Health Plan Medical Ratio and Administrative Expense Snapshots

by Clive Riddle, September 20, 2019

Two reports on health plan performance were released this week:  Mark Farrah Associates issued an analysis brief providing insights into mid-year profitability for commercial and government lines of health insurance business entitled: Health Insurance Segment Mid-Year 2019 Profitability; and Sherlock Company's September 2019 Plan Management Navigator summarized cost trends among Medicare-focused plans.

Key findings from the Mark Farrah report on health plan profitability include:

• At the end of second quarter 2019, the average medical expense ratio for the Individual segment was 73.9%, as compared to 69.0% the previous year.
• Growth in medical expenses pushed the average medical expense ratio for the Employer-Group segment up to 81.4% for 2Q19 from 80.5% in 2Q18.
• For Medicare Advantage, premium growth outpaced increases in medical expenses pushing the medical expense ratio down to 84.7% from 85.5% in 2Q18.
• An increase of 9.7% in medical expenses per member per month pushed the medical expense ratio for Managed Medicaid up to 92.0% from 88.8% in 2Q18.

Their report concludes “at mid-year 2019, all four health care segments are signifying reduced levels of profitability for health insurers over 2018.  Due to the minimum MLR constraints placed upon the individual segment, the stagnation of premium growth along with the rise in the mid-year med expense rations is not surprising, especially after the underwriting gains reaped in 2018.”

While Mark Farah Associates focused on profitability driven by medical expenses, Sherlock Company reported on administrative expenses and found that “for 2018, Medicare-focused plans experienced administrative cost growth, excluding Miscellaneous Business Taxes, of 6.4%. Account and Membership Administration [expenses were] also trending higher in 2018 at 7.0%, up from last year’s increase of 3.7%.

For Medicare-focused plans, they found “High cost Medicare Advantage grew at a median rate of 4.1%, Medicare SNP grew at a median rate of 5.7%, while low cost Medicaid increased at a median rate of 1.1%. The Commercial Insured product membership fell by a median rate of 2.1%, while Commercial ASO grew at a median rate of 3.5%. Overall, commercial membership decreased by 1.9%. Comprehensive membership in continuous plans fell by a median rate of 1.5%.

Health Plan Medicare Ratio and Administrative Expense Snapshots

by Clive Riddle, September 20, 2019

Two reports on health plan performance were released this week:  Mark Farrah Associates issued an analysis brief providing insights into mid-year profitability for commercial and government lines of health insurance business entitled: Health Insurance Segment Mid-Year 2019 Profitability; and Sherlock Company's September 2019 Plan Management Navigator summarized cost trends among Medicare-focused plans.

Key findings from the Mark Farrah report on health plan profitability include:

• At the end of second quarter 2019, the average medical expense ratio for the Individual segment was 73.9%, as compared to 69.0% the previous year.
• Growth in medical expenses pushed the average medical expense ratio for the Employer-Group segment up to 81.4% for 2Q19 from 80.5% in 2Q18.
• For Medicare Advantage, premium growth outpaced increases in medical expenses pushing the medical expense ratio down to 84.7% from 85.5% in 2Q18.
• An increase of 9.7% in medical expenses per member per month pushed the medical expense ratio for Managed Medicaid up to 92.0% from 88.8% in 2Q18.

Their report concludes “at mid-year 2019, all four health care segments are signifying reduced levels of profitability for health insurers over 2018.  Due to the minimum MLR constraints placed upon the individual segment, the stagnation of premium growth along with the rise in the mid-year med expense rations is not surprising, especially after the underwriting gains reaped in 2018.”

While Mark Farah Associates focused on profitability driven by medical expenses, Sherlock Company reported on administrative expenses and found that “for 2018, Medicare-focused plans experienced administrative cost growth, excluding Miscellaneous Business Taxes, of 6.4%. Account and Membership Administration [expenses were] also trending higher in 2018 at 7.0%, up from last year’s increase of 3.7%.

For Medicare-focused plans, they found “High cost Medicare Advantage grew at a median rate of 4.1%, Medicare SNP grew at a median rate of 5.7%, while low cost Medicaid increased at a median rate of 1.1%. The Commercial Insured product membership fell by a median rate of 2.1%, while Commercial ASO grew at a median rate of 3.5%. Overall, commercial membership decreased by 1.9%. Comprehensive membership in continuous plans fell by a median rate of 1.5%.

Costs & Transparency Number One for 2020 on HCEG’s Top 10 List

By Clive Riddle, September 12, 2019

Once  September is upon us and Pumpkin Spice lattes invade your nearest Starbucks, Christmas decorations should be arriving any day at your nearest Costco, and its not too early to think about what  are the top issues we will be facing in the business of healthcare in new year ahead.

 The Healthcare Executive Group has been doing exactly that for the past decade, presenting their top 10 list of issues at this time for the next year, have announced that for 2020 “Costs & Transparency was voted as the #1 issue/challenge facing healthcare by over 100 C-Suite and director level executives in the industry.”

HCEG explains that “executives from payer, provider and technology partner organizations were presented with a list of over 25 topics. Initially compiled from webinars, roundtables and the 2019 Industry Pulse Survey, the list was augmented by in-depth discussions during the [HCEG Annual] Forum, where industry experts explored and expounded on a broad range of current priorities within their organizations.”

Ferris W. Taylor, HCEG Executive Director in a statement comments that “It shouldn’t be surprising that costs and transparency is at the top of the list along with the consumer experience and delivery system transformation. Data, analytics, technology and interoperability are still ongoing challenges and opportunities. At the same time, executives need to be cautious, as individual health, consumer access, privacy and security are on-going challenges that also need to remain as priorities.”

Here, verbatim is the 2020 HCEG Top 10 Challenges, Issues and Opportunities:

1. Costs & Transparency - Implementing strategies and tactics to address growth of medical and pharmaceutical costs and impacts to access and quality of care.

2. Consumer Experience - Understanding, addressing and assuring that all consumer interactions and outcomes are easy, convenient, timely, streamlined,  and cohesive so that health fits naturally into the “life flow” of every individual’s, family’s and community’s daily activities.

