TowersWatson Employer Survey: Employees and Vendors aren’t getting it done

by Clive Riddle, February 24, 2010

Employers hold employee health habits and lack of engagement largely to blame for cost increases, and feel vendors are ineffective at getting this behavior to change.

TowersWatson just released results from their 15th Annual National Business Group on Health/Towers Watson Employer Survey on Purchasing Value in Health Care. The study finds that employer health plan costs are projected to increase 6.5% for 2010, down from 7.0% in 2009, but still more than double the inflation rate. The study also found that in response, 83% of companies have already revamped or expect to revamp their health care strategy within the next two years, up from 59% in 2009.

Ron Fontanetta, a senior consultant at Towers Watson tells us, “the downturn has amplified the pressure on companies to find ways to support effective health management programs under budget constraints. For employers, the current environment is a clarion call to adjust their health plan strategy, reassess vendor relationships and aggressively address the challenge to encourage workers to become better advocates for their own health.”

Perhaps most interesting was employer listings of the top three challenges to maintaining affordable benefit coverage. Of eleven responses summarized in the survey report, the three responses listed the most were: Employees Poor Health Habits (67%); followed by a tie between High Cost Catastrophic Cases and End of Life Care (41%) and Underuse of Preventive Services (41%.)

So then Employers where asked, what were the top three obstacles to changing these poor employee health habits: of thirteen responses summarized in the survey report, the three responses listed the most were: lack of employee engagement (58%); lack of financial incentives to encourage participation in programs (31%); and lack of adequate budget to support health management programs (30%).

Other findings from the survey include:

• Regarding Consumer Driven Health Plan adoption: 44% said they had already done so with no further action needed; another 9% have adopted but plan to take additional action; 14% plan to adopt in the next two years; and 34% don’t intend to adopt.

• 23% have already consolidated health and productivity programs with a single vendor or health plan with no further action needed; another 8% have done so but plan to take additional action; 13% plan to do so in the next two years; and 57% have no plans to do so.

• 93% had no intention of reducing or eliminating health promotion programs; and 78% had no intention of reducing staff dedicated to health benefit programs.

• 57% had confidence in the future of employers as health benefit sponsors, compared to 62% in 2009 and 73% in 2010.

• 69% are auditing or reviewing health plan eligibility; 66% are using incentives to encourage completion of health risk appraisals; 57% are using claims analysis of data in a warehouse; 56% offer health coaching; and only 19% are reducing pharmacy copays for those with chronic conditions (a value based purchasing initiative)

• Employers feel vendors aren’t that effective in changing member behavior: 67% said they were not at all or just slightly effective in driving more efficient member use of services; and 66% said they were not at all or just slightly effective in changing member behavior to make more health lifestyle decisions.

Results from the Future Care 2010 e-poll

By Clive Riddle, President, MCOL

MCOL has just released results from our eighth annual Future Care* e-poll survey conducted this month of Future Care web summit attendees and MCOL members. Almost all responses were received after the Brown Massachusetts Senate election. Respondents represented the following perspectives:

• Payor - 30.5%
• Provider - 33.6%
• Vendor - 16.4%
• Other - 19.5%

We ask participants three questions each year. First, which of the following health care business trends do you think will have the greatest overall impact in the coming year? Respondents point to health reform and the recession as the big drivers. Its also interesting to see how cost sharing increases have significantly diminished in importance last year and this year. Here’s this year’s and historical responses:

Trend	2010	2009	2008	2007	2006	2005	2004	2003
Advances in technology	6%	3%	12%	8%	17%	14%	12%	11%
Consumer Driven plans	7%	3%	13%	18%	21%	23%	14%	15%
Compliance issues	7%	1%	1%	3%	1%	1%	6%	18%
Effects of the Recession	26%	57%	NA	NA	NA	NA	NA	NA
Health Reform Initiatives	37%	21%	24%	11%	28%	14%	4%	N/A
Increased cost sharing	5%	9%	34%	40%	26%	38%	36%	39%
Disease Management	5%	3%	13%	8%	3%	6%	24%	N/A
Other	5%	1%	4%	12%	5%	6%	4%	17%

Conversely, we asked what predicted trends do you feel is LEAST likely to occur or have an impact in the next two years? Respondents feel health plan premium increases won’t keep cooling down, and there are plenty of health care reform skeptics:

Response	Percent
Premium Increases will continue to slow down	24%
Significant National Health Care Reform Legislation will be enacted	20%
Major growth of Consumerism initiatives	19%
Health Plan cost sharing activities will level off/slow down	13%
Further growth/adoption of disease management and wellness	12%
Major advances in patient/provider/plan electronic data transfer	11%
Other	1%

Lastly, we asked respondents to rank stakeholders as winners or losers for the coming year.  Respondents feel pharmaceutical plans will by far fare the best among stakeholders, with health plans finishing a distant second, and all other stakeholders ranked way back.  Of course the great unknown is health reform, which could significantly alter the fortunes for health plans depending on the final structure.

Sector	Better Off	Same	Worse Off
Pharmaceutical	39%	40%	21%
Health Plans	29%	30%	41%
Hospitals	16%	34%	50%
Physicians	12%	33%	55%
Consumers	8%	26%	66%
Employers	7%	35%	58%

From a historical perspective, here’s how respondents see health plans future prospects from year to year. Note that despite the potential of health reform, optimism for health plans returned a little this year, after pervasive pessimism from 2007 through 2009:

Health Plans:	Better Off	Same	Worse Off
2010	29%	30%	41%
2009	12%	44%	45%
2008	14%	36%	50%
2007	12%	41%	47%
2006	54%	35%	12%
2005	43%	42%	16%
2004	36%	50%	14%
2003	36%	44%	21%

* The Future Care survey incorporates respondents from MCOL Future Care Web Summit attendees and MCOL members. n = 131 for 2010, 90 for 2009, 127 for 2008, 146 for 2007, 267 for 2006, 110 for 2005; 118 for 2004; 139 for 2003

Making Sense of What’s Next for Health Reform

by Clive Riddle, January 21, 2010

What a difference a week makes! Amidst the political chaos and confusion during the past few days on status and prospects of health care reform, some prominent pundits and lawmakers are either proclaiming health reform is absolutely dead, or that there is still a viable pathway for reform, and it will pass. Both sides of the spectrum voicing such certainty right now would seem to be ‘spinning.’ Chaos and confusion should reign as we speak, because at this point either outcome is quite possible. Thus for now, one would be wise to position for a range of possibilities.

Here are some key points to consider in this “anything’s possible” phase that will undoubtedly clear up with a little time:

• The public nationally is clearly not happy with reform as proposed. The latest Wall Street Journal / NBC poll released this week tracking this issue pegged approval ratings of Obama's handling of health care at 38% approval and 55% disapproval.

• But doing nothing, and opposing everything isn’t necessarily popular either. The same WSJ/NMC poll gave Republicans an even lower approval rating for their handling of health care: 26% approval and 64% disapproval.

• Lawmakers up for reelection this year are looking to the Massachusetts Senate election as the referendum on health reform, so some Democrats may reverse course next time around with any health reform votes. But the Washington Post today makes an interesting point: “the Republican candidate rode to victory on a message more nuanced than flat-out resistance to universal health coverage: Massachusetts residents, he said, already had insurance and should not have to pay for it elsewhere.”

• President Obama has just signaled in an ABC interview that he would like Congress to revise the reform package to include core elements that would be more publicly acceptable and potentially gain support of a few Republicans: "We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don't, then our budgets are going to blow up…And we know that small businesses are going to need help so that they can provide health insurance for their families. Those are the core, some of the core elements of this bill."

• The available options for the Senate and House to proceed leave no clear path, and plenty of disagreement. The President stated he doesn’t want to Senate to “jam” something through before new Massachusetts Senator Brown arrives, and Senate Majority Leader Harry Reid agreed this approach would not be taken. The option of the House adopting the Senate version of the reform bill as-is, has been floated, but House Speaker Pelosi is signaling the votes aren’t there at this time. Instead, she is looking at getting the House to pass the Senate Bill in combination with a companion clean-up bill.  The House has a year until the Senate Bill expires. The other options include a new watered down bill as the President now advocates, or an attempt to jam various components of the bill through budget reconciliation, which just requires a simple majority to pass, but also could trigger delays,  messy procedural fights with Republicans and make Democrats up for re –election skittish about potential public wrath.

Prowling through the Census Bureau 2010 Statistical Abstract

by Clive Riddle, January 15, 2010

Okay, so sifting through The 2010 Statistical Abstract may not rank up there with bungee jumping or running with the bulls (book your trip to the Pamplona Spain San Fermin Festival this July 6^th through the 14^th) on the adrenaline rush meter, and might not be recommended to list as a favorite activity in your Facebook profile, but just the same, there’s some pretty cool, free and easy to access health care data tables available in the Abstract.

