Tag Archives: emerick

What Caused the ACA Rate Surge?

Here is the answer, in 100 words or less:

ACA permits people to sign up even if they are already sick. Real insurance cannot work that way.

Imagine an Accountable Fire Insurance Act that required insurers to sell you fire insurance after your home had burned. Homeowner insurance rates would skyrocket. Anyone who carefully read the ACA would have seen that coming.

The big insurers knew this would happen but played along in the beginning to avoid attracting political fire.

When 75% of Americans get a taxpayer subsidy under ACA, it isn’t really insurance but more of an income redistribution mechanism…for better for worse.

There it is, 96 words.

Walmart Shows Way on Health Benefits

Walmart, a true leader in benefit innovation, is taking the next right step, expanding its popular and successful Centers of Excellence.

When Walmart workers, called associates, use Centers of Excellence, deductibles and co-pays are waived. All travel expenses are paid for the patient and a companion.

Starting next year, if covered folks at Walmart have spine surgery outside of a Center of Excellence, it will be considered out of network, and only 50% of the costs will be covered.

This is a huge step and is reminiscent of the early days of preferred provider organizations (PPOs), provider networks and health maintenance organizations (HMOs). At the beginning, if you got care through a PPO, your deductible and co-pay were waived. In a few short years, those programs evolved into ones that paid regular benefits with deductibles, etc., if you used PPO doctors, but applied higher deductibles and co-pays if members went out of network. Of course, in most HMOs, if members went out of network, nothing was paid.

See also: Walmart’s Approach to Health Insurance  

What Walmart is doing now, while a very logical extension of what benefit plans have been doing for more than 30 years, is a huge step forward in truly controlling waste, overtreatment and misdiagnoses in health plans.

Kudos.

Here is the press release:

The Right Care at the Right Time: Expanding Our Centers of Excellence Network

Starting next year, Walmart will double the number of world-class medical facilities available to our associates who have been told they need a spine surgery. Whether you’re a cashier in Wyoming who’s been with the company for six months or you’re a 20-year associate running a store in Miami, if you have Walmart health insurance, you have this benefit.

We are adding the Mayo Clinic facilities in Arizona, Minnesota and Florida to our current list of Centers of Excellence (COE) for spine surgeries, which are Mercy Hospital Springfield in Missouri, Virginia Mason Medical Center in Washington and Geisinger Medical Center in Pennsylvania. Our COE program is about more than just access to these facilities and their specialists; it covers these procedures at 100%, including travel, lodging and an expense allowance for the patient and a caregiver.

Why would Walmart offer a benefit like this? It’s pretty simple – we care about our people and want them to receive the right care at the right time.

Walmart started offering this benefit in 2013, and our data tells us we are making a difference for our people, but we want to do more. That’s one of the reasons for adding more eligible medical facilities to the program. Other reasons these medical facilities were selected are that each facility:

  • Fosters a culture of following evidence-based guidelines, and, as a result, only performs surgeries when necessary.
  • Structures surgeons’ compensation so they [have incentives to provide] care based on what’s most appropriate for each individual patient and look at surgery as a last option.
  • Is geographically located throughout the country to provide high-quality care to participants in one of Walmart’s health benefits plans.

Research, as well as our own internal data, shows about 30% of the spinal procedures done today are unnecessary. By utilizing the Centers of Excellence program, our associates are assessed by specialists who are [given incentives] differently to get to the root cause and prescribe appropriate treatment.

Our associates are very important to us, and we want to make sure they and their families receive the highest level of quality care available.
Preventing a surgery that someone doesn’t need is only part of our Centers of Excellence. The other, even more important aspect is making sure our people receive the right diagnosis and care plan for their pain. In The New Yorker, renowned surgeon and public health researcher Atul Gawande underscored the importance of this approach:

“It isn’t enough to eliminate unnecessary care. It has to be replaced with necessary care. And that is the hidden harm: Unnecessary care often crowds out necessary care, particularly when the necessary care is less remunerative. Walmart, of all places, is showing one way to take action against no-value care—rewarding the doctors and systems that do a better job and the patients who seek them out.”

