Tag Archives: united healthcare

7 Reasons Why Health Premiums Are So High

As he blazed/thrashed/insulted his way to the White House, Donald Trump constantly claimed Obamacare was not working. According to Trump, it was a “disaster” that only he could fix. His criticisms have certainly been creative, such as this tweet about one of the perpetrators of the Boston Marathon bombing.

Whether Trump  can actually fix Obamacare remains to be seen, but he was right about one thing: Insurance premiums are on the rise. It’s estimated that in 2017 premiums will go up by approximately 24%.

Insurance companies like Aetna and UnitedHealthcare are pulling out of some markets after reporting significant losses, and other companies are significantly reducing the plans they offer.

But why exactly is this happening? What are the root causes?

While the issue is certainly complex, we do know some of the reasons costs keep rising. Here are seven primary reasons why Obamacare isn’t quite what everyone hoped.

Two Things You Need To Know

Before we depress you and make you worry about the future, let us give you two semi-good pieces of news. It’s not all gloom and doom.

The Increases Primarily Affect Those Who Purchase Their Own Insurance

First, it’s important to note that the rise in premiums primarily affects those who are purchasing their own insurance, like those who are self-employed. If you live in cubicle land or work for the man, you probably won’t feel the brunt of the increase in premiums.

Also, if you get your insurance through Medicaid, Veterans Affairs or Medicare, you probably won’t see much increase in your premiums.

However, those who shop in the insurance marketplace will find themselves staring at steeply increasing premiums. For now, you may be able to work from a beach while sipping a mojito, but soon you may need to start drinking Bud Light. Let’s hope that doesn’t happen. You may not be working for the man, but you’ll giving more money to the man.

Those Who Are Willing to Shop Around Will Probably Be Relatively Safe

If you get a government subsidy to offset the cost of your insurance premiums and are willing to shop around for a new plan, you may not be hurt by the increase in premiums. There are various plans available in the insurance marketplace, some more expensive than others. If you’re willing to switch to a new plan, you can probably find one that doesn’t gouge you so deeply.

But this is one of the problems with Obamacare. It usually covers a narrow selection of doctors and hospitals, and if you switch plans you may need to find a new doctor. If you’ve got challenging or complex health issues, this can be a big deal, especially if a particular doctor has been treating you for years. Unfortunately, this means that those who are in the worst health may get hit the hardest by the rate increases.

If you don’t want to switch plans, you always have the option of becoming independently wealthy. Of course, this can be a bit more difficult than switching plans unless you happen to have a rich relative.

See also: How to Push Back on Healthcare Premiums  

Now let’s talk about why premiums are going up.

Reason #1: Predictions Weren’t Very Good

Wait, you mean when the insurance companies and the government teamed up, they actually made some mistakes? But they both have such sterling reputations for efficiency!

It turns out that the health insurance companies underestimated how much it would cost them to insure those who weren’t already covered. A 2015 report found that insurance companies lost $2.7 billion in the individual market, in part because they had to cover more claims than expected. Insurance companies aren’t really in the business of losing money, and now they’re scrambling to make up for what they lost.

On top of this, those patients who are the sickest generate about 49% of the healthcare expenditures. This unequal distribution of costs complicates the estimates and means some companies are losing money.

Now that insurance companies actually understand the pools of patients, they’re adjusting premiums to account for the actual costs, which are way higher than they estimated.

Reason #2: Insurance Companies Are Bailing Out

Leading the way in the “Things That Aren’t Surprising” category is that many insurance companies are discontinuing plans that lose money. Additionally, some companies such as United Healthcare and Aetna are completely exiting some markets, leaving very little competition. In some states, there is a single insurance provider, allowing it to raise rates without consequence.

In 2017, it’s expected that the number of healthcare providers will drop by 3.9% in each state. As we all learned in introductory economics, less competition equals higher prices.

Reason #3: Healthcare Costs a Lot

Remember last year when the price of EpiPens started skyrocketing and people were saying, “We’ll die without them!” and the producer said, essentially, “Well, it stinks to be you!”? People got rightfully upset because that was a pretty low move to pull.

Unfortunately, rising medical costs aren’t just happening to EpiPens. Generally speaking, medical costs have been rising at about 5% each year, but some think they’re going to go up even more. Unfortunately, Obamacare is at least partially to blame for this.

Newer treatments tend to be very expensive, and now even the sickest people have access to health coverage. This, in turn, means that they have access to the pricey treatments they never had access to before. As their expenses are covered, overall costs for all people are increased.

As Sean Williams wrote:

The reason insurers are coping with substantially higher costs for Obamacare enrollees is actually pretty easy to understand. Prior to Obamacare’s implementation, insurers had the ability to handpick who they’d insure. This meant people with pre-existing conditions, who were potentially costly for insurers to treat, could be legally denied coverage. However, under Obamacare insurers aren’t allowed to deny coverage based on pre-existing conditions.

Now could be the time to begin experimenting with those homeopathic cures we’ve been hearing about all these years, like rubbing cucumbers on our feet or bathing in olive oil. Purchasing hundreds of gallons of olive oil is probably cheaper than premiums will be.

See also: More Transparency Needed on Premiums  

Reason #4: Some Government Subsidies for Insurers Are Ending

Since 2014, the government has provided some subsidies to marketplace insurers that cover higher-cost patients. These subsidies significantly reduced the cost to insurance companies and made them more inclined to work through the problems.

But this program is ending in 2017, and it’s expected that premiums will go up 4% to 7% as a result.

Reason #5: It’s Not Easy to Fix a Giant Market

Unfortunately, fixing a giant market like health insurance isn’t simple. This should surprise absolutely no one. First, the government is involved. Fixing anything government is always a nightmare, taking years of meetings, proposals and backroom deals. Second, the healthcare industry is involved, which is only slightly less unwieldy than the government.

Getting both of these entities to actually make progress is like trying to convince an elderly person that rock ‘n roll doesn’t sound like pots and pans banging together.

Lots of solutions have been proposed, but a single, straightforward solution has not been adopted.

Reason #6: The Market Is Smaller Than Expected

Chalk this one up to yet another miscalculation by the government. It turns out that significantly fewer people are enrolled in the insurance marketplace than expected. Like, 50% less.

Young adults in particular aren’t signing up, probably due to the fact that the penalty for not signing up has only been around $150.

A smaller market means that insurance companies can’t absorb the cost of particularly ill patients as easily. In larger cities, enough people may enroll to spread out the risks, but in smaller areas insurance companies are hit hard.

This, of course, causes insurance companies to pull out, increasing the problem even more.

Reason #7: The Rules Aren’t Helping Things

One of Obama’s big selling points for his healthcare plan was that insurance companies wouldn’t be able to deny coverage to those with preexisting conditions. This sounds great in the public square but doesn’t always work well in reality.

Currently, the government forces insurance companies to cover people but doesn’t offer the companies assistance when their costs exceed their revenues. If an insurance company doesn’t think it will make money, it will pull out faster than Donald Trump says something ill-advised.

See also: A New Way To Pay Long Term Care Insurance Premiums – Tax Free!  

Conclusion

It’s easy to be critical of Obamacare, but we should also recognize the great things it has achieved. Many people who would never have received medical coverage have been able to get the treatments they desperately wanted.

Will the problems be fixed? Let’s hope. But as we’ve seen, creating a solution that works for both consumers and insurance companies isn’t easy.

This article originally appeared at Life Insurance Post and has been republished with the permission of lifeinsurancepost.com.

Not Your Mama’s Recipe for Healthcare

This article is about opening minds, eyes, hearts and futures. I’m going to take you on a journey into a world where I shine my flashlight into dark corners, challenging norms, introducing ideas and connecting different areas of current players and practice.  

Thanks in advance for sharing, caring and daring to think in ways that transform.

– Steve

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Imagine if we could just wave a magic wand and all enjoy mutually delicious sips from the same icy cocktail of healthcare reform. The solutions appear to be so clear and obvious — to everyone except the major players that engage in healthcare.

Why would health systems, medical facilities and specialists willingly leave the B2B payer system and depend on consumer payments?  Why would hospitals, big pharma and providers want to compete on price when they can use their political influence and retain greater certainty in a regulated pricing model?

If large self-insured companies contract with health systems directly, could we count on these companies to pass savings directly to their employees, rather than pocket them as profit? Moreover, what would be the fallout on payer pricing to the individual and the fully insured markets? If payer competition was lessened through direct contacting, could health systems ultimately wield pricing leverage in these relationships?

Check out the latest reports on wellness plans and seniors’ use of digital health tools. Why would patients who feel good or are not remunerated financially want to make these consistent, long-term behavior changes?

In a country with a proven history of high obesity and chronic disease rates, why would patients choose to change their lifestyles en masse? What is the motivation for long-term adherence and results?

Okay, then, how do we disassemble a massively interconnected, for-profit health model that is complete with individual and institutional shareholders and bondholders? What about the leftover millions of employees from payers, brokers and insurance agents who are not able to be repurposed into other jobs?

What happens to the rest of the economy when consumer spending from all this unemployment and loss of investment money drops our GDP into the toilet? How would this affect future tax rates for individuals and companies?

We need payers, drug companies, providers and hospitals to lower healthcare costs. But, if they do lower costs, what then?

Instead of being motivated by satisfying shareholders and taking in more profit, will these companies choose to willingly pass on new savings as a result of lower pricing to healthcare consumers? If that’s the case, why haven’t we seen any major industry players going on record to say this?

Enter Will McAvoy from the HBO show “The Newsroom.”  The fake TV anchor from ACN said it best with his famous utterance: “The first step in solving any problem is realizing there is one.”

See also: Consumer-Friendly Healthcare Model  

Increased healthcare costs, lower quality, worsening outcomes, fraud, waste, abuse, mass unaffordability, stagnant wages, overutilization, defensive medicine, uber-administration and physician burnout are all too obvious, painful and expensive realities. Yet these are largely the emerging effects of a largely missed core problem:

The chief reason for our healthcare crisis has been political leaders’ lacking the guts to make the tough decisions for our future.

If our current weak, spineless, clueless, ego-driven, special interest capitulating, partisan robots led America during WWII, I fear we’d today be speaking Japanese or German. But the leaders in the 1940s recognized and decisively drew upon the need for all Americans to pull together for the greater good. Our citizens and businesses believed in the vision and greatness of perpetuating a better America for the next generation.

As much as I never thought I’d say it, we actually need greater government oversight in several key areas. It is obvious that large healthcare industries and public players are not simply going to go away or let their built-up leverage shrivel up. Consumers and employers need to stand on more equal footing, which cannot be accomplished solely by the Triple Aim (simultaneously improving the experience of care, bettering the health of the population and reducing per-capita costs).

When I think of great decisions that shaped our country, I think of John F. Kennedy’s decision to land a man on the moon. I think of Lyndon B. Johnson getting the Civil Rights Act passed. I think of Abraham Lincoln’s Emancipation Proclamation. I think of Congress passing the 19th Amendment. I think of Franklin Delano Roosevelt’s New Deal with 100 days of full bipartisan support. And I think of the way America rallied together, had conservation drives and raised war bonds during WWII.

We need those same leadership qualities to better position and deliver affordable, quality healthcare for the next generation. Consumer initiatives and bold plans are good — until special interests hit politicians.

Apart from aspirations of greater political leadership, we need to have a viable model for bringing fairness, accountability and affordability to the current status quo of health care.

ENTER: THE ‘HIT-IQ’ PLAN

HIT-IQ = Health reform by Intelligent augmentation, Transparency, Incentive and Quantity.

HEALTH REFORM: To speed up the ability for all players in the U.S. health system to benefit from reform, the HIT-IQ plan fills the cracks in healthcare reform. It is composed of the following:

INTELLIGENT AUGMENTATION (IA): Also known as intelligence amplification. Think of IA as a computer system or technology that supports and enhances human thinking, analysis, planning and decisions. Yet it allows the control and oversight to remain with humans. An example is Google’s search algorithm that allows us to find what we want online, in just a matter of seconds.