I grabbed a few of the excel files from the various categories of health care tables that I found interesting, and compiled summary information from three items I thought would be worth sharing:

From Table 160. Percent Distribution of Number of Visits to Health Care Professionals by Selected Characteristics: I wanted to see how the pie slices up by selected age group for frequency of annual visits to doctors and other health care professionals

Annual Visits by Selected Age Group	Zero	1-3	4-9	10+
Under 18 years	10.3%	57.0%	25.5%	7.2%
45 to 64 years	14.9%	45.3%	23.9%	15.9%
65 to 74 years	8.4%	35.4%	36.0%	20.3%
75 years and over	5.5%	30.6%	36.4%	27.5%

[2007 data from the U.S. National Center for Health Statistics, Health, United States, published 2009.]

From Table 158. Physicians by Sex and Specialty: I wanted to calculate the percentage that were primary care physicians (family practice, internal medicine and pediatrics- I left out Ob-Gyns), and I was surprised to see the percentage has gone up over time

	1980	1990	2000	2007
% Primary Care MDs	28.5%	31.6%	34.3%	34.7%

[Calculated from Source: American Medical Association, Chicago, IL, Physician Characteristics and Distribution in the U.S. annual]

From Table 153. Retail Prescription Drug Sales: I was interested in calculating the percentage mix of prescription sales by type of retail outlet. What you can see is the decline of independent pharmacies and the rise of mail order

Retail Outlet:	1995	2000	2005	2008
Traditional chain	38.5%	40.6%	39.6%	41.0%
Independent	30.4%	23.0%	19.2%	17.3%
Mass merchant	10.7%	9.3%	9.7%	9.8%
Supermarkets	10.2%	12.0%	11.9%	10.2%
Mail order	10.2%	15.2%	19.6%	21.7%

[Calculated from Source: National Association of Chain Drug Stores, Alexandria, VA,NACDS Foundation Chain Pharmacy Industry Profile, 2008]

What to make of the CMS National Health Expenditure Report

by Clive Riddle, January 5, 2010

CMS’ Office of the Actuary today issued their annual report on the National Health Expenditure Accounts. CMS states the report contains good and bad news. On one hand, “nominal health spending in the United States grew 4.4 percent in 2008, to $2.3 trillion or $7,681 per person.  This was the slowest rate of growth since the Centers for Medicare & Medicaid Services started officially tracking expenditures in 1960.” On the other hand, “health care spending continued to outpace overall nominal economic growth, which grew by 2.6 percent in 2008 as measured by the Gross Domestic Product (GDP).”

CMS states that “the 4.4 percent growth in 2008 was down from 6.0 percent in 2007, as spending slowed for nearly all health care goods and services, particularly for hospitals. However, health spending as a share of the nation’s GDP continued to climb, reaching 16.2 percent in 2008, up 0.3 percentage points from 2007.” Jonathan Blum, CMS Director of Center for Medicare Management tells us “this report contains some welcome news and yet another warning sign. Health care spending as a percentage of GDP is rising at an unsustainable rate.”

One of the supplemental reports: the Nation's health dollar - where it came from, where it went, provides a nice brief summary pie chart that breaks down as follows:

The Nation’s Health Dollar, Calendar Year 2008: Where it Came From:

• Private Insurance - 33%
• Medicare - 20%
• Medicaid/SCHIP – 15%
• Other Public – 13%
• Out of Pocket – 12%
• Other Private – 7%

The Nation’s Health Dollar, Calendar Year 2008: Where it Went:

• Hospital Care - 31%
• Other Spending- 25%
• Physician and Clinical Services - 21%
• Prescription Drugs - 10%
•  Nursing Home Care - 6%
• Program Administration and Net Cost - 7%

Digging into other supplemental files provided with the report, it’s interesting to examine trends in the portion of public vs. private funding of spending, and the subset of private spending from consumer out of pocket payments, which we compiled as follows:

% of Total National Expenditure	2008	2005	2000	1995	1990	1980	1970	1960
Total Public Payments	47.3%	45.4%	44.1%	45.8%	40.2%	42.0%	37.5%	24.5%
Total Private Payments	52.7%	54.6%	55.9%	54.2%	59.8%	58.0%	62.5%	75.5%
Consumer Out-of-pocket	11.9%	12.5%	14.2%	14.4%	19.1%	22.9%	33.3%	46.9%

The continual shift between public and private funding is certainly apparent, as is the decline in the portion accounted by consumer out of pocket payments. While much has been made over ever increasing consumer cost sharing, that concern has been expressed in absolute, as opposed to relative terms. Relative to total national health expenditures, consumer out of pocket costs continue to decline as a percentage. Of course the shift towards private funding is the cause- as more consumers are covered by public vs private programs over time and public cost sharing requirements are generally much less than private cost sharing.

Here’s some other highlights CMS noted in regard to the actual numbers comprising where these dollars went or came from:

• Hospital spending in 2008 grew 4.5 % to $718.4 billion, compared to 5.9 % in 2007, the slowest rate of increase since 1998.
• Physician and clinical services’ spending increased 5.0 % in 2008, a deceleration from 5.8 % in 2007.
• Retail prescription drug spending growth also decelerated to 3.2 % in 2008 as per capita use of prescription medications declined slightly, mainly due to impacts of the recession, a low number of new product introductions, and safety and efficacy concerns.
• Spending growth for both nursing home and home health services decelerated in 2008.   For nursing homes, spending grew 4.6 % in 2008 compared to 5.8 % in 2007.
• Total health care spending by public programs, such as Medicare and Medicaid, grew 6.5 % in 2008, the same rate as in 2007.
• Health care spending by private sources of funds grew only 2.6 % in 2008 compared to 5.6 % in 2007.
• Private health insurance premiums grew 3.1 % in 2008, a deceleration from 4.4 % in 2007.

Five Trends to watch for with 2010

by Clive Riddle, December 17, 2009

As the first decade of the millennium closes, and the new year is just  a limited number of sunrises and sunsets away, the time has come to consider some major health care business trends that should deliver an increased impact for 2010 and beyond.

The big “duh” of course is the health care reform package still being tossed around in Congress, but in fact, much of the anticipated legislation won’t kick in until after 2010 anyway. So, what else is there to consider?

1. Regulation for starters. As the focus shifts from legislation, assuming the reform package finally passes in early 2010, implementing regulations will take center stage. But increased regulation won’t stop with the health benefit coverage-dominated reform package. The Obama Administration has signaled an objective to enhance oversight of health plans, particularly with programs such as Medicare Advantage, and to further crack down on fraud and abuse. And assuming a reform package that improves coverage is adopted, there will be increased pressure from most vantage points to start addressing costs via regulations. So expanded regulation should be a big trend emerging in 2010.

2. Expanding Primary Care Access will gain considerable attention. While coverage from Health Care Reform won’t fully kick in until well after 2010, the debate and discussion about who is going to treat all these people with new or enhanced coverage, and where are they going to treat them? Medical Home Development should gain ground, with altered and enhanced primary care reimbursement mechanisms that help motivate practitioners to stay or train for primary care practices and incorporate information technology and infrastructure that can handle increased patient loads. Retail clinics, while continuing to fluctuate in growth and contraction spurts, will likely serve as an increased marketplace response in urban areas. Programs to develop, train or import more primary care physicians into the pipeline will increase.

3. Provider Information Technology Readiness will grow as a concern during the year, and other stakeholders will be squeezed to help get lagging physicians to where they need to be. While vendors and health plans appear reasonably ready for ICD-10 conversion, providers in general, and medical groups in particular appear to be well behind where they need to be. While hospital and health plan EHR initiatives progress at a reasonable rate, large segments of physicians continue to lag. For health plans, hospitals, vendors and government, their own respective positions will suffer due to the state of readiness of a significant segment of physicians, particularly small practices, and these other stakeholders will undoubtedly have to commit and contribute increased resources in 2010 to help move things along.

4. Integrated Health Care Delivery will continue to expand and evolve with a greater number of regional health systems, as a strategic response to the above issue. A greater focus from all stakeholders on costs will move more systems in this direction, new health reform coverage provisions may motive them in this direction, the need to expand primary care access may force them in this direction, and the infrastructure needs of medical groups may necessitate the move in this direction.

5. Developing and Monitoring Pilot Programs will command significant attention as 2010 progresses. Reform legislation, and Obama Administration initiatives will stimulate numerous pilot programs, and various organizations and stakeholders will scramble to get in on the action. But everyone will have their eyes on the status and progress of these projects, given the implications their success or failure may bring.

Oh, and here’s wishing all of you, a happy new year, and a more prosperous decade ahead.

Survey on Plan, Provider and Vendor ICD10 Transition

By Clive Riddle, December 10, 2009

MCOL this week released results from an exclusive survey of HealthcareWebSummit participants in the ICD-10 web summit and other interested parties. Participants were asked to respond to four items:

1. Please categorize your organization.
2. When do your project your organization will complete transition to ICD-10?
3. How prepared is your organization at this point for transition to ICD-10?
4. Is your organization undertaking other IT or Administrative initiatives to leverage use of the ICD-10 codes?

