation estimates that 3.4 million people in the individual market will receive $426 million in consumer rebates because of the Affordable Care Act’s new MLR rules. In the small group market 4.9 million enrollees will see $377 million in rebates, and 7.5 million people will get $540 million in the large group market.
Continue reading “The Medical Loss Ratio (MLR) Report—Just Fiddling While Rome is Burning”
Posted 4/25/12 on the Huffington Post
While it’s comforting to just blame the GOP for the unhappiness with health reform threatening the president’s re-election, the truth is that Barack Obama repeatedly botched, bungled and bobbled the health reform message. There were three big mistakes:
The Passionless Play While Candidate Obama proclaimed a passionate moral commitment to fix American health care, President Obama delved into legislative details.
Continue reading “How Obama Botched and Bungled the Health Reform Message”
Posted 4/12/12 on Common Sense Family Doctor
Regardless of whether or not the Supreme Court strikes down the individual mandate or the entire 2010 health reform law in June, state-based health insurance exchanges are a good idea and, if established, should benefit many working Americans who are too well-off to qualify for Medicaid but unable to otherwise afford health insurance coverage on their own. This post and two to follow over the next week are excerpts from an unpublished paper that I recently authored on this topic.
One of the key elements of the insurance coverage expansion contained in the Affordable Care Act (ACA) is the establishment of health benefits exchanges operated by individual states, groups of states, or the federal government, by January 1, 2014. These exchanges will offer competitive and/or subsidized insurance options for individuals whose employers do not provide insurance, as well as offer plans to small businesses (up to 100 employees) at reasonable rates. Prior to the ACA, Massachusetts and Utah had both operated state insurance exchanges with varying degrees of success. By outlining only basic requirements for the functions of the exchanges, the ACA left many important questions regarding their design unanswered. Some states appear to be pursuing a “wait and see” strategy, hoping that the U.S. Supreme Court will strike down the ACA prior to the January 2013 deadline for showing sufficient progress toward establishing an exchange or ceding control to the federal government. Others are at various stages of the planning process; as of January 2012, 13 states had formally established their exchanges through legislation or executive orders. Maryland and California are at the vanguard of this group.
Continue reading “My Take On State Health Insurance Exchanges – Part 1”
Posted 4/12/12 on Gooz News
From Reuters: With the United States spending more on healthcare than any other country — $2.5 trillion, or just over $8,000 per capita, in 2009 — the question has long been, is it worth it? At least for spending on cancer, a controversial new study answers with an emphatic “yes.”
Cancer patients in the United States who were diagnosed from 1995 to 1999 lived an average 11.1 years after that, compared with 9.3 years for those in 10 countries in Europe, researchers led by health economist Tomas Philipson of the University of Chicago reported in an analysis published Monday in the journal Health Affairs.
Continue reading “Critics Pounce on Cancer Care Costs Study”