196 Pages of the Patient’s Bill of Rights

by Clive Riddle, June 24, 2010

This week, HHS, Department of Labor, and Department of The Treasury issued regulations to implement the Patient’s Bill of Rights referenced under the Patient Protection and Affordable Care Act.  A Fact Sheet summarizing these regulations was posted on healthreform.gov.   The 196 page Interim Final Rules have already been posted and the Federal Register will post the Rules on Monday (June 28^th.

President Obama remarked on the status of the Act, and the new Bill of Rights, in a White House Event, noting “The Departments of Health and Human Services, Labor and Treasury are issuing new regulations under the Affordable Care Act that will put an end to some of the worst practices in the insurance industry, and put in place the strongest consumer protections in our history -- finally, what amounts to a true Patient’s Bill of Rights. This long-overdue step has one overriding focus, and that’s looking out for the American consumer.  It’s not punitive.  As I said when I met with the insurance executives, it’s not meant to punish insurance companies.  They provide a critical service.  They employ large numbers of Americans.   And in fact, once this reform is fully implemented a few years from now, America’s private insurance companies have the opportunity to prosper from the opportunity to compete for tens of millions of new customers.  We want them to take advantage of that competition.”

As implementing regulations from the Act, there is no new policy here, just the creation of the document set forth in the Act with operational details. So in reading a summary of the Bill of Rights, you will certainly get déjà’ vu because all this was well covered in highlights of provisions of the Act itself.  Of course, the fun will be pouring through the 196 pages of details.

Never the less, here is a summary of what the detailed regulations address: Effective on or after September 23: insurance companies are barred from:

1. Imposing pre-existing condition exclusions on children
2. Rescinding or taking away coverage based on an unintentional mistake on an application
3. Setting lifetime limits on coverage
4. Restricting use of annual limits on coverage.
5. Restricting choice of the primary care doctor or pediatrician within a plan’s provider network
6. Requiring a referral for women to can see an OB-GYN
7. Requiring prior approval before seeking emergency care at a hospital outside the plan’s network.

(Items 5-7 apply to plans that are not grandfathered as defined in the regulations)

An interview with Brian C. Smith on Prospective Overpayment and Fraud Prevention

by Clive Riddle, June 18, 2010 

This week, MCOL conducted a podcast interview with Brian C. Smith, an Executive Vice President with HealthCare Insight as a part of the 2010 Predictive Modeling Web Summit. Brian addressed a predictive approach to health care fraud and abuse. Below are some selected statements from Brian during the interview. 

“It’s a sad fact that particularly such areas as Durable Medical Equipment and HIV testing are wide open for abuse. For example, in South Florida with over a couple of years of focus just on the DME problem, they've seen the amount of DME submitted bills go down $1.7 billion dollars, meaning that upwards of 50-60% of prior claims were pure fraud.” 

“If you're going to defraud a payor, you're going to go where the easiest, most likely, and highest dollars are, and those are in federal and states programs like Medicare and Medicaid, as opposed to commercial health insurers who are investing a fair amount of dollars and really getting after fighting fraud and abuse.” 

“The Federal side has about a $1.8 billion investment in fraud, waste and abuse on an annual basis that primarily goes to the DOJ Office of Inspector General and Medicaid Fraud units, and has recaptured in the $2.5 - 2.8 billion range. In contrast, the Blues, for example, which have reported recently that across their 100 million members, that their 39 plans represent, they recovered $516 million, which works out to $0.43 pmpm. Apply that to the much larger federal population, and it would be a much higher yield. “ 

“We're seeing our customers move away from the idea of pay and chase [retrospective identification of overpayments or fraud] to a prospective basis. We're looking at literally all of their claims, upfront, overnight. We have history of flagged providers as well, from a couple of years for up to five years, and we can identify various schemes and profiles of these providers, and stop these payments up front. That produces a tremendously higher yield, and those dollars never leave the claims shop. The Federal side has generally not embraced this technology. “ 

“The predominant tactic today, particularly on the Federal side, is pay and chase. The Federal side uses fiscal intermediaries who generally have no incentive, or capability, for that matter, to stop the payment before it leaves the door. Many self insured administrators are also just doing a cursory job at looking backwards, retrospectively, at these schemes. The best, most efficient way, is when clients and payor customers, before they send these payments out, look at patterns with these particular providers, comparing those providers to other specialists within that provider range. What you can see is that these particular providers are often unbundling their services for what should be a global procedure, and bill continually in a manner fraught with unbundling, overcoding, upcoding, and incorrect coding. That's a pattern. Our customers are stopping those claims from being paid, and have the claims clinically verified. Once our system identifies a pattern, we have clinical investigators that drill down into those particular providers, and provide a detailed report with recommended actions to take.” 

“1 to 2 percent of the 1 million+ providers might have been involved in actual fraud at some point in time. There's far more dollars in the abuse area, where there's aggressive billing habits, compared to normal billing patterns, where the particular providers are 2 to 3 standard deviations more aggressive in how they bill, with areas such as modifier abuse with the codes. That's where we see hundreds and hundreds of millions of dollars of abuseful practices.” 

Click here to listen to the full podcast interview with Brian C. Smith, Executive Vice President, Sales, HealthCare Insight, discussing "Prospective Overpayment and Fraud Prevention.

Health Systems Organizing Themselves Around Individuals

by Clive Riddle, June 11, 2010

This week Benjamin Isgur, Director at PricewaterhouseCoopers’ Health Research Institute gave a presentation in the Healthcare Web Summit event, Healthcare in the Decade Ahead: HealthCast: The Customization of Diagnosis, Care and Cure.

In Ben’s words, what the folk at PWC’s Health Research Institute see in the decade ahead with respect to global trends for health systems, is that the “cost pressures are still there, but we’re seeing a new way forward for sustainability and systems being more efficient and effective, by organizing themselves around individuals.” The headline of his third slide said it all: “Individuals will be at the center of diagnosis, care and cure.”