Contrast this with artificial intelligence (AI), where machines are meant to fully reproduce human cognition within a system that functions and learns autonomously in its own domain. True human-free AI is not fully here yet, though portions of AI are coming forward in new technology and solutions.

We now live in a world where much of our data has moved from paper to digital. Big data offers great benefit, yet it still has to be organized, analyzed, prioritized and optimized for a specific purpose. IA is the generator, and when coupled with massive computing power and speed, it allows humans to become far more accurate and efficient in their business and life activities.

See also: The Search For True Healthcare Transparency  

In a previous article on AI, I wrote about different companies, each with emerging technologies meant to improve accuracy and efficiency in different facets of healthcare. This includes medical imaging, mental health, risk management, drug discovery, genomics, hospital monitoring and lifestyle management. IBM’s Watson is a great example of IA in healthcare, where doctors can better diagnose and employ the latest personalized evidence-based care.

Help in efficiency can come none too soon. Recent reports show the last three quarters of U.S. worker productivity are at the lowest levels since the pre-stagflation period in the 1970s. According to popular economists, something very interesting is happening. The last six years of great technology has not helped overall productivity — in fact, it has gone backward in a hurry.

This becomes extremely important for healthcare, which, at the end of 2016, will have the highest employment pool of any U.S. sector. Moreover, the pricing of healthcare and health coverage has become unsustainable for many individuals and small to mid-size employers.

A big game of “financial musical chairs” now exists between employer profits, consumers who want to afford healthcare and retain their current standard of living and health companies that want to satisfy shareholders with ever-surging profits.

The big fear of robotic automation and AI is that computers will replace human workers. But I believe IA efficiency makes job elimination en masse an absolute necessity in bringing down the cost of healthcare. Any company’s purpose is to make profit, attain customers and stay competitive — and that does not include keeping people employed. That is, unless the replaced quality, accuracy and value becomes less than when current high levels of human capital were involved.

With what I continue to see coming in IA solutions, I believe it will not be long until we see deep learning and pattern recognition being applied to hiring, work flows, management and core operations — as well as patient intake, diagnosis, m-health data, patient marketing, population health and chronic and acute remote and in-house care management.

The fact that interest rates remain low also bodes well for healthcare companies to make investments in greater levels of integrated technologies that will replace bunches of humans with greater accuracy, efficiency, fewer errors and greater predictability. Let’s not forget this technology operates 24/7/365 with fewer salaries, benefits, sick days, arguments — or the ability to file lawsuits.

But wait…there’s more!

Look for malpractice rates and defensive medicine practices to come down significantly, as expertly designed, optimized, scalable and proven algorithms come into play. As medical malpractice rates drop, health systems and providers will capture that cost difference — and not add them over current net salaries. Et voila! Still lower costs!

It’s not magic, folks; we’re trading off large inefficiencies and human-based error inherent with a large employment pool. There’s a reason medical error is the third-largest killer in America, and big data analysis, predictability, accuracy, greater monitoring and efficiency are precisely what is needed for lower costs, higher quality, greater safety and better outcomes.

Best of all, the system will still be run by humans.

TRANSPARENCY: This is one area where the government must make a mandate across all states. We have seen that without mandated public and easy-to-access transparency, health consumers and employers have absolutely no chance of greater affordability.

Healthcare companies have no interest in making healthcare more affordable to consumers. And, please, don’t be lulled into thinking that just because payers, plans, medical device companies and big pharma/PBMs are working to lower healthcare costs and increase care quality that the savings will be passed on to the consumer in the form of lower, more affordable pricing.

Look at this: United Healthcare’s PATH program is a joint effort for better care outcomes. In 2015, 1,900 providers hit their program marks and were paid a bonus of $148 million, near $78,000 per provider. Sick and diseased consumers are going into bankruptcy and medical debt or are holding holding off seeing doctors because financial constraint — and United is paying doctors bonuses to lower costs that should have never been that high to begin with?

Is this a joke? Providers are being rewarded for doing what is expected anyway, and the consumers (errrr, paying customers) get regularly increased premiums? Take a look at the PATH consumer website; with all the accolades on improving health, help me find where it says United will reward customers by delivering lower prices for their plan’s premium pricing.