Here’s what the survey found:

• Overall, only 3.1% of respondents indicated that their organization had completed the transition to ICD-10 while a plurality of respondents, 26.15% projected their organizations would complete the transition in 2013.  A majority (55.3%) of respondents projected their organization to complete transition sometime between 2010 and 2012 (21.5% in 2010; 20.0% in 2011; 13.8% in 2012.)

• A majority (58.7%) of respondents considered their organization to be prepared for transition to ICD-10, with 14.3% indicating being very prepared and 44.4% being somewhat prepared. (17.5% stated unprepared, 14.3% very unprepared and 9.5% were unsure or not applicable.)

• 62.5% respondents indicated that their organization were either undertaking other IT or administrative initiatives to leverage use of the ICD-10 codes (34.4%) or at least considering doing so (28.1%.)

• Responses, in some instances, varied materially by category of respondent.  Those respondents who listed their organization as vendor were not only more prepared for transition than providers or payers, but also projected that they would complete transition sooner and were more likely to be undertaking other IT or administrative initiatives. 

• While payors were more likely than providers to be very prepared for transition, providers were more likely to be some degree of prepared with 55% listing their organization as somewhat prepared.

• General category of respondents (N = 66):
  • Payor              33.3%
  • Provider          31.8%
  • Vendor/Other   34.9%

The Disparity between State Health Rankings

By Clive Riddle, November 19, 2009

How much difference is there between overall health care performance rankings of states, conducted by major organizations? I thought I’d peek into two recent studies and compare them. Interestingly, the two studies both agreed on who was first (Vermont), who was last (Mississippi), generally agreed on this highest and lowest ranking states, but agreed on little in-between.

This week, United Health Foundation, the American Public Health Association and Partnership for Prevention released the 20^th Anniversary Edition of America’s Health Rankings. The full report can be downloaded, or drop-down queries can be made from www.americashealthrankings.org. 

Their press release states that the rankings “provide an analysis of national health on a state-by-state basis by evaluating a historical and comprehensive set of health, environmental and socio-economic data to determine national health benchmarks and state rankings. The Rankings employs a unique methodology, developed and annually reviewed by a Scientific Advisory Committee of leading public health scholars.” 21 core measures and 15 supplemental measures were used, categorized into determinants including Behaviors, Community Environment, Public and Health Policies, Clinical Care, and Outcomes.

Last month, The Commonwealth Fund released their report "Aiming Higher: Results from the 2009 State Scorecard on Health System Performance." This is a comparative follow up to their 2007 state scorecard report. The report has been released in the context of health reform, with the finding that there continues to be significant disparities between states regarding a wide number of health care measures. The Commonwealth Fund states their report "includes 38 indicators grouped into five dimensions of performance—access, prevention/treatment quality, avoidable hospital use and costs, equity, and healthy lives. The analysis ranks states on each indicator and then averages the indicator ranks to determine the dimension rank. Dimension scores determine the overall rank. Equity measures the gaps in performance between vulnerable groups and the national average."

So I compiled the overall state rankings for both reports (but I encourage you to review the individual measures in both reports- it gets more meaningful when you examine the specifics.) I indicated the absolute difference in rankings between the reports for each state (factoring out DC which was included in the Commonwealth report but not America’s Health Rankings- also it should be noted there are duplicate rankings in both reports when states tied.)

The exercise kind of reminded me of the college football ranking comparisons displayed this time of year with the BCS, AP and Harris polls.

State	Commonwealth	America's	Difference
Alabama	39	48	9
Alaska	33	34	1
Arizona	35	27	8
Arkansas	47	40	7
California	30	23	7
Colorado	24	8	16
Connecticut	8	7	1
Delaware	14	32	18
Florida	42	36	6
Georgia	36	43	7
Hawaii	2	4	2
Idaho	28	14	14
Illinois	41	29	12
Indiana	27	35	8
Iowa	2	15	13
Kansas	23	24	1
Kentucky	44	41	3
Louisiana	48	47	1
Maine	5	9	4
Maryland	17	21	4
Massachusetts	7	2	5
Michigan	20	30	10
Minnesota	4	5	1
Mississippi	50	50	0
Missouri	36	38	2
Montana	18	26	8
Nebraska	13	16	3
Nevada	46	45	1
New Hampshire	5	5	0
New Jersey	29	18	11
New Mexico	42	31	11
New York	21	25	4
North Carolina	40	37	3
North Dakota	9	17	8
Ohio	26	33	7
Oklahoma	49	49	0
Oregon	31	13	18
Pennsylvania	15	28	13
Rhode Island	11	10	1
South Carolina	32	46	14
South Dakota	12	20	8
Tennessee	38	44	6
Texas	45	39	6
Utah	19	2	17
Vermont	1	1	0
Virginia	22	22	0
Washington	16	11	5
West Virginia	34	42	8
Wisconsin	10	12	2
Wyoming	25	19	6

Commonwealth Fund International Survey of Primary Care Physicians

by Clive Riddle, November 6, 2009

The Commonwealth Fund this week released their report: A Survey of Primary Care Physicians in 11 Countries, 2009: Perspectives on Care, Costs, and Experiences which compares U.S. primary care physician attributes to those in Europe, Australia, New Zealand and Canada.

Harris Interactive and subcontractors conducted the surveys via mail, phone and internet earlier this year, with results reported from over 10,000  primary care doctors, including 1,016 in in Australia, 1,401 in Canada, 502 in France, 715 in Germany, 844 in Italy, 614 in Netherlands, 500 in New Zealand, 774 in Norway, 1,450 in Sweden, 1,062 in the U.K., and 1,442 in the U.S.

The Commonwealth Fund press release on the report shaped their study in the context of health reform. Cathy Schoen, Commonwealth Fund Senior Vice President and lead author tells us "we spend far more than any of the other countries in the survey, yet a majority of U.S. primary care doctors say their patients often can’t afford care, and a wide majority of primary care physicians don’t have advanced computer systems to access patient test results, anticipate and avoid medication errors, or support care for chronically ill patients. The patient-centered chronic care model originated in the U.S., yet other countries are moving forward faster to support care teams including nurses, spending time with patients, and assuring access to after-hours. The study underscores the pressing need for national reforms to close the performance gap to improve outcomes and reduce costs." Commonwealth Fund President Karen Davis adds “access barriers, lack of information, and inadequate financial support for preventive and chronic care undermine primary care doctors' efforts to provide timely, high quality care and put the U.S. far behind what many other countries are able to achieve. Our weak primary care system puts patients at risk, and results in poorer health outcomes, and higher costs. The survey provides yet another reminder of the urgent need for reforms that make accessible, high-quality primary care a national priority."

Here’s a few highlights the Commonwealth Fund pointed out from their report:

• More than half of U.S. physicians (58%) report their patients often have difficulty paying for medications or other out-of-pocket costs, compared to between 5 percent and 37 percent in the other countries.

• Twenty-eight percent of U.S. doctors report their patients often face long waits to see a specialist—a rate similar to that reported by Australian (35%) and U.K. (22%) physicians, the lowest rates in the survey

• Just 29 percent of U.S. doctors report any arrangement for patients to see a doctor or nurse after hours, a drop from 40 percent in the 2006 Commonwealth Fund International Health Policy Survey. In contrast, nearly all doctors in the Netherlands (97%), and large majorities in New Zealand (89%) and the U.K (89%) report after-hour provision.

• While nearly half (46%) of U.S. primary care doctors report using electronic medical records (EMRs)—up from 28 percent in 2006—U.S. primary care practices, along with Canadian doctors, continue to lag well behind other leading countries.

• Primary care physicians in the U.S., are among the least likely to report that they receive financial incentives for quality improvement, such as bonuses for achieving high patient satisfaction ratings, increasing preventive care, use of teams, or managing patients with chronic disease or complex needs.

• Teams that include health professionals such as nurses serve an important role in managing care, especially for chronic conditions. The survey results indicate that use of teams including nurses and other health professionals to manage care, especially for chronic conditions,  is widespread in Sweden (98%), the U.K, (98%) and many other countries but was far less frequent in the United States (59%), Canada (52%), and France (11%)

• Asked about comparative information systems, doctors in the U.K. are most likely to routinely receive and review data on clinical outcomes (89%), followed by Sweden (71%), New Zealand (68%), and the Netherlands (65%). Less than half of doctors in other surveyed countries—including the U.S. at 43 percent—report such reviews.

• U.K physicians (65%) were by far the most likely to report they receive data on how they compare to other practices and, along with Sweden and New Zealand doctors, the most likely to have information on patient experiences. Notably, U.S. doctors lagged well behind these leading countries on feedback on both clinical quality and patient experiences.

