Cigna Study: More Stressed + Less Rested + Less Family & Friends Time = America

Cigna has released their 2019 360 Well Being Survey: Well and Beyond, a 15-page report “that explores perceptions of well-being across five key indicators – physical, family, social, financial and work – in 22 countries, including the United States.” Their findings indicate applicable measure for the U.S. are all getting worse – not better. Jose Quesada, Cigna’s Chief Medical Officer, International Markets tells us “we’re seeing high incidences of stress, poor sleep quality and less time connecting with loved ones, which all can have a profound impact on one’s physical health.”

Overall the study found "the global well-being index remained largely steady at 62.0 points, closer to 2017 levels, with a marginal improvement from 2018’s decline;" and that "geographically, India, Saudi Arabia, Nigeria and Indonesia showed the strongest improvement in overall wellness with a rise of between 2.1 and 4.4 points, while the US, New Zealand, Taiwan and Singapore showed slight drops, with New Zealand reporting the largest fall." 

The survey results for Americans include:

• Only 28% reported being at a healthy weight
• 33% know their Body Mass Index (BMI)
• 60%+ know their blood pressure
• Four of five Americans report feeling stressed
• Only 25% report employer assistance/support f in managing stress – down 17% from 2018
• 61% said their employer did not provide or sponsor any workplace wellness program
• Only 35% report they get sufficient sleep at night, down six points from 2017
• 32% report having “good quality sleep,” down eight points from 2017
• 45% attested to feeling excellent/very good about the amount of time spent with family, compared to 51% in 2017
• 62% of Americans spend sufficient time with friends, down five points from 2018

Healthcare Incumbents: Watch Your Sides as Well As Your Back For Disruptions

By Clive Riddle, March 22, 2019 

Reuters reports that “United Parcel Service Inc wants to get beyond U.S. doorsteps with a new push into healthcare.” They tell us “the world’s largest package delivery firm is preparing to test a U.S. service that dispatches nurses to vaccinate adults in their homes, Reuters has learned, as the company and its healthcare clients work to fend off cost pressures and competitive threats from Amazon.com.” 

Deloitte, in a recent paper on the Health Plan of Tomorrow, that is the subject of an upcoming webinar, asks who will win the future of healthcare and health insurance: incumbents or disrupters> They tell us that “incumbents’ decisions will determine wither disrupters will be willing to partner with them in the transformation or compete and disrupt their business models.” 

Disrupters and Incumbents, it seems, are relative terms. We often think of disrupters as startups, and incumbents as established companies. But clearly the terms apply to lines of business, as opposed to the business as a whole. So UPS the incumbent in package delivery can become a disrupter in healthcare. Existing healthcare incumbents need to not just watch their backs for startup disrupters seeking to pass them by, but watch their sides as well, from established disrupters. 

UPS has touted healthcare supply chain management for some time. Then in May last year they announced “Chris Cassidy as vice president of global healthcare logistics strategy. He is charged with leading and advancing UPS’s commitment to the healthcare supply chain, which remains a top company priority….Cassidy possesses 18+ years of global logistics and business change experience, holding various supply chain operations, strategy and transformation roles at global healthcare company GlaxoSmithKline (GSK).”

Reuters states that “the world’s largest package delivery firm is preparing to test a U.S. service that dispatches nurses to vaccinate adults in their homes, Reuters has learned, as the company and its healthcare clients work to fend off cost pressures and competitive threats from Amazon.com UPS did not disclose which vaccines it would be using in the project, but drug and vaccine maker Merck & Co told Reuters it is looking at partnering with the company for the initiative.” 

How far and how disruptive this plays out to be remains to be seen, but the transformative potential is there for more healthcare to be transferred from provider settings to the home. And then of course, when patients with more complex needs have to set foot outside the home into provider settings and back again, there is now the disruption taking place with UberHealth and Lyft Healthcare, who have been around long enough to be incumbents in personal transportation but now disrupt in healthcare transportation. The Uber and Lyft disruption is being further fueled by SDOH (Social Determinants of Health), causing CRM incumbent Salesforce to recently roll “out new ‘social determinant’ tool for patients who need other kinds of help, like a ride to the doctor.” And now Uber and Lyft face startups like Veyo solely focusing on peer-to-peer healthcare transportation. 

So who is an incumbent and who is a disruptor? While answering be sure to watch your sides as well as your backs.

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week: 

Government watchdog: Costly air ambulances can put patients at 'financial risk'

Air ambulances can be life-saving for critically ill patients who need to get to a hospital quickly, but they can also put patients in financial risk, according to a study conducted by the Government Accountability Office (GAO).

The Hill

Friday, March 22, 2019 

Health Plans For State Employees Use Medicare's Hammer On Hospital Bills

States. They're just as perplexed as the rest of us over the ever-rising cost of health care premiums.

NPR

Thursday, March 21, 2019 

Fentanyl-Linked Deaths: The U.S. Opioid Epidemic's Third Wave Begins

Men are dying after opioid overdoses at nearly three times the rate of women in the United States. Overdose deaths are increasing faster among black and Latino Americans than among whites. And there's an especially steep rise in the number of young adults ages 25 to 34 whose death certificates include some version of the drug fentanyl.

NPR

Thursday, March 21, 2019

Bayer shares slide after latest Roundup cancer ruling

Shares in Germany’s Bayer’s fell more than 12 percent on Wednesday after a second U.S. jury ruled its Roundup weed killer caused cancer.

Reuters

Wednesday, March 20, 2019 

Ohio accuses UnitedHealth's OptumRx of drug overcharges in lawsuit

Ohio’s attorney general on Monday said he had filed a lawsuit against UnitedHealth Group Inc’s OptumRx unit, saying the pharmacy benefit manager had overcharged the state nearly $16 million for prescription drugs.

Reuters

Tuesday, March 19, 2019 

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

An Innovative Acquisition for HCA

by Clive Riddle, March 15, 2019

Nashville-based HCA Healthcare has just announced that HCA will become the majority owner of the parent company of Galen College of Nursing, one of the largest educators of nurses in the nation.  HCA, of course, is one of the nation’s leading providers of healthcare services, comprising 185 hospitals and approximately 1,800 sites of care.