3. Delivery System Transformation - Operationalizing and scaling coordination and delivery system transformation of medical and non-medical services via partnerships and collaborations between healthcare and community-based organizations to overcome barriers including social determinants of health to effect better outcomes.

4. Data & Analytics -  Leveraging advanced analytics and new sources of disparate, non-standard, unstructured, highly variable data (history, labs, Rx, sensors, mHealth, IoT, Socioeconomic, geographic, genomic, demographic, lifestyle behaviors) to improve health outcomes, reduce administrative burdens and support transition from volume to value and facilitate individual/provider/payer effectiveness.

5. Interoperability / Consumer Data Access - Integrating and improving the exchange of member, payer, patient, provider data and workflows to bring value of aggregated data and systems (EHR’s, HIE’s, financial, admin and clinical data, etc) on a near real-time and cost-effective basis to all stakeholders equitably.

6. Holistic Individual Health - Identifying, addressing and improving the member/patient’s overall medical, lifestyle/behavioral, socioeconomic, cultural, financial, educational, geographic and environmental well-being for a frictionless and connected healthcare experience.

7. Next Generation Payment Models - Developing and integrating technical and operational infrastructure and programs for a more collaborative and equitable approach to manage costs, sharing risk and enhanced quality outcomes in the transition from volume to value. (bundled payment, episodes of care, shared savings, risk-sharing, etc).

8. Accessible Points of Care - Telehealth, mHealth, wearables, digital devices, retail clinics, home-based care, micro-hospitals; and acceptance of these and other initiatives moving care closer to home and office.

9. Healthcare Policy - Dealing with repeal/replace/modification of current healthcare policy, regulations, political uncertainty/antagonism and lack of a disciplined regulatory process. Medicare-for-All, single payer, Medicare/Medicaid buy-in, block grants, surprise billing, provider directories, association health plans, and short-term policies, FHIR standards, and other mandates.

10. Privacy / Security - Staying ahead of cybersecurity threats on the privacy of consumer and other healthcare information to enhance consumer trust in sharing data. Staying current with changing landscape of federal and state privacy laws.

Corresponding with Executive Director Ferris Taylor, I asked who the list has changed and evolved during the past five years. Ferris replied that “everything has changed in healthcare in the last 5 or so years and that is reflected in the changes in the HCEG Top 10. The Affordable Care Act was really the 'accessible care act' - upwards of 20 million more people now have insurance but affordability in terms of premiums and escalating deductibles have affected everyone. It shouldn't be surprising then that cost and transparency has gone to the top of the list. For 2020, the HCEG Top 10 relate much more to how central the consumer is for all stakeholders. Healthcare is finally coming into the 21st century with digital technology, holistic individual health and a focus on the consumer journey in everything we do." 

New Changes in Health Care Executive Pay

The Spring 2019 issue of Warren Salary Surveys is published and there are some interesting findings highlighted here.

Warren is the oldest and largest survey of its kind reporting 600 positions in the health care industry. Large and small health plans, health systems and ACOs are reporting their data every 6 months and the data includes salary, bonus by region and by size and type of plan.

This week saw a report of a large health system in the southwest began to move bonus payments in line with patient engagement. By using HCAPS score improvement as well as patient complaint resolution and satisfaction scoring to create a base formula for bonus pay, the health system is moving towards a more patient centric incentive system.

Signaling further changes in the health care compensation programs offered by Accountable Care Organizations and Health Maintenance Organizations, Warren is observing an increase in compensation for positions such as financial analysts representing a 3.32% increase over 2018 to $68,859 and Underwriters moving to $66,749 as an average reported nationally by over 160 plans over the past year (Collected in spring 2019).

VP of Planning and Development saw a large jump of 5% to $243,181.00 over last year, perhaps revealing more focus on new markets and new products. In the medical management departments, there was an increase in pharmacy service coordinator to $52,457, underscoring for many health plans the need to better manage pharmacy costs especially for Medicare Advantage patients.

The biggest gain was in the position of Clinical Informaticist: a 13% gain to a salary averaging $105,778. These people are very hard to find and several organizations have started to create an internal training program to move some of their health information specialists into affiliated support roles to learn the clinical informatics discipline and support the lead informatics person.

Finally, the newer lead executive positions in Accountable Care Organizations CEO show an average salary of $269,575 with a range of $211,911 in the mountain states to $356,888 in the northeast. The majority of the ACOs reporting were not-for-profit with an average of $280,953 salary. At this point few bonuses have been calculated for the ACO chief executive, but Warren sees the above formula of measuring patient engagement improvements to be a very new but a meaningful way for ACO Boards of Directors and managers to consider these types of incentives to attract and retain talented ACO executives who continue to be elusive in the marketplace.

Further information can be obtained at: www.warrensurveys.com

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: 

They Got Estimates Before Surgery — And A Bill After That Was 50% More

Before scheduling his hernia surgery, Wolfgang Balzer called the hospital, the surgeon and the anesthesiologist to get estimates for how much the procedure would cost. But when his bill came, the estimates he had obtained were wildly off.

Kaiser Health News

Friday, August 30, 2019

Health insurers slam CMS proposal to alter Medicare Advantage audits

Health insurers and their industry trade groups this week urged the federal government to scrap proposed changes to the way it audits Medicare Advantage plans, warning the changes could result in higher costs and reduced benefits for seniors.

Modern Healthcare

Thursday, August 29, 2019

Medicare Part D paid millions for drugs already covered by Part A hospice benefits

Despite a previous warning, the Center for Medicare and Medicaid Services failed to take steps to ensure the Medicare Part D program does not also pay for medicines that should be covered under the Medicare Part A hospice benefit, resulting in an estimated $161 million in duplicate payments in 2016, according to a new federal government analysis.

Stat News

Thursday, August 29, 2019

Administration ends protection for migrant medical care

The Trump administration has eliminated a protection that lets immigrants remain in the country and avoid deportation while they or their relatives receive life-saving medical treatments or endure other hardships, immigration officials said in letters issued to families this month.