Here are needed areas of transparency:

1. An all-claims reporting mandate, from every payer, hospital, facility, doctor, self-insured company and government agency. While the recent ERISA ruling by the Supreme Court caused some setback, the Department of Labor could — and should — push through self-insured entities to report payments through state-mandated requirements.

2. Every hospital, facility, health system and provider should have their full fees, within 90 days for every product or service, be freely and easily available to the public. Any website or app could tie into the API or data to create patient or employer comparison shopping tools.

3. Every individual and company must be able to see what underwriting factors and specific influences went into a payer deciding upon their fully insured plan premium. Line-by-line calculations, each fully explainable.

4. All pharmacy benefits managers (PBMs) should be required to be fully transparent on all fees, kickbacks and bonuses.

5. There must be increased safety when it comes to providers and facilities. There is no reason that circumstances involving doctors, hospitals or medical facilities that have been found guilty of state law violations or have lost or settled in malpractice suits shouldn’t be made clear to consumers.

6. People should be made aware of drug companies’ R&D costs. We’re all sick and tired of the moaning relating to big pharma’s R&D and how our demands for price cuts will kill future new cures and drug development. Okay, then, let’s open those books so we can share in your pain. Hey, greater public appreciation and demand for IA in drug delivery will keep profit margins while bringing down prices.

INCENTIVES:  I’d like to meet the geniuses who believe that a healthcare population that is 40% obese, full of chronic disease and is constantly tempted by fast food and sedentary online entertainment is going to make (wait for it) long-term consistent changes by using wellness programs.

Will they do so because doctors (who are compensated by financial incentives or are punished by financial withholding penalties) tell them to do so?

Here’s a toughie: What if we asked doctors and practices to lower their cost to provide care, make less in profits and lower their salaries. Then, we told them they would willingly pass on these newfound monies to reduce pricing for patients because it would be financially healthier for the country’s future.

How do you think our white coat paladins, hospital administrators and health system executives would respond?

This is not rocket science — it is common sense. Studies are very clear that loss aversion related to money is a far better motivator, even than giving them money. Moreover, only 25% of employees find their wellness programs at work to be effective.

In a recent study of 7,600 businesses by Payscale, 73% of employers believe they pay fairly, while only 36% of employees feel the same. And just 21% of the workers believe the company is transparent about pay.

Catching my drift, employers? You can kill three birds with one stone: gaining healthier employees, potentially lowering healthcare costs and improving engagement through greater levels of trust and feeling appreciated financially.

Reward healthcare consumers by tying wellness goals to financial rewards or punishments. (We are talking cash here, folks — not trips, massages or points). Health plans? Same thing. If you want to balance out the risk of sicker members, per enrollment with the ACA mandates, hit up your chronic, pre-chronic and younger members. See how financial incentives and disincentives work there.

If they use wearables and contribute data to you or their provider, they are rewarded financially. If they hit goals on medication adherence, weight loss, lowering cholesterol or blood sugar, give them a paid check rebate. If they have a yearly physical, reward them.

Better yet, show them that future check with all applicable bonuses added together for their rewards. It is a nice, juicy number. Now, deduct 2% of that cash every week they don’t execute — like a melting ice cube. Keep showing them as often as possible what they are going to be missing. Catching my drift?

QUANTITY: Care delivery professionals, facilities and systems will soon have outcomes, patient satisfaction and cost numbers pitted against their service reimbursement levels — and, eventually, against each other.  Consumerism is growing and, whether healthcare stays largely regulated in its pricing or not, reimbursement levels at all aspects of the care supply and delivery chain (including on many prescription drugs) will likely decrease.

Moreover, reimbursement via bundled, value-based payments will come to replace the old, perverse, fee-for-service model. Hence, lower payments for the same work means the number of people engaging in healthcare products and services must grow if revenues are to grow.

Healthcare businesses will have to optimize every possible aspect of their business for new and repeat customer engagement and to retain their customer base. Especially important here will be those successful companies who focus on their intangible assets. These include advertising, marketing, sales, goodwill, customer relationships and various expertise that hospitals, providers, payers, drug companies and facilities have, which they can, and should, capitalize upon to their economic advantage.