The announcement states that “The innovative new strategic partnership brings together two of the top nursing organizations in the country in order to increase access to nursing education and provide career development opportunities in nursing to improve patient care. With 94,000 registered nurses, HCA Healthcare is one of the largest employers of nurses in the country, with nurses holding positions from bedside caregivers in a variety of healthcare settings to leadership positions throughout the organization.”

Hospital funding and partnerships for nursing education certainly isn’t new. For example, here’s a website providing a state-by-state listing of 123 such hospital arrangements, which they acknowledge is only a partial list.

But what is innovative is to move beyond strategic partnerships with an outright acquisition.  Not only does the move create synergy for HCA’s staff career development, it should also serve as a burse recruitment tool for HCA, in an environment where hospitals compete for nursing staffing.

Furthermore, this perhaps signals that healthcare organizations will continue to peek and climb further out-of-the-box with acquisitions beyond traditional M&A of other healthcare providers.  Deloitte, in a discussion of the Health Plan of Tomorrow that is the subject of an upcoming webinar, writes that "buy, share or build? is a question many health plan leaders will face as they begin this transformation journey. And accessing these capabilities may require an industry-agnostic approach. As new players break the rules around who plays what role in the industry, health plans may need to turn to want might today be considered strange bedfellows: competitors, providers, manufacturers, technology companies, transactional sector companies, and/or other industries for answers."

The same holds true for healthcare providers as for health plans.  And so HCA and Galen seem to be pairing up on a transformative journey as well.

We’re #1! Healthcare Leads the Way in Travel and Wait Times

by Clive Riddle, March 8, 2019

Altarum recently released a six page report: Travel and Wait Times are Longest for Health Care Services and Result in an Annual Opportunity Cost of $89 Billion” which compiled data for the Bureau of Labor Statistics’ American Time Use Survey. Their study found “waiting times for health care services in particular were much higher than the other service categories, over twice the length of the next closest, veterinary services.”

Alturm reports that “the time spent traveling and waiting for health care services on a day when an individual got care was over 50% of the time spent actually receiving care—45 combined minutes traveling & waiting vs. 76 minutes receiving care (data not shown). Among all time spent on health care related activities (self-care, assisting others, receiving professional care, waiting and travel), travel and waiting for care accounted for 19.7% of the total time spent, on average over two minutes a day or an hour per month.”

Altarum outs a price tag and all this traveling and waiting: “When quantified by applying an individual’s hourly wage as an approximate measure of the economic cost of time spent, travel and waiting costs averaged $89 billion dollars annually from 2006 thru 2017.”  But the really sad news is that “despite significant investments in the United States over this period in improving access to health care through better insurance, the use of innovative delivery systems, and advances in digitizing health care records and automating administrative processes, travel and wait times show no discernable improvements in these data from 2006 to 2017.” 

Vitals, recently acquired by WebMD, has annually released a report on physician wait times, Their most recent report tells us that where you’re traveling to or from makes a big difference in physician waits. Wisconsin has the shortest average wait time of 13 minutes 23 seconds while Alabama comes in as the longest with 22 minutes 19 seconds.  Your wait in Seattle averages 14 minutes 38 seconds (second shortest city– three seconds longer than Milwaukee) while a wait in El Paso comes in as the longest at 26 minutes 50 seconds. 

Vitals also reports that “30 percent of people reported they’ve walked out of an appointment due to long waits. What’s more, 1 in 5 report they’ve changed doctors because of long wait times.”

Four Questions for Aaron Fulner, Senior Director, Product Marketing, Edifecs, Post-Webinar Interview:

By Claire Thayer, March 8, 2019

Recently, Aaron Fulner, Senior Director, Product Marketing with Edifecs, participated in a Healthcare Web Summit webinar discussion that illustrates how health plans participating in government-sponsored programs, such as Medicare Advantage, can take off the blindfold and improve risk-adjusted revenue accuracy as well as value-based program performance. If you missed this informative webinar presentation, “No More Blindfolds: Improving Value-Based Outcomes and Optimizing Revenue,” we invite you to watch the On-Demand version here.

After the webinar, we interviewed Aaron on four key takeaways from the discussion:

1.  Can you explain the impact on provider satisfaction as a result of this approach?

Aaron Fulner: By enabling a health plan to be more targeted with their requests, and reducing the overall volume of requests, provider abrasion can be reduced.

2. There's a lot of discussion in the industry around A.I. and machine learning.  What are some of the trends in AI that Edifecs is particularly excited about?

Aaron Fulner: In discussions with our partners, we are seeing a lot of industry excitement around the ability to stem the tide of opioid abuse and also the application of AI and ML technologies to more accurately identify targets to prevent disease progression and readmissions, improve patient medication adherence, project value-based care outcomes, improve risk-adjusted revenue integrity and Stars/HEDIS scores.

3. What are some of the challenges of having claims and clinical data in separate siloes?

Aaron Fulner: When plans house claims and clinical data in separate siloes it renders any correlation between the two datasets, at worst, impossible and, at best, unusable or irrelevant given the lag time and the spreadsheet-based process employed by most plans. When this occurs, plans miss out on additional dimensions of data that can be used to improve intervention planning and value-based program performance, not to mention enhanced risk-adjusted revenue integrity.

4. In your Food for Thought discussion, you mentioned importance for good insight into submitted encounter data and how this relates to the risk scores and subsequent reimbursement received back from CMS. Can you elaborate more here?

Aaron Fulner: Without complete visibility into the encounter lifecycle, managed care plans can lose sight of the volume and quality of claims submitted vs encounters submitted. Additionally, especially for managed Medicaid plans operating in states with stringent timeliness and completeness requirement, there can be significant penalties for not meeting those standards. Also, and this paramount, plans can lose sight of exceptions/rejections coming back from CMS for Medicare Advantage. Poor visibility and a lack of prioritized workflows can negatively impact optimal risk scoring and therefore reduce risk-adjusted revenue integrity.