Ben’s presentation was based on a paper published by their Institute, entitled HealthCast: The Customization of Diagnosis, Care and Cure. The report reflects proprietary research conducted by PwC, including more than 200 in-depth interviews in 25 countries with thought leaders and executives representing government, hospitals, pharmaceutical companies, insurance companies, clinicians, academics and the business community and a survey of 3,500 individuals in seven countries and 590 leaders of health plans, providers, government, employers, physician groups and pharmaceutical/life science firms in 20 countries.

Ben’s case for why today’s health system model must change:

1. “Both young and old consumers are developing chronic diseases in record numbers, leading to an explosive consumption of resources that is driving up spending and creating liabilities for future generations. Following a global recession, health leaders are under pressure to show more value from rising health costs.”


2. “Converging influences in health. Chronic diseases are driven by social, economic, genetic and behavioral factors that are largely unaddressed by today's medical delivery system.”


3. “Technology is leading healthcare into a new era of "mass customization," following other industries such as auto manufacturing, media, and entertainment. The use of metadata is changing the behaviors of individuals and health systems.”

Ben’s presentation used international and domestic cases to support their thesis that the trends ahead for the U.S. are really part of global overarching  developments. For example, in discussing how chronic disease now affects young and old, driving up spending, he shared this Australian experience regarding “drivers of health spending in Australia in respiratory disease (which affects the young) and neurological disease (which affects the old)”:

Respiratory cost drivers:	Neurological Cost Drivers:
Volume per case: 84%	Volume per case: 25%
Price: 9%	Price: 5%
Disease Rate: 4%	Disease Rate: 4%
Ageing: 3%	Ageing: 48%
Population: 0%	Population: 18%

Other key trends Ben addressed in the same manner:

• Health reform is moving the status quo to customized care
• Funding is being redistributed from sickness to wellness
• Incentives are being designed to encourage partnership
• Electronic medical records and IT ease collaboration, customization
• Patient communication is supporting shared decision-making
• Workforce models will be more flexible and efficient

In summary, Ben stated these are the vectors of change for customization and individual engagement:

• Regulatory reform that focuses on efficiency
• Funding that is redistributed
• Incentives that encourage partnership
• EMRs and IT that ease collaboration
• Patient communication that supports shared decision- making
• Workforce models that are flexible

The toolkit PwC prescribes to address this change includes:

1. Coordinated care teams: Consumers want coordinated care. Integrated care networks that share information, care and accountability for patient outcomes are likely to become models for the future.
   
2. Fluent navigators: Individuals lack the knowledge and skills they need to navigate the health system and understand their choices. In a patient-centered health system, there will be a growing need for consumer advocates beyond friends and family. PricewaterhouseCoopers sees the role of healthcare-fluent navigators being played by pharmacists, community workers and possibly the emergence of a new professional field much as financial planners emerged with the rise of consumer-directed investing.
   
3. Patient-experience benchmarks: In a patient-centered health system, more attention will be paid to understanding and meeting consumer expectations. Many health systems already are tracking and publicly reporting on patient-centric metrics of care, such as cleanliness, wait times and physician satisfaction, allowing patients to make more informed decisions.
   
4. Care-anywhere networks: The definition of access is being redefined by telehealth, wireless mobile devices, remote monitoring and new care delivery models that move care from hospitals, nursing homes and physicians’ offices and into patients’ homes, which increasingly are wired with networked devices.
   
5. Medical proving grounds. Through collaboration and investment, some regions and other countries are positioning themselves to be medical proving grounds, or centers of excellence in medical innovation and care as a way to attract patients, researchers and providers looking for the shortest path to access and innovation.

PwC’s Recommendations for adopting a convergence viewpoint:

• Encourage partnership
• Reward competition and innovation
• Fund wellness
• Empower shared decision-making
• Develop dynamic workforce models
• Enable IT

1.      “Both young and old consumers are developing chronic diseases in record numbers, leading to an explosive consumption of resources that is driving up spending and creating liabilities for future generations. Following a global recession, health leaders are under pressure to show more value from rising health costs.”

2.      “Converging influences in health. Chronic diseases are driven by social, economic, genetic and behavioral factors that are largely unaddressed by today's medical delivery system.”

“Technology is leading healthcare into a new era of "mass customization," following other industries such as auto manufacturing, media, and entertainment. The use of metadata is changing the behaviors of individuals and health systems.”

How Brokers See the Recession’s Impact on Employee Benefits

by Clive Riddle, June 4, 2010

Survey data on employee benefit trends and implications surrounding such drivers as the recession typically focus on data from large employers.  Large employers, of course, represent the clientele of the major benefit consulting firms that produce the majority of such studies.

Thus it is interesting to consider perspectives from the broker population, which typically represent smaller and mid-size employers. Colonial Life conducted broker surveys at two large national broker conferences during March and April, regarding the economy’s effects on benefits.

Here’s the results provided by Colonial Life, which indicate expansion of voluntary benefits, increasing employee contributions, and adding HSAs/HRAs are the top strategies:

• Added voluntary benefits options – 59%
• Increased employee contributions – 48%
• Added benefits options – 35%
• Added a health savings account – 29%
• Switched carriers – 28%
• Reduced benefits options – 27%
• Added a high-deductible health plan option with an health reimbursement account – 26%
• Increased employer contributions – 10%
• No change – 9%

In this environment, 80% of the brokers surveyed said voluntary benefits are very important to the overall benefits package they offer business owners. It thus could be beneficial for various stakeholders to do their homework on what existing and emerging products are being offered through the voluntary benefits market, and consider their implications.

The Center for Health Value Innovation on Value Based Design

by Clive Riddle, May 27, 2010

This week, Cyndy Nayer, M.A., President, CEO and co-founder of the Center for Health Value Innovation and Michael S. Jacobs R. Ph., Principal and National Clinical Practice Leader, Buck Consultants, LLC  (also a board member at the Center) spoke in the HealthcareWebSummit event Leveraging Health: Current Impact of Value Based Design.

