Et Tu, Oscar?

By Kim Bellard, February 25, 2016

Things seem to be going well for Oscar Health, the health insurance start-up that has been wowing investors and the media since it was founded in 2012.  Forbes reports that Oscar just raised $400 million in an investment round led by Fidelity, which effectively values Oscar at about $2.7b.  So why do I fear that perhaps they are taking the wrong path?

I've previously expressed my concern that Oscar and some of its fellow health insurance start-ups might be more about repackaging than reinventing.  I'm more concerned than ever after Bloomberg reported that Oscar is adopting a new network strategy: moving to "tight, exclusive networks with hospitals."  

There's no secret why Oscar is taking this approach.  It's about cost, with the expectations that narrower networks yield cost savings Closer relationships with providers and the ability to offer lower premiums without hurting quality.  If that's what Oscar is after with its new network strategy, what's not to like?

Well, plenty.  For one, with this strategy Oscar isn't innovating; it is buying into the strategy that most other health plans are trying to adopt.  That doesn't make it a bad strategy, but playing follow-the-leaders certainly doesn't fit the cool yet disruptive image that Oscar has so carefully cultivated. 

More importantly, it is the wrong strategy.  For Oscar.  For any health plan.  It is a strategy rooted in the 1990's, if not earlier.  The argument for networks, especially narrow networks, is that health plans can drive better bargains by promising more volume to specific providers.  I don't have a problem with health plans driving hard bargains with providers, especially if those bargains are performance-based.  What I do have a problem with is forcing consumers to use those, and only those. 

I think it is great when a health plan tries to find the highest quality providers, and to get a good deal with them.  What I wish they would do, though, is say, "here's the data that demonstrates their quality, and here's how much we're willing to pay them to take care of you.  If you can find providers that are better, that's great; go to them, and we'll still pay the same as we'd pay the providers we recommend.  No hard feelings." 

In other words, let the health plan act as the concierge, not the gatekeeper.

If a consumer goes to providers who charge more than the health plan would pay their designated providers, well, there's a price for choice; consumers might have to pay extra.  On the flip side, maybe the consumer should pocket some of the savings if they manage to find less expensive providers.

This approach might sound like reference pricing, because reference pricing is a start to where I think we need to go.  I'd rather we put more effort into that than in narrowing consumer's choices.  
Noah Lang, CEO of Stride Health, told Fast Company, "Oscar is primarily a consumer experience company."  I don't think restricting choice of providers is a very good consumer experience for any health plan, and especially not for one like Oscar who prides itself on its member experience.

Oscar thinks this new approach is their future.  If so, their future may be as just another health plan.  And that'd be too bad.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Two Employee Benefit Studies Don’t Agree on Everything – But Do Agree on 52% HDHP Adoption

By Clive Riddle, February 19, 2016 

Benefitfocus has just released the “Benefitfocus State of Employee Benefits 2016,” based on benefit selection data from 700,000+ people at 500 large employers, based on actual behavioral versus self-reported data. They cite that 52 percent of large employer clients now offer high-deductible health plans (HDHPs). 

The report notes that “millennials—born between 1980 and 1989—selected HDHPs more than any other age group. However, while approximately 44 percent of employees in this group chose HDHPs, a much smaller number of these employees took full advantage of health savings accounts (HSAs.)”

In addition, the report found that their clients “should be well positioned to navigate the Cadillac tax to be levied on higher-cost health care plans in 2020 under the Affordable Care Act. Total premiums across all 2016 plans averaged $14,974 for family coverage and $6,096 for individual coverage—both well below the tax’s respective target thresholds of $27,500 and $10,200.” 

While voluntary benefits have receiving much publicity as a popular solution and offering in consumer driven plan environments, they report that “only 36 percent of large employers offered such voluntary benefits for 2016, and only 14 percent of employees actually enrolled.” 

Meanwhile, Wells Fargo Insurance  has just released their Employee Benefits Trend Study surveying 650 middle-market companies and large corporations, which painted a somewhat different picture. They found that “fifty eight percent of employers surveyed expect their medical plan costs to exceed the thresholds for the Affordable Care Act (ACA) excise tax, or “Cadillac” tax, which was originally to take effect in 2018, but has been delayed until 2020.” Their findings state that “As more employers offer high deductible health plans, the C-suite is also aware of the financial exposure that employees face with these types of plans. As a result, they are looking to mitigate those costs by offering voluntary benefits solutions (e.g. critical illness and accident insurance).” 

But the Wells Fargo survey did agree to the penny with the Benefitfocus study on one item – HDHP adoption, citing that “half of the employers in the study said they will continue to make changes to their plans either this year or in 2017 by adding a high deductible plan option (52 percent), increasing the employee contribution percentage (56 percent), or increasing co-insurance features (55 percent).

What Is the Difference Between Population Health, Community Health and Public Health?

by Clive Riddle, February 12, 2016

What Is the Difference Between Population Health, Community Health and Public Health? That is the question asked in the ThoughtLeaders Corner in this month’s issue of Population Health News. Here’s what some population health experts had to share:

Garth Graham, M.D., MPH, President of Aetna Foundation says “throughout medical school and residency, I paid close attention to my mentors in their efforts to make an impact both on the individual patient and on the broader public health level to influence health outcomes in entire communities. Today, as a cardiologist and president of the Aetna Foundation, I work every day to follow in their footsteps by looking at three distinct areas: population health, community health and public health.  When talking about population health, we are describing health and healthcare outcomes that impact a specific group of people being tracked and managed for specified health conditions. For example, at the Aetna Foundation, we’re working to bridge the health divide by paying close attention to chronic diseases, such as heart disease and diabetes, that disproportionately affect African Americans.”