Walmart is not alone in this approach to appropriateness of care. One example is the Choosing Wisely initiative, which is backed by recommendations from more than 70 specialty societies including the American Academy of Orthopaedic Surgeons, North American Spine Society and the American College of Surgeons. The stated purpose of Choosing Wisely is to help patients choose care that is supported by the evidence, not duplicative of other tests or procedures already received, free from harm and truly necessary – we couldn’t agree more.

To further encourage our associates to take advantage of this offering, next year, spine surgeries at one of our six Centers of Excellence medical facilities will continue to be covered at 100% with travel and lodging paid for the patient and a caregiver. If the surgery is performed outside of a COE facility, it will be considered out of-network and paid at 50% in most cases.

Our associates are very important to us, and we want to make sure they and their families receive the highest level of quality care available. 

We have seen spine surgeries performed often when they are not necessary. By making these changes in our benefit offerings next year, Walmart wants to make sure that our associates and their family members are diagnosed correctly and that they get the best possible treatment.

See also: There May Be a Cure for Wellness  

There May Be a Cure for Wellness

During my tenure at both British Petroleum and Walmart, I tried various forms of wellness, but to no avail. There were never any savings, participation was low, employees didn’t like it, and administration was complex.

I’ve continued to follow the wellness industry but could never see any genuine success stories. The gratifying news is that I’m not the only one to notice any more. The Los Angeles Times called wellness a scam while Slate just recently called it a sham. And Al Lewis, my co-author on Cracking Health Costs, would say they’re being polite. Most recently, he has noted that the 2016 Koop Award is going to a vendor whose own data shows they made employees unhealthier.

See also: The Yuuuuge Hidden Costs of Wellness  

Speaking of Al Lewis, he has now entered the employee health field directly with Quizzify, which transforms the boring but long-overdue task of educating employees about health, healthcare and their health benefit into an entertaining trivia game. As a colleague and co-author, I have an obvious conflict of interest as I describe my impressions below, so don’t take my word for any of this. Just go play the sample short game right on the website, and ask yourself if you’re learning anything useful, right off the bat. Click here for a link to Quizzify.

Do you think your employees already know this stuff? It’s doubtful. Americans vastly over-consume healthcare; it’s almost free at the point of service once the deductible is satisfied, and they are being bombarded with ads and marketing, as are their doctors. Nothing can solve this massive problem, but Quizzify can help, and is about the only vendor even trying. Backed by doctors at Harvard Medical School and a 100% savings guarantee, Quizzify provides a plethora of shock-and-awe, “counter-detailing” questions-and-answers (with full links to sources) that will educate even the savviest consumers of healthcare and entertain even the dourest CFO. Nexium? Prilosec? Prevacid? You wouldn’t believe the hazards of long-term use. Then there is the sheer waste and possible harm of annual checkups, well-woman visits, PSA tests and so on.

Speaking of hazards, CT scans emit as much as 1,000 times the radiation of an X-ray. Uninformed people are going clinics that will give them a “preventive” CT scan. If a doctor suggested patients have a series of a thousand X-rays for “preventive” reasons, there would be a stampede out of the office.

On the other hand, there are instances where people should go to the doctor but don’t. Swollen ankles? Painless, perhaps, but you may have a circulation problem, possibly a serious one. Blood in your urine, but it goes away before you even make an appointment? That could be a bladder tumor tearing and then re-attaching itself, especially if you smoke. And show me one health risk assessment that correctly advises people over 55 or 60 to get a shingles vaccine if they had chicken pox as a kid.

Then there are the health hazards of everyday life. Those healthy-sounding granola bars are full of sugars cleverly hidden in the ingredients labels. And whoever says vaping is safer that smoking better not be pregnant, because for pregnant moms, incredibly, vaping could be worse for the unborn baby. Just as with the shingles vaccine, chances are your HRA is silent on the texting-while-driving (TWD) issue while obsessing about seat belts, but TWD is by far the more underappreciated hazard.

See also: Wellness Promoters Agree: It Doesn’t Work

Your HRA is probably also silent on the health risks of loneliness, poor spending habits, boredom and most of the other major health risks Robert Woods, PhD, and I describe in our book, An Illustrated Guide to Personal Health. Quizzify has many questions on spending habit, but, if I had one complaint, it would be that (at least in the questions I’ve seen) Quizzify doesn’t address these risks we’ve described in this book.