AP News

Monday, August 26, 2019

Judge Cites Opioid ‘Menace,’ Awards Oklahoma $572M In Landmark Case

An Oklahoma judge has ruled that drugmaker Johnson & Johnson helped ignite the state’s opioid crisis by deceptively marketing painkillers and must pay $572 million to the state.

Kaiser Health News

Monday, August 26, 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.

Key Consumer Touchpoints: Patient Bills and Patient Reviews

by Clive Riddle, August 23, 2019

Patient bills and patient reviews and two consumer touchpoints with significant business impact for providers. Two papers have just been released with survey results on these topics.

OODA Health in partnership with HIMSS has just released a 7-page report: Why Patient Payments are a System Issue, that examines “how consumer healthcare payment dysfunction affects all healthcare stakeholders, creating unforeseen system-wide issues and interfering with patient care. The study surveyed executives from U.S. hospitals and health systems, health insurers, payers and health plan administrators.”

Their survey found: 

• Two-thirds of clinicians indicated that dealing with patient collections takes time away from patient care
• Providers say 44% of patients are frequently distracted by bills and payment concerns, resulting in a lower level of compliance and adherence to medical plans
• 67% of providers use patient collections to justify rate increases during payer negotiations
• 85% of payers report that member satisfaction drives benefit design, at least to a moderate extent
• 63% of payers report they want greater insight into how plan complexity is experienced by the member
• 4% of payers indicated that having actual consumer payment data would improve their models

Meanwhile PatientPop has just released a 17-page white paper, their second annual study: Healthcare Providers Survey Report: Online Reputation Management,  in which they surveyed 233 healthcare providers nationwide about their online reputation management experiences to learn more and identify trends. PatientPop found that: 

• 47.6% of healthcare providers say they’re not sure how to positively affect their reputation. 
• 76.1% of healthcare providers worry about receiving negative reviews from patients; 41% are very or extremely concerned. 
• 89.9% of healthcare providers have seen reviews of their practices online. 
• More than half of healthcare providers say they have seen reviews of their practice on Google and Yelp. 
• 64.5% of healthcare providers have visiting patients who say they’ve read a review of their practice. 
• 52.2% of practices spend 10+ hours a week on administrative tasks related to patient communication. Of those, 34.7% spend 30+ hours a week.

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: 

$16B veterans' health project hits major snag

Veterans Affairs Secretary Robert Wilkie insisted last week that the Trump administration is "on track" with a $16 billion project to connect medical records for the military and vets.

Politico

Friday, August 23, 2019 

Dialysis Industry Spends Big To Protect Profits

The dialysis industry spent about $2.5 million in California on lobbying and campaign contributions in the first half of this year in its ongoing battle to thwart regulation, according to a California Healthline analysis of campaign finance reports filed with the state.

Kaiser Health News

Friday, August 23, 2019 

Opioid Treatment Is Used Vastly More in States That Expanded Medicaid

States that expanded Medicaid under the Affordable Care Act have seen a much bigger increase in prescriptions for a medication that treats opioid addiction than states that chose not to expand the program, a new study has found.

NY Times

Thursday, August 22, 2019 

Exclusive: Cigna seeks sale of group benefits insurance business - sources

U.S. health insurer Cigna Corp is exploring a sale of its group benefits insurance business, which could be valued at as much as $6 billion, four people familiar with the matter said on Tuesday.

Reuters

Wednesday, August 21, 2019 

The Collapse Of A Hospital Empire — And Towns Left In The Wreckage

The money was so good in the beginning, and it seemed it might gush forever, right through tiny country hospitals in Missouri, Oklahoma, Tennessee and into the coffers of companies controlled by Jorge A. Perez, his family and business partners.

Kaiser Health News

Tuesday, August 20, 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.

Ten Things to Know From the NBGH Employer Survey

By Clive Riddle, August 16, 2019

The National Business Group on Health has released their annual study - The 2020 Large Employers' Health Care Strategy and Plan Design Survey, which found “employers project the total cost of health benefits will rise 5% in 2020, taking cost management initiatives into account. That increase is identical to 2019’s projected increase - but actual costs are coming in lower. Large employers reported the actual increase in 2018 was 3.6%.”

For comparison, PwC's Health Research Institute in their June report: Medical cost trend: Behind the numbers 2020, projected which projects the 2020 trend to be a six percent cost increase.  In late July Milliman released their 2019 Milliman Medical Index, a 12-page report and their 15th annual analysis that "measures healthcare costs for individuals and families receiving coverage from an employer-sponsored preferred provider plan (PPO). For 2019, they found overall healthcare costs for a hypothetical family of four have reached $28,386, an increase of 3.8% from the year prior.

Here’s ten things to know from this year’s NBGH study:

1. Total cost of health care per employee including premiums and OOP is estimated to be $14,642 for 2019 and $15,375 in 2020.
2. The employers will cover contribution is about 70% of costs while employees will bear about 30%, 
3. 44% of employers ranked musculoskeletal issues as the top condition impacting their costs. 85% ranked it among the top three conditions.
4. The top two listed large employer initiatives for 2020 were: (1) Implement more virtual care solutions - 51%; (2) More focused strategy on high-cost claims - 39%
5. 31% of employers plan to implement an ACO or high performance network in select markets in 2020
6. 49% of employers plan to pursue an advanced primary care strategy in 2020, and another 26% are considering one by 2022.
7. 34% of employers will deliver advanced primary care through an onsite or near-site health center 
8. 85% of employers rate high-cost drugs as the number one or two most concerning pharmacy issues.
9. 20% of employers will have a point of sale prescription rebate program in 2020, but 67% favor a model based on net price of medications with no rebate as an alternative.
10. The number of employers offering full replacement consumer-directed health plans will shrink to 25% in 2020, down from 30% this year and 39% in 2018.

The Latest on Physician Burnout

By Clive Riddle, August 9, 2019

InCrowd has just released their 16-page 2019 Physician Burnout Survey report - a follow-up to their 2016 burnout research, asking their participating physicians how they’re coping with job-related stress. They found “sixty-eight percent of US-based physicians surveyed reported experiencing burnout at some level,” and that “primary care physicians (PCPs) report higher burnout rates than specialists, with 79% of PCPs personally experiencing burnout compared with 57% of specialists. And, more than a third of InCrowd physicians surveyed said they would not recommend their profession to a young family member.”

