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Another HDHP rant! March 28, 2012

Posted by medvision in health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Risk Management, Uncategorized.
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Today we are in the middle of the arguments concerning healthcare reform before the US Supreme Court. The individual mandate is the issue of the week; however, I’d like to discuss the lack of procedure pricing in health markets. Although lack of pricing information is not the main problem with High Deductible Health Plans, the issue is amazingly resilient. First, I’d like to describe personal experience with my own HDHP.

Somehow during December 2011 my family actually met the large deductible of our plan. Given this was the first month of any reimbursable expenses over the last several years, I elected to follow my primary physician’s advice and submit to a sleep study. My physician is owned by a local hospital and I was referred to their outpatient center. I tried to check the pricing on my MCO’s website only to find no information exists for sleep studies. So, around December 30th I traipsed over to the hospital ending up in the basement in a drab, lifeless room. Subsequently, I was met by male technician who proceeded to stick wires all over my head and chest to the point I looked like Frankenstein. Somehow, I fell asleep, was awoken after four hours and drove home.

About two weeks later, I noticed the EOB in the mailbox and quickly opened it. Shock, outpatient billing $4000, BUCA allowed $2000, BUCA paid $1600, member amount due at 20%, $400. Subsequently, I start receiving calls from hospital to schedule my next delightful evening, another four-hour visit, but this time entirely subject to my fantastic $3000 deductible. I answered, “Hmm, let me get back to you”.

By now, I’m feeling pretty stupid and decide to call another facility to inquire the discounted rate for the same procedure/CPT under my MCO. The facility answers, “we don’t know what you’re MCO pays”. Then I say, “forget the MCO, I’m paying cash”. “Oh, you should’ve mentioned that at first, yes the cash price is $300 per evening or $600 for the entire procedure”. Pretty big variance? Drafty hospital, $4000 or brand-new facility $600!

Here’s a supporting posting today on Kevin M.D. The subject has a little more clinical risk significance.  Again, I’m not in the HDHP corner!




State of Georgia 2012 health enrollment guide–OMG March 11, 2012

Posted by medvision in health data, Healthcare Costs, Insurance Plans, Uncategorized.
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No wonder we are confused with employer health plans! While researching benefits available to state employees, I came across Georgia’s, State Health Benefit Guide, SHBG. (This acronym is the easiest element of the plan to understand) Now before I criticize the 1000s of billed consulting hours that produced these 13 health benefit options, please realize I have access to population claims expense distribution data which never sees the inside of the consultant’s highrise offices. Here’s an example!

I bet 40% of all Georgia employees/dependents covered (40 of 100) average incurring less than $100 in claims annually from the state health trust fund. Not accounting for the member’s required premium contributions of umpteen $1000s. 70% of all covered members spend less than $500 after their premiums and 85% incur less than $1000. So, let’s set the record straight: 85% of the population’s incurred claims average less than the payroll premiums they contribute to be covered under the plan! Now back to the options. They offer the exact same options, HRA, HSA (plus countless employer fund contributions) and HMO, all with individual wellness, yes/no from (2) national managed care organizations, MCOs. Throw in a Tricare supplement option and we have 13 options.

Maybe I’m too simplistic? 5% of Georgia’s covered employees will account for close to 60% of the plan’s $100s of millions in plan expenses. Why not make sure the sick 5% are getting the best quality, value based care in the world? For the 95%, provide all the low-cost doctor services, screenings, preventative medicines, wellness, weight loss and stress reduction to prevent their entering the top 5%? Drop all the HSA/HRA individual account stuff and their accompanying VISA cards! Many covered members don’t even have their own VISA cards in today’s weakened economy!

These plan designs look to be more tinkered with than a rusted 1955 Chevy in Havana Cuba! The enrollment guide covers 35 pages! I’d bet the consultants and Georgia HR staff don’t understand the options in their entirety. How’s a state trooper working nights and part-time jobs going to understand? Logical rework option: Go back a few decades and provide care to covered beneficiaries? Manage risk instead of burying it under acronyms, ink and paper! Georgia needs to realize it’s the largest purchaser of health services in the state, so act like the largest. Demand quality and value, and of most importance demand accountability from all stakeholders, providers, patients, MCOs and consultants.


The light of free markets slipping into employer sponsored health care! March 6, 2012

Posted by medvision in Employee Wellness, health data, Healthcare Costs, Insurance Plans, Risk Management, Uncategorized.
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Free market practices appear to breaking through the screens covering our American health care system. Healthcare is a unique marketplace in which our current lack of financial and quality transparency produces high cost and poor clinical outcomes. How many patients will flock to a hospital experiencing 300% increases in cardiac death for heart surgery?  Read this physician’s post: Why we are busier than we’ve ever been.