What’s going on with Value Based Design initiatives right now? Glad you asked. While some other elements of health reform have stolen the spotlight during the past few months, VBD continues to move forward as a key solution to its core stakeholders. 

The Center for Health Value Innovation is an educational organization that serves as an information exchange for value-based designs. The Center’s members include health plans, employers, unions, government, pharmaceutical organizations and other stakeholders that represent over 40 million lives. The Center recently published a new book, Leveraging Health, which shares findings from their recent interviews and surveys that identify more than 100 levers that influence consumer and patient behaviors in Value-Based Design, and15 categorized macro-levers.

Definitions of Value Based Design have evolved over time. The Center has this to say about defining VBD: “It’s important to note that value-based designs (VBD) are much more than waived or reduced co-pays for chronic care, particularly medications.  A value-based design uses evidence-based clinical impact merged with financial impact (Health + Economics) to guide the behaviors of populations in managing their health.  VBD can influence choice of care provider, appropriate and persistent treatment, and early risk/prevention/wellness.  All of these have been documented to show a meaningful impact in health status, productivity (safety, disability, unscheduled absences, and more), quality and financial cost trend.”

Nayer and Jacobs expanded on this definition during their presentation, stating:

• VBD is an engagement tool that engages the employee (consumer) and the employer (plan sponsor) and the provider (clinician)
• VBD focuses on outcomes:  better performance
• VBD is driven by data that drives the suite of performance tuners: levers
• VBD is sustainable and applicable at the small-large employer and at the community level
• VBD builds the Health-Wealth-Performance Portfolio
• VBD uses Data to invest in incentives (Design) and services (Delivery) that change behavior for improved health, quality, performance and financial trend (Dividend.)       

They note that EAP and behavioral health are important components of VBD, given that behavioral change is the key to sustaining value. They further advocate that if value is to be built on outcomes, than purchasing must be aligned. Nayer and Jacobs stat that Outcomes-Based Contracting must align incentives between the contracting parties.

After VBD emerged as a mainstream concept and solution, the Great Recession intervened, and Nayer and Jacobs point out the effect of the economy on health behaviors, placing employee/patient compliance, adherence and persistence at risk.

Here’s some of the Center’s survey results they shared, which are incorporated into their book, Leveraging Health. Over 100 companies responded to their survey, representing over 1 million lives:

87% Use incentives (levers) in prevention and wellness, 60% Use levers for chronic care management, and 26% Use levers for guidance to appropriate care delivery

Given that VBD programs provide various forms of incentives, including applicable waivers of cost sharing, an obvious concern in a down economy would be that employers would feel pressure to pull back in these areas to in the name of achieving short term savings. However the survey indicated 79 % of the employers with VBD in place two or more years made no VBD changes in 2009 and 56% did not plan to make changes in 2010.

Of the 44% who did anticipate changes in 2010: 64% of them plan to pass more of the cost of brand drugs to the employee; 16% plan mandatory enrollment in disease management programs; and 16% plan to pass more of the cost of generic drugs to the employee.

Additional survey results:

• 63 % waive employee cost sharing for yearly screening exam
• 40 % provide insurance premium incentive for completion of a Health Risk Assessment (HRA)
• 54 % cover depression under care management program
• 70 % reduce/waive co-pay for utilizing the lowest cost appropriate site of care (e.g., urgent care, convenient care, onsite services, medical travel)
• 58 % provide incentives for the use of EAP programs
• 35 % provide incentives for financial counseling
• 20% reduced applicable prevention screen cost for age/gender appropriate groups
• 18% provided an insurance premium incentive for completion of a biometric screen
• 13% reduced OOP costs for setting and/or achieving health promotion goals
• 13% provided insurance premium incentive for complying with recommended prevention exam
• 12% adjust their condition-based formulary (all tiers lowered for specified conditions)
• 12% link co-pay/coinsurance waivers to mandatory condition management

Employers also indicated these as their top challenges to deploying their VBD programs (more than one answer allowed):

• 53% - Increasing engagement with employees: slow to use the new benefits
• 45% - Enrolling employees in disease management programs
• 42% - Keeping the momentum going
• 34% - Obtaining and integrating data
• 34% - Lack of communication with physicians/pharmacists/clinicians
• 34% - Communicating benefits with the covered lives
• 32% - Segmenting and interpreting data
• 18% - Communicating success with the covered lives
• 13% - C-Suite support

Getting One’s Head Around the Physician EHR Marketplace

by Clive Riddle, May 21, 2010

In the midst of health reform and stimulus initiatives to drive EHR adoption, I’ve been trying to get my head around the physician Electronic Health Record marketplace. What is the total size, what is the current level of adoption, who are the major vendors, and what is their market share?

So then Chris Thorman of SoftwareAdvise.com surfaces, with his own blog post, EHR Software Market Share Analysis, that takes a pretty good stab at these questions. Here’s  what Chris and Medical Software Advise team determined:

• 65% of all 788,000 U.S. physicians, or 512,000 are outpatient/private practice based and thus in the potential EHR market (U.S. Bureau of Labor and Statistics)

• 44% of these 512,000 physicians, or 225,000 doctors, have adopted either a partial, basic, or fully functional EHR system (CDC)

• The top vendors in this marketplace are:
  • Epic (45,000 ohysicians/ 17% marketshare)
  • Allscripts (40,000 physicians / 15% marketshare)
  • eClinicalWorks (40,000 physicians / 15% amarketshare) 
  • GE Centricity (35,000 physicians / 10% marketshare)
  • NextGen (35,000 / 13% marketshare) 
  • SOAPWare (30,000 physicians / 12% marketshare) 
  • Practice Fusion (18,500 physicians 7% marketshare 
  • Other Vendors (10% marketshare)

There are of course a number of nuances and issues that would benefit from further clarification in their analysis, which Chris details in his post. Chris is also seeking feedback from those with direct knowledge in this area.