The report also shares findings that: 

• Burnout is highest among younger physicians, with those in their 30s and 40s reporting highest rates of burnout (74%), and burnout rates dropping thereafter.
• Hospital employees report slightly worse metrics for addressing burnout (20% effective) compared to those who work across private practices (27% effective).
• Those who report that their facilities effectively address burnout credit workplace initiatives that improve workflow (46%), provide schedule flexibility (45%), and support wellness (41%).
• When asked what actions their facilities could take to alleviate the issue of physician burnout, over half of respondents report that increased support staffing (66%), mandatory vacation time or half-days (57%), and reduced patient volume (56%) are likely to help. 

InCrowd notes their findings are “higher than the 43-54% range found in MedScape’s 2019 national report yet lower than the 80% of The Physicians Foundation/Merritt Hawkins biennial survey of September 2018. With PCPs, however, InCrowd found nearly 80% burnout levels—dramatically higher than the 43.9% cited in an American Academy of Family Physicians (AAFP) study of March 2019, which itself reflected a decline from 54.4% in 2014.”

Last month, Spok, Inc. released a paper: "Clinician Burnout in Healthcare: A Report for Healthcare Leaders" providing survey results from over 470 clinical staff at U.S. hospitals and health systems. in which clinician perception of burnout was measured. 92% of clinicians said burnout is “a public health crisis that demands urgent action.” 

When asked "what prevents clinicians from seeking help for potential symptoms of burnout, the No. 1 obstacle cited by respondents (65%) was that their organization lacks institutional attention and resources. When asked how often their organization leaders discuss burnout, 47% said rarely or never."  When asked "whether increased or ineffective technology contributes to the risk of clinician burnout, the vast majority (90% of all respondents) strongly or moderately agreed. And 89% of respondents said burdensome or increased workload (not related to direct patient care) is the biggest factor that contributes to this risk."

The Spok survey also found:

• 70% experience symptoms of burnout "considerably” or “a great deal.
• 95% believe improving EHR usability will be at least somewhat helpful
• 30% of respondents said their organizations are improving EHR usability
• Nurses use an average of 4.1 technology systems daily 
• Physicians use an average of 3.9 systems daily and clinical leaders 3.5
• 20% reported mental health treatment or support is available
• 13% have a chief wellness officer or equivalent
• 11% reported not experiencing risk factors including work-related stress, lost satisfaction, or a loss of efficacy in their own work

The Spok survey certainly lays much of the problem at the lap of HER. The InCrowd survey asked for suggestions on how to reduce burnout and “more than half (51%) of those providing additional recommendations suggest improving processes related to administrative burden: 23% suggest employing scribes, 23% advocate for reduced documentation, and 5% propose scheduling more time for charting.” 

Two Papers on the Health Plan Medicare Opportunity

By Clive Riddle, August 2, 2019 

Oracle has released an Executive Insight paper on the Opportunity Ahead for Agile and Efficient Medicare Advantage Plans,  cautioning that “While the opportunity is great, MA plans are not automatically a wise or profitable business decision for all health insurers. There is growing competition as new players enter the market, and cost and margin pressures continue unabated. To make the most of this opportunity, MA plans must look to accelerate innovation while optimizing costs across their enterprises— from marketing and enrollment to plan configuration, claims processing, compliance, and renewal.”

They report on three development plans should consider now:

1. It is “Time to flex strength with expanded flex benefits. In 2019, MA plans were cleared to offer new flex benefits, designed to move plans toward expanded population health capabilities.”
2. “MA plans look to differentiate on other fronts and deliver high levels of service—without placing profitability and stability in peril.”
3. Payers are eager to bring new urgency and focus to improving claims accuracy and delivering innovative provider payment models.

HealthEdge has just released results of its Voice of the Market Survey, a study of 201 health insurance executives directly involved in Medicare lines of business. 92% responded that they are trying to grow their Medicare Advantage book of business faster than their traditional Medicare Supplement business.

Here’s some key findings from their survey:

• 53.2% said the value-based model of Medicare Advantage significantly factors into a desire to grow the business, while 42.8% said it moderately factor in.
• Expanding to new service areas ranked first in level of importance as the steps being taken to attract new Medicare and Medicare Advantage members, followed by (2) Appealing to tech-savvy digital consumers; (3) Providing incentives for healthy behaviors; (4) Addressing social determinants of health; and (5) Marketing/advertising to prospective members
• Applicable steps above get re-ordered somewhat when ranking importance to retain current Medicare and Medicare Advantage members: (1) Appealing to tech-savvy digital consumers; (2) Addressing social determinants of health; (3) Providing cost transparency; (and 4) Providing incentives for healthy behaviors; (5) Providing education services to members about their benefits
• There is not consensus on what is the biggest challenge to acquiring new members in the Medicare or Medicare Advantage (MA) line of business.  29.4% said it was funding/executing marketing outreach to  attract new members; 23.8% said competitors who  dominate the market; 22.4% said offering the variety of  plans necessary to satisfy members; and  19.9% answered differentiating  between MA and  traditional Medicare.
• When asked “what is the biggest external challenge your organization faces in the Medicare and Medicare Advantage line of business.” Competitors seem top of mind, with 34.3% responding “competition”; and another 29.9% stating “members unwilling to switch plans from a competitor. Other responses were 19.9% replying “regulations” and 15.9% saying “member demands.”

Four Questions for Erin Benson and Courtney Timmons with LexisNexis Health Care: Post-Webinar Interview

By Claire Thayer

Erin Benson, Director Market Planning and Courtney Timmons, Market Planning Specialist, LexisNexis Health Care, participated in a Healthcare Web Summit webinar discussion on ways for health plans to reduce the risk of a data breach, the necessary steps to validate and verify member information, and ingredients for a strong multi-factor authentication strategy.  If you missed this engaging webinar presentation, you’ll want to be sure to watch the Webinar Video. After the webinar, we interviewed Erin and Courtney on four key takeaways:  

1. What are some of the key ways health plan members are using their member portals? 

Erin Benson and Courtney Timmons: Health plan members are increasingly using their member portals as a tool to View and get answers to coverage questions

•  Track claims and account activity
•  Locate providers and services
•  Find health advice
•  Manage their member profile
•  Pay bills

2. With the rise of digital healthcare, there's also a rise in online fraud. Tell us more about how this impacts healthcare firms?