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week: 

Medicare Trims Payments To 800 Hospitals, Citing Patient Safety Incidents

Eight hundred hospitals will be paid less by Medicare this year because of high rates of infections and patient injuries, federal records show.

Kaiser Health News

Friday, March 1, 2019 

CMS considers tossing hospital star ratings methodology

The CMS is considering scrapping the model it uses to assign hospital star ratings, signaling a big shift from the agency's stance just seven months ago.

Modern Healthcare

Thursday, February 28, 2019 

Did some pharma execs offer misleading testimony to a Senate committee?

During Tuesday’s Senate hearing on drug pricing, each of the seven pharma execs insisted their companies have never withheld samples from generic rivals, a step that has raised concerns about unfairly thwarting competition.

Stat News

Thursday, February 28, 2019 

Anthem Says Bid to Save $49 Billion Deal Was ‘Cut Off at Knees’

Cigna Corp. officials did everything they could to sabotage a $48.9 billion merger with Anthem Inc., including refusing to consider divestitures that would have helped the deal win regulatory approval, Anthem’s general counsel told a judge.

Bloomberg

Tuesday, February 26, 2019 

U.S. Judge Will Not Block Amazon-Berkshire-JPMorgan Health Venture's New Hire

The decision by U.S. District Judge Mark Wolf in Boston came in a lawsuit closely watched in the industry for clues about the future plans of the venture, which was announced in January 2018 with a goal of lowering healthcare costs.

NY Times

Monday, February 25, 2019

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

Stakeholders Pick Rx Costs & Pricing as Topic With Greatest Impact This Year

Clive Riddle. February 25, 2019 

MCOL and Healthcare Web Summit jointly sponsored a survey of healthcare professionals on which of three key topics would have the greatest impact, and what stakeholders would be economic winners and losers during this year. Here’s a summary of the findings: 

Participants were asked to respond to three items:

 1.  Which one of these three topics will have the greatest impact on stakeholders in 2019? 

• Medicaid Funding and Eligibility
• Pharmaceutical Costs and Pricing
• Value Based Care Initiatives  

2. Please project who you think the economic winners and losers for 2019 will be. Who do you think will be economically better off, the same or worse off by this time next year: Consumers; Employers; Health Plans; Hospitals; Physicians; Pharmaceutical 

3. Please indicate your perspective 

• Purchaser (Health Plan, Employer, TPA, Agent, PBM)
• Provider (Hospital, Physician, Pharmaceutical, Other Providers)
• Vendor or Other  

Stakeholders overall (51.7%) selected Pharmaceutical Costs and Pricing as the topic having the greatest impact in 2019, compared to Value Based Care Initiatives (31.7%) and Medicaid Funding and Eligibility (16.7%). 

Providers (54.5% and Vendor/Other (52.0%) respondents both selected Rx as the top choice, but Purchasers selected Value Based Care (53.8%) slightly over Rx (46.2%).  More Providers selected Medicaid (27.3%) over Value Based care (27.3%), while Vendors chose Value Based Care (32.0%) over Medicaid (16.0%)

More respondents (45.2%) overall selected Pharmaceutical Stakeholders vs. other categories as being better off in 2019  Health Plans came in second for being better off at 33.9%. Hospitals reflected the least optimism, with just 18.0% viewing them as better off this year. 

Hospitals thus were viewed with the most pessimistic outlook, with 65.2% feeling they will be worse off this year. Physicians were next in line, at 56.5%.Health Plans and Pharmaceutical stakeholders tied for the least pessimism, each with 21.7% viewing them as worse off this year. 

It should be noted that these levels of pessimism have generally declined from last year. The top three choices for being worse off in last year’s epoll all dropped: Consumers from 68.&% in 2018 to 38.7% in 2019; Hospitals from 57.2% in 2018 to 49.2% in 2019; and Physicians from 50.8% in 2018 to 29.0% in 2019. 

Purchasers had a rosier view for Consumers and Pharmaceutical stakeholders, with 46.2% saying Consumers would be better off, compared to 23.7% of Providers and 23.1% of Vendors/Others; and 61.5% of Purchasers saying Pharmaceutical would be better off compared to 39.1% of providers and 42.3% of Vendors/Others. 

Providers saw themselves in a worse position for 2019 compared to other respondents. 65.2% of Providers said Hospitals would be worse off, compared to 38.5% of Purchasers and40.0% of Vendors/Others. 56.5% of Providers said Physicians would be worse off, compared to 30.8% of Purchasers and 34.0% of Vendors/Others.

The End of Health Insurance

By Kim Bellard, February 20, 2019 

Paul Tullis has an interesting article in Bloomberg about how self-driving cars might kill auto insurance “as we know it.” After all, if human error is responsible for 90% of auto accidents, and those humans are taken out of the equation, what’s left to insure? 

Many people don’t think much about autonomous vehicles, but Mr. Tullis reports that Michelle Krause, an Accenture insurance expert, says that their impact on auto insurance “…comes up in every strategic conversation” within insurers. 

It made me wonder: what would it take to kill health insurance…as we know it? 

Let’s think about what health insurance is for: Averting losses, Budgeting and Subsidization. I’ll take these in reverse order: 

Subsidization

Health insurance is not the right mechanism to do wealth transfers. It’s not what it is designed for, and it is not what it is good at. 

Budgeting

We need to stop expecting health insurance help us budget for expenses that, in any other aspect of our lives, we’d be paying for ourselves. 

Averting losses

Even if we accomplished both of the above, health insurance would still probably not look too different than it does now. Our healthcare system would still have catastrophic expenses, and we’d be looking for protection against them. We’d still have networks, negotiated prices, and tensions between those who deliver health care and those who pay for it. 

We have to attack the root problem, which is not just the prices, but also the costs. Some examples of how this can happen: 

Virtual care will allow us to get advice and even treatment where/when we want it, and increasing reliance on A.I. rather than human expertise will both cut direct costs and, hopefully, unnecessary treatments. 