Inside the Mind of Managed Care Contracting Executives

by Clive Riddle, May 5, 2010

MCOL, in conjunction with the Health Plan Contracting Web Summit, just concluded an e-poll on contracting issues. Respondents were asked “What are the greatest opportunities from a contracting perspective?” and chose accordingly from the following answers:

Response	Percent
Advancements in analytics capabilities	7.5%
Advancements in electronic health records and transactions	16.7%
Consumer engagement initiatives	10.8%
Emergence of value based and newer payment models	26.7%
Formation of Accountable Care Organizations	16.7%
Increased covered population due to health reform	17.5%
Potential growth in patient centered medical homes	3.3%
Other	0.8%
Total	100.0%

Respondents were also asked “What are the greatest challenges from a contracting perspective” and chose as indicated from the following answers:

Response	Percent
Consumer engagement Initiatives	9.9%
Continued market consolidation	14.1%
Cost pressures due to economic downturn	28.1%
ICD-10 transition	6.6%
Increased complexities of benefit design	8.3%
Increased mix of government program vs. commercial covered populations	14.9%
Issues related to new health reform provisions	14.0%
Other	4.1%
Total	100.0%

121 professionals responded to this e-poll, and indicated the following perspectives:

Purchaser                               24.0%

Provider                                 55.4%

Vendor/Other                          20.6%

So, while respondents indicated there is clearly a mixture of factors, and not just one single opportunity or challenge that requires their focus, the emergence of value based and newer payment models, and cost pressures due to the economic downturn are certainly the front runners commanding their attention.

The Impact of Accountable Care Organizations During the Next Few Years

by William J DeMarco, April 27, 2010

I was asked to address the following question for the current issue of MCOL’s Thought Leaders newsletter: "How large of an impact will the emergence of Accountable Care Organizations have during the next few years, and what are some of the implications we might expect as a result?”  

I supplied a brief summary statement for Thought Leaders. Here are my expanded thoughts on this topic:

We believe that ACOs will have a tremendous impact on lowering costs and improving quality long term because these initiatives will be operated at the local level and therefore make quality improvement an ongoing process versus a short term discount approach to value improvement.

The concept of having local providers competing as integrated systems has long been a scholarly supported and business researched model that theoretically should work. The problem has always been in the reimbursement at the practice level. Money and care delivery have been separated from the care coordination making payment a barrier versus the bridge it should be to better patient management.

We have spent millions of dollars as health plans, medical groups, and hospitals to come up with reporting systems that are just now yielding some patterns of care that we know offer positive solutions in the area of chronic care and general prevention.  However, the savings from this more effective care outcome has always gone to the payers. The providers, patients, and most employers never really see these savings in the form of better benefits or lower premium costs so there has never been an incentive for physicians and hospitals to work together to better coordinate inpatient and outpatient care.

We think that the bundled payment opportunities will change this and, as Medicare continues to reduce or flatten its fee increases, bundled payments will become more attractive.

By having risked adjusted patient care guidelines tied to payments for hospital, physician and drug costs for each episode of care, well planned care management protocols will yield a margin IN ADDITION to billed charges to Medicare.  Therefore, there may be a way for many providers to actually see Medicare revenue start to come closer to commercial revenue.

Managed care companies handling commercial payers would also have an interest in seeing hospitals and physicians work together to improve everything from coding to clinical outcomes in order to secure a share of the savings created by their innovation and discipline. There is talk that delegated models of medical management as seen in Florida and California may offer an even more lucrative opportunity to participate by taking 85% of premiums through global or bundled payment structures. This would represent an outsourcing of medical management to hospitals and physicians who, we have always thought, should explore this as a business opportunity to leverage care AND management of care. Health plans and insurance companies would pay a nominal fee to have this management done, but that would only enhance the ability of the caregivers to hire navigators to assist people within and outside the care system so discharges are followed up and preventive services explored before admissions.

The ACO structure will truly be following the integrated care guidelines to improve care with an incentive versus just avoiding anti trust issues. Perhaps we will see different physician driven governance and locally based quality and utilization feedback to physicians and hospital staff whose compensation is dependent upon not just delivering more services but delivering more of the right services at the right levels within the delivery system. We reaffirm this point by saying if physician are incented to deliver top quality and share the savings but the hospital staff operates business as usual to load beds and get paid based upon gross revenue, we have created a monster in terms of two factions in the delivery system going in opposite directions. This happened under early bundled and capitation payments where doctors were starting to see serious gains in income while the hospital’s losses were mounting due to reduced lengths of stay.

Finally, the long term impact here will be collaboration between hospitals in an area where they were competing against one another in a small market. The larger delivery system and its primary care referral system offer great coverage of a larger Medicare and commercial population. This allows PCPs and specialty practices to grow and align better benchmarks and communication with other MSO services that share expense and allows a network of small practices to operate as a large multi-speciliaty group practice. This group without walls can achieve some of the economies of scale but would need to be linked by Health Information Exchange making patient records, ordering of tests, and recommending follow-up care more efficient than much of the paperwork and patient chasing by phone done now.

Assuming the demonstration projects give CMS some good feedback on key performance indicators and that many hospitals and physicians arrive at the conclusion that indeed there is an opportunity to perform better and be paid better under this ACO framework, we would say the government’s estimate of savings from ACO development is largely understated.  The costs curve will bend regionally which will create even more savings than projected for Medicare.

Even now states are talking about ACOs for Medicaid and some employer coalitions are attempting to encourage ACOs around centers of excellence to push providers to compete more on quality and less on discounts.  We have told these large, self funded employers that they need to stop being passive players in the health insurance arena and take an active interest in designing benefits that offer incentives to patients who see the ACO aligned doctors versus the non aligned doctors, who may be part of a discount network but have no real accountability when it comes to performance. Then the employer or health plan must also offer some sort of shared savings plan to continue to incent doctors and hospitals to improve quality and outcomes. This additional amount shared from savings costs employers and health plans nothing more than what they normally pay, but it opens the door to seeing waste removed from the system permanently and better coordination of services for the employee. This levels off premiums and reduces employee out of pocket costs.