I compiled some selected key issues addressed in the survey into a table, to make it easier to compare various primary care responses by country. While the Commonwealth Fund does go out of their way to paint the U.S, “system” in a bad light as fodder for reform, and perhaps glosses over that U.S. Access to Care isn’t comparatively that bad (refer to specialist wait times below) it is hard to argue we don’t have a lot of room for improvement across the board.

Country	(1) EHRs	(2) Patient Reminders	(3) Rx Costs	(4) Long Specialist Waits	(5) Patient Rx List	(6) Outcome Data	(7) Financial Incentives
Australia	95%	89%	23%	34%	12%	24%	65%
Canada	37%	31%	27%	75%	16%	17%	62%
France	68%	60%	17%	53%	43%	12%	50%
Germany	72%	32%	28%	66%	66%	41%	58%
Italy	94%	33%	37%	75%	59%	40%	70%
Netherlands	99%	80%	33%	36%	4%	65%	81%
New Zealand	97%	97%	25%	45%	5%	68%	80%
Norway	97%	15%	5%	55%	20%	25%	35%
Sweden	94%	51%	6%	63%	29%	71%	10%
United Kingdom	96%	97%	14%	22%	83%	89%	89%
United States	46%	47%	58%	28%	30%	43%	36%

(1) MDs using EHRs

(2) Send Patient Reminders for Preventive/Follow Up Care

(3) Patients have difficulty paying for medications

(4) Patients have long wait times to see specialists

(5) Routinely provide patients list of all medications

(6) Routinely receives/reviews patient outcome data

(7) Can receive various Financial incentives

Accelerated and Deferred Strategic Maintenance

By Clive Riddle, October 22, 2009

As the Great Recession kicked in, two phenomena were documented in a number of studies: 1) accelerated utilization of services from employees and dependents with their existing health plan coverage, due to impending loss of coverage from layoffs or fear of potential loss; and 2) deferred maintenance with health care services by the uninsured, underinsured and those with broader coverage that sill involved material cost sharing.

Now impending national health care reform may be bringing about similar polar trends regarding strategic actions and resources deployed by all types of health care organizations: A) Accelerated steps taken by those organizations concerned that their applicable activities might be curtailed or inhibited post-reform; and B) Deferred activity by health care organizations that have adopted a “wait and see” philosophy until specifics of reform become tangible and apparent.

As opposed to consumer health care behavior derived from the Great Recession, which can by more readily quantified through survey and other research findings, such organizational behavior is evidenced only anecdotally.

But start networking with those involved in the business of health care, and it is difficult to escape a mounting sense of such anecdotes, particularly regarding deferred strategic maintenance. Now everyone loves a good reason to procrastinate, and “waiting until we see the specifics of what reform shakes out” has become a great reason de jour for executives to say no to requests for everything from planning meetings, conference attendance, capital purchases, programming changes, product development, and promotional campaigns.

Of course there are those who aren’t afraid of possibly spinning some wheels and take some risks in order to “hit the ground running.” But a combination of recession driven economic pressures that inhibit strategic initiatives, combined with the temptation to avoid the risks and unrewarded costs of spinning wheels, seem to motivate a growing number of health care organizations to defer their Strategic Maintenance for another day. So the question is, how soon is that Day going to be?

Comparing HDHP, HMO and PPO Value based on Employer Benefit Survey Data

By Clive Riddle, October 7, 2009

The Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2009 was released a couple of weeks ago.  The annual survey is a must read for any professional interested in employer health benefit issues and is packed with data.

I thought it would be interesting to use the data to compare the value of HDHPs to HMOs and PPOs, realizing of course for any individual’s actual situation, you’d need to compare specific benefit and premium parameters of specific plans. Also, this doesn’t take into consideration if there were any employer contribution to an HRA or HSA account in conjunction with the HDHP, or tax advantaged employee contributions were made to the account. But the survey data can still provide an overall sense of the industry-wide value of each plan type on the basis of premium and deductible comparisons.

Here’s ratios of single premium by plan type, compiled from the survey data.

HMO Premiums 1.011
PPO Premiums   1.020
POS Premiums   1.002
HDHP Premium 0.826
Overall Average 1.000 ($402 per month)

So based on the survey data does the HDHP premium, at 82.6% of the overall average premium, justify itself when the deductible cost sharing is taken into account? Let’s compare, based on single premium and deductible data.

HMOs: The survey data indicates that 84% of HMOs have no deductible requirement, and that those who do have an average of a $699 annual deductible. This yields a weighted average (16% * $699) of a $111.84 deductible for all HMOs. The survey data indicates that the average HDHP deductible is $1,838. Thus the net annual difference in deductibles is $1,726.16.

For simplicity, assuming that the HMO and HDHP copay/coinsurance requirements, benefit limitations and maximums after the deductible is met are in the same ballpark (which of course often isn’t the case) we’ll compare the value of an HMO to HDHPs solely on premium versus deductible differential.

The total annual difference in premiums based on the survey data is $892 ($4,878 annual HMO premium versus $3,986 HDHP premium). If you were to consume the entire HDHP deductible amount, the HMO would save you $834 (the deductible difference of $1,726 less the premium difference of $892.

But another way of looking at it is the HDHP would save you $892 if your total annual health expenditures for the year were less than $111.84 (the average HMO deductible amount.) Assuming an equivalent coinsurance rate of 18% after the deductible is met, meaning that 82 cents of each dollar consumed after $111.84 (the HMO avg deductible) would be reduced from the $892 savings for the HDHP. This means that once you spent an additional $1,087.80 ($892 divided by 82%) the savings stop. This equates to total annual health claims of $1,199.64 ($1,087.80 + the $111.84 avg HMO deductible.)

So you’d have to gamble that your annual health claims would costs less $1,200, or 65% of the HDHP deductible requirement in order for the HDHP to save you any money compared to an HMO.

Traditional PPOs: Using the same methodology, the survey data indicates that 26% of PPOs have no deductible requirement, and those who do have an average $634 deductible, yielding a weighted average $469 deductible for all PPOs, and an annual net difference of $1,368.84 compared to the HDHP deductible. The total annual difference is premiums based on the survey data is $936 (the PPO annual premium is $4,922).

So if you were to consume the entire HDHP premium, the PPO would save you $432.84  ($1,368.84 less $936). The HDHP would save you $936 if your total annual health expenditures for the year were less than $469 (the average PPO deductible amount.) Assuming an equivalent coinsurance rate of 18% after the deductible is met, meaning that 82 cents of each dollar consumed after $469 (the PPO avg deductible) would be reduced from the $936 savings for the HDHP. This means that once you spent an additional $1,141.46 ($936 divided by 82%) the savings stop. This equates to total annual health claims of $1,610.46 ($1141.46 + the $469 avg HMO deductible.)

So you’d have to gamble that your annual health claims would costs less $1,610, or 87.5% of the HDHP deductible requirement in order for the HDHP to save you any money compared to a traditional PPO.

Health Care Crisis and Reform: Everything Old is New Again

By Clive Riddle, October 1, 2009

As the Summer Town Hall agitation of health care reform has now wound its way into autumn, it seems darn perplexing trying to prognosticate what exactly will happen next with health reform and what exactly is the national mood at this moment.

So I thought it might be instructive to listen to the ghosts of health reform and health crisis past. I took a stroll down memory lane, sifting through Time Magazine’s archives for the past 70+ years. Along the way I found many a headline that surely must have surfaced from discussion from this summer’s town hall meetings. But it seems, both health care and Yogi Berra are experiencing déjà vu all over again.

Here’s a timeline of recycled topics from the 30’s through the 60’s:

Presidential Commission Recommends Complete Reorganization of American Medicine

December 5, 1932: “The Committee on the Costs of Medical Care finally published its recommendations for the re-organization of the practice of medicine in the U. S.” The Committee report notes that a massive number of Americans have no access to care (“38.2% of the population were getting no medical care whatsoever”) and that if the “U. S. annual sick bill were equitably spent, every inhabitant of the nation would get adequate medical attention, every person connected with the practice of medicine would earn an adequate living.” The Committee advocates large group practices, based around hospitals.

A Book on What is Wrong With Health Care and a Call for National Health Insurance

May 15, 1939: Professor Bertram Bernheim, MD of Johns Hopkins pens “a startling book, Medicine At the Crossroads.” He “sees national health insurance coming” and says that eventually “all doctors will band together and practice in clinics, and this streamlined system of medical care will in itself bring greater specialization and raise the quality of service. Once this great step is taken, he believes it will make little difference in a doctor's professional life whether the patient or the government pays the doctor's bill.”

Study on Nation’s Health Finds U.S Plagued by High Rate of Chronic Disease

January 15, 1945:  the Senate subcommittee on Wartime Health and Education after a two-year study of the state of the nation's health found that “about one U.S. citizen in six has a chronic disease or physical impairment.”