Self-Funded plan management–take a close look at disease management results February 27, 2012

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Recently results of Medicare’s largest commercial disease management study were republished in the New England Journal of Medicine.

This study should refocus plan managers on the issue of disease management because 75% of all plan dollars are spent on chronic disease. Preventing the production of disease and the management of existing disease states is the entire ball game with respect to healthcare. Back to the Medicare pilot. In the Medicare Modernization Act of 2003, CMS was required to test the commercial disease management industries services with respect to the Medicare fee-for-service program. The program engaged eight of the industry’s DM providers, 250,000 Medicare beneficiaries with serious cardiovascular disease and spent $400 million over the four-year program. The conclusion was reported: In this large study, commercial disease-management programs using nurse-based call centers achieved only modest improvements in quality-of-care measures, with no demonstrable reduction in the utilization of acute care or the costs of care.

How should this be viewed in today’s environment? I’ve always felt the practice of nurses calling healthcare members they do not know, usually from a different state while attempting to offer advice concerning very personal aspects of one’s health is very problematic. Why? (1) Everyone, especially working folks, have very limited time during home hours (2) Not many are comfortable discussing their health issues with strangers and (3) nurses calling many times have limited, or worse, incorrect data about the medical conditions associated with the member.

My impressions of commercial disease management reports being delivered to clients today seem to be verified by the Medicare study as having, essentially, no positive results. But, Medicare members are very different from commercial health plan members? Yes in some ways, however they are mainly at home available so members have time to speak with nurse managers, this pilot targeted serious states of disease, and still, no demonstrable reduction. In what ways should plan managers react when delivered industry standard reports?

  1.  Don’t allow a 50 page DM document impress. DM providers have a strategy of creating member silos in which they describe all silo members as participants in the plan. A member not complaining about monthly mailings is “not” a participant! How many of us pitch 3/4ths of the mail we receive in the trash can? Probably over 90%. The only participants are the ones in continuous monthly/weekly phone calls with nurse managers. Usually this class never exceeds 1-3% of total members.
  2. Health claims metrics reported by the DM vendor probably will contain positive results. These must be verified from independent data in order to be considered valid. Many times DM providers attempt to “prove the negative’ by claiming their efforts created an absence of claims. Even worse are “vapor” attempts to prove savings by producing some type of productivity gain metrics! Sorry but this business in not akin to a college philosophy class.
  3. Each year $100s of millions are simply wasted on telephonic DM. If you cannot see the results clearly, the result didn’t happen.
  4. If you are offering a sole HDHP don’t assume a short-term claims reductions are necessarily good news. In today’s economic climate many are forgoing important medical care. As water recedes prior to a tsunami, an absence of claims this year may be indicative of an avalanche of future chronic disease.

Now the good news. If it isn’t working, try another approach. I’ve seen clients spend $250K through $500,000 with no clear results. How about using the dollars to hire, through a vendor/or directly, on site full-time nurses to reach out to members, face to face? People trust others they meet, trust and recognize!

The greatest opportunity in healthcare is for employer purchasers of healthcare to start demanding the results they want/need from vendors. Vendors which perform win should be rewarded and the many failing need to be sent packing!

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

Wellness screenings covered at 100%–read the small print! December 28, 2011

Posted by medvision in Cancer Care, Chronic Disease, Employee Wellness, health data, Healthcare Costs, Insurance Plans, Risk Management, Uncategorized.
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Here’s an egregious practice unfortunately common in the managed care industry. A member, trying to maintain health, participates in a “no cost” wellness procedure. While sedated, or undergoing the procedure, the physician identifies a minor medical issue and fixes it. Then “whack” the member wakes up facing a fat charge due to a diagnostic in place of a screening code.  One could argue it’s a “technical event” allowing insurance companies a manner to collect additional revenue. http://tinyurl.com/7lxz32l

Here’s the work place problem. For example, colon cancer is the 2nd leading cause of cancer death in the US. The main weapon to fight this cancer is early detection by colonoscopy. It’s hard to imagine this procedure being abused by members, recreational colonoscopies? Due to these hidden charges, one has to wonder how many colon cancer deaths result? If a plan is self-funded, the plan managers need to prevent ASO claims payors from implementing these processes. If fully insured, employers should pick up/pay for the additional fees.