Erin Benson and Courtney Timmons: 

As the ways in which members access their data becomes more sophisticated, so too do the ways in which hackers are finding ways to commit fraud:

• More than 1 in 10 new account openings are fraudulent with 60% of those accounts being created using a mobile device
• Call center fraud is up 113%
• A record 1 Billion BOT attacks were seen in Q1 of 2018
• There has been a 202% growth in login attacks since 2016
• And 88% of all ransomware attacks were against healthcare organizations in 2017 –healthcare organizations are known on the black market to pay      

When fraudsters are successful it compromises patients’ trust in the healthcare organization, increases costs if they have to remediate a breach, and potentially leads to member safety risks if any of the patient’s health data is altered and care givers then act on bad information. Not to mention members will go somewhere else if they don’t trust that you can take care of their data.

3. You've mentioned that identity is the key to solving the challenge of balancing member engagement and data security. How do these interact together?

Erin Benson and Courtney Timmons: The healthcare organization should determine when and how to communicate with the member, ensuring updated contact information is maintained to best engage them. The member’s information should be protected from fraudster access. A foundational step is for healthcare organizations to aggregate the many data points about each member into one location linked together by a unique, persistent member-level identifier to create the one golden record about the individual.

Identity management and proofing, in tandem with new technological innovation, allows organizations to:

•  Perform intuitive linking of data points to the accurate identity
•  Leverage cross-industry analytics that allow organizations to determine if an identity enrolling in   your plan actually exists and if all of the identity information is accurate and belongs together, and 
•  Monitor transaction activity across a diverse array of industries from financial, retail, insurance and   government, using machine learning to build analytics, provide fraud intelligence and track   fraudulent behaviors and schemes.
   

In order to protect their data, you have to know who to grant access to and be able to verify their identities. Knowing your members will allow you to validate that the right users get access to their information, while keeping fraudsters out, and providing insight into who is accessing your site, mobile application and/or portal no matter where in the medical journey a member… or fraudster… is trying to gain access. 

4. Identity verification is complex. What are a few key considerations in selecting identity verification layers? 

Erin Benson and Courtney Timmons:  Various types of authentication methods should be used to cover different types of security vulnerabilities.  It is important to implement solutions that serve different purposes, targeting different types of fraud.

Some questions to ask as you develop your strategy are:

• Do we have a way of preventing fraud such as BOT attacks or ransomware by scanning devices trying to gain access to our portal?
• Can we confirm that the user requesting access to the data is the owner of that identity?
• Does the input identity exist and do all of those data elements belong together?

We recommend putting the no to low friction solutions up front in the process and introducing solutions with increasing levels of friction later in the process so only suspicious identities are facing additional scrutiny before logging in or completing a high risk transaction. 

Overconfident Healthcare Organizations? Could Be According to Healthcare Cybersecurity Survey

By Clive Riddle, July 19, 2019

LexisNexis Risk Solutions in collaboration with Information Security Media Group has released results from their recent survey of hospitals, medical groups and payers, in their new 18-page report The State of Patient Identity Management, which found 50% are confident they have the necessary controls in place to prevent unauthorized access to patient information, 58% believe their portal cybersecurity is above average (and only 6% feel they are below average), yet 35% don’t deploy multifactor authentication.

To digress, some insight into those results can be gained from reading last week’s mcolblog post by Kim Bellard on Our Dinning-Kruger Healthcare System, which discusses the Dunning Kruger effect involving “the cognitive bias that leads people to overestimate their knowledge or expertise,” illustrated in the world of NPR’s Lake Wobegon – where “all the children are above average.” 

88% of the organizations surveyed had patient/member portals, and 93% use username and password as the patient portal authentication method. 65% deploy multifactor authentication, with 39% using a knowledge-based Q&A for verification, 38% using email verification, and 13% deploy device identification. 65% report that their individual state budgets for patient identity management will not increase in 2019.

Here’s the top three cybersecurity takeaways of the report according to LexisNexis:

1. Traditional authentication methods are insufficient: As a result of many healthcare data breaches, hackers have access to legitimate credentials; users are also easily phished. Therefore, traditional username and password verification are considered an entry point, not a barrier, and alone cannot be relied upon to provide a confident level of security.
2. Multifactor authentication should be considered a baseline best practice: HCOs should rely on a variety of controls, ranging from knowledge-based questions and verified one-time passwords to device analytics and biometrics to authenticate users based on the riskiness of the transaction. The more risky the access request is, the more stringent the authentication technique should be.
3. The balance between optimizing the user experience and protecting the data must be achieved in an effective cybersecurity strategy: HCOs need to make it easy for patients and partners to access records while ensuring adequate data protection. To do this, an HCO's cybersecurity strategy should layer low to no-friction identity checks up front, making it easier for the right users to get through and layer more friction-producing identity checks on the back end that only users noted as suspicious would complete.

Speaker Panel Answers My Accreditation Questions

By Claire Thayer, July 15, 2019

In June, Iris J. Lundy of Sentara Healthcare, Lorie Gillette and Dr. Robert C. Pendleton of the University of Utah Health, Lori Flies of Houston Methodist, and Patrick Horine, Chief Executive Officer at DNV GL Healthcare participated in a Healthcare Web Summit webinar discussion on how accreditation can be a catalyst for improvement in care quality, patient outcomes and overall operational efficiency. If you missed this lively presentation, you'll want to be sure to watch the Webinar Video. After the webinar, we interviewed our speakers on four key takeaways: 

1. Can you describe some of the quality improvement benefits within your system that have been implemented since contracting with DNV GL Healthcare? 