Graham continues: “Community health broadens the scope, going beyond traditional health and healthcare needs to factor in the social determinants of health, such as education, employment, public safety and more. In our work with communities, we know factors such as access to information and services can have a direct impact on community health. As we look at the broader tapestry of national and state indicators, we see public health unfold beyond a specific community or group. It is the 10,000-foot view that helps us define the health of an entire nation. At the Aetna Foundation, we know that where you live can make a dramatic impact on your health. According to data from the Centers for Disease Control and Prevention (CDC), your zip code is a greater indicator of your health than your genetic code. As we work to improve health outcomes and close health divides for underserved communities in our nation, we can all contribute by sparking change—community by community, city block by city block. “ 

Alexis Pezzullo, Chief Growth Officer for DST Health Solutions offers this take: “One of the favorable consequences of the ACA’s passage has been the re-ignition of discussion around ways to enhance and sustain health in individuals, groups and populations. Stakeholders are thinking about and collaborating in various ways to improve health outcomes and address value-based utilization of healthcare resources. Not too surprisingly, the importance of public and community health efforts is becoming increasingly clear. Public health by definition is the science of protecting and improving health of entire populations, from neighborhoods to countries, through promotion of healthy lifestyles, research for disease and injury prevention and detection and control of infectious diseases.”

Pezzullo contrasts that “community health, on the other hand, is a field of public health centered on the study and enhancement of the health characteristics of biological communities. While the term can be broadly defined, community health tends to focus services, education and research on geographical areas with shared characteristics. Population health, meanwhile, is concerned with the distribution of health outcomes across a group of individuals. This field includes health outcomes, patterns of health determinants and policies and interventions that link the two. Improving ‘total’ population health requires partners across public health, healthcare organizations, community organizations and businesses. Today’s population health management necessitates innovative approaches that address the complexity involved in analyzing data, evaluating patient risk and effectively managing care. The cumulative value of these efforts has never been fully realized. As the healthcare industry seeks to optimize outcomes, changing strategies, capabilities and actions to leverage synergies across these health ecosystems is essential.            

Deborah Dorman-Rodriguez, Leader, Healthcare Practice Group, Freeborn & Peters LLP offers that “the terms population health, community health and public health are often used interchangeably even though they are somewhat distinct. Population health is now commonly used in the post-ACA environment in association with the Triple Aim of improving the quality of care, improving the health of populations and reducing the per capita cost of healthcare. David Kindig and Greg Stoddart first defined population health in 2003 as: ‘health outcomes of a group of individuals, including the distribution of such outcomes within the group.’ (Kindig D, Stoddart G. “What Is Population Health?” Am J Public Health. March 2003;93(3):380-383.)”

Dorman-Rodriguez goes on to say that “the definition did not include the cost or provider intervention aspects of healthcare. The evolution of the term over the last 10 to 12 years indicates there is not one specific definition that is universally recognized. It appears, however, that the concept of investment/cost and provider intervention/influence is likely to be included. In contrast, the terms public health and community health have traditionally meant a focus on the improved health of a population. The WHO defines public health broadly as ‘all organized measures (whether public or private) to prevent disease, promote health and prolong life among the population as a whole.’ The CDC Foundation defines public health as being ‘concerned with protecting the health of entire populations.’ Community health is often seen as a field within public health, focusing on the health of a particular population group that has common characteristics, such as culture, work, physical traits, geography or other demographics. All three terms are likely to evolve in their respective meanings given the current emphasis on improving healthcare outcomes.”  

Finally, Neil Smiley, CEO/Founder of Loopback Analytics has this to say: “Population health is a health improvement strategy for risk-based entities, such as managed care plans, self-insured employers and accountable care organizations that are financially responsible for clinical and economic outcomes of beneficiaries under their care. Population health competencies include analytics to proactively identify individuals with shared characteristics, such as chronic conditions, payer classifications, patient demographics and other risk factors. Once a population of interest has been identified, individuals are matched with interventions to manage health risk, with a feedback loop to measure clinical and economic efficacy. “

Smiley states that “community health is defined by local geography, such as a town, city or county. Communities typically include many risk-based entities, each operating their respective population health strategies. Whereas population health is often focused on clinical interventions, community health addresses non-clinical interventions, such as social services, transportation, housing and education provided by non-profits and community-based organizations. Public health spans both risk-based entities and communities with a focus on clinical research, health policy, regulations and quality and safety standards. Public health encompasses environmental factors that can impact the health of a population, such as infectious disease control (Centers for Disease Control and Prevention), air and water quality (Environmental Protection Agency) and safety of the food supply (U.S. Food & Drug Administration). Ideally, population, community and public health initiatives work together to continuously improve healthcare delivery and outcomes. “

More information about Population Health News is available at www.PopulationHealthNews.com