Physician’s Rebel Against Discounted Insurance Payments and Second Guessing Over Tests Ordered

December 1, 1947:” San Francisco rumbled last week with a battle over compulsory health insurance. Under fire was a medical system covering San Francisco's 12,000 municipal employees. The only governmental compulsory health insurance system in the U.S., it provides medical care in return for a small monthly fee deducted from members' pay….Because members' payments were set too low, doctors have often been paid less than the scheduled fees. Last fortnight, aroused by rebuffs of their demands for a 15% raise in fees, and by Medical Director Alexander S. Keenan's suggestion that they had needlessly pyramided costs by calling for too many laboratory tests and X rays, the doctors finally rebelled.”

Heated Debate Over Competing Proposals of Public Option vs. Private System

December 29, 1952:  “Attention has been concentrated on two rival methods…compulsory national health insurance (favored by President Truman and Federal Security Administrator Oscar Ewing, "socialized medicine," to its opponents) and the present system of private payment…..ast week the U.S. was offered a middle way. The President's Commission on the Health Needs of the Nation recommended that the U.S.: 1) put the Truman-Ewing plan on ice, 2) go all out to extend voluntary insurance plans to tens of millions not now covered, 3) let federal and state governments pay the premiums for those who cannot afford to pay them, 4) dot the nation with up-to-date medical centers where doctors would practice in groups.”

U.S. Health Care is Touted as Best in the World, But Really Isn’t

November 16, 1953: A noted physician, Boston's Dr. James Howard Means, pens a book, Doctors, People, and Government in which he states "The impulse to reform in medical public affairs comes usually from without, and resistance to it from within the majority fold of organized medicine ... It is only under the lash of public opinion that organized medicine makes any social progress” The article notes “though U.S. medicine is often touted as the best in the world, he asks, ‘Best for whom? Doctors, patients, or everybody? Certainly it is not best for everybody, else the public affairs of medicine would not have been in turmoil for the past two decades.’”

Medical Costs Rising Much Faster Then Any Other Segment of the Economy

August 27, 1956: “Medical costs have been rising faster than any other item on the cost-of-living index, according to the Bureau of Labor Statistics. A patient must now pay 25% more for treatment than in 1950, as compared to an 8% rise in the overall price index. At the same time, benefit payments from health-insurance programs are running a fifth higher this year than last.”

Physicians Having to Hire Staff Just to Deal With Insurance Paperwork and Hassles

September 8, 1957: “Health insurance, a boon to no million people in the U.S., is regarded by more and more doctors as a paper-spewing ogre. Reason: the torrent of technical information requested by insurance forms is cutting into doctors' valuable time for treating patients, leading directly to higher costs for medical care. With even minor treatment requiring detailed reports, many busy doctors find they can no longer get along with just a receptionist or nurse, are hiring a new kind of medical officeworker—the ‘insurance secretary.’”

Covering Millions of More American Will Cause a Log Jam Trying to Access Health Care

October 22, 1965: In the Article Medicare: Will It Work? fears are cited that “no one in the Administration or in the American Medical Association can be really certain as to how many aged eligibles will jam into hospitals for long-delayed, noncritical "elective" operations or other "nonessential" treatment.”

Health Insurance Industry Fights Government Insurance Proposals Only To Embrace Them After Passage

October 22, 1965: Before the health insurance lobby opposed today’s Public Option, they opposed the HMO Act of 1973, only to embrace them later. Before that, “the insurance industry was second only to the medical profession in battling the advent of medicare. For years, insurance lobbyists in Washington opposed any Government-sponsored health-insurance program. Last week the insurance industry's representatives were still active, but this time it was at the huge social-security complex on the outskirts of Baltimore, where they are negotiating with the Government to get their share of medicare. Most insurance companies now realize that medicare, far from being the disaster they once predicted, may prove to be a welcome pep pill for their industry.”

American Health Care Is Un-Organized, Inefficient, Costly and Not Always High Quality

December 1, 1967: The article Crisis of Organization states “costs for its services are rising twice as fast as the general cost of living, and are expected to keep on soaring, hospital costs to the tune of 250% by 1975, physicians' services by 160% and dental care by 100%. Yet the industry is ill-organized and inefficient, and much of the care given in hospitals is of poor quality. That is what the National Advisory Commission on Health Manpower reported to President Johnson last week.”

Health Plan Coverage of H1N1 Virus Administration Varies

by Clive Riddle, September 17, 2009

Earlier this week, the FDA announced approval of four vaccines against the H1N1 virus. As we await the expected spread of the H1N1 virus this fall, health plans around the country are announcing their policy regarding coverage. Of course, the H1N1 vaccine itself is being covered by the government, once it becomes available. So the coverage issue is with respect to payment to providers for their administration of the shot.

Is it a no-brainer that health plans will provide coverage for administration of the H1N1 virus? It is as long as their specific plan of benefits cover immunizations. But typically, health plans offer a wide menu of benefit plans, including some that do not provide immunization coverage.

However, some health plans have announced they will take the extra step to provide administration coverage for all their members, even those whose benefit plans do not offer immunization coverage. Such health plans are taking the public health policy approach that by removing barriers to the vaccine, they are doing their part to reduce the potential spread of the virus, which should provide the indirect benefit of reduced overall incidence and corresponding cost of treatment for their member population as well.

A survey of recent health plan coverage announcements indicates health plans uniformly will cover H1N1 administration costs for member benefit plans that cover immunizations, but are split on providing H1N1 administration coverage when their benefit plans do not cover vaccines.

Those who will provide administration coverage to all members include:

• CIGNA has just stated they will provide coverage of H1N1 vaccine administration for all insured members without application of any deductible or copay requirement.

• United Health Group has announced they will on a corporate-wide basis provide coverage of H1N1 vaccine administration even for members whose benefit plans exclude immunization coverage.    

• Likewise, Independence Blue Cross in Pennsylvania issued a release that they will provide coverage of H1N1 vaccine administration including for members whose benefit plans exclude immunization coverage

•  Blue Cross Blue Shield of Arizona issued a statement that they will provide coverage of H1N1 vaccine administration including for all members

• Blue Cross and Blue Shield of Florida also will provide coverage of H1N1 vaccine administration including for members whose benefit plans exclude immunization coverage. BCBS Florida also announced its operational continuity preparedness plans in case of a significant disruption due to pandemic influenza.

Those who will limit administration coverage to members with vaccine coverage benefits include:

• WellPoint some time ago announced they will provide H1N1 vaccine administration coverage only for members with benefit plans covering vaccines.

• Aetna sent notices to providers that they will provide H1N1 vaccine administration coverage only for members with benefit plans covering vaccines.

•  Wellmark Blue Cross and Blue Shield in Iowa and South Dakota issued a statement they provide H1N1 vaccine administration coverage only for members with benefit plans covering vaccines.

• Blue Cross and Blue Shield of Nebraska also announced they will provide H1N1 vaccine administration coverage only for members with benefit plans covering vaccines.

The AAFP news yesterday published a story providing details on how physicians should code and bill major health plans and Medicare  for H1N1 administration fees. Interestingly, there is not a standard approach for coding by the health plans. The administration fee cannot exceed the regional Medicare vaccine administration fee.

Using Social Media to Model H1N1

By Clive Riddle, September 10, 2009

In the September 2009 issue of Predictive Modeling News, Russell A. Jackson reports on the use  of Twitter, Facebook, blogs, search engines and more in modeling the spread of the H1N1 influenza virus, in his article “Social Media, Traditional Data Sources Fuel Swine Flu Models” Both social media updates and comments, and keywords from online searches, can provide data useful for such analytics.

Russell writes “One example of the cutting-edge marriage of predictive modeling and social media is the Social Web Information Monitoring for Health – or ‘SWIM for Health’ -- project operating out of the University of Iowa. Researchers there have embarked on a major study that tracks public perception of the swine flu outbreak and other infectious diseases, utilizing technology from OneRiot that indexes the social web in real time. The project, its participants say, ‘has the potential to enhance disease tracking and forecasting by harnessing the power of the social web.’ By monitoring updates from Twitter and Facebook, recent blog posts, current popular search queries and other web usage activity, public health officials can potentially locate an influenza outbreak or simply indicate an elevated perception of disease risk. Such information might help public health authorities better address public concerns. The first step in the research includes an interactive, real-time map of the United States that monitors swine-flu-related Twitter updates. It’s available at http://compepi.cs.uiowa.edu/swim/.

Who is OneRiot you ask? Jackson tells us “launched in November 2008, OneRiot “finds news, stories and videos people are talking about right now across the social web.” Unlike any other search engine, it ranks a web page’s relevance based on its current popularity with real people. OneRiot is a privately held company headquartered in Boulder, CO, with offices in San Francisco.”