We are excited about the ACO opportunity.  While there will be a large education process needed to implement these approaches in some markets, most agree this beats the alternative of price controls and further mandates on payers and providers.

Health Plan “Early Adopters” for Extended Dependent Care Coverage

by Clive Riddle, April 22, 2010

The bandwagon started rolling at full steam this week for major health plans to allow applicable dependent coverage up to age 26 in advance of the September 23^rd, 2010 effective date provided in The Patient Protection and Affordable Care Act.

HHS has been in communication with a number of major plans for purposes of stimulating such an initiative. On Monday, April 19^th during the day, UnitedHealthcare and WellPoint issued releases regarding their new policy in this regard. HHS Secretary Kathleen Sebelius issued a statement discussing the initiative, and acknowledging the two health plans.

Monday evening Humana issued their release in this regard, and the Blue Cross Blue Shield Association issued a release on Tuesday committing the entire association of Blues plans. It’s interesting to note the WellPoint’s statement came ahead, and wasn’t coordinated with announcement of the BCBS Association policy. HHS Secretary Kathleen Sebelius issued a follow-up statement on Tuesday acknowledging Humana, the BCBS association and Kaiser Permanente. Kaiser has not issued a formal public statement in this regard, but made a general commitment to HHS and has acknowledged their position with the media.

On Wednesday the 21^st, Aetna issued a statement announcing their plan to extend coverage, without providing specific details. CIGNA has not yet issued a statement. Local and regional plans (other than BCBS plans) generally have not yet issued such statements, due to the fact the initial HHS outreach was to national plans, and more to the point in a number of regions because state laws already require dependent coverage until age 26 or higher.

Regarding the varying state dependent coverage requirements, one example, as the Dayton Daily News reminds readers is that "in Ohio, that age will rise to 28 on July 1, under the provisions in the two-year budget state lawmakers approved last year." The National Conference of State Legislatures (NCSL), in a web page dedicated to the state-by-state coverage issue on this topic, provides a summary of various state initiatives to address this issue, that started all the way back in 1994, when "Utah become the first state to enact legislation allowing coverage for unmarried dependents to continue up to age 26, regardless of school enrollment status." New Jersey enacted legislation extending dependent coverage to age 31 in 2006 and the NCSL notes that now "at least 30 states have now enacted similar legislation to extend dependent coverage regardless of enrollment in school." (NCSL provides a state by state table in their web site.) The Robert Wood Johnson Foundation also provides a web site dedicated to State Coverage Initiatives that summarized Dependent Coverage provisions.

Regarding the details of the national plans extension of dependent coverage (with links to their statements):

• UnitedHealthcare’s change is effective immediately. They state “this extension of coverage applies to college students who currently are covered under their parents' fully-insured health plan offered through UnitedHealthcare. Individual family health plans through UnitedHealthcare's Golden Rule business already allow all dependents to stay on the plan until age 26 and enrollees do not need to take any action.”

• Humana’s change is also effective immediately, and they note “the decision by Humana directly impacts the adult children of members who are enrolled in Humana’s fully insured lines of business. (Children of members enrolled in a HumanaOne individual health plan have already been able to remain on their parents’ or guardians’ coverage until age 26.) Humana is also encouraging large employers who self-fund their coverage with Humana to extend coverage to the adult children of their employees who would otherwise lose their coverage this year.”

• WellPoint’s policy will take effect June 1^st. They state that at that time “WellPoint's affiliated health plans will automatically retain these young individuals on their parents' policies in both fully insured group and individual health plans. Our self insured clients and members will have the option of not offering this extended coverage.”

• The BCBS Association policy is also tied to June 1^st, but further equivocates that the extension is only definite for individual plans, and that they will make the option available to their employer groups, as they state “every Blue Cross and Blue Shield company has agreed to allow covered individuals under age 26 to remain on their parents' individual health insurance policies effective June 1. We will offer this extension of coverage to our employer accounts for their members.”

• Aetna for now is at the stage where they are “working with their customers” to develop a policy: “We understand that young adults are concerned about potential gaps in health care coverage. We are working with our customers to allow young adults to remain on their parents' plan until the dependent coverage requirements of the Patient Protection and Affordable Care Act go into effect later this year. We believe this is in the best interests of our members and is in keeping with the spirit of the health reform law.”

• Kaiser was cited in USA Today as planning “to extend coverage before September to consumers who have individual policies and is in discussions with employer groups about their policies. Details are still being worked out, ‘but our intent is to avoid an interruption in coverage for them,’ spokesman Chris Stenrud said.”

Employer Health Care Strategies: Multinational Edition

by Clive Riddle, April 15, 2010

 It's one thing for a multi-state employer to weave their health care strategies through the maze of varying state regulations, delivery systems, demographics, patterns of care and consumer behavior. Consider the daunting task of attempting to synthesize a strategy that reaches across nations and continents.

TowersWatson tackles the subject, this week releasing results from their multinational employer health care survey: Workforce Health Strategies: A Multinational Perspective.  The survey “includes responses from 106 organizations that have at least 500 employees and significant business operations in more than one country. Ninety-three percent of the participating companies are based in North America and manage, on average, 25 health programs and operate in 20 countries around the world.”

Francis Coleman, senior international consultant with Towers Watson tells us “to mitigate growing health care risks and associated costs as well as boost worker productivity, multinationals can increase their use of health strategies that are truly global. In particular, forward-looking multinationals are using leading indicators of health and well-being to proactively and effectively focus their resources rather than react to the rising costs caused by lifestyle diseases and increased adoption of advanced medical technologies.”

