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Blind Faith: Self-Funded Health Plan Management and Hospital Billings November 16, 2012

Posted by medvision in Chronic Disease, Employee Wellness, health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Risk Management, Rx Costs, Uncategorized.
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Blind Faith: Self-Funded Health Plan Management and Hospital Billings

 Health CostsMany things concerning our current healthcare situation leave me in amazement. For example, today an article featured in “The Hill” highlighted a 4-5% decrease in healthcare inflation, which is a positive sounding reduction. http://tinyurl.com/czmmdz4  The national consultant attributed this to America’s adoption of high deductible health plan programs. This would seem logical if our national problems were based upon members utilizing too many $100 doctor visits. In other words, make patients 100% responsible for funding doctor visits, prescription medications and other high-value, low-cost health services. This sounds terrific until one discovers an excess of 75% of our national healthcare expenditures go to mitigate/control existing chronic disease. So is the logic “prevent the low-cost services to inflate high cost chronic disease services”?

 Unfortunately, the above can only make sense to plan managers who have no independent, actionable data. One simple exhibit, the expense distribution analysis, would show plan managers that a very small number of their members account for huge expenditures of claim dollars. Let’s assume a plan provides health benefits for 10,000 members (employees, spouses and children). If together the plan sustains $36 million in annual claims, a typical report would note a per-member-per-year, PMPY, expenses equaling $3600.  If the real expense distribution analysis was available, one would see:

-Top 1% (100 members) incur annual average claims of $90,000 each;

-Next 4% (400 members) incur $35,000 each;

-Next 25% (2500 members) incur $3000 each;

-Next 20% (2000 members) incur $1500 each; and

-Bottom 50% (5000 members) incur $500 each.

Notice the above does not include member paid coinsurance or monthly payroll deductions for coverage. Now, the plan manager is  advised to increase the deductible to $2000 per member before any plan benefits are payable. Why? Give members skin in the game! Immediately, it’s easy to see 50% are completely disenfranchised from any benefit payable. Does it make sense for the plan sponsor to eliminate benefits payable for the bottom 50% to 60%?  How much impact will the new $2,000 deductible have on the top 1% members spending an average of $90,000 per year?

Remember that very sick members are not consumers in the sense of purchasing an automobile. They are fighting for their lives. The bottom 50% of members are not consumers either, as the vast majority are not in life or death disease struggles.  Due to the 100% expense, these 50% are foregoing necessary wellness visits and other necessary disease management services. From a risk management standpoint, this plan design doesn’t compute.  I think this builds a speed lane into the top 5%/1%!

 The centerpiece of my consulting practice at Med-Vision is actionable, independent, HIPAA compliant, patient centric health plan data. Recently, while digging through a client’s outpatient hospital data, I noticed a $7 million paid run of charges recorded under revenue codes entitled — other pharmacy IV solutions and pharmacy incidental to radiology. These have no detail, no backup, and will require the administrator to request itemized billings to investigate. This could be totally legitimate, but I find it amazing clients are scouring the lunch tabs of their sales force and increasing the deductible for needed member preventative health services, while blindly paying $7 million for possible saline injections.  If this isn’t a home run example of the necessity of actionable data, nothing else is.

I often joke that many large self-funded health plans could be purchasing someone a brand-new Mercedes- Benz, S-500, each month with no notice.  It’s time for employers to take notice, evaluate their plans, implement solutions, and gain control of their healthcare costs.  What’s more, with the right plan design and data analytics, costs can be cut while simultaneously enhancing benefits and improving the quality of care.

                                                                                           

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Economy taking a toll on healthcare spending April 19, 2012

Posted by medvision in Chronic Disease, health data, Healthcare Costs, Healthcare Reform, Insurance Plans, Risk Management, Rx Costs, Uncategorized.
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Health Costs, Rx CostsIn my last 8 years working with employer-sponsored self-funded health plans, and their health claims data, one common element is always a signal as to their clinical and financial health. It’s amazingly simple! The higher the total ratio of primary care cost to total cost, the better the plan performs. (Lowest trend, lowest cost and highest member compliance rates to evidence based medicine/screenings) For example, if a plan only spends 8% of total dollars on primary care, then the plan’s condition is sick/poor. Why? Because the balance, 92% is being spend due to advanced disease–in hospitals, seeing multiple specialists, utilizing high-cost technology and receiving costly drugs.

Again, why? Primary care is low-cost/high value. Primary care is preventative care or health maintenance-care, instead of reactive disease care. This makes sense and is the major reason employer sponsored on/near site primary care clinics, save so much money on disease care! (These centers charge no member co-pays or co-insurance for primary care visits and generic drugs)

Here’s an article saying the public is skipping primary care visits due to the down economy! If you are responsible for an employer sponsored health plan, you need to make member primary care compliance a critical metric. A stay-awake-at-night concerned, metric.

http://www.marketwatch.com/story/health-care-spending-takes-a-hit-2012-04-18

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!

http://tinyurl.com/7ddt2a8

 

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!

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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