The companies that get this will shape their precise outcomes through mastering the art of optimization. Learning how to maximize their intangible assets to drive more engagement of current and prospective consumer clients, thus increasing quantity of services and products. They will look at every consumer and business relationship, every past and present contact, every opportunity in current consumer interactions, every supply and distribution channel, every employee and every piece of capital or human capital they have.

See also: Is Transparency the Answer in Healthcare?

Many healthcare companies suffer from tunnel — instead of “funnel” — vision. They believe they provide products or care and are paid for such — and that’s it. But the organizations that recognize they can not only offer more but be more than their basic business offerings will derive greater revenue and profit.

Population health is a great example. It is about more than capturing data from wearables; it is about recognizing the interplay between chronic disease and genetics and the need for screening those who don’t currently engage in healthcare services. It is about tying in mental health for those who are caregivers and don’t take care of themselves. It is about recognizing that, if you work out a medical debt with more than a negotiation but perhaps a thank you card sent after, your name will be more gold than mud.

For direct primary care doctors, it is about offering a rebate to customers who bring new members to your practice. For a health system, it might be coordinating a telehealth counseling visit to a family member grieving because of a loved one’s illness. What about making that extra call to check up on how a patient is doing at home the day after they get home from the hospital?

Perhaps it’s giving a free service. Often, the most self-serving thing a company can do is actually to be selfless. Maybe it is a doctor’s office sending flowers after a successful surgery outcome or even upon a loved one dying. Maybe it is a call from a drug company outbound customer coordinator, just to see how the new medication is working.

Health companies of all types and sizes that replace current limiting beliefs with empowering ones will find themselves on a track toward capturing greater community value, engagement and increasing their market identity. In short, companies that get people to want to engage and help others engage with those same companies will thrive.

Players in healthcare must not forget that consumerism is not a dirty word; it is people putting up their hands saying, “I want to be cared for and find value in that care so that I can feel good about my time and money spent.”

If they have to be cared for because of sickness or an emergency, then that is all the more reason to make patients feel good about you.

It is no longer a healthcare world where providing the service, billing and receiving payment suffices. People and employers are smartening up and recognizing that lower reimbursement, more competition and new options for care and coverage are developing.

Those healthcare companies that can integrate the intangibles in a meaningful, ethical and value-added manner for their current and prospective healthcare consumers will thrive. Increasing quantity of consumers and identifying and rendering necessary services is key (especially in a healthcare business environment that has properly integrated lower costs, greater efficiency through technology and better outcomes).

It will make — and keep — current and future healthcare consumers far happier in the long run. Now that’s some of the best risk management I know about.

10 Most Dangerous Wellness Programs

If corporate wellness didn’t already exist, no one would invent it. In that sense, it’s a little like communism, baseball, pennies or Outlook.

After all, why would any company want to purchase programs that damage moralereduce productivitydrive costs up…and don’t work 90% to 95% of the time? And those are the results reported by wellness proponents.

Those are the employers’ problems, but the employers’ problems become the employees’ problems when employees are “voluntarily” forced to submit to programs that are likely to harm them. (As the New York Times recently pointed out, there is nothing voluntary about most of these programs.)

Recently, the head of United Healthcare’s (UHC) wellness operations (Optum), Seth Serxner, admitted that Optum’s programs consciously ignore U.S. Preventive Services Task Force (USPSTF) screening guidelines. Rather than apologize, Serxner blamed employers for insisting on overscreening and overdiagnosing their own employees…and (by implication) overpaying for the privilege of doing so. “Our clients make us do it,” were his exact words.

We asked our own clients who use Optum about why they turned down Optum’s generous offer to do more appropriate screenings at a lower price. None of them remember receiving such an offer.

A UHC executive wrote and said we were making the company look bad. I said I would happily revise or even retract statements about the company if the executive could introduce me to just one single Optum customer — one out of their thousands — who recalls insisting on overscreening and overpaying. Never heard back….