DIY health is a trend that has promise to greatly impact costs. Whether it is hearing aids, insulin pumps, or “biohacking,” we’re starting to move away from reliance on expensive solutions from traditional healthcare sources to cheaper, even home-grown solutions.

Robots, right now, fall within the “more technology, more expensive” ethos of our current healthcare system, but that cannot last. Robots will get smarter and more versatile, we’ll get better at building them, and they’ll allow us to take costs out of healthcare in the way they’ve taken costs out of manufacturing. 

Hospitals are, as I’ve stated previously, “19th century institutions operating under 20th century business models in the 21st century.”

Prescription drugs are one of the biggest pain points for consumer healthcare spending. Part of this looks a lot like greed, part of it is the U.S. not negotiating prices as other countries do, and part of it reflects the long pipeline for drug discovery and development. The former two are more price issues than cost ones, but the latter one is one 21st century technology can help address.

We shouldn’t accept the status quo; not in how care is delivered, not in how much care costs, and certainly not in how it is financed. If auto insurers are discussing merging with automakers, Apple is thinking about its post-iPhone era, Ikea wants to become the “Amazon of furniture,” and Amazon’s own future may be more about cloud computing than retail, then certainly health insurers should be looking to a very different future.

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

Speaking Tooth to Power: J.D. Power Releases Dental Plan Satisfaction Report

By Clive Riddle, February 15, 2019 

J.D. Power has released their annual Dental Plan Satisfaction Report for 2018, which finds that “overall dental plan customer satisfaction has improved by 5 points (on a 1,000-point scale) to 775 from 2017.”  

J.D. Power reports that “DentaQuest (805) ranks highest, performing particularly well in the customer service, communication, and cost factors. HumanaDental (784) ranks second and myCignaDental (782) ranks third.” 

And just who is DentaQuest, who has now been ranked first for the third year in a row? They tout that they “manage dental and vision benefits for more than 27 million Americans and provide direct care to patients through our network of more than 85 oral health centers in five states,” and that they provide “dental solutions for Medicaid and CHIP, Medicare Advantage, small and large businesses and individuals throughout the U.S.” 

Steve Pollock, president and chief executive officer of DentaQuest.  Pollock says the company’s continued investment in technology and person-centered care solutions as reasons for the high customer satisfaction. “While it is incredibly gratifying to see the high satisfaction among our members, we know that true success means ensuring everyone has access to quality oral health care,” Pollock said. “Our Preventistry™ platform, which is a prevention-based approach that defines oral health as more than visits to the dentist, will ultimately improve oral health for all.”

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week: 

Poll: Just 13 percent want 'Medicare for all' if it means end of private insurance

A new poll finds that about only one in 10 registered voters want the equivalent of Medicare for all if it means abolishing private health insurance plans.

The Hill

Friday, February 8, 2019

Johnson & Johnson to disclose drug list prices in TV ads

Johnson & Johnson said Thursday it will start showing the list price of its prescription drugs in television ads, making it the first company to do so.

The Hill

Thursday, February 7, 2019

Greenway Health to pay $57M to settle claims it falsified EHR certification

Tampa, Florida-based electronic health record (EHR) company Greenway Health has agreed to pay $57.25 million to resolve claims it falsely obtained EHR certification and incentivized clients in exchange for promoting or recommending its product to prospective new customers.

FierceHealthcare

Thursday, February 7, 2019

Humana expects more than 700,000 will drop out of Part D plans as market competition heats up

Humana is expected to bleed a significant number of members from its Part D plans, as greater competition has chipped away at the company’s market share.

FierceHealthcare

Wednesday, February 6, 2019

Amazon health venture taps former Zocdoc technology chief as new CTO

The new healthcare venture started by Amazon, JPMorgan Chase and Berkshire Hathaway, which still does not have a name, continues to add notable executives to its roster with the addition of Serkan Kutan, the former Zocdoc chief technology officer, as its new CTO.

FierceHealthcare

Tuesday, February 5, 2019

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members

Prior Authorizations Getting No Love From Physicians

by Clive Riddle, February 7, 2019 

Let’s examine something widely unloved, as we find ourselves just one week from that day of love known as Valentine’s Day, 

In the 1980’s and 90’s, managed care was largely perceived by physicians as a vehicle running on two unpopular characteristics: capitation and prior authorizations. Two decades into the new century, managed care is much more nuanced. But both characteristics have evolved and survived in various forms. 

And physicians still don’t love prior authorizations. Just ask the AMA, who just released survey results on this topic. AMA findings of physicians responses included: 

• 91% say that prior authorizations programs have a negative impact on patient clinical outcomes.
• 65% report waiting at least one business day for prior authorization decisions from insurers 
• 26% said they wait three business days or longer for decisions
• 91% said the prior authorization process delays patient access to necessary care
• 75% report that prior authorization can at least sometimes lead to patients abandoning a recommended course of treatment.
• 86% said the burdens associated with prior authorization were high or extremely high
• 88% believe burdens associated with prior authorization have increased during the past five years.
• Every week a medical practice completes an average of 31 prior authorization requirements per physician
• These weekly authorizations take 14.9 hours of physician and staff time to complete.
• 36% employ staff members who work exclusively on tasks associated with prior authorization 

The AMA reports that “In January 2018, the AMA joined the American Hospital Association, America’s Health Insurance Plans, American Pharmacists Association, Blue Cross Blue Shield Association and Medical Group Management Association in a Consensus Statement outlining a shared commitment to industry-wide improvements to prior authorization processes and patient-centered care.

Taking a Peek Inside The Profit Margins and Administrative Expenses in BCBS World

By Clive Riddle, February 1, 2019

Mark Farrah Associates has released analysis of major Blue Cross Blue Shield plan profitability performance, comparing year-over-year results as of September 30, 2018. They note that “BCBS plans with over $10 million in revenue at third quarter 2018 include Anthem, Health Care Service Corp. (HCSC), Blue Shield of CA, BCBS of Michigan Group, Guidewell Mutual Holding Group, Independence Blue Cross (IBX), and Highmark.  These industry leaders reported positive, and in most cases, improved profitability between 3Q17 and 3Q18.”