Lori Flies: At Houston Methodist, a few of the many quality improvement benefits included:

Implementation of ISO 9001 internal survey/internal audit using a process-based approach has improved identification of variations in quality and safety so that we can take corrective actions and evaluate improvement. Another benefit that we implemented was structured management review to quality and safety variations has resulted in leader decisions that drive improvements, such as ED throughput. Lastly, since contracting with DNV GL Healthcare, we’ve experienced stronger integration of clinical and non-clinical aspects of patient care; for example, last year working with both clinical and facility aspects of assessing ligature risk. 

2. You've talked about process owners within each of your hospitals, can you tell us more here? 

Iris Lundy: Each NIAHO standard or an identified process has an owner within the hospital (process owner) and a system lead who serves as the subject matter expert.  These individuals assist with developing educational material and other tools to assist their hospital with successfully implementing.  The system person assists to ensure we are standardizing as much as appropriate across our system.  There is also a VP sponsor for each of these groups to assist with removing barriers when they are identified. 

3. As an academic health system, you've mentioned historic silos within organization structure and clinical specialties. How did implementing management to support ISO 9001 force you to break down these silos? 

Bob Pendleton and Lorie Gillette: At the University of Utah Health, when we implemented a management system as per the ISO 9001 standards, silos were broken down due to the new reporting structure for management review which included adding key directors as well as executive leaders. The goal was to spread system information requiring process improvement and in turn, agree upon shared system goals collaboratively. Providing training and aligning goals on a system level provided the impetus to break down silos.  

4. Can you tell us how DNV GL approaches accreditation and give us a few examples of how you work more collaboratively with hospitals and why this approach is advantageous for the hospital? 

Patrick Horine: We think of our hospitals as partners. This process should be meaningful to the hospital leadership and staff. It is not just about noting a finding, but you want to understand how an organization applies a standard and their process. Doing so enables us to share insight, share ideas on how other organizations meet the requirements, and what they may consider for making improvements. We learn from the hospitals as well that we can improve our process and use to help others. We still hold the hospitals accountable for compliance, we just take a different approach in doing so. This is advantageous because the hospital staff get more from the survey experience. They see the practical application and understanding of the requirements and appreciate this being more than just passing the survey for the certification and about improving for their patients.   

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: 

‘Cadillac Tax’ on High-Cost Health Plans Could Affect 1 in 5 Employers in 2022

A new KFF analysis estimates that the Affordable Care Act’s tax on high-cost health plans would affect one in five (21%) employers offering health benefits when it takes effect in 2022 unless employers change their health plans.

Kaiser Health News

Friday, July 12, 2019 

Reckitt Benckiser Agrees to Pay $1.4 Billion In Opioid Settlement

British company Reckitt Benckiser has agreed to pay $1.4 billion to resolve all U.S. government investigations and claims in what is the biggest drug industry settlement to date stemming from the nation's deadly opioid epidemic.

NPR

Thursday, July 11, 2019 

As Its Drug Pricing Plans Fall Through, Trump Administration Turns To Congress To Act

The Trump administration has dropped one of the meatiest portions of its plan to reduce drug prices.

NPR

Friday, July 12, 2019 

California Effort to Stop Surprise Hospital Bills Stalls

A California proposal aimed at limiting high medical bills from emergency room visits has stalled for the year.

Associated Press

Thursday, July 11, 2019 

Congress has ambitious agenda tackling health care costs

Lawmakers are trying to set aside their irreconcilable differences over the Obama-era Affordable Care Act and work to reach bipartisan agreement on a more immediate health care issue, lowering costs for people who already have coverage.

Associated Press

Monday, July 8, 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.

Our Dunning-Kruger Healthcare System

By Kim Bellard, July 11, 2019

Psychologist David Dunning, originator of the eponymous Dunning-Kruger effect, recently gave an interview to Vox’s Brian Resnick. For those of you not familiar with the Dunning-Kruger effect, it refers to the cognitive bias that leads people to overestimate their knowledge or expertise. More importantly, those with low knowledge/ability are mostlikely to overestimate it.

Dr. Dunning believes that we tend to think that this effect only applies to others, or only to “stupid people,” when, in fact, it is something that impacts each of us As Dr. Dunning told Mr. Resnick, “The first rule of the Dunning-Kruger club is you don’t know you’re a member of the Dunning-Kruger club. People miss that.”

So, how does this relate to our healthcare system?

We brag about our excellent care, our great hospitals and doctors, and all those healthcare jobs powering local economies. Yet we have by far the most expensive healthcare system in the world, which is expensive not because it delivers better care or to more of its population than health systems in other countries, but because it feels it is justified in charging much higher prices. Our actual outcomes, quality of care, and equity are all woefully mediocre on a number of measures.

How many of you live in an area that has at least one hospital system claiming to be one of the “best” hospitals in the country? Similarly, how many of us like to believe that our doctors are “the best”? Perhaps they even have “best doctors” plaques in their offices to support this claim.

Statistically speaking, most of us receive average care, and some of us receive sub-standard care. We don’t live in Lake Wobegon. We can’t all be getting the best care, or even above-average care. Just look at how few hospitals earn high ratings from The Leapfrog Group.

In The Atlantic, Olga Khazan reported on a new study that suggests that, despite all their supposed superior knowledge, doctors don’t really make better patients than the rest of us. They get C-sections about as often, and about as unnecessarily as we do, they get about the same amount of unnecessary/low value tests, they’re not better at taking needed prescriptions.

As Michael Frakes, one of the authors told Ms. Khazan, the doctors “went through internships, residencies, fellowships. They’re super informed. And even then, they’re not doing that much better.” Professor Frakes speculated that even physicians tended to be “super deferential” to their own physicians, despite their own training and experience.

It is widely accepted that as much as a third of our healthcare services are unnecessary or inappropriate — even physicians admit that — but, of course, it is other physicians doing all that. No one likes to believe it is their doctor, and few doctors will admit that they are the problem.

Dunning-Kruger, indeed.

Much as they’d like us to, it is not enough for us to always assume that our healthcare professionals and institutions are qualified, much less “the best.” It is not enough for us to trust that their opinions are enough to base our care recommendations on. It is not enough to believe that local practice patterns are right for our care, even when they are at variance with national norms or best practices.

“Trust” is seen as essential to the patient-physician relationship, the supposed cornerstone of our healthcare system, but trust needs to be earned. We need facts. We need data. We need empirically-validated care. We need accountability.