One of the largest health risks that workers have is being in a job you hate. You won’t see that question on anyone’s HRA either, or in Quizzify. That issue could lead to mass resignations in some pressure cooker companies.

Scores and scores of people have told me they fudge answers on HRAs, anyway. Interestingly, they feel they are on the ethical high ground to do that because of the goofy, nosy and intrusive questions they are asked to answer, e.g., asking about your pregnancy plans in the future. Quizzify, on the other hand, encourages people to cheat. Quizzify wants you to look up the answers because that’s how you learn. So instead of denying human nature, Quizzify channels it.

Conclusion: if you offer old-fashioned wellness, walk, don’t run, to the nearest exit. If you want to look at something that shows huge promise, check out Quizzify.

Healthcare: When a Win-Win Is Lose-Lose

“Workplace Wellness Programs Are a Sham“ is a good article in Slate by L.V. Anderson. This is a must read for people who remain true believers that workplace wellness will improve worker health.

“The idea behind wellness programs sounds like a win-win,” Anderson writes. Alas, history is full of “win-win” ideas that were destructive, costly or ineffective.

She describes the infamous “doublespeak” of Safeway CEO Stephen Burd’s description of success with Safeway’s wellness program. Anderson writes, “As it turns out, almost none of Burd’s story was true.” (Regular readers of my blog will know I’ve written about the Safeway nonsense before.)

For decades, everyone knew that an annual physical was a great way to stay healthy, but various studies, including the famous New England Centenarian Study, have exposed that as a myth, too.

See also: A Proposed Code of Conduct on Wellness  

Antibacterial soap, anyone? Sounded like a great win-win, no? The FDA finally outlawed it. In my book, An Illustrated Guide to Personal Health, written in 2015 with UNLV Professor Robert Woods, Chapter 4 was titled, “Avoid Antibacterial Soaps and Gels.” Why? “Overuse of antibacterial soaps and gels can reduce the effectiveness of antibiotics you may need someday…. They are helping create antibiotic-resistant germs.”

Back to wellness failures. Companies in the U.S. have spent huge dollars trying to keep employees healthy through methods that are shams. It’s time to move on.

I immodestly include the following quote from Anderson’s article: “You might think of Al Lewis, Vik Khanna and Tom Emerick as the Three Musketeers in the fight against wellness programs.“* Al and I are co-authors of the Amazon best seller, Cracking Health Costs. It describes flaws in typical corporate wellness schemes, which while profitable to wellness vendors are useless at best and can actually be harmful to workers health at worst, not to mention the inconvenience and costs of going to doctors for all that screening. Concerns about wasted productivity, anyone?

How can wellness programs harm worker health? One way is by promoting gross over-testing and excessive screening by tools that have very high error rates and rates of false positives, e.g., PSA screens.

One good byproduct of dumping your wellness program is to avoid all the costly and burdensome reporting ACA requires. Yet another good byproduct is letting your employees do their work at work instead of spending non-productive time every year in wellness lectures, filling out health risk assessments, reading wellness-related emails and brochures, etc., etc., ad nauseum.

How can “wellnessophiles” in companies truly believe that their employees don’t already know that smoking, overeating, lack of exercise and excessive consumption of concentrated sugars are not good for them? Do wellness proponents truly believe that the employees’ doctors haven’t already addressed those issues…not to mention public service announcements, health classes in high school and so on? Do proponents think their employees who smoke have never noticed warning labels on cigarette packs?

I meet a lot of people from various walks of life. Occasionally, I ask them if their employer has a wellness program and, if so, what do they think about it. The typical first reaction is they roll their eyes. The most common comment is that the company’s wellness program is “just another [insert unflattering adjective here] HR program.” That’s usually followed by comments best described as lampooning the programs, as in “you’re not gonna believe this but…” type of comments.

Interestingly, I meet HR executives who admit their wellness program are ineffective and costly, yet they cling to them. They usually give one of two reasons. One is that they don’t want to admit that their program is a big waste of money. Another common rational is some version of “Too many of our employees are unhealthy; we gotta do something.” (I put that in roughly the same category as, “the beatings will continue until morale improves.”) That line of thinking is bureaucracy at its worst. You would never spend your own money that way…or maybe they would?  Hmm.

