jump to navigation

Ominous threat to employer sponsored healthcare July 25, 2012

Posted by medvision in Chronic Disease, Employee Wellness, health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Risk Management, Rx Costs, Uncategorized.
Tags: , , , , , , ,
add a comment

If your job involves managing employer sponsored health plans, on behalf of employers, there’s an article out (http://tinyurl.com/d836mol) that  says the following:

One in 10 employers plan to drop health benefits.

Employee Health, Wellness, Health Plan, DataI hope this is a huge wake-up call for employers.  Over the past 10 years, I’ve pounded the pavement trying to explain the necessity for plan executives to utilize actionable, independent, member-centric data to manage the financial and clinical aspects of their health plans. Some employers have adopted this model and, as a result, their trend/health inflation has become virtually nonexistent over the past several years. Just look at Med-Vision’s news page for examples.  Many others, however, have declined and are flying, virtually blind.

Let’s think about the impending threat to our current system of healthcare delivered at work. First, which types of employer plans are at the highest risk? To make my point, I’m borrowing from the comedic styling of Georgian funnyman, Jeff Foxworthy:

(1)        If you report to an elected board, commission, mayor or any other type of politician who grovels every few years to be reelected, you might have a problem

(2)        If your annual per employee plan costs are $8,000 plus, versus the penalty of $2000 PEPY to drop coverage, you might have a problem

(3)        If your plan design pays claims for an unlimited maximum, while you attempt to save money by preventing care during the first $10,000 of expense, you might have a problem

(4)        If your plan advisors, broker, consultants tell you your existing 10% trend fits the norm, you might have a problem

(5)        If your plan pays hundreds of thousand dollars annually for disease management and the only result you see is one out of 100 members talking to a nurse, you might have a problem

So, maybe you fall into a few of the top Foxworthy-isms. Believe it or not, this performance can be turned around in as little as a year or two. What do you do?  Here’s my advice:

•           Work with advisors/vendors who win solely when you win. If you’re partnering with a public company, MCO/consultant/broker, look at their financial performance on one of the multiple finance websites. Yahoo finance is a great spot. How is their stock, profits, cash flow performance? If they are succeeding wildly while your plan fails, you probably are not receiving the best advice? Why would you pay more in fees and commission while your plan performs negatively? Pay for performance and zero for failure. Make your advisors stay awake at night worrying about the care/lack of care your members receive. If your plan is failing, yell, scream and threaten firing all vendors. Here’s a nice take-away. MCOs are dumping huge sums of cash into client wellness funds to be selected during bidding competition. If you are humming along with an MCO/TPA, demand some wellness cash!  Ask $40K per thousand employees covered.

•           Are you treating plan reports, performance metrics from your MCO/TPA as gospel? Do you think they report on failures/weaknesses concerning your plan while you pay fat ASO fees? (If so, I have some beautiful, airboat accessible, home sites in the center of the Everglades for you to consider purchasing). This is where plan managers fly blind. Identify and implement services from an independent, patient centric deep data mining company. Analyze health data as a risk manager focusing on prevention, disease mitigation and financial accuracy. Read and analyze your existing employee benefits contracts closely. With your data mining functionality you’ll be able to determine if your plan is paying 2000% markups for cheap generic drugs delivered via mail. PBM performance is an easy way for plans to save $10-$15 PEPM. Ask simple questions like, what percent of our women members are receiving breast cancer screenings past age 50?

•           Where is your health plan money being spent by service category? Plans performing in the top 10% spend over 15% of their total budget on primary care services. The vast majority I see spend less than 10% on primary care.

Furthermore, please don’t be assured a Republican win in November will clear the threat. The “right” wants to remove the corporate tax deductions for employer sponsored healthcare.  An era of employer-driven healthcare reform is needed to mitigate risks and lower costs.

And a last thought. Worry about your plan members receiving appropriate health care services in the same manner you worry about your family members receiving correct care. The higher the quality, the lower the cost!

As Geoffrey Hickson said: “If you forget you have to struggle for improvement you go backward.

Advertisements

Healthcare price transparency and the empty airplane seat July 6, 2012

Posted by medvision in Chronic Disease, Employee Wellness, health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Risk Management, Uncategorized.
Tags: , , , , ,
add a comment

health, paying for healthcareAnyone paying attention to our current national healthcare situation has surely seen published examples of pricing defying all realms of logic. For example, MRIs priced at $3000 for individuals without insurance, $1500 for individuals with insurance and, wow, $300 for individuals paying cash. Here’s the result of a recent Consumer Reports Study! http://tinyurl.com/7pnj4wx

I know, things like this make you want to pull your hair out. It’s simply a function of no transparency, infused with high utilization rewards/fee-for-service, plus a lack of value measurement, coupled with oversupply, fragmentation of care and unaccountably from spending someone else’s money. Our healthcare system lacks basic laws of supply and demand, accountability and economic reality. On the good side no place on earth can provide better care needed for critically ill patients.

For plan managers, such marketplace disruption can create some phenomenal opportunities to provide member care while sequentially saving vast dollars sums. For example, let’s say you’ve swallowed the consultant’s Kool-Aid and have a HDHP plan design w $3000 deductible while allowing members to make deposits into an HSA. Yes, yes, we all know annual physicals are covered at 100%, assuming nothing is diagnosed. However, you’ve adopted a plan design which essentially prevents members from receiving the lowest cost, highest value healthcare delivered to prevent chronic disease or manage emerging disease. For the sake of argument, let’s assume the same plan design in place but look to the crazy pricing variances for ways to cover the underinsured risk, i.e. the first $3000 annually:

  • Primary care. If your members are within a distinct geographic area/areas, why not contact a few of the larger primary care practices and ask for a capitated, or cash deal to treat your members? Cash deal means completely outside of your plan. Members would have no co-pays for doc visits and blood tests. Common low-cost generic drugs could be paid by the member or reimbursed by the employer, in or outside of the plan. What kind dollars would be involved here? Maybe an initial $100 cash payment when a member goes to the physician followed by a $40 per member per month payment.
  • Ancillary care. From the press we know pricing differences are amazing. Cash prices for CAT Scans can be 10% of the insured price. Simply coach members with the option of calling providers and asking for the cash price without mentioning they have coverage under a high deductible plan. These vastly reduced cash prices will not go towards the satisfaction of the deductible however from an economic perspective this practice makes perfect economic sense.
  • Inpatient hospital care. This is what insurance is for, so have members utilize the discounts available under the high deductible plan.

Empty airplane seat? I use is simply as an explanation of why such extreme variances exist in the health care system. A jetliner taking off with empty seats is simply losing seat revenue. This is why such wild price variances exist in the airline industry. It’s better to collect $.50 from a dollar ticket then receiving zero from an empty seat. The exact same thing happens with healthcare procedures. As an example, hospital A purchases a $2 million dollar CAT Scan machine. The hospital’s fixed cost is exactly the same whether it’s being utilized or not. Their expense includes capital outlay, interest and personnel necessary to operate the equipment. If they normally received $2000 per procedure and equipment is not utilized 50% of the time, it makes perfect sense to collect $300 per procedure during the time the machine is not being utilized for the $2000 procedure. Pricing information is invisible to consumers and the fact they charge either $2000 or $300 isn’t a problem.

How to plan managers take advantage of these situations? The answer is simple. The same way we purchase cheap airline seats. We explore, question, investigate and ask. The attached link shows a physician perspective.  http://tinyurl.com/chx8quh

%d bloggers like this: