A particularly pernicious American healthcare myth holds that costs are out of anyone’s control. Health plans and benefits consultants often convince organizational purchasers that costs simply are what they are, and that no better alternatives exist.
Nothing could be further from the truth. In fact, there’s reason to believe that a new crop of “high performance” healthcare innovators could make healthcare more rational. The question is whether employers and unions will embrace the high performers, independent of their health plans. Are they sufficiently frustrated that they’ll step outside the poorer performance conventions placed on them by health organizations invested in the status quo?
BY BRIAN KLEPPER
A challenge for health care purchasers is choosing vendors whose performance matches their cost and outcomes claims. A 2015 Mercer survey found that only 41 percent of worksite clinic sponsors think that they’re saving money. As Al Lewis and Tom Emerick have detailed, many wellness and disease management companies simply overstate their results. In many cases employers may not realize that they, not the vendor, take the risk for results.
One important answer is the Care Innovations Validation Institute, founded by Intel, that offers health care vendors and purchasers objective validation of vendors’ claims. The Institute stands behind its work with a money-back guarantee. In the Wild West of the health care marketplace, the Validation Institute is an invaluable resource for purchasers, allowing them to confidently proceed with vendors, knowing that their promises have been vetted by scientists.
With these dynamics as backdrop, World Health Care Congress has partnered with The Validation Institute and The Health Rosetta Institute, another not-for-profit organization dedicated to accelerating adoption of proven fixes to health care dysfunction. Together, they are sponsoring The 2018 Health Value Awards, showcasing health care organizations and programs that demonstrate measurably better health outcomes, costs and/or safety than conventional care.
These awards will recognize health care vendors, brokers, and purchasers who deliver higher value care. They seek to identify high performance organizations that adhere to principles of compassion, evidence, transparency, competition and efficiency, as examples that can be emulated.
The first competition will be held within 11 categories, eight of them formally validated by the Validation Institute: Validated categories cover programming by health plan sponsors (i.e., employers and unions), health plan administrators, and organizations that provide or manage care.
While the awards program’s larger emphasis is on validated high performance approaches, it will also recognize individuals and companies on the basis of more qualitative information. Non-Validated Categories will recognize individuals and firms that are progressive benefits leaders.
Applicants will describe and provide performance data on innovative health benefits programming that has measurably demonstrated significant improvements in health outcomes, patient safety and/or cost Judges will consider not only programmatic impact, but scalability (i.e., ease of program replication in other sites/employers), stickiness (or the durability of impact over time), and the calculation methodology used to demonstrate efficacy.
Online nominations for the 2018 awards competition will be solicited between July 15, 2017 and January 31, 2018. Anyone, including nominees, may submit nominations. Special attention will be given to candidates who receive multiple external nominations.
A multi-stakeholder panel has developed criteria for initial review of the submissions, and an independent panel of experts will review all submissions. Five finalists within each category will be selected and announced by February 28. Final selections will be made by the independent panel.
Health Value Award entrants should plan to attend the 2018 World Health Care Congress unless there are unusual circumstances. Registration for representatives will be complimentary. Finalists will also participate, at a discounted rate, in a validation process developed and managed by The Validation Institute. Stipends will be available to applicants who need support. Entry is not a guarantee of validation.
The Health Value Award is part of a larger movement to bring health care purchasers clear and transparent value data. This, in turn, will move competition among vendors to objective, measurable results. By shining bright lights on those that truly perform, the Award program is an important first step in the right direction.
Health plan representatives are always saying that their plans are doing everything they can to control costs and deliver greater value. But then nothing ever seems to change.
The truth is that group health plans typically earn a percentage of total claims, and it is in their interest for healthcare to cost as much as possible. Employer or union group health plans are frequently associated with a variety of services — e.g., health IT, pharmacy benefit management, case management, reinsurance — each with its own revenue stream. By choosing and incentivizing vendors, plan administrators directly influence their systems’ capabilities to manage risk. Intentionally meek approaches to healthcare risk management result in excessive care and cost, in turn fueling higher expenditures, greater net revenues and elevated stock prices.
This structure has been spectacularly successful for the health insurance industry. Using data pulled from Google Finance, the chart and table below show the 10-year stock price performance of five commercial health plans: Aetna, Anthem, Cigna, Humana and United, as well as the Dow and Standard & Poor’s Index.