Their findings include:

• BCBS of Michigan’s “profit margin increased nearly 3% from 5.43% in 3Q17 to 8.31% in 3Q18 due to premium growth that outpaced the increase in medical expenses and an income tax credit taken in 2018.” 
• Guidewell’s “profit margin grew to 5.33% from 4.71% in September of 2017, primarily due to increased premium revenue, which outpaced the growth of expenses.”
• Independence Blue Cross (IBX) “reported the largest improvement with a profit margin of 2.29% as of September 30, 2018, up from 0.30% in September of 2017 due in part to increased premium revenue and reduced medical costs per member.”
• Blue Shield of CA “increased its profit margin to 3.36% from 2.81% due in part to lower medical costs per member.”
• Health Care Service Corp (HCSC) “reported the largest profit margin of 14.21% for 3Q18, up from 6.10% in 3Q17 due to an increase in premium revenue and a large income tax credit.”
• Highmark’s “profit margin of 6.62% in 3Q18 fell slightly from 7.11% in 3Q17 due in part to increased administrative spending.” 
• Anthem’s “3Q18 profit margin of 5.66% improved from 4.52% a year ago due in part to a combination of slightly lower medical expenses and higher premium revenue per member.”

Being administrative expenses are such an important factor in plan profitability, it’s worthwhile to examine BCBS performance in this arena. Sherlock Company annually examines BCBS plans with respect to their administrative expenses, with their most recent report published in summer 2018. 

Results aren’t published by plan, but rather are aggregated for the BCBS sector. Overall, administrative costs increased 5.9% for 2017. Their 2017 median benchmark findings include: 

• Sales and Marketing: $8.79 pmpm; 2.0% of premium
• Medical and Provider Management: $4.44 pmpm; 1.3% of premium
• Account and membership Administration: $14.66 pmpm; 4.0% of premium
• Corporate Services: $6.27 pmpm; 1.6% of premium
• Total administration: $34.99 pmpm; 8.9% of premium
• Total administration pmpm by product line:  Commercial HMO $48.87; Commercial PPO $43,85; Commercial ASO $27.13; Medicare Advantage $97.63; Medicaid $43.22
• Total administration % of premium by product line:  Commercial HMO 8.6%; Commercial PPO 10.1%; Commercial ASO 7.7%; Medicare Advantage11.3%; Medicaid 9.3%

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week: 

Cigna reports strong fourth quarter, shrugs off potential impact of drug rebate rule proposal

Insurance giant Cigna posted strong year-end results following its merger with Express Scripts. Cigna pulled in $49 billion in revenue for the year, a 15% increase over 2017. Its income from operations was $3.6 billion or $14.22 a share, up more than 30% over $2.7 billion, or $8.77 a share, in 2017.

Fierce Healthcare

Friday, February 1, 2019

Lawsuit Details How The Sackler Family Allegedly Built An OxyContin Fortune

The first nine months of 2013 started off as a banner year for the Sackler family, owners of the pharmaceutical company that produces OxyContin, the addictive opioid pain medication. Purdue Pharma paid the family $400 million from its profits during that time, claims a lawsuit filed by the Massachusetts attorney general.

NPR

Friday, February 1, 2019

Trump officials make new moves to lower drug prices

A new proposal from the Trump administration is targeting secretive rebates between drug manufacturers, insurers and pharmacy benefits managers as a way to lower drug prices for Medicare.

The Hill

Friday, February 1, 2019

In a heated court hearing, Atul Gawande’s new company and Optum fight to keep their own secrets

The executive in the middle of an intense legal fight between UnitedHealth Group and the new health venture helmed by Dr. Atul Gawande testified Wednesday that he did not attempt to steal trade secrets from the United subsidiary, Optum, and was taken aback by the ferocity of the legal allegations against him.

Stat News

Thursday, January 31, 2019

VA Issues New Rules Expanding Access to Private Care

The Department of Veterans Affairs announced new rules greatly expanding the amount of medical care provided to military veterans through the private sector, potentially costing billions of dollars and fueling debate over the privatization of the health services under the Trump administration.

Wall Street Journal

Thursday, January 31, 2019

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

Trade secrets case involving Atul Gawande’s company raises a key question: Who counts as a threat? 

Before last month, David W. Smith was a midlevel executive at the sprawling health services company Optum. He’d never met the company’s CEO, according to a sworn affidavit, or cracked into a senior leadership team that includes about 200 people. He was basically a strategy consultant.

Stat News

Friday, January 25, 2019

Drug-Pricing Policies Find New Momentum As ‘A 2020 Thing’ 

The next presidential primary contests are more than a year away. But presumed candidates are already trying to stake a claim to one of health care’s hot-button concerns: surging prescription drug prices.

Kaiser Health News

Friday, January 25, 2019

More Americans Lack Health Insurance, New Survey Finds 

The number of Americans without health insurance jumped to its highest level in four years, new figures show, a trend that pits Democrats who say the White House is sabotaging the Affordable Care Act against Republicans who blame high premiums under the law for locking people out of coverage.

Wall Street Journal

Thursday, January 24, 2019

Trump calls for cracking down on surprise medical bills 

President Trump on Wednesday spoke out against surprise medical bills that patients often cannot afford, highlighting an issue that has received bipartisan concern in Congress.

The Hill

Thursday, January 24, 2019

U.S. insulin costs per patient nearly doubled from 2012 to 2016: study 

The cost of insulin for treating type 1 diabetes in the United States nearly doubled over a five-year period, underscoring a national outcry over rising drug prices, according to a new analysis shared with Reuters.

Reuters

Wednesday, January 23, 2019

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

Do Unto Robots As You…

by Kim Bellard, January 23, 2019

It was very clever of The New York Times to feature two diametrically different perspectives on robots on the same day: Do You Take This Robot… and Why Do We Hurt Robots? They help illustrate that, as robots become more like humans in their abilities and even appearance, we’re capable of treating them just as well, and as badly, as we do each other. 