But in considering the topic that TowersWatson raises, the question rattles around in the back of my mind ‘How big of a deal is this? After all, can the scope of the multinational work force really be that large?’ So a little background research was in order. First stop, the U.S. Census Bureau, Table 772. United States Multinational Companies--Selected Characteristics which indicates that in 2006 their scope incorporated:

• Total assets $18.5 trillion
• U.S. Parents
  • Capital expenditures $442 billion
  • Value added: $2.5 trillion
  • Employment : 21.7 million
• Majority-owned foreign affiliates:
  • Capital expenditures $153 billion     
  • Value added: $996 billion
  • Employment 9.6 million

So the answer is, yes, the scope is big, and is largely U.S. centric. The National Foreign Trade Council in a press release last year entitled U.S. Multinational Companies Strengthen the Domestic Economy informed us that “The worldwide operations of U.S. multinational companies are highly concentrated in America, not abroad in their foreign affiliates. Domestic parent companies accounted for nearly 70 percent of worldwide employment of U.S multinationals….and represents about 19 percent of total private-sector payroll employment….Foreign affiliates are located primarily in high-income countries that in many ways have economic structures similar to the U.S., not in low-income countries. Affiliates in high-income countries accounted for 79 percent of total affiliate output. …U.S. parent companies account for nearly 25 percent of all private-sector output (measured in terms of GDP), or more than $2.5 trillion.”

Getting back to the matter at hand, here are some key results from the Towers Watson Multinational Survey:

•  26% have a global health strategy in place today, and  an equal number plan to implement a global health strategy by 2012
• 77% offer employee health programs in lieu of, or in addition to, publicly provided programs in all or most of the countries in which they operate.
• 83% of respondents said that stress have a high or moderate impact on their health care costs and workforce productivity, while 77% said chronic conditions and 63% said obesity (63%) had this impact.
• 40% of respondents provide case management programs in most or all countries, while 25% provide disease management, 30% offer health promotion, health screenings and behavioral health programs and 25% provide health risk assessments in most or all countries.
• 51% indicate that non-U.S. markets lack available or reliable health care cost data 44% said these markets lack available or reliable health care products and services and 30% said they lack desired health care vendors

<!--[if !supportLists]-->·             <!--[endif]-->26% have a global health strategy in place today, and  an equal number plan to implement a global health strategy by 2012

<!--[if !supportLists]-->·             <!--[endif]-->77% offer employee health programs in lieu of, or in addition to, publicly provided programs in all or most of the countries in which they operate.

<!--[if !supportLists]-->·             <!--[endif]-->83% of respondents said that stress have a high or moderate impact on their health care costs and workforce productivity, while 77% said chronic conditions and 63% said obesity (63%) had this impact.

<!--[if !supportLists]-->·             <!--[endif]-->40% of respondents provide case management programs in most or all countries, while 25% provide disease management, 30% offer health promotion, health screenings and behavioral health programs and 25% provide health risk assessments in most or all countries.

51% indicate that non-U.S. markets lack available or reliable health care cost data 44% said these markets lack available or reliable health care products and services and 30% said they lack desired health care vendors

Hewitt Says We’re More Engaged in Selecting Our Benefits

by Clive Riddle, April 2, 2010

Hewitt Associates this week released data indicating that employees in 2009 were more engaged in selected their health benefits than in previous years. That being said, Hewitt concluded their choices weren’t all that different than before, they were just more involved in the process.

Here’s some of what Hewitt had to report on the matter: “Hewitt's analysis of 6 million U.S. workers, for whom Hewitt managed benefits enrollment in the fall of 2009, revealed the highest number of active enrollees since Hewitt began tracking the data in 2003. Nearly half (45 percent) of employees actively chose their benefits for 2010 instead of passively defaulting into the same coverage or no coverage at all. This is up significantly from the 2009 open enrollment period, where just 39 percent of employees actively enrolled. Despite employees taking a more active role in selecting their benefits, Hewitt's data shows very few workers enrolled in different health insurance plans.”

So what plans are employees enrolling in? Here’s a data table Hewitt shared indicating enrollment by plan type for the past three years (note that the survey involves large employers):

Enrollment by Plan Type

Open Enrollment Year	EPO	HMO	POS	PPO	Indemnity	HDHP
2008	1%	17%	11%	31%	15%	20%
2009	1%	17%	5%	34%	11%	18%
2010	1%	14%	8%	35%	13%	18%

So what does Hewitt make of all this? Sara Taylor, Hewitt’s Health and Welfare Strategy Leader tells us: "Employee inertia continues to play a large role in enrollment decisions—it's encouraging to see that people are more engaged in assessing their benefits, but that doesn't mean they are necessarily making different choices. If employers want workers to make different elections, they might need to adopt a more aggressive approach—whether it's changing or reducing plan options or offering plans with widely differing price points."

Accountable Care Organizations: A New Pathway for Physicians and Hospitals

by Claire Thayer, March 26, 2010

MCOL’s Healthcare Web Summit has announces Accountable Care Organizations: A New Pathway for Physicians and Hospitals.  Please join us on Thursday, April 29^th at 1PM Eastern as industry leader William DeMarco, Pendulum Healthcare, provides an introduction and overview of Accountable Care Organizations, including structural components of ACOs, organizational requirements to function as an ACO and business opportunities resulting from new federal regulations being discussed.

Detailed information at:

http://www.healthwebsummit.com/aco042910.htm

How do Insiders Feel About Consumerism Now?

by Clive Riddle, March 26, 2010

In conjunction with last week’s Ninth Annual Consumerism Web Summit, MCOL conducted an e-poll of professionals, asking what components of consumerism are the most important, and how linked consumerism’s fate is to the outcome of health reform.

Survey respondents for 2010 and 2009 were asked the same questions regarding ranking typical components of Consumerism, and their perspective as a respondent. 2010 respondents were also asked, to what degree are health care consumerism initiatives dependent upon the outcome of any impending health care reform.