Stock prices began to creep upward in November 2008, when a Democratic majority was elected to Congress, foreshadowing the successful passage of the Affordable Care Act. Lobbying by healthcare interests was intense during this period, with Congress accepting an unprecedented $1.2 billion in campaign contributions, presumably in exchange for influence over the shape of the law. In the 8 years between May 2009 and May 2017, the stock prices of these insurers soared between 387 and 748 percent. They vastly outperformed the rest of the market, growing 1.5 to 3.0 times faster than the S&P and 1.2 to 2.4 times faster than the Dow.
Growth, driven by an endless rise in expenditures, has profoundly grim implications. Let’s say a clinical risk management firm emerges that, within a high value niche, consistently delivers measurably better health outcomes at half the cost. Reductions in unnecessary surgeries, imaging and drugs would likely yield strong savings. But the resulting drop in health plans’ net revenue would also translate into lower stock prices and market capitalization, and lead to strained relations with network providers, whose utilization and revenues would also suffer. Under these circumstances, concerns about compromised network performance and reduced valuation would deter insurers from investing in the risk management firm’s capacity to deliver better value.
Of course, these dynamics are not unique to health plans. Virtually every healthcare organization —including physician practices, health systems, imaging centers, labs, drug manufacturers, pharmacy benefit management firms — earns a percentage of the spend within its niche. Not surprisingly, each also has developed mechanisms to promote the highest possible unit volumes and pricing.
This may seem like an obvious point, but it is critical to U.S. health policy going forward. For decades, lawmakers have done the bidding of health industry lobbyists and avoided payment methodologies that reward value. This has made American healthcare, at double the cost of other developed countries, unaffordable and inaccessible to large swaths of the American people. The need to continually pay more for healthcare has drained funding away from other critical needs, such as education, transportation and infrastructure. This has played a significant role in crushing the American dream for the middle class and compromising U.S. global competitiveness and economic security.
Alternative approaches like a single payer health plan won’t solve this problem unless how healthcare is purchased also changes. A stable, sustainable health system will remain a pipe dream until people refuse to pay for products and services at ever decreasing value. Instead, healthcare purchasers must tie payment to observably better results. An abundance of market-based evidence shows this is readily achievable.
Brooke Murphy. And with a hat tip to Bill Rusteberg
The following article is entitled “20 Things To Know About Balance Billing.” We added one more. There is only one market strategy that protects consumers against balance billing – Reference Based Pricing (RBP) plans. Traditional managed care plans provide no protection against balance billing – consumers are on their own when they get one. Not so under RBP plans.
Which plan would you rather have?
As payers and providers wage war over reimbursement rates for medical services, patients have been increasingly strapped with unanticipated health care bills that can have detrimental financial effects.
The practice of balance billing refers to a physician’s ability to bill the patient for an outstanding balance after the insurance company submits its portion of the bill. Out-of-network physicians, not bound by contractual, in-network rate agreements, have the ability to bill patients for the entire remaining balance.
Balance billing may occur when a patient receives a bill for an episode of care previously believed to be in-network and therefore covered by the insurance company, or when an insurance company contributes less money for a medical service than a patient expected.
Dave Chase and Sean Schantzen
Originally published 5/05/2017 on Marketwatch
Lawyers are preparing lawsuits over waste and fraud in health care — invoking Erisa, a law better know for retirement benefits
How much of health care is wasteful?
ERISA, the Employee Retirement Income Security Act, has been around since the Ford administration. Most people know the law in relation to retirement benefits, but it’s emerging as an unexpected, yet high-potential, opportunity to drive change in the dysfunctional U.S. health-care system.
The law sets fiduciary standards for using funds for self-insured health plans, which is how more than 100 million Americans receive health benefits. Health plans for companies with more than 250 employees are self-funded because they are generally less costly to administer. As a result, just over $1 trillion in annual health-care spending is under Erisa plans or out-of-pocket by Erisa plan participants, and the amount spent on Erisa health plans is roughly double the amount spent on Erisa retirement plans.
This makes Erisa plans an attractive target for operational efficiencies. It’s one of the only buckets of operational expenses that most companies haven’t actively optimized. For those that don’t get on top of this, it could also be a source of potential liability for companies and plan trustees.