I get asked, if not wellness then what? My reply is anything that might actually save money or get better care for your workers, e.g., centers of excellence and direct contracting with providers. There is some promising work on reference-based pricing and better pharmacy management. Also, I believe we may have a surge of international medical travel in the future, too, especially to places like Health City Cayman Island (HCCI), about an hour’s flight from Miami and one of the best-quality hospitals and clinics in this hemisphere. I have visited HCCI a number of times and met a number of their surgeons. They are excellent.

See also: EEOC Caves on Wellness Programs  

I tried various forms of wellness in my career of running large sell-insured plans. I tried to make them work, but in the end none of them were effective, and some actually drove up health costs in a way a steely-eyed CFO would quickly understand. For about half my career, I reported through the CFO chain, not HR. CFOs really get the numbers and ask the tough ROI questions.

HR executives, take note: You can increase your status and respect if you just get out of wellness. Again, it’s time to move on. While wellness at work was a noble notion and one that made sense to many on the surface, it’s time to “fess” up to your bosses. They will appreciate your message and appreciate the reduction of wasteful spending.

Tom Emerick’s latest book is An Illustrated Guide to Personal HealthFor further information on this topic, see the They Said What blog by Al Lewis and Vik Khanna.

New, Troubling Healthcare Model

As physicians and hospitals compete for the “under 65” patient — whose payments are generally 150%-plus higher than for a Medicare patient — they have to determine their pricing model. The traditional choice is to offer a low price per service based on a higher volume, or a high price per service based on a lower volume. But some are charging a higher price with the goal of generating higher volume, and their number may increase.

Healthcare spending is already 17.5% of U.S. GDP and is expected to hit 20% by 2025. This high-price/high-volume approach could exacerbate the problem.

See also: Healthcare: Time for Independence  

Part of the reason for concern is a recent landmark decision, in which Cigna was ordered to pay an out-of-network provider more than $13 million to cover certain alleged underpaid claims and ERISA penalties. ERISA is the federal law governing large employers that self-insure their medical plans (generally those with more than 250 employees).

In the lawsuit, Cigna alleged that the supplier was failing to collect the patients’ deductibles and coinsurance. The carriers’ intent is for the supplier to collect the deductible and coinsurance to make patients aware of the supplier’s charges and of their shared responsibility for the bill. Cigna took the position that, if the healthcare supplier does not collect any payment from the patient, the provider is accepting as “payment in full” the amount processed by Cigna on behalf of the employer. Cigna argued that, if the patient’s portion under the Summary Plan Documents (the carrier’s contract with the employer and the employee) is waived, then the plan’s portion is waived, as well.

When suppliers “forgive the patient liability,” these healthcare providers often have a revenue model of very high prices with the goal of higher volumes. They’ll entice the patient to use their more expensive services because the patient does not have to pay anything — and the higher payment to the healthcare provider under the plan will more than cover the liability that the provider forgave for the patient, even though the average employee deductible is high, at $1,300.

Most patients have not grasped that healthcare suppliers are running a business and that prices vary by as much as 300% within a network. As a result, while employees (the patients) may save money when the provider waives their financial responsibility, they lose in the end. That’s because their employers’ costs increase, resulting in higher health insurance costs, with larger deductibles and payroll contributions for all employees.

The court’s decision to reject Cigna’s claims creates further risk to the affordability of healthcare for employers, as employees will be financially motivated to access care from suppliers with higher prices because the patient’s liability is forgiven. Can we expect other healthcare suppliers to implement a revenue model tied to high prices with no patient liability?

See also: AI: The Next Stage in Healthcare  

Conversations with a number of healthcare suppliers shows that many do not realize that most large employers self-insure their medical plans; the suppliers perceive that the insurance carriers covers the costs. The purchasers (the employers) have the opportunity to engage the healthcare suppliers (hospitals/physicians) in a discussion around supply chain management, quality and patient safety, so the providers fully comprehend that the one ultimately paying the bill is monitoring their performance.

We’ll look forward to sharing the results of this type of collaboration, now underway in a major market. It’s time for employer-driven healthcare.