Healthcare
For most states offering health care exchanges, rate filings were due by May 1, 2013. Each carrier hoping to operate within the exchange had to finalize their benefit offering and related rate filing. Some of the results are gradually emerging as regulators review the filings. Some have been rejected, some have been accepted and approved, some are going through various stages of review and revision. The interesting result of this process is finding out what rates will be and what costs carriers expect.
Prior to the actual submission process, multiple reports were issued prognosticating what rate levels might emerge. Some of these reports suggested that the anticipated morbidity levels (i.e., claim levels) for those enrolling in these programs would be higher than current individual benefit programs. This was logical to most — the hard part was the anticipation of what was a reasonable load in light of what other companies might assume and use in their pricing.
We learned of estimates ranging from a low of at or above 10% to a high approaching 45% - 50%. An important consideration is the nature of the current individual products offered in the marketplace (i.e., are they individually underwritten or were they guarantee issue). In those states where health plans and carriers were permitted to medically underwrite the product, the transition to a guarantee issue product will be greater than in those states where the product was already a guarantee issue product.
It was almost a miracle, an immediate answer to my question about the cost of an ultrasound.
"$196 including the interpretation, and we price-match if you find a better price somewhere else."
In my eight years having a health savings account (HSA), clear, immediate information about cost has been extremely rare. Most often, "How much?" provokes the dismissive evasion of "It depends" or irritation, followed by "We have no way of knowing."
In other instances, office personnel launch into detailed explanations about how deductibles and insurance work in an effort to convince me I don't really need to know. Another tactic is to stall: "A representative can call you with an estimated price in 3-5 days, but it will only be an estimate." Or the sad response, accompanied by a look of pity, "So you can't afford insurance?"
When I asked a surgeon about the hospital-acquired infection rates in the hospital where he performs his operations, he had the audacity to give an annoyed don't-worry-yourself-about-such-things expression and report that "In my area of the hospital," patients don't get infections. This contradicted my knowledge that some of his own patients had, in fact, developed infections.
Asking questions about care is a hassle, an inconvenience, and sometimes a frustrating battle against a system unfamiliar with sharing information or control. By tradition, we can't get a test without a doctor's order, we can't receive our own test until the doctor gets it first, we can't know how much things cost, and we can't refill a drug for the 100th time without getting another prescription exactly the same as the first 99.
In an environment built on layers of permission — have the pharmacist call the doctor who can call the insurance company — do-it-yourself requests aren't welcomed. Some providers seem genuinely insulted by requests for information. "How could you question my ________ (fill in the blank with abilities, record, skill, safety, intentions)?"
Choices in health care can be overwhelming. Which treatment? Which doctor? Which hospital? How much should I spend? What metric should I trust? In some ways it was easier when we had strict gatekeepers and coverage that paid for everything. Relying on mother-may-I rules assigns responsibility for everything to someone else, including the bill.
So why make the effort?
Fact
Significant dollars can be saved by getting injured workers to the best doctor. Evidence supporting this fact is the mounting Workers' Comp industry research clearly stating treatment by well-informed and well-intentioned medical doctors results in lower costs and better outcomes.
Belaboring A Point
As repeatedly stated in this series, many doctors in networks are not well-informed or well-intentioned regarding management of Workers' Comp claimants. As a consequence of their involvement, claim results are lacking, costs are high, and outcomes are precarious. This series of articles, "Tips for Building a WC Medical Provider A Team," is intended to describe how to identify doctors who know the ropes in Workers' Comp using indicators in the data.1
Beyond the indicators discussed in the previous articles in this series, additional salient data elements are available in the data to broaden the scope of medical management evaluation. What makes this approach so feasible is that solid knowledge of who demonstrates best practices is revealed in the data. However, to find that knowledge, some operational processes and the data itself need refinement. Access to the data and its quality must be addressed.
The same old proposals for reform won't work
The military's health care system known as Tricare is in need of a major overhaul, according to news articles.
The cost of military health care has almost tripled since 2001, from $19 billion to $53 billion in 2012, and now represents one-tenth of the entire defense budget. The Congressional Budget Office estimates that health care costs for military personnel will increase to $65 billion by 2017 and $95 billion by 2030.
Defense Secretary Chuck Hagel has warned that military health care spending is creating a growing imbalance among Pentagon resources. He implied that money dedicated to health care or benefits is challenging the department's allocation of resources from preparing our troops for battle and meeting their health care needs at home.
Mr. Hagel is not alone in his concern. Two previous defense secretaries, Leon E. Panetta and Robert M. Gates, also insisted that costs must be brought under control. Mr. Panetta said personnel costs put the Pentagon on an "unsustainable course," and Mr. Gates bluntly said in 2009 that "health care is eating the department alive."
However, the Pentagon keeps offering the same old proposals: higher out-of-pocket fees and enrollment costs for military families and retirees. President Obama's fiscal 2014 budget proposal missed another opportunity to offer a different approach.
In my article last month — Care Transparency: What Employers Are Missing! — I wrote about how employers are missing an understanding of how employees are making health care decisions, and how that crucial factor impacts health care costs.
Employers need to meet employees where they are — online. Employers need to provide them with tools that can help their research and decision-making process with robust, accurate, unbiased and evidence-based information. Employers can significantly improve the quality of care consumed by their employees and reduce health care costs by focusing on creating care transparency.