We’re going to have robots in our healthcare system (Global Market Insights forecasts assistive healthcare robots could be a $1.2b market by 2024), in our workplaces, and in our homes. How to treat them is something we’re going to have to figure out. 

Written by Alex Williams, Do You Take This Robot… focuses on people actually falling in love with (or at least prefering to be involved with) robots. The term for it is “digisexual.” 

As Professor Neil McArthur, who studies such things, explained toDiscover last year: We use the term ‘digisexuals’ to describe people who, mostly as a result of these more intense and immersive new technologies, come to prefer sexual experiences that use them, who don’t necessarily feel the need to involve a human partner, and who define their sexual identity in terms of their use of these technologies.

And it’s not just about sex. There are a number of companion robots available or in the pipeline, such as: 

• Ubtech’s Walker. The company describes it as: “Walker is your agile smart companion — an intelligent, bipedal humanoid robot that aims to one day be an indispensable part of your family.”
• Washington State University’s more prosaically named Robot Activity Support System (RAS), aimed at helping people age in place.
• Toyota’s T-HR3, part of Toyota’s drive to put a robot in every home, which sounds like Bill Gates’ 1980’s vision for PCs. 
• Intuition Robot’s “social robot” ElliQ. 
• A number of cute robot pets., such as Zoetic’s Kiki or Sony’s Aibo.

All that sounds very helpful, so why, as Jonah Engel Bromwich describes in Why Do We Hurt Robots?, do we have situations like: A hitchhiking robot was beheaded in Philadelphia. A security robot was punched to the ground in Silicon Valley. Another security bot, in San Francisco, was covered in a tarp and smeared with barbecue sauce…In a mall in Osaka, Japan, three boys beat a humanoid robot with all their strength. In Moscow, a man attacked a teaching robot named Alantim with a baseball bat, kicking it to the ground, while the robot pleaded for help.

Cognitive psychologist Agnieszka Wykowska told Mr. Bromwich that we hurt robots in much the same way we hurt each other. She noted: “So you probably very easily engage in this psychological mechanism of social ostracism because it’s an out-group member. That’s something to discuss: the dehumanization of robots even though they’re not humans.”

Robots have already gotten married, been granted citizenship, and may be granted civil rights sooner than we expect. If corporations can be “people,” we better expect that robots will be as well.

We seem to think of robots as necessarily obeying Asimov’s Three Laws of Robotics, designed to ensure that robots could cause no harm to humans, but we often forget that even in the Asimov universe in which the laws applied, humans weren’t always “safe” from robots. More importantly, that was a fictional universe.

In our universe, though, self-driving cars can kill people, factory robots can spray people with bear repellent, and robots can learn to defend themselves. So if we think we can treat robots however we like, we may find ourselves on the other end of that same treatment.

Increasingly, our health is going to depend on how well robots (and other AI) treat us. It would be nice (and, not to mention, in our best interests) if we could treat them at least considerately in return.

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

Peering Into the Perpetual State of Crisis in Healthcare?

by Clive Riddle, January 18, 2019 

This week, Gallup released data from their annual healthcare poll, which found “Seventy percent of Americans describe the current U.S. healthcare system as being "in a state of crisis" or having "major problems." This is consistent with the 65% to 73% range for this figure in all but one poll since Gallup first asked the question in 1994.” The point out the only time the figure dipped was in 2001, just after the September 11^th attacks, when terrorism was top of mind, and “just” 49% of the public felt U.S. healthcare was in crisis or having major problems. 

The first year Gallup took the poll – in 1994, 69% held we were crisis bound, and 30% said we were just experiencing minor problems. At the end of 2018, the number virtually hasn’t shifted: 70% crisis and 30% minor problems. 

But while U.S. healthcare may have been besot in a crisis-soaked state of affairs during the past decades, it appears that crisis, like beauty, is in the eye of the beholder and the beholder’s lens is shaped by politics.

Democrats were in the 70-84% crisis range in the post 9/11 Bush years. Upon Obama’s election, the Democrat crisis levels dropped  (from 84% to 59% from 2007-2014) and the Republican levels rose (from 58% in 2007 to 80% in 2016); meeting at similar levels as the ACA passed and early implementation rolled out.  Then with Trump, Democrats soared from 63% to 84% while Republicans plummeted from 80% to 56%. 

The prediction for public perception of healthcare crisis entering the next decade and another presidential election year? Perpetual, and Political.

Two New Milliman White Papers On MSSP Pathways to Success:

Final Rule Revisions and Data Mining Tactics to Reduce Population Costs

By  Clive Riddle, January 11, 2019

Milliman's Noah Champagne, Charlie Mills, and Jason Karcher published a white paper on January 7th: “Pathways to Success” MSSP final rule: Key revisions to the proposed rule, which was preceded with a paper on January 4th by Kathryn V. Fitch, Adam Laurin, and Michele M. Berrios: “Pathways to Success” MSSP final rule: Faster movement to downside risk increases focus on reducing population costs.

The final rule isn’t a radical departure from the proposed rule, but as Champagne, Mills and Karcher summarize, these are the key changes from the proposed rule:

• Levels A and B maximum shared savings percentage increased from 25% to 40% while Levels C and D increased from 30% and 40%, respectively, to 50%.
• Less strict definition of low-revenue ACO: Now ACOs are considered “low revenue" if their historical Medicare Part A and B fee-for-service (FFS) revenues are less than 35% of the total historical expenditures for their assigned Medicare beneficiaries. 
• High-revenue ACOs currently participating in MSSP Track 1+ will be allowed an exception to renew for one agreement period in Level E of the BASIC track.
• New, low-revenue ACOs, not experienced with performance-based Medicare ACO initiatives, will be allowed to remain in Level B (one-sided risk) for an additional performance year. 
• The final rule retains the proposed 3% cap on benchmark increases for risk scores. However, ACOs’ benchmarks will be fully adjusted for changes in the relative risk score when there is a decrease from the baseline year to the performance year instead of applying a 3% reduction cap as originally proposed.
• The final rule still uses a maximum regional cost blending percentage of 50%, but finalizes a more gradual phase-in of the maximum blending percentage from the proposed rule for ACOs with historical expenditures above their regional service areas.
• ACOs participating in the July to December 2019 performance period and selecting prospective assignment will be assigned beneficiaries based on October 2017 to September 2018 experience data.