Otherwise, we just fall victim to healthcare’s Dunning-Kruger effect.

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

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:

Scott Gottlieb walks through the revolving door to the Pfizer board

After a two-year stint running the Food and Drug Administration, Scott Gottlieb has joined the board of directors at Pfizer, giving the world’s largest drug maker crucial insights into the inner workings of the Trump administration as it attempts to contain national angst over the rising cost of medicines.

Stat News

Friday, June 28, 2019

Five Things We Found In The FDA’s Hidden Device Database

After two decades of keeping the public in the dark about millions of medical device malfunctions and injuries, the Food and Drug Administration has published the once hidden database online, revealing 5.7 million incidents publicly for the first time.

Kaiser Health News

Thursday, June 27, 2019

Senate health committee may change surprise billing proposals ahead of floor vote

The Senate health committee approved its major healthcare package on Wednesday, but with one change to the proposed ban on surprise medical billing and potentially more to come ahead of a full Senate vote expected later this month.

Modern Healthcare

Thursday, June 27, 2019

In first 2020 debate, Democrats escalate their attacks on pharma and its high prices

Democrats demonized the pharmaceutical industry throughout the first primary debate of the 2020 presidential election, racing to prove their status as the candidate most willing to “take on pharma.”

Stat News

Thursday, June 27, 2019

At AHIP19, a call to 'break glass' to survive fast-changing industry

A panel of top executives, including a major provider, payer and former CMS chief opened America's Health Insurance Plan's annual meeting with some soul searching and a call for the industry to disrupt itself.

Healthcare Dive

Monday, June 24, 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.

Growing where you are already planted

Kristin Rodriguez, Health Plan Alliance, June 24, 2019

 

Dan Michelson, CEO of Strata Decision believes integrated delivery systems need to shift their focus from buying and building hospitals to leveraging their existing platforms to generate growth and often more profitable streams of revenue.  This creates the ability for delivery systems to become a hub for health and healthcare in the future.

What needs to occur for this transformation to take place? 

In an article published in Becker's Hospital Review recapping the 2019 JP Morgan Healthcare Conference, Michelson outlines six ideas for integrated delivery systems to get started on leveraging their existing platform.  Each represents a formidable challenge, but if we work together and take advantage of resources available to us, we can start moving in the right direction.

1. Embrace the digital front door: Healthcare providers have long excelled at building relationships and trust once consumers walk into our hospitals and clinics.  We need to harness the ability to create that same meaningful relationship, without limiting ourselves to a physical location.  
   
   Benjamin Isgur, Health Research Institute Leader at PwC Health Research Institute, echoes this advice.  At the recent Alliance Spring Leadership Forum, he underscored that Private Equity investors are particularly interested in anything that gets closer to the consumer.  And consumers themselves are eager for a new era of care delivery, with new venues and new menu options.  If we don't offer consumers a more convenient alternative, someone else will. 
2. Get serious about affordability: This isn’t just about transparency or about reallocating resources more thoughtfully.  It is bigger than combining clinical and financial data.  The healthcare cost problem is huge and policymakers, drug manufacturers, insurers, delivery providers and consumers all play a role.
   
   It's important we avoid the danger that is “everyone’s problem” becoming “no one’s problem.”  As part of integrated systems, Alliance members are particularly well positioned to get a strong line of sight on this challenge.
3. Don't just provide, prevent: Michelson points to the “strong strategic rationale associated with taking on a broader role of driving health versus only providing healthcare” in the communities we serve.  Policymakers understand this too; Medicaid and Medicare Advantage plans are encouraged more and more toward payment models and benefit design approaches that take on more than just clinical care.
   
   Just a few themes in the government-sponsored care space include VBID, telehealth, benefit flexibility, and behavioral health integration, all of which present unique opportunities to leverage the network, venues of care, community partnerships, and more to reimagine the system’s role in the local healthcare landscape.
4. Partner to innovate, or miss out: Becoming a hub isn’t just about the digital front door or food farmacies. It also means creating a space for innovators to gather, where research and education can occur so that ongoing evolution becomes a core competency of the system.
5. Target chronic conditions and specific services: This builds on the center of excellence model in profound ways.  Systems that craft a powerful experience for specific chronic conditions or targeted services stand a better chance of maintaining a relationship with those consumers.  Michelson notes that this is both an opportunity and a threat for integrated systems, as we compete more and more with new platforms gaining competency in serving chronic conditions, like those of CVS Health and Walgreens. 
6. Don’t just aggregate data – use it:  An Alliance member and informatics leader said that he envisions the day when his informatics teams can stop being data archeologists and can instead be data analysts.  The truth is that integrated systems are still solidifying their competency as data aggregators.  But it’s not enough.  It’s time to turn our attention to applied analytics: practical data sets that provide decision support so that we can gain better insights and pivot our platforms even faster.

With payers big and small across the country, the Alliance member network is a veritable think tank for executives wrestling these questions and challenges.  Join us and work elbow to elbow with your peers at our upcoming events designed exclusively for Alliance organization leaders. You can also meet and hear from Dan Michelson at the Fall Leadership Forum 2019.

Ten Takeaways From PwC’s Medical Cost Trend Behind The Numbers 2020

By Clive Riddle, June 21, 2019 

PwC's Health Research Institute has just released their 14th annual report on medical cost trends: Medical cost trend: Behind the numbers 2020, which projects the 2020 trend to be a six percent cost increase. As PwC's HRI describes their 47-page report, they project "the growth of private medical costs in the coming year and identifies the leading trend drivers.... based on the best available information through June 2019. HRI conducted 55 interviews from February through June 2019 with health industry executives, health benefits experts and health plan actuaries whose companies cover more than 95 million employer sponsored large group members about their estimates for 2020 and the factors driving those trends. Also included are findings from PwC’s 2019 Health and Well-being Touchstone Survey of more than 550 employers from 37 industries as well as PwC HRI’s national consumer survey of 2,500 US adults."