In this article, we have explained the types of tools that will be effective in supporting employee decisions and that employees will really use in making care and treatment decisions. WiserTogether's research of patient decisions across the top 200 health conditions shows that of the 22 unique factors that patients typically use in evaluating treatments, quality of care tops the list. Cost does not even make the top five. In other words, cost is not the primary decision driver for patients, and consumers do not seek out cost tools when they begin making decisions. This explains the low utilization that organizations see when they offer cost transparency tools as a stand-alone service.
Success in the medical device business is a team sport. One crucial member of a device firm's team is often an insurance broker. The right insurance brokers can help you get the most affordable coverage at the broadest terms. They can help guide you through the insurance maze and help you build a financial bulwark against various risks. If you face a crisis or a claim, they can partner with you and offer resources to come to your aid. In short, they can be invaluable business partners. Thus, a key part of any medical device firm's risk management program should be wise broker selection.
For starters, let's differentiate between an insurance agent and a broker. An insurance agent typically represents the insurance seller, i.e., the insurance company. An agent may have exclusive or non-exclusive contracts with certain insurance companies, and can place coverage only with those insurers.
An insurance broker brings buyers and sellers of insurance together, but represents you, the buyer. A broker can survey the entire insurance marketplace to find the best deal for you — assessing price, service and scope of coverage. For many medical device companies, an insurance broker will be their chief insurance advisor.
What should medical device companies look for in an insurance broker, or when evaluating their current one? Recently, I queried several insurance brokers who work in the medical device and life science space. Here, in no particular order, is a shopping list of fifteen qualities to look for when selecting this key business partner:
The State of Vermont recently posted summaries (available here) comparing what residents might pay for different types of coverage under Obamacare starting January 1, 2014. What I see really concerns me and underscores what many have predicted — extremely expensive insurance premiums for 2014.
I have had a high deductible health plan and a health savings account (HSA) since 2005. I'm happy to see that HSA-qualified plan options will be available in both the Silver and Bronze tiers of coverage in Vermont. Vermont has a fairly strong history of offering HSA-qualified plans — the Green Mountain State led the nation in 2012 in terms of the percentage of private market adoption of health savings account plans, according to an annual survey by America's Health Insurance Plans (available here).
What troubles me about the proposed Vermont plans is that the health savings account plan options have more expensive premiums than their non-HSA counterparts in both the Silver and Bronze tiers. The difference is only a few dollars per month in the Silver tier but is more pronounced in the Bronze tier. Why is that? No explanation is given. Without a better understanding of the plan designs, it is impossible to tell.
The passage of the Patient Protection and Affordable Care Act (PPACA) in 2010 proved again that change is constant. HR managers and smaller employers are struggling to keep up with the many changes and requirements under the plan. But the changes are here, and more are on the way in 2014. Here is a quick guide to some of the major provisions.
Employee Notices
Employer plan sponsors must provide formal notice about the planned creation of the new state health insurance exchanges (also known as "American Health Benefit Exchanges") that will be offering coverage to individuals and their families beginning January 1, 2014. The original deadline for providing these notices to employees was March 1, 2013, but the Department of Labor has extended that deadline pending the issuance of new regulations. The regulations are not expected until the summer or fall of 2013.
What information will need to be provided in these notices? Employers will need to provide employees with information about the existence of the state exchanges, including a description of the services provided by their state's exchange and how to contact the exchange to request assistance. Employees must also be informed that they may be eligible for subsidies through the exchange based on their family income. These subsidies may reduce their premium cost or out-of-pocket expenses through the exchange. Finally, employers must also inform their employees about the financial impact of the foregoing on their employer's coverage, such as the employer's contribution toward the cost of employer-provided coverage and the associated tax benefits.
One Friday afternoon three years ago, Harvard Professor Ashish K. Jha found out his father had been taken to "one of the most dangerous places in the world." Knowing as I do the energetic and courageous Professor Jha, I pictured a more senior version of him sky diving or climbing Mt. Katahdin. Unfortunately, the reality was far more banal, though still dangerous — Dr. Jha's father was taken to an American hospital.
The good news is Dr. Jha's father made a full recovery after only a few days in the hospital. The bad news: at least three potentially harmful errors occurred during those days. "On Saturday afternoon, he was given an infusion of a medicine intended for another patient — an infusion that was stopped only after I insisted that the nurse double-check the order," recounts Dr. Jha. "After she realized the error, she tried to reassure me by saying, 'Don't worry, this happens all the time.'"
Indeed, Dr. Jha agrees this "happens all the time," but it's not reassuring to him at all. In addition to being a concerned son, the professor is an expert in patient safety. He knew only too well the dangers his father faced — the legions of rampant errors, accidents and infections in hospitals throughout the United States.
When 2014 arrives, employers and their workers must be prepared for the changes brought by the Patient Protection and Affordable Care Act (PPACA). New regulations will require larger employers to offer medical coverage to employees or pay a penalty for not doing so. This is why it is important for employers to start analyzing their options and developing a strategy sooner rather than later.
Many employers have reported that the PPACA law will increase their expenses, which will result in the need to reduce workers' hours or lay off employees. Many employers are favoring the idea of eliminating their health insurance offerings, in part because the penalty appears to be much cheaper than the cost of the coverage they are currently providing. Although paying the penalty may seem like the right answer for some employers, there are several reasons why this may not always be the best choice.
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Whether it’s Healthcare, Worker’s Compensation, Property & Casualty, Auto, Sophisticated Life Insurance designs, Directors & Officer’s, Safety, Risk Control or other Claims Management, Insurance Thought Leadership promises to deliver the most relevant mind share the industry has to offer.
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Dave Dias
David Axene
Jeff Pettegrew
Jennifer Weathersbee
Mark Webb