Champagne, Mills and Karcher conclude that “CMS introduced the MSSP with the goal of transitioning ACOs to becoming risk-bearing entities and improving the quality of care provided to Medicare FFS beneficiaries. With the MSSP final rule, CMS has reaffirmed its commitment to these goals while offering greater shared savings potential to ACOs participating in the BASIC track and making the BASIC track available to a broader set of ACOs. The effect of these rule changes on specific ACOs will vary significantly depending on an ACO’s size, region, cost and quality performance, and structure.”

Fitch, Laurin and Berrios remind us that “one of the hallmarks of the new MSSP rule is faster movement to downside risk. Under the current regulations, accountable care organizations (ACOs) can stay in an upside-only track for up to six years. The new rule requires some ACOs in the Basic Track to begin assuming some downside risk in year 3.”  They stat that “under the new rule, there will be a more urgent need for ACOs to reduce population costs,” and that “two major tactics are typically implemented by health plans and ACOs to reduce population costs” are demand management and supply management.

Their report “focuses on supply management and, in particular, data mining tactics that identify medically unnecessary services.” They advocate "several data mining tactics we have seen successful ACOs adopt to effectively guide strategies to reduce medically unnecessary services and in turn reduce the ACO’s total population costs." including:

• "For MSSP participants, the monthly Claim and Claim Line Feed (CCLF) data files provided by CMS should be routinely grouped and summarized into an actuarial cost model in order to evaluate cost drivers, identify potential targets for utilization reduction initiatives, track outcomes expected from key initiatives, and track overall costs compared to the ACO’s PMPY expenditure benchmark set by CMS."
• "After identifying potential services to target from the actuarial cost model, organizations need to evaluate whether the utilization and spend in a service category represents efficient or inefficient care with very little or very large opportunity for improvement."
• "ACOs must be able to target inefficient physician performance, which requires credible provider profiling. As with the benchmarking exercise described previously, physician profiling requires credible risk adjustment."
• "ACO should also consider data mining to identify leakage of services to providers outside of the ACO." 

Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week: 

Federal Shutdown Mostly Spares Health Coverage, But Other Issues Loom

As the partial government shutdown drags on, about 800,000 federal employees who work for the shuttered agencies — and their families — are facing the reality of life without a paycheck.

Kaiser Health News

Friday, January 11, 2019

As Congress returns, lawmakers rush to detail drug-pricing agendas

Chuck Grassley wasted little time this week in unveiling his drug-pricing agenda, attaching his name to a trio of bills that, as the new chair of the Senate Finance Committee, he is freshly empowered to advance.

Stat News

Thursday, January 10, 2019

Medicaid ‘Buy-In’ Could Be a New Health Care Option for the Uninsured

Even as calls for “Medicare for All” grow louder among Democrats in Washington, D.C., at least 10 states are exploring whether to allow residents to pay premiums to “buy in” to Medicaid, the federal-state health care program for the poor.

Pew Trust

Thursday, January 10, 2019

Health Care Industry Spends $30B A Year Pushing Its Wares, From Drugs To Stem Cell Treatment

Hoping to earn its share of the $3.5 trillion health care market, the medical industry is pouring more money than ever into advertising its products — from high-priced prescriptions to do-it-yourself genetic tests and unapproved stem cell treatments.

Kaiser Health News

Tuesday, January 8, 2019

At glitzy Vegas tech show, chronic-disease gadgets to take center stage

An exploding array of digital health companies will converge on Las Vegas this week to showcase the latest advances in using data and algorithms to try to solve the world’s toughest health problems.

Stat News

Monday, January 7, 2019 

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.

A Tour of 2019 Healthcare Predictions

By Clive Riddle, January 4, 2019 

We recently released our own 2019 healthcare prognostications, and now it’s time to take a tour of a selected healthcare weather forecasts for the year ahead, on a variety of fronts. 

First for a general overview, we stop at the PwC Health Research Institute’s 13th annual report on the year ahead, with six healthcare trends to watch in 2019: 

1. Connected health devices and digital therapies will become integrated into care delivery and the regulatory process for drug and device approvals, with several new products coming to market
2. Healthcare organizations will have to make major capital and training investments in artificial intelligence robotics, automation and data analytics in order to keep pace.
3. The 2017 Tax Cuts and Jobs Act will continue to create tax savings for healthcare organizations while creating new challenges. 
4. The healthcare industry is ready for a disruptor like Southwest, the budget airline provider was to that industry. 
5. The pace of healthcare private equity investment will accelerate 
6. Republican changes to the ACA will shift the law's winners and losers. Providers are on the losing end of most of these changes.

Also, providing an overall view is CareMore’s Sachin H. Jain in Forbes magazine with these: 10 Healthcare Industry Predictions for 2019:

1. Humanism and humanity in healthcare will make a real comeback.
2. The epidemic of loneliness will take center stage.
3. Medicare Advantage will be seen as a template for the healthcare system of the future
4. Quality measurement will focus on what happens in the exam room.
5. The health care industry will make progress on new models for drug pricing.
6. We will finally learn what Amazon, Berkshire Hathaway and JP Morgan are up to.
7. Tech companies will get into the health care delivery business.
8. More buzzwords: I’m not sure what language mashups we can expect next year, but rest assured they’ll generate plenty of conferences and spam emails.
9. Another unlikely, head-scratching mega-merger will occur.
10. We will all keep our new year’s resolutions: Each of us will lose fifteen pounds. We will all read a book a week. We’ll learn Mandarin, remember to call our grandparents, wash the dog more often and write that mystery novel about the doctor who uncovers a crime syndicate operating out of the hospital cafeteria 

One more overview entry on the tour comes from the 2019 HCEG Top 10 by the Healthcare Executive Group 