Here’s Ten Takeaways from their 2020 report: 

1. Small Uptick: The Medical Cost trend, still rounding to double digits in 2007 (11.9%) and 2008 (9.9%), trended downwards subsequently, to round to six percent since 2016 (6.2%), but have ticked up since the low-water mark of 5.5% in 2017 (and 5.7% in 2018-2019.)
2. Price, Not Utilization: “Prices have been a larger component of employer benefit costs than utilization since 2004; utilization has hovered around zero percent growth since 2006. Utilization by individuals with employer-based insurance decreased by 0.2 percent from 2013 to 2017 while prices rose 17 percent during that time.”
3. Impact of High Deductibles: “Average deductibles for employer-sponsored plans tripled between 2008 and 2018. This increase likely has led to a low utilization trend because employees are delaying or forgoing care due to their deductible.”
4. Stall in HDHP Growth: “The shift to HDHPs by employers seems to have stalled. With 84 percent of employers offering an HDHP option in 2019 and a tight labor market, employers may not be as quick to push HDHPs in 2020.
5. Acceleration in Retail Rx Spending: “Starting in 2020, retail prescription drug spending growth for private health insurance will begin to increase, hitting between 3 percent and 6 percent annually through 2027.24 The growth in spending can be attributed to the waning impact of generics on the market and the introduction of new drugs.”
6. Specialty Drug Million Dollar Drugs Pipeline: The portion of total retail drug spending on specialty drugs continues to grow. “We are at an inflection point with drugs in the pipeline. We thought hep C was expensive at nearly $100,000 per treatment. Many drugs in the pipeline are life-altering and come with a price tag of $1 million to $2 million per treatment.”
7. Growth in Chronic Disease Spending: "Spending by employers on individuals with chronic diseases is nearly quadruple [3.5x] that of healthy individuals while spending on individuals with complex chronic diseases is eight times higher" [8.2x].
8. Growth in Onsite Clinics: “38 percent of large employers offered an onsite health clinic in 2019, up from the 27 percent that offered a clinic in 2014. An additional 13 percent said they were considering adding one.”
9. Telehealth Potential: “49 percent of consumers with employer coverage said they are willing to use telehealth in place of an in-person visit.”
10. Underutilized Wellness and Prevention programs: “For decades, employers have invested in health and wellness and prevention, yet participation remains low.....The small population of employees who participate in their employers’ health and wellness programs generally believe the programs have had a positive impact on their health.”

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:

Surgeons’ Opioid-Prescribing Habits Are Hard To Kick

As opioid addiction and deadly overdoses escalated into an epidemic across the U.S., thousands of surgeons continued to hand out far more pills than needed for postoperative pain relief, according to a KHN-Johns Hopkins analysis of Medicare data.

Kaiser Health News

Friday, June 21, 2019

Health Insurance Providers Launch Project Link to Address Social Barriers to Health

Not every health care problem can – or should – be addressed with a prescription pad. That’s why America’s Health Insurance Plans (AHIP) is launching Project Link – a new initiative that brings together the best thinking on how to effectively address social barriers to health and long-term well-being.

AHIP

Thursday, June 20, 2019

1 In 6 Insured Hospital Patients Get A Surprise Bill For Out-Of-Network Care

About 1 in 6 Americans were surprised by a medical bill after treatment in a hospital in 2017 despite having insurance, according to a study published Thursday.

Kaiser Health News

Thursday, June 20, 2019

Private Medicare Advantage Could Hit 70% Market Share

Enrollment of seniors in private Medicare Advantage plans could reach 70% of those eligible for federal health benefits for the elderly between 2030 and 2040, a new report shows.

Forbes

Tuesday, June 18, 2019

Trump says he will roll out new health care plan in next couple of months

President Trump said he'll be rolling out a new health care plan in a couple of months, saying it will be a key focus in his 2020 reelection campaign.

The Hill

Monday, June 17, 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.

Looking Back at Healthcare Headline news this week 20, 10 and 5 years ago

By Claire Thayer, June 14, 2019

The MCOL Weekend newsletter is a treasure trove of historical healthcare news, dating back over twenty years.  Here’s a look back on some of the top news items this week 20, 10 and 5 years ago: 

1999

Health Care: Boehner proposes expanded coverage, June 10, 1999

U.S. Rep. John Boehner announced a proposal Wednesday to reform managed health care programs for most Americans through bills simultaneously introduced by several Republicans. Boehner said his plan seeks to make health plans more accountable to patients while expanding health insurance to most of the 43 million Americans now without coverage. After months of `bipartisan hearings,' on health care reform, no Democrats endorsed the Boehner program. 

Healthcare Industry Earnings Up 15.3% in 1st Quarter 1999, June 8, 1999

HealthCare Markets Group released today its first quarter 1999 analysis of the financial performance of publicly traded healthcare companies. First quarter 1998 Healthcare Industry adjusted earnings increased 15.3 percent, on 14 percent revenue growth. By way of comparison, fourth quarter 1998 Healthcare Industry adjusted earnings increased 21 percent, on 16.3 percent revenue growth, and third quarter 1998 Healthcare Industry adjusted earnings increased 14 percent over third quarter 1997, on a 14.3 percent increase in revenue.

2009

Pfizer exec reinforces company's generic drug plan, June 10, 2009

The Associated Press reports that an executive at Pfizer Inc. said Wednesday the drug developer will focus on expanding its portfolio of generic drugs in order boost sales and build its position in that market.

Cigna's drug unit could fetch $1.3 billion-analyst, June 10, 2009

Reuters reports that Cigna Corp's pharmacy benefit unit could fetch $1.3 billion in a sale, an industry analyst said on Wednesday, as the health insurer's top executive reiterated the company is evaluating the business 

2014

Mixed Bag for Health Co-Ops, June 12, 2014

The Wall Street Journal reports: Many of the nonprofit health-insurance cooperatives created by the Affordable Care Act have enrolled far fewer people than they had hoped, according to figures obtained by a Republican-led House committee, calling into question their viability. 

Hospitals Push Bundled Care as the Billing Plan of the Future, June 8, 2014

The Wall Street Journal reports: Hospital bills may soon get a lot simpler. Traditionally, hospitals have charged patients separately for every service and supply they use-as anybody who has waded through pages of charges knows.