Unintended consquences, PPACA eliminating 100,000+ agents and brokers December 13, 2011

Posted by medvision in health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Risk Management, Uncategorized.
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The president’s healthcare bill is showing America “change” has unintended consequences. Here’s one which will ripple through the lives of Americans receiving health benefits through small to mid-sized employers! Losing their jobs are 100,000+ agents and brokers who served as a buffer between the needs of insured Americans and the insurance companies? http://tinyurl.com/7l2oup3

It seems Kathleen Sebelius, Duchess of HHS, found the 2.02% of agent commission unworthy to be included in expenses for MLR calculations. Back to the land of unintended consequences. What roles do these agents play in the health outcomes of every-day Americans? (Ok, I understand the intent of Obamacare’s creators is to completely eliminate employer sponsored health benefits. For the sake of discussion, let’s pretend the nation comes to its senses and only permits part of PPACA to survive?)

Here’s a few instances in which agents and brokers changed the lives of their clients (1) Cancer diagnosis A woman’s physician, and consulting physician, strongly suspect she has initial stages of  serious organ cancer. They recommend advanced imaging as a diagnostic tool. The insurance company declines opting only to pay/permit exploratory surgery to collect multiple biopsy samples. The insurance broker reminds the insurance company of legal and public perception issues with such a decision and, after additional consideration, the insurance company relents. The test indicates the woman cancer free!

(2) Simple mistakes sink ships– During an open enrollment meeting an employee mistakenly prints the wrong date on the group enrollment application. The insurance company denies coverage under the group. The agent threatens to move another large group to a competitor if the mistake is not treated an inadvertent mistake. Problem solved.

(3) Deny by contract provision An applicant for individual coverage correctly answers individual underwriting questions as not knowing about heart disease. The policy is issued and after 9 months the person suffers a heart attack. The insurance company cites a prior doctor visit as proof the individual knew, or should have known they were subject to a heart attack, and denies coverage. The agent hounds the company VP of underwriting until the decision is reversed.

I know some will say the above are exactly what the entirety of PPACA will prevent! Hold on there “Kiomsabe”. If you believe free market healthcare can be tough, how about nationalized healthcare. http://tinyurl.com/nyap8o Things aren’t so rosy with the national health system in Great Britain! What makes us think our government would do better? For example, “Cash for Clunkers”

I once had a boss with very initiative advice. “Be careful what you ask for. You may get it”. Why not make provisions for uninsured American’s without destroying our current system? More on this later!

High deductible plans not working? Here’s what works, 0 deductible! December 10, 2011

Posted by medvision in Cancer Care, Chronic Disease, Employee Wellness, health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Rx Costs, Uncategorized.
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My initial introduction to consumer driven plans, HDHPs, was presented in a group setting by a national carrier, or, “industry speak” a BUCA. We were first told the reason for explosive trend is a combination of easy physician access due to low copays, better technology, our legal environment and expensive drugs. Then came the HSA regulatory part. (I used to think the 401K regs were somewhat complex)! Today, from my years of data experience, I know explosive health inflation is driven by a small percentage of members suffering worsening states of chronic disease.

Anyway, a troubling thing is sneaking up on the disciples of HDHPs and their concept of member consumerism. It’s the rapid adoption of on/near site clinics by 20%+ of employers with a thousand or more employees.

Hmm. In one corner we have plans requiring members to spend the 1st $1,000 – $10,000 before plan benefits start, And, in the other corner, all-inclusive primary care benefits with no, 0, member dollars needed. If fact, a few BUCAs are big proponents of both plans! Sort of an AC/DC strategy.

The clear winner is immediate and easy access to primary care, preferably in scenarios in which the physicians are significantly rewarded for “great” member health. A great plan discount occurs when large claims don’t occur due to prevention/early disease identification. Guess how many $70 primary care visits can be purchased for the cost of a $250K annual claim paid on behalf of a member facing end-stage renal failure? A great physician can he hired for $200K annually. So, how many members can a physician see in 12 months? Here’s a good opinion article on employer clinics! http://tinyurl.com/7rvm7sm

Cracks in high-deductible/consumer-driven health plan models November 29, 2011

Posted by medvision in health data, Healthcare Costs, Insurance Plans, Uncategorized.
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I’ve always been confused by the values highlighted by proponents of HDHPs. My logic has consistently been: (1) 75% of healthcare payments are made as the result of treating chronic diseases and, if/when, caught at the earliest stages can be cured, or mitigated. (2) Shifting initial plan expenses to patients, in the form of high deductibles, tends to prevent doctor visits/medical treatment thus negatively impacting the early discovery and treatment of disease. (I understand wellness checks are paid at 100%)

Here’s some real evidence our physicians will be the keys to unlocking our national health care cost/quality problems: http://tinyurl.com/7acns8o

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