1. Data & Analytics: Leveraging data (especially clinical) to manage health and drive individual, provider and payer decisions.
2. Total Consumer Health: Improving members’ overall medical, social, financial, and environmental well-being.
3. Population Health Services: Operationalizing community-based health strategy, chronic care management, driving clinical integration, and addressing barriers to health such as social determinants.
4. Value-based Payments: Transitioning to and targeting specific medical conditions to manage cost and improve quality of care.
5. The Digital Healthcare Organization: HSAs, portals, patient literacy, cost transparency, digital payments, CRM, wearables and other patient-generated data, health monitoring, and omni-channel access/distribution.
6. Rising Pharmacy Costs: Implementing strategies to address growth of pharma costs along with benefits to quality of care and to total healthcare costs.
7. External Market Disruption: New players like Amazon, Chase, Apple, Walmart, and Google.
8. Operational Effectiveness: Implementing lean quality programs, process efficiency (with new core business models), robotics automation, revenue cycle management, real-time/near-time point of sales transactions, etc.
9. Opioid Management: Developing strategies for identifying and supporting individuals and populations struggling with substance abuse/addiction or at risk of addiction.
10. Cybersecurity: Protecting the privacy and security of consumer information to maintain consumer trust in sharing data 

Here’s a venture capital perspective on the healthcare industry from Venrock, featured in Fortune magazine: 10 Health Care Predictions for 2019 From a Pair of Venture Gurus 

1. More payer consolidation
2. Physician-led Accountable Care Organizations will grow rapidly
3. Doctors get less dissatisfied
4. Interoperability becomes interoperable: Five years after being declared successful, forces will finally come together to lead breakthroughs on cross health system and platform interoperability. 
5. Consolidation in digital health
6. We think that we are near peak hype cycle for insurance technology. 2019 is likely to be a year of toe stubbing for many. 
7. Dialysis disrupted: Just as Sears has been replaced by home delivery, dialysis centers will be supplanted too. 
8. Telemedicine takes off
9. PBM disruption talk becomes reality
10. Real progress with new DNA sequencing platforms 

Turning toward technology, CIO Magazine offers Healthcare technology markets: 5 predictions for 2019: 

1. Health systems are investing in specific programs such as telehealth and remote monitoring. While these initiatives gather momentum, other digital health programs are struggling to emerge from pilot deployment and also face competing priorities for discretionary budgets.
2. AI will make steady progress but will struggle with adoption gaps
3. Big tech is yet to figure out its play for healthcare markets, with one possible exception (Apple Watch)
4. Digital health startups will face a continuing struggle for growth and stability
5. Blockchain will remain a solution looking for a problem 

On the policy front, Morning Consult offer thse Top 5 Health Policy Predictions for 2019: 

As cost of health care continues rising, states and industry set to act 

1. Affordable Care Act: A ruling from a federal judge finding the Affordable Care Act unconstitutional has cast uncertainty on the future of the nation’s health care system — and reframed national debate on health reform ahead of the 2020 elections.
2. CMS waiver guidance: Armed with a majority, House Democrats are poised to probe how the Trump administration has handled the ACA during the last two years
3. Drug-pricing policy: Addressing the cost of prescription drugs is sure to continue dominating health priorities in 2019, although there is a long road from bipartisan commitment to reducing prices — to bipartisan consensus on how best to do so.
4. Shift toward value-based payment structures: Increasing pressure on hospitals, which contributed to one-third of total health care spending last year, could drive a shift toward value-based payment models next year — a top priority in the Department of Health and Human Services’ Choice and Competition 2018 report.
5. Digital therapeutics and e-health: After years of being just within reach, digital therapeutics and e-health initiatives stand to finally emerge in in the industry and transform care delivery next year. 

Next, we’ll consider employer benefit trends, with the selections of Mercer thought leader predictions posted here and here: 

1. AI everywhere!  Healthcare will be the next industry to be transformed by AI. 
2. Account-based plans create buzz.  
3. Personalization of health care. 
4. Value on investment: The new yardstick for benefits will be how they affect employees’ perception of their employer. 
5. Transparency in Rx pricing.  
6. Getting family-friendly fast. 
7. Extreme claims get real.   A number of factors are driving an increase in both the prevalence and the size of extreme claims
8. More stop loss. With the severity and frequency of catastrophic claims, employers will up their stop loss insurance levels and those that don’t buy it now will reconsider. 
9. More outsourcing.  HR and health and wellbeing functions will increasingly be outsourced t
10. Midsized employers doing something really different.  While jumbo employers are typically the trailblazers, this year midsized employers will take the lead with a couple of truly radical benefit strategies:
11. Moderate cost growth allows longer-term focus. 
12. Big things for behavioral health Change is happening in the behavioral health care delivery system.
13. Specialty drugs will command attention. 
14. Rx management gets yet more complicated. PBMs, carriers, pharma companies, and wholesalers will continue to face intense scrutiny regarding profits, delivery models and alignment (or lack of alignment) with plan sponsor goals.
15. Employers mix it up with clinical services. 
16. The issue of bill coding will surface. As doctors and hospitals become health systems, they are hiring coding experts at an increasingly rapid rate as a means of maximizing reimbursements. 

Finally, let’s end the tour peeking into pharmaceuticals, as CFO magazine features Deloitte’s Greg Reh in Four Trends That Could Shape Life Sciences in 2019 

1. Greater scrutiny over drug pricing. 2018 was one of the biggest years for policy efforts to reduce drug prices and out-of-pocket expenses for patients. 
2. Increased interest in contracts that demonstrate value. The launch of several gene and cell therapies has been a catalyst to advance the discussion of alternative payment models. 
3. The declining return on investment for R&D. A Deloitte analysis on the ROI of R&D among 12 large-cap biopharma companies portrays a steep decline over the nine years that the analysis has been performed.
4. Evolving regulatory frameworks and collaboration between industry and regulators. The U.S. Food and Drug Administration’s (FDA) pre-certification program, which launched in late 2017, is an example of how collaboration between industry and regulators can drive more self-regulation that is rooted in a culture of quality, organizational excellence, and performance monitoring.