Another initiative Russell cites is a project in which “researchers with the National Institutes of Health’s Models of Infectious Disease Agent Study, or ‘MIDAS,’ recently posted these questions on Facebook: [1} “When did you first learn about the swine flu outbreak?”  2} “Have you searched the internet for additional information on the swine flu outbreak?” {3} “If a vaccine for swine flu became available, would you want to be vaccinated?” …. The researchers will use the Facebook responses to build a dynamic model that simulates how changes in decision-making influence patterns of disease spread. The model will help them and others identify the strategies that improve adherence to interventions and reduce the spread of disease. “

So perhaps not only can you reduce your chance of contract with H1N1 by socializing online instead of in person, but you might help measure and combat its spread at thie same.

U.S. Uninsured Total Hits 180 Million (if you include dogs and cats)

by Clive Riddle, September 2, 2009

Who knew that September was North American Pet Health Insurance Awareness Month? Not I, until I visited the North American Pet Health Insurance Association web site and discovered their press release. The association informs us that “about 60% of U.S. households have at least one dog, cat, bird, or other companion animal. Many have more than one….. Projected 2009 pet expenditures for North America are over $45 billion, of which $25 billion will be spent on veterinary medicine.”

Now inspired that the calendar had indeed turned to September, and that there was only 29 days left of North American Pet Health Insurance Awareness Month,  I dug deeper. I came across the article Pet Insurance Shows Promising Market Growth, from InsuranceNewsNet, Inc., which informs us:

• “The U.S. pet insurance market recorded 107 percent increase in total growth from 2003 through 2007”
• “It is estimated that there are more than 70 million pet cats and 68 million pet dogs in the country but only 1 to 4 percent of pets are covered by health insurance.”
• “The cost of pet insurance also varies greatly. Accident-only coverage may cost as little as $9.50 while fuller benefits above $60 but typically the cost is about $30 to $50 a month.”

So doing the math, if there are 138 million pet cats and dogs, and we assume 3% are insured and 97% are uninsured, we have approximately 134 million uninsured Fidos and Tiggers. Add this to the 46 million two-legged uninsureds, and the health care reform debate is re-framed. What’s more, there is a huge market opportunity if anyone can get the owners of these 134 million pets to pony up and buy some insurance.

The plans represented by the North American Pet Health Insurance Association certainly think the opportunity exists. Participating plans include:

• Embrace Pet Insurance (www.embracepetinsurance.com)
• The Hartville Group, Inc. (www.hartvillepetinsurance.com)
• Trupanion (www.trupanionpetinsurance.com)
• Petsecure (www.petsecure.com)
• Vetinsurance (www.vetinsurance.com)

And now health insurance giant Aetna has been bitten by the pet insurance bug. Right on the Aetna Home Page, under the "Find the Right Plan" section, resides a link "For Pet Insurance" in which Aetna proclaims “We have offered insurance products to help our members for more than 150 years. Now we can help you with pet health coverage for your cat or dog, too.”

Aetna inked a deal at the end of last year to underwrite Pets Best. This July Aetna and Pets Best announced a program to “provide 50,000 local businesses and 79 working Chambers of Commerce in Connecticut and Western Massachusetts access to discounted rates on pet insurance plans.”

Gretchen Spann, Aetna’s very own Head of Pet Insurance tells us “in these difficult economic times, many people are having difficulty keeping up with the rising cost of veterinary services. Some people might find that the predictability of a monthly premium helps them budget for the care their dog or cat might need in the future.”

Health Co-ops: Checking out Group Health Cooperative

by Clive Riddle, August 20, 2009

Health Care Cooperatives are certainly getting more than 15 minutes of fame as the health reform debate intensifies. Group Health Cooperative has been perhaps the most visible and referenced example referenced in discussions from all sides. For the less initiated, what follows is a quick overview of all things GHC. Group Health Cooperative is based in Seattle, Washington, with almost 10,000 employees and serves around 550,000 members in twenty Washington counties and two counties in Northern Idaho.

Governance

As a cooperative, GHC arranges the delivery of health care benefits and services for its members as a non-profit, member controlled organization. Unlike the traditional structure of a member-owned cooperative, financial surpluses are reinvested and not distributed to the members.

Group Health is governed by an 11-person Board of Trustees of volunteer consumer members, which hires the chief executive officer and makes major policy decisions. Any member of GHC eighteen years or older is eligible to vote to elect the Board of Trustees, and to vote on bylaw changes. The GHC bylaws are available for review online. Members must register to vote, and the registration deadline just passed (August 18^th) to vote at the 2009 annual membership meeting (Oct. 17^th 2009.)

Public Board meetings begin with an open microphone session during which any GHC can address the Board directly on all matters except those related to personal health care. Some GHC medical centers also have volunteer-led Medical Center Advisory Councils that work with staff to address care and wellness issues and meet at least four times per year. The councils are open to GHC members who reside near or receive care at a respective medical center.

GHC’s President and CEO is Scott Armstrong, who has been with the organization since 1986, starting as an assistant hospital administrator. He became president and CEO in January 2005. Prior to GHC he was the assistant vice president for hospital operations at Miami Valley Hospital in Dayton, Ohio.

Provider Network

GHC care is delivered by Group Health Permanente providers (880+ physicians) at Group Health-operated medical facilities, and in outlying areas and through POS options, also through a network of almost 9,000 providers and 40+ hospitals. After five decades serving as a staff model, the physicians formed Group Health Permanente, an independent professional corporation, in 1997, which operates under exclusive contract to serve GHC. 

History and Growth

In 1946, GHC, known as Group Health Cooperative of Puget Sound, was developed, acquired a Seattle medical clinic and hospital and starting with 1947 established a group practice, prepaid health plan. Initial coverage costs involved a $100 membership fee, plus $3 per month dues for each adult family member and $1.50 per month per child up tot four, with no charge for additional children. The local King County Medical Society undertook a highly organized campaign against GHC physicians and their members, resulting in a lawsuit and 1951 State Supreme Court unanimous ruling against the anticompetitive practices of the Medical Society.

Membership by the end of the 1950’s came close to 40,000. Enrollment surpassed 100,000 in 1967. Additional medical centers were developed and service area expanded each decade. In 1977 11,000 member Tacoma's Sound Health Association was acquired, and by 1979, enrollment surpassed 275,000. In 1982, the first agreement was signed to provide care by non-Group Health physicians on Vashon and Maury islands.  In 1983, enrollment surpassed 300,000 and GHC established the Group Health Center for Health Studies; the Center for Health Promotion; and Group Health Foundation., and acquired an existing Spokane 20,000 member health plan serving Eastern Washington, which evolved by 1987 into the affiliate Group Health Northwest, consolidating services east of the Cascades. In 1990, GHC launched Group Health Options, Inc., a subsidiary, which offered the Northwest's first POS plan. In 1994, Group Health membership passed 500,000. By the late 1990s membership approached 700,000.

In 1997, a strategic alliance was formed with Kaiser Permanente’s Washington operations, creating Kaiser/Group Health, a new non-profit corporation set up to oversee Group Health Cooperative, Group Health Northwest, and Kaiser Permanente Northwest.However, at the same time, GHC deficits began mounting, and GHC began cutting back in participation in various programs and markets, causing enrollment to begin shrinking down to its current level (550,000.). Kaiser and GHC agreed to dramatically scale back their affiliation to a more simple reciprocity of provider services agreement. GHC experienced a financial turnaround at the start of the new millennium. In 2005, GHC acquired KPS Health Plan, a 62-year-old nonprofit plan based in Bremerton, WA.

Additional historical information is available at HisotryLink.org and in the GHC web site.

Current Financials

GHC yielded $2.8 billion in revenue in 2008, up from $2.6 billion in 2007, with operating expenses of $2.7 billion in 2008 and $2.6 billion in 2007. External provider network expenses (non GHC owned facilities or Group Health Permanente) comprised 50% of operating expenses. 2007 yielded a $71 million surplus primarily due to $57 million in investment income, while 2008 yielded a $9 million loss, primarily due to $60 million in investment losses. In August 2009 Standard&Poor's Ratings Services “lowered its counterparty credit, financial strength, and senior secured debt ratings on Group Health Cooperative (GHC) to 'BBB+' from 'A-'. The outlook on the counterparty credit and financial strength ratings is negative. The rating action is based on GHC's downward revision to its 2009 earnings forecast. The company is now expecting a pretax operating loss.”

Accolades

A recent Commonwealth Fund case study notes that Group Health Cooperative is structured with incentives aligned "to launch innovations and organize services in ways that make the most sense operationally and clinically." The case study highlighted attributes contributing to the organization’s success:

• Information Continuity  with EHR

•  Care Coordination and Transitions and System Accountability, including medical homes and case management

• Peer Review and Teamwork for High-Value Care, including clinical dashboards and P4P

• Continuous Innovation

• Easy Access to Appropriate Care, including same day appointments for urgent care, after hours urgent care and telephonic nurse advise linked to HER, direct specialist access, group visits and electronic visits

GHC touts that it has the "Highest Member Satisfaction among Commercial Health Plans in the Northwest Region" ranking by J.D. Power and Associates;

"Excellent" accreditation rating from the National Committee for Quality Assurance (NCQA) for the seventh year in a row; "America's Best Health Plans" rating by U.S. News & World Report and NCQA; and Highest ranked for health plan quality and prescription drug plan quality by the Centers for Medicare and Medicaid Services (CMS) Medicare Plan Comparisons.