United Healthcare isn’t alone in harming employees. It is just the first company to admit doing so. It is also far from the worst offender, as the harms of its overscreening for glucose and cholesterol don’t hold a candle to the ideas listed below, in increasing order of harms:

#10 Provant

We would say: “Someone should inform Provant that you are not supposed to drink eight glasses of water a day,” except that we already did, and they didn’t believe us. Obsessive hydration remains one of their core recommendations despite the overwhelming evidence that you should drink when you are thirsty.

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By contrast, the New York Times, which has an Internet connection, writes the opposite:

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#9 Cerner

The employee who recorded this blood pressure is essentially dead. Cerner’s diagnosis? Blood pressure “higher than what is ideal.” Cerner’s recommendation? “Talk to your healthcare provider.” A real doctor’s recommendation? “Call an ambulance. The guy barely has a pulse.”

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This is not a random mistake. This is the front cover of the company’s brochure.

#8 Nebraska/Health Fitness Corp.

USPSTF screening age recommendations aren’t minimums. They are optimums, the ages at which screening benefits might start to exceed harms, even if they still fall far short of costs. Otherwise, you are taking way too much risk. This is especially true for colonoscopies, one of this program’s favorite screens — complications from the test itself can be very serious.

Your preventive coverage is not supposed to be “greater than healthcare reform guidelines.” That’s like rounding up twice the number of usual suspects. And you aren’t supposed to waive “age restrictions.” That’s like a state waiving minimum “age restrictions” to get a driver’s license.

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Yet this program won a C. Everett Koop Award for excellence in wellness, not to mention the unwavering support and admiration of leading wellness apologist Ron Goetzel.

#7-#6 (tie) ShapeUp and Wellness Corporate Solutions

Both these outfits pitch exactly the opposite of what you are supposed to do in weight control: unhealthy crash dieting. Attaching money to this idea and setting a start date make the plan even worse: along with crash-dieting during these eight weeks, you’re encouraging employees to binge before the initial weigh-in.

Here is ShapeUp:

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Here is Wellness Corporate Solutions:

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Both also made up outcomes. In ShapeUp’s case, the company had to rescind its “findings” after the customer, Highmark, skewered the company in the press. And neither seems to care that corporate weight control programs are proven not to work.

#5 Aetna

In addition to its wellness program that collects employee DNA (partnered, ironically, with a company called Newtopia) and then makes up claims about savings, Aetna owns the distinction of launching the only wellness program whose core drugs are specifically editorialized against in the Journal of the American Medical Association. This would literally be the most harmful wellness program ever, except that the only employees being harmed are (1) obese employees who (2) answer the phone when their employer’s health plan calls them to pitch these two drugs; (3) who have a doctor who would willingly prescribe drugs that almost no other doctors will prescribe, because of their side effect profile; and (4) who don’t Google the drugs. Presumably, this combination is a very low percentage of all employees.

The good news is that the drugs, Belviq and Qsymia, should be off the market in a couple of years because almost no one wants to take them, so the harms of this Aetna program should be self-limited.

#4 Star Wellness

Star Wellness offers a full range of USPSTF D-rated screens. “D” is the lowest USPSTF rating and means harms exceed benefits. Star gets extra credit for being the first wellness vendor to sell franchises. All you need is a background in sales or “municipal administration” plus $67,000 and five days of training, and you, too, can poke employees with needles and lie about your outcomes. Is this a great country, or what?

Also, the company’s vaccination clinic features Vitamin B12 shots. We don’t know which is more appalling–routinely giving employees Vitamin B12 shots or thinking Vitamin B12 is a vaccine.

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#3 Angioscreen

Angioscreen doesn’t have the most USPSTF D-rated screens. In fact, it offers only one screen in total, for carotid artery stenosis. That screen gets a D grade from USPSTF, giving Angioscreen the unique distinction of being the only vendor 100% guaranteed to harm your workforce.

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Angioscreen’s other distinction is that the company admits right on its website that this screen is a bad idea. Angioscreen is probably the only non-tobacco company in America to admit you are better off not using its product.

#2 Total Wellness

In addition to the usual