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Managing employer sponsored health plans–some good news! January 30, 2012

Posted by medvision in Chronic Disease, health data, Healthcare Costs, Insurance Plans, Risk Management, Uncategorized.
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healthcare data analysisLooking over my prior postings, I seem to have identified some problems. Now let’s highlight solutions starting with the foundation which should guide every plan decision focused upon “mitigating” risk while sequentially improving quality. Define quality anyway you want! Prevented disease, better disease outcomes, enhanced member wellness behaviors, however better quality, “always on aggregate”, means lower cost!

The foundation is an independent, HIPAA compliant, patient-centered database. A quick meaning of independent data:Loaded “flat” files from the TPA which are assembled by a data mining company, not associated with the TPA/MCO claims administrator. We don’t want the administrator to put any spin on data reporting. By omitting elements, highlighting others and changing metrics, virtually any recommendation can be validated.

Also, let’s not discuss normative data. Although sometimes useful to compare performance against peers, let’s not go into rear-view mirror data yet. Here’s a 10K foot look of the process to utilize an actionable database! (1) What are our plan problems/precursors to problems? Why? Because they will repeat in the future. (2) What strategies can be implemented to mitigate these problems? (3) After a strategy/s are decided, how are they implemented and (4) How can we measure the results? (5) Repeat

The market is overrun with data vendors purporting the ability to perform as above. Additionally, some of their “dash boards”, or reporting output look beautiful. If you are dealing with a “top” vendor, a major portion of the sales presentation should be focused upon their ability to quickly and completely scrub healthcare data. To say healthcare data is dirty is akin to describing the condition of the worst gas station bathroom in Panama. MCOs grew by mergers of multiple health plans, each with 1980s-1990 based IT legacy systems. Claims paid in Atlanta are merged with member eligibility sourced in Oakland, each data feed pulled by a different MCO employee each month. Recently my data partner described a site visit to and insurance company claim office as comparing our use of the I Phone S4 to their use of tin cans connected by string. One last time, if the database vendor doesn’t describe data scrubbing as their major challenge, run away!


5% of Americans spend 50% of annual health care dollars–how will the Cadillac tax work? January 13, 2012

Posted by medvision in Chronic Disease, health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Rx Costs, Uncategorized.
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Health Costs, Rx CostsMy firm has had the opportunity to analyze years of medical claims from multiple self-funded employer health plan sponsors, covering thousands of members. Across employer groups, various industries and  state to state, one metric is virtually identical, the member expense claims distribution. This metric examines the annual plan dollars spent as a percentage of covered plan members. Here’s the common finding:  The top 1% of members account for 25%-30% of annual expenses and the next 4% account for an additional 25%. As recounted in USA Today, the top 5% of Americans spend 50% of all dollars! http://tinyurl.com/7wp9frh

What’s this got to do with the famous Cadillac Tax? The article shows a picture of HHS Sec. Kathleen Sebelius. Not mentioned is the Secretary’s firm stance on the wisdom of the Cadillac tax as a funding vehicle of PPACA. They define a Cadillac plan as containing very rich benefits, better than those enjoyed by average Americans. Starting in 2018 Americans covered under high-cost Cadillac plans will pay substantial taxes for these rich benefits!

Oh–but the article reports just 5% of Americans spend 50% of all dollars, $36,000 each and the top 1% averaging $90,000 of annual medical charges. I bet everyone knows the top 5% suffer from multiple chronic diseases/acute injuries and are suffering. They are not enjoying life compared to the bottom 75% not spending significant dollars. Here’s the issue!

PPACA (ObamaCare) plans on taxes from the Cadillac plans to fund care in the future. What makes plans high-cost? It isn’t what Washington considers a high-cost plans as having low deductibles or low/no co-pays. In reality these “rich gold-plated” plans spend less as their benefits encourage low-cost doctor visits and facilitate the prevention of high-cost disease through the identification of emerging disease at the earliest, low-cost stages. Don’t believe me? Then why are employers slashing health cost by adopting on/near site clinics which employ physicians seeing members for 0 deductibles, no copays and dispensing generic drugs at no member cost? They are preventing disease. The best deal in healthcare is someone living a healthy, disease free life.

The upcoming result of Cadillac plan taxing will confront/afflict groups of older Americans with the sickest populations of members with chronic diseases! Doesn’t seem fair? The 5%-50% fact highlighted by this USA Today report is the most important issue in our national healthcare debate. High cost equals much disease and suffering. If a discussion of healthcare fails to mention chronic disease, the discussion is moot! A famous bank robber was once asked by a reporter, ” Why do you rob banks”? His answer– Fool, because that’s where the money is”.  A meaningful discussion American healthcare inflation, must include chronic disease because that’s where the money is!

I’d call it a new version of voodoo economics, but I’m afraid that would give witch doctors a bad name.
 Geraldine A. Ferraro
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