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Could managed care results suffer from Wall Street? January 8, 2011

Posted by medvision in health data, Healthcare Costs, Insurance Plans, Uncategorized.
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Clayton Christensen, is a noted Harvard Business School lecturer and author, famous for his concept of “disruptive technologies”.  http://tinyurl.com/27u6gao

This article cites his theory that public corporate management’s incessant attention to stockholder value and quarterly reporting, hurts/prevents longterm success. Stockholders are no longer long-term investors. I question if improvement in human health, including wellness and optimum medical outcomes, is in sync with 90 day corporate reporting and goals?

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Considering plan management to the “norm” as ok? In America, by definition, normative healthplan performance is failure. January 3, 2011

Posted by medvision in health data, Healthcare Costs, Insurance Plans, Risk Management, Uncategorized.
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“Nothing average ever stood as a monument to progress. When progress is looking for a partner it doesn’t turn to those who believe they are only average. It turns instead to those who are forever searching and striving to become the best they possibly can. If we seek the average level we cannot hope to achieve a high level of success. Our only hope is to avoid being a failure.”  A. Lou Vickery, American business writer

Define another business process which considers standard (D+ C-) performance acceptable because of falling into the norm? Nationally we do it all the time with healthplan inflation/norms at 10% or increasing 500% over CPI. Today consultants and managed care organizations peg national trend at 10%. Have you ever stopped to analyze how wacky this is? Let’s start by setting our thoughts for the subject of high healthcare trend:

From the last post, I described the expense distribution concept. In this example, a client covering 12,000 members has an expense distribution showing 70% of members spend only $308 average per year, or 8.4% of the total annual spend. (at $308 per year 70% of members don’t even have claim expenses equal to the plan’s ASO fees) In contrast, members in the top 5% category spent 59% of the annual claim totals.

If plan claims are increasing 10% annually, which segment is impacting the plan the greatest? By basic math it has to be the top 5% as this category pushes the greatest percentage of plan cost!  Here’s a basic-truth: The clinical conditions of few members have great financial impact on the whole!

What is the normative/standard reaction to increasing health trend? Following the lead bull straight off-the-cliff by adopting the crowd mentality of increasing deductibles, copays and member contributions? Back to the expense distribution concept: Which segment is impacted the greatest by a deductible/copay increase? (A) The member battling cancer with annual claims approaching $200,000 or (B) The member battling to control diabetes, struggling to support a family in today’s economic climate, spending $300 annually  of employer funded benefits after meeting deductible on health and Rx claims?

What could go wrong by raising the deductible significantly for 70% of members? Let’s describe it as a “disfranchise strategy” to meet next year’s norm!

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