Doubts about GHC as a nationwide model

But for all the success, these doubts have publicly surfaced regarding how realistic it would be to duplicate GHC as a nationwide model for health reform:

1. As a recent New York Times article questions, is the governance aspect of a cooperative, as advanced by many reformers, the successful attribute of GHC, or is it the integrated delivery system, which is present in non-cooperative based programs such as Kaiser?


2. Considering the infrastructure required to operate the GHC mixed delivery model that at its core is an integrated group practice, is it realistic to develop something similar from scratch for new markets in any reasonable time frame?


3. Considering GHC’s financial position is no stronger, and perhaps weaker than other major health plans around the country, what are the financial dangers in replicating their model?

Lindsay Resnick on More Effective Medicare Marketing

by Clive Riddle, August 13, 2009

Lindsay Resnick, a fellow member of the MCOLBlog team this week provided an exclusive 34 minute podcast for MCOL on Reducing Medicare Marketing Costs ... While Boosting Enrollment which includes a companion follow-along presentation. I encourage you to check it out if Medicare Advantage is of interest to you.

Here’s some selected takeaways from his discussion:

· Medicare Advantage payments to plans will reduce to equal to Medicare FFS payments by 2014, and payments to plans in 2009 were cut by an average of 4.5%

· For 2010, member premium increases will range from $25 to $80, and on the chopping block for plans will be value-added benefits and zero premium products

· Regulatory scrutiny over the marketing and sale of Medicare products will intensify

· It takes 3 to 7 prospect touches—through a combination of media—to get a qualified Medicare lead

· 56% of Internet users who are age 64-72 make online purchases; 45% of all seniors age 70-75 are Internet users

· Post-sale for Medicare members:  4+ touches/year can yield over 90% retention

· Agent distribution- a key strategy in enhancing enrollment while reducing marketing costs, requires significant commitment in credentialing and monitoring agents

· Agent Credentialing: Gather demographic information about your agents and use it to verify their credentials. A credentialing program needs to include: –Agent portal for establishment of e-file for agents; –Verification of licensure; =–Check state regulatory actions; –Verify and store E&O; –Background checks; –Link documents to agent file on an ongoing basis; –Manage agents slow to submit required documentation; –Agent contracting

· Agent Monitoring: A Monitoring Program should be developed that can: -Accumulate agent data; -Track allegations by agent; -Manage disciplinary actions; -Audit-friendly print views; -Track investigations; -Offer Remedial training information; Provide Licensure confirmation. Agent oversight should address and incorporate: Complaints (Allegations); Credentialing; Training; Certification; State DOI Notifications of Terminated Representatives; Accurate & Timely Commission Payments; and Targeted Sales Audits.

Rating Consumer Reports New Hospital Ratings

By Clive Riddle, August 6, 2009

Consumer Reports this week announced “for the first time, Consumer Reports will provide patient satisfaction Ratings for more than 3,400 hospitals across the U.S. Subscribers to www.ConsumerReportsHealth.org will be able to look up their local hospitals to see how they stack up and the types of challenges that patients have experienced there. CR notes several areas of concern at hospitals nationwide; the vast majority of hospitals received the worst Ratings for communication about new medications and discharge planning.”

In order to access this new tool, one must subscribe to Consumer Reports Health at a cost of $19.00 annually or $4.95 monthly. The subscription also gives you access to their rating tools for health plans, treatments, prescriptions, related products and provides various supplemental information.

Questions for those in the business of health care include, how influential will these Consumer Reports tools be? How many consumers will use them? How reliable is the information? How are providers, plans and products portrayed?

Consumer Reports touts that the hospital ratings, “are based on patient surveys collected by the federal government's Hospital Consumer Assessments of Healthcare Providers and Systems Survey, known as HCAHPS. For the first time, the HCAHPS data will be available to consumers in a user-friendly interface with CR's familiar Ratings. A team of statisticians and health experts analyzed the government data to develop the Ratings. The Health Ratings Center also integrated intensity of care rankings, revealing a link between patient satisfaction and intensity of care; the hospitals that have above average patient satisfaction Ratings provide, on average, a more conservative (and less expensive) type of medical care. The intensity of care rankings are based on data from the Dartmouth Atlas of Health Care and the Dartmouth Institute for Health Policy and Clinical Practice.”

HCAHPS and the Dartmouth Atlas of Health Care are perhaps the most mainstream established comparative data sources, so the reliability of the Consumer Reports data is not so much the issue, and hospitals are already accustomed and have access to how they are portrayed by these sources. So the remaining questions to address are how influential will the Consumer Reports tools be and how many people will use them. Should hospitals and other professionals invest energy in monitoring this?

If you’re a professional looking to research data from the Consumer Reports hospital ratings tool, you need not bother investing the $19 annually. I did, and while the Consumer Reports tool is darn easy to use and provides a choice of summary and detailed information, you can get the same data and much more for free direct from the sources. HCAHPS data in incorporated into the CMS Hospital Compare Web Site. The Consumer Reports tool lets you compare up to five hospitals at once, and Hospital Compare only lets you compare up to three. But the Consumer Reports detailed data is limited to the HCAHPS patient survey results and Dartmouth data on Chronic Care and Average Costs, while the Hospital Compare detailed information incorporates many more measures in addition to the HCAHPS survey data and provides optional graphs and tables.

As discussed in a previous blog, Checking Out CMS’ Hospital Compare, you can download the entire database from the Hospital Compare web site if you wish. There aren’t such data download capabilities from Consumer Reports. In fact, outside of providing a comparison to the top national ranked hospital in any results page (Oakleaf Surgical Hospital in Eau Claire, Wisconsin) I couldn’t find national or state average data using the Consumer Reports tool. I did find a very nice Summary of HCAHPS Survey Results indicating state and national averages for each survey indicator for free from the HCAHPS web site.  Here’s the national average of hospital satisfaction levels for their various components, which are interesting:

• Communication with Nurses: 74%
• Communication with Doctors: 80%
• Responsiveness of Staff: 62%
• Pain Management: 68%
• Communication about Medicines: 59%
• Cleanliness: 69%
• Quietness: 56%
• Discharge Information: 80%
• Overall Hospital Rating: 64%
• Recommend the Hospital: 68%

The Consumer Reports tool does include some Dartmouth data, and The Dartmouth Atlas of Health Care does cost $59 to purchase in print form. But while its not entirely simple to use, you can drill down through the site and query the databases, download applicable files and review applicable report, all for free.

So, a professional will find much more data, and free at that, going to the original sources rather than Consumer Reports. I can’t that I’d recommend the Consumer Reports tool to a consumer either for the same reasons, unless they really want and need something very simple and centralized to use, that doesn’t confuse them with too many data choices and options, and don’t mind paying for the privilege.

Of course, the Consumer Reports Health tool does offer much more than hospital comparisons, and because its offered by Consumer Reports, it will yield some influence over a number of consumers’ health decisions, and a number of consumers will undoubtedly use the service.

H1N1 Flu: Key Info, Web Resources and News Headlines

by Clive Riddle, July 29, 2009

So the health care community has been warned for some time to brace for a surge in swine flu this fall. As August approaches, what’s the latest? The following is a summary compiled of some key information, key web resources, and recent news headline:

- KEY INFORMATION –

CDC provides this summary in their latest situation update: “On June 11, 2009, the World Health Organization (WHO) signaled that a global pandemic of novel influenza A (H1N1) was underway by raising the worldwide pandemic alert level to Phase 6. This action was a reflection of the spread of the new H1N1 virus, not the severity of illness caused by the virus. At the time, more than 70 countries had reported cases of novel influenza A (H1N1) infection and there were ongoing community level outbreaks of novel H1N1 in multiple parts of the world.  Since the WHO declaration of a pandemic, the new H1N1 virus has continued to spread, with the number of countries reporting cases of novel H1N1 nearly doubling. The Southern Hemisphere’s regular influenza season has begun and countries there are reporting that the new H1N1 virus is spreading and causing illness along with regular seasonal influenza viruses. In the United States, significant novel H1N1 illness has continued into the summer, with localized and in some cases intense outbreaks occurring. The United States continues to report the largest number of novel H1N1 cases of any country worldwide, however, most people who have become ill have recovered without requiring medical treatment.”

According to the CDC Novel H1N1 Flu Situation Update as of July 24, 2009, the U.S. has experienced 43,771 cases involving 302 deaths. The top five states by number of cases are:  

1. Wisconsin 6222 cases; 6 deaths
2. Texas 5151 cases; 27 deaths
3. Illinois 3404 cases; 17 deaths
4. California 3161 cases; 52 deaths
5. Florida 2915 cases;  23 deaths

For the week of July 12 -18 the CDC reported that:

· Widespread influenza activity was reported by seven states (California, Delaware, Georgia, Hawaii, Maine, Maryland, and New Jersey).