Respondents were asked to rank the five listed components 1 through 5, with 1 being the most important, and to only use each ranking once (only one item ranks 1, one item ranks 2, etc.)

Professionals continue to feel Price and Quality Transparency is the most important component by far.  Account based plans and wellness incentive programs end up close to distant tie for second, depending on the measure you use, followed by web based consumer patient health records and retail medicine.

Interestingly, if you examine the percent of respondents ranking an item as number 1, and consider the change from 2009 to 2010: transparency, account based plans and web based records all gained ground, while wellness incentives and retail medicine lost ground.

36.3% of respondents said that  consumerism initiatives were highly dependent upon the outcome of impending health care reform, while 41.2% said they were somewhat dependent and 22.5% said they were not very dependent.

Below are details regarding how respondents ranked components of consumerism, and their perspective as a respondent, for the past two years:

(Rank 1 through 5 with 1 = highest value and 5=lowest value, and only use each ranking once; i.e. only rate one item a 1, one item a 2, etc.)

	2010	2009	2010	2010
	Mean	Mean	Median	Mode
Price and Quality Transparency	1.85	2.00	1	1
Account Based Plans (HSA/HRA/FSA)	3.06	3.08	3	2
Wellness Incentive Programs	3.03	2.65	3	4
Web Based Consumer Patient Health Records	3.35	3.70	4	4
Retail Medicine (Convenient Care, etc)	3.69	3.57	4	5

Component	Rank 1: 2010	Rank 1: 2009	Rank 5: 2010	Rank 5: 2009
Price and Quality Transparency	59.4%	55.8%	7.0%	11.9%
Account Based Plans (HSA/HRA/FSA)	17.7%	12.8%	24.9%	17.9%
Wellness Incentive Programs	7.0%	20.9%	8.7%	3.6%
Web Based Consumer Patient Health Records	11.8%	4.7%	21.6%	31.0%
Retail Medicine (Convenient Care, etc)	4.3%	5.8%	37.8%	35.7%

Perspective of Respondent:	2009	2010
Purchaser (Health Plan, Employer, TPA, Agent, PBM)	30.6%	43.4%
Provider (Hospital, Physician, Pharmaceutical, Other Providers)	27.1%	24.0%
Vendor/Other (Vendors, Consultants, Institutions, Gov., All Other)	42.4%	31.8%

n = 189 for 2010, 85 for 2009 

Health Plan Contracting Web Summit

by Claire Thayer, March 24, 2010

MCOL’s Healthcare Web Summit has announced the Agenda for the live Health Plan Contracting Webinar, scheduled for April 22, 2010 at 1PM Eastern.  Robin Fisk, Esq, Author and Attorney, Fisk Law Office will begin the live webinar event with a discussion on “Contracting in a Time of Uncertainty.” Terri L. Welter, Principal, ECG Management Consultants, Inc follows with her presentation “Preparing for Innovative Payment Methodologies.”  Jeffrey Gold, VP, Managed Care and Special Counsel, HANYS, will wrap up our discussion with “Contracting Lessons Learned from Denials Management Task Force Outcomes.”
Podcasts will also be available for all session attendees.
Detailed information at: http://www.healthwebsummit.com/contracting.htm

Medicare Marketing ROI: What’s Working…and What’s Not?

by Claire Thayer, March 22, 2010

MCOL’s Healthcare Web Summit has announced its Medicare Marketing ROI: What’s Working…and What’s Not webinar event.  Please join us on Thursday, May 27th at 1PM Eastern to learn more about critical assessments and measurable marketing ROI, next generation Medicare marketing trends and tactics, customer segmentation data and direct response lists and more!
Detailed information at: http://www.healthwebsummit.com/medroi052710.htm

Carrots and Sticks

by Clive Riddle, March 18, 2010

Carrots and Sticks.
Will employee health behaviors they fix?
Or are they just a fad, pulled from employers’ big bag of tricks?
Should incentives or penalties be preferred, oh what’s the right mix?
Surveys may tell us the answer, about Carrots and Sticks.

On Saint Patrick’s Day, while others were reveling and feeling festive, Hewitt Associates released results from the annual health care trends survey, in which they conclude “Companies [are] increasing the Use of Both Incentives and Penalties to Motivate Employees, Improve Outcomes and Reduce Costs.”

Hewitt’s Cathy Tripp tells us "the economy and continued escalation of health care costs have driven many employers to be a little more bold and demanding of their employees, making disincentives an increasingly attractive option. As companies learn more about their workforce, they're realizing that some people may be more motivated to take action if they risk losing $100 versus gaining $100. The key for each employer is to find the right mix of strategies and plan designs that will motivate employees to be healthier, but not go so far as to drive the wrong behaviors."

The Hewitt survey tapped 600 large employers representing 10 million+ employees. Here’s what they found:

Penalties for non participation in health improvement programs

• 47% either already use or plan to use financial penalties over the next three to five years
• 81% of those using/planning penalties will impose higher premium contributions; 17% will apply increased deductibles; and  17% will design higher other out-of-pocket cost sharing
• Of those using/planning penalties, the behaviors that will trigger penalties were: smoking (64%); non-participation in disease management/lifestyle behavior programs (50%); non-participation in biometric screenings (45%); non- participation with a health coach (25%); failure to  achieve applicable biometric improvements (17%)

Incentives for participation in health improvement programs

• 58% offer incentives, with 24% of them extending incentives to spouses and/or family members
• 63% of those offering incentives provide cash for completing a health risk questionnaire (35% in 2009)
• 37% of those offering incentives cash incentives for participating in health improvement and wellness programs (29% in 2009)
• 14% of those offering incentives cash incentives for participating in condition management programs (17% in 2009)

Towers Watson Findings

Hewitt isn’t alone in seeing a trend is in the works. Towers Watson last week released additional findingsfrom their 15th Annual NBGH/Towers Watson Employer Survey on Purchasing Value in Health Care which covered 507 employers of 1,000 or more employees, representing 11.5 million employees, also concluding that employers are going to be putting much greater emphasis on incentives and consumerism.