· Regional influenza activity was reported by Puerto Rico and 13 states (Arizona, Arkansas, Connecticut, Florida, Nevada, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Virginia, Washington, and West Virginia).

· Local influenza activity was reported by the District of Columbia and 13 states (Alaska, Illinois, Massachusetts, Michigan, Minnesota, New Hampshire, New Mexico, Oklahoma, Oregon, Tennessee, Texas, Utah, and Wisconsin).

· Sporadic activity was reported by 17 states (Alabama, Colorado, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, South Dakota, Vermont, and Wyoming).

The World Health Organization’s (WHO) latest update, as of July 24, 2009, states “in most countries the majority of pandemic (H1N1) 2009 cases are still occurring in younger people, with the median age reported to be 12 to 17 years (based on data from Canada, Chile, Japan, UK and the United States of America). Some reports suggest that persons requiring hospitalization and patients with fatal illness may be slightly older.... The development of new candidate vaccine viruses by the WHO network is continuing to improve yields (currently 25% to 50 % of the normal yields for seasonal influenza for some manufacturers). WHO will be able to revise its estimate of pandemic vaccine supply once it has the new yield information. Other important information will also be provided by results of ongoing and soon-to be-initiated vaccine clinical trials. These trials will give a better idea of the number of doses required for a person to be immunized, as well as of the quantity on active principle (antigen) needed in each vaccine dose. Manufacturers are expected to have vaccines for use around September. A number of companies are working on the pandemic vaccine production and have different timelines.”

- WEB RESOURCES -

Pandemic (H1N1) 2009

World Health Organization

Key Facts About Swine Influenza

Centers for Disease Control and Prevention

Novel H1N1 Flu (Swine Flu) and You

Centers for Disease Control and Prevention

 Novel H1N1 Flu Situation Update

Centers for Disease Control and Prevention

Interim Guidance on Antiviral Recommendations for Patients with Novel Influenza A (H1N1) Virus Infection and Their Close Contacts

Centers for Disease Control and Prevention

H1N1 Influenza A (Swine Flu) Alert Center

Medscape

- NEWS HEADLINES -

H1N1 Flu Spreads to Remote Corners of the World

Reuters Health Information, July 28, 2009

Pregnancy Likely to Be Swine Flu Shot Priority

Associated Press via Google, July 28, 2009

H1N1 Flu Shots Ready in Months, Winter a Risk: WHO

Reuters Health Information, July 27, 2009

China Presses Quarantine Against Flu

New York Times, July 27, 2009

Swine flu could hit up to 40% in U.S. this year and next without vaccine

Associated Press via USA TODAY, July 26, 2009

US: 160M doses of swine flu vaccine due in Oct.

AP via GoogleNews, July 23, 2009

First Trials of Swine Flu Vaccine Begin in Australia

Bloomberg News, July 22, 2009

Grants to States and Territories, July 2009

HHS Press Release, July 10, 2009

Checking out CMS’ Hospital Compare

 By Clive Riddle, July t6, 2009

Last week, CMS issued an announcement touting “important new information was added to the Centers for Medicare & Medicaid Services’ (CMS) Hospital Compare Web site that reports how frequently patients return to a hospital after being discharged, a possible indicator of how well the facility did the first time around” They noted around 20% of hospitalized Medicare beneficiaries experience a readmission within 30 days from discharge.

This prompted me to take the opportunity to check out Hospital Compare again, and see what was going on in that cyber neck of the woods. Here’s a few things I learned:

• The tool is being used. Hospital Compare has been on-line since 2005. Last year the site 18 million+ page views, and is receiving around 1 million page views monthly during 2009.
• Here’s how CMS describes the what information Hospital Compare provides: “The Hospital Compare Web site will show a hospital’s mortality or readmissions rate is ‘Better than,’ ‘No different from,’ or ‘Worse than’ the U.S. national rate...Hospital Compare also includes 10 measures that capture patient satisfaction with hospital care, 25 process of care measures, and two children’s asthma care measures. The site also features information about the number of selected elective hospital procedures provided to patients and what Medicare pays for those services.”
• So what are you supposed to do with this information? CMS states that “Public reporting of these and other measures is intended to empower patients and their families with information they need to engage their local hospitals and physicians in active discussions about quality of care..” Charlene Frizzera, CMS Acting Administrator, tells us "Providing readmission rates by hospital will give consumers even better information with which to compare local providers. Readmission rates will help consumers identify those providers in the community who are furnishing high-value healthcare with the best results. CMS believes that all hospitals, regardless of their readmission and mortality rates, should use the data available in these free, detailed reports to find ways to continually improve the care they deliver.”
• Of course, has lawyers on staff, and the hospital web site counsels us that we really shouldn’t “view any one process or outcome measure on Hospital Compare as a tool to ‘shop’ for a hospital” and that “consumers should gather information from multiple sources when choosing a hospital.”
• If you really want to swim around in the hospital compare data, they do provide the option to download the entire database (9MB).
• How old is the data, and how often is it updated? The collection period for the process of care quality measures is generally 12 months. Currently, the Hospital Compare quality measures are refreshed the third month of each quarter. The collection period for the mortality and readmission measures is 36 months. The risk-adjusted 30-day risk-adjusted mortality and readmission measures for heart attack, heart failure and pneumonia are produced from Medicare claims and enrollment data. The mortality and readmission quality measures will be refreshed once annually.
• Downloading and then sifting through the actual database, I came across a table summarizing the national averages (as opposed to the hospital and state specific averages typically displayed in the online reports, or national data just for a specific item. Below are tables with the national HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) survey data and the national mortality readmission data.

HCAHPS Measures	HCAHPS Response Categories	Overall Survey %Response Rate
How often were the patients rooms and bathrooms kept clean?	Room was always clean	69%
How often were the patients rooms and bathrooms kept clean?	Room was sometimes or never clean	10%
How often were the patients rooms and bathrooms kept clean?	Room was usually clean	21%
How often did nurses communicate well with patients?	Nurses always communicated well	74%
How often did nurses communicate well with patients?	Nurses sometimes or never communicated well	6%
How often did nurses communicate well with patients?	Nurses usually communicated well	20%
How often did doctors communicate well with patients?	Doctors always communicated well	80%
How often did doctors communicate well with patients?	Doctors sometimes or never communicated well	5%
How often did doctors communicate well with patients?	Doctors usually communicated well	15%
How often did patients receive help quickly from hospital staff?	Patients always received help as soon as they wanted	62%
How often did patients receive help quickly from hospital staff?	Patients sometimes or never received help as soon as they wanted	12%
How often did patients receive help quickly from hospital staff?	Patients usually received help as soon as they wanted	26%
How often was patients pain well controlled?	Pain was always well controlled	68%
How often was patients pain well controlled?	Pain was sometimes or never well controlled	8%
How often was patients pain well controlled?	Pain was usually well controlled	24%
How often did staff explain about medicines before giving them to patients?	Staff always explained	59%
How often did staff explain about medicines before giving them to patients?	Staff sometimes or never explained	23%
How often did staff explain about medicines before giving them to patients?	Staff usually explained	18%
Were patients given information about what to do during their recovery at home?	No, staff did not give patients this information	20%
Were patients given information about what to do during their recovery at home?	Yes, staff did give patients this information	80%
How do patients rate the hospital overall?	Patients who gave a rating of 6 or lower (low)	10%
How do patients rate the hospital overall?	Patients who gave a rating of 7 or 8 (medium)	26%
How do patients rate the hospital overall?	Patients who gave a rating of 9 or 10 (high)	64%
How often was the area around patients rooms kept quiet at night?	Always quiet at night	56%
How often was the area around patients rooms kept quiet at night?	Sometimes or never quiet at night	13%
How often was the area around patients rooms kept quiet at night?	Usually quiet at night	31%
Would patients recommend the hospital to friends and family?	NO, patients would not recommend the hospital (they probably would not or definitely would not recommend it)	6%
Would patients recommend the hospital to friends and family?	YES, patients would definitely recommend the hospital	68%
Would patients recommend the hospital to friends and family?	YES, patients would probably recommend the hospital	26%

Condition	Measure Name	National Mortality_Readm Rate
Heart Attack	Hospital 30-Day Death (Mortality) Rates for Heart Attack	16.6
Heart Attack	Hospital 30-Day Readmission Rates for Heart Attack	19.9
Heart Failure	Hospital 30-Day Death (Mortality) Rates for Heart Failure	11.1
Heart Failure	Hospital 30-Day Readmission Rates for Heart Failure	24.5
Pneumonia	Hospital 30-Day Death (Mortality) Rates for Pneumonia	11.5
Pneumonia	Hospital 30-Day Readmission Rates for Pneumonia	18.2