Ted Nussbaum, senior consultant with Towers Watson tells us "employers are frustrated by their employees’ low use of expensive health improvement programs. As employers continue to empower workers to be more health focused, they are beginning to target and reward those workers who demonstrate a real commitment to making positive lifestyle changes.”

Here's what Towers Watson found:

• 53% offer financial incentives for employees enrolled in health engagement activities
• 37% reward only employees who meet the company’s requirements for completion of a health engagement activity,
• 29% only reward members who participate in multiple activities

Accenture Says Physician Laggards are Poised to Finally Adopt

by Clive Riddle, March 5, 2010

Smaller physician offices, lacking infrastructure and capital and perhaps motivation, have been viewed as the stumbling blocks to widespread physician EMR adoption, And without adequate physician adoption, hospital and health plan adoption won’t likely achieve the level of effectiveness required to justify their investments.

Accenture this week released results from a study conducted by their Innovation Center for Health and Institute for Health & Public Service Value in conjunction with Harris Interactive in which they surveyed 1,000 U.S. physicians from smaller practices (fewer than 10 physicians) regarding EMR use, with 15% of respondents being current EMR users at various levels and 85% non-users.

The good news? The majority of non-users say they now intend to purchase a system, and the percentage goes way up when you ask those who aren’t so close to retirement. The bad news?  (1) The majority if them are looking to hospitals for help and subsidies; (2) saying you intent to purchase a system doesn’t necessarily translate into actually doing so; and (3) there’s still a material number that won’t even go so far as to make that verbal commitment, despite upcoming federal penalties and incentives.

Here’s some of the key findings from Accenture:

• 58% of non-users intend to purchase an EMR system within the next two years;

• About 80% of physicians under age 55 plan to implement an EMR system within the next two years;

• 75% of non-users are potentially interested purchasing an EMR system from a local hospital - if at least subsidized for about half the cost;

• The key driver of EMR adoption is federal legislation - 61% cited federal penalties for non-adoption and 51% cited federal incentives;

• Non-users underestimate the cost and time requirements to implement an EMR system, but also have an exaggerated perception of difficulties in using EMR systems, compared to the actual experiences of EMR users;

• 90% of current EMR users – believe that their system has brought value to their practice- providing an effective overview of patients’ relevant history, records and information; and allowing quick and accurate data entry.

Accenture credits federal legislation for stimulating interest. Dr. Kip Webb, who leads their clinical transformation practice, tells us “our research indicates that, as intended, federal legislation is an important driver of EMR adoption among U.S. physicians. If U.S. health care providers properly implement and use EMRs more broadly, there is no doubt that EMRs can make an important contribution to improving quality of care and controlling costs.”

While a wider number have some level of EMR, Accenture notes that “today, just six percent of U.S. office-based physicians use a fully functioning system.”

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.

Membercentricity Defines Medicare Member Retention

By Lindsay Resnick, February 8, 2010

Member-centric Medicare Advantage plans have loyal, trusting customers. It’s not easy to steal a loyal member. More importantly, loyalty equals customer LifeTime Value which translates into stable membership and sustained profitability. In the Medicare market, competitive rivalry is at an all-time high, with well-orchestrated “switcher” campaigns targeting YOUR members. And, at a time when beneficiaries are seeing big changes in benefits and rates, plans seeing even the slightest uptick in voluntary disenrollment are also feeling the threat to long-term profitability.

Retaining members by creating loyal, satisfied customers has never been more important; particularly when acquiring new members is as much as 5-times the cost of keeping existing ones. Successful member retention takes proactive, personal customer service built on an attitude of MEMBERCENTRICITY. Improving customer loyalty is one of the least expensive, most impactful ways to protect membership and improve margins. Successful retention programs are based on three core principles:

• Data Driven The more you know about your customers, who’s at risk and what’s important to them, the more members you will retain. Understanding your customer demographic and psychographic indicators helps build loyalty.

• Continuous Interaction Frequent, personalized member outreach has huge payoff by reinforcing plan value and reaffirming a consumer’s purchase— from welcome calls to an array of “after-sale sale” communications.

• Meaningful Messaging Create a dialogue with customers…not a monologue. Seniors are looking for guidance and interaction that’s meaningful to their situation throughout their membership lifecycle—part customer service, part sales, and part senior advocacy.

Across America, consumers have become much less forgiving of bad service. In a heartbeat, they will just take their wallet and loyalty somewhere else. A member-centric Medicare Advantage experience involves every interaction with a plan’s members?every telephone call, every email exchange, and every written communication. Make sure your plan embraces a high-touch, high-results philosophy. Retention is the ultimate measure of success in Medicare Advantage.

Women Rule in Consumer Health Internet use

By Clive Riddle, February 4, 2010

The CDC’s National Center for Health Statistics this week released preliminary results from their National Health Interview Survey, a national household survey regarding consumer use of health information technology with data collected from January through June 2009.

Their report cites a previous study:  The social life of health information [online]. Pew Internet and American Life Project. 2009, which found 74% of adults in the U.S. use the Internet, 61% have used the Internet to search for health or medical information and, 49% of adults have accessed a website that provides information about a specific medical condition or problem.

• The new National Health Interview Survey examined use by adults age 18-64 and found that women’s consumer use of health care internet exceeded men’s in every category:
• 50.8% used the Internet to look up health information during the past 12 months (58.0% of women, 43.4% of men)
• 3.3% used an online chat group to learn about health topics in the past 12 months (4.1% of women, 2.5% of men)
• 4.9% communicated with a health care provider by e-mail in the past 12 months (5.6% of women, 4.2% of men)
• 6.0% requested a refill of a prescription on the Internet during the six month survey period ((6.6% of women, 5.3% of men)
• 2.7% had made an appointment with a health care provider in the past 12 months using the Internet (3.5% of women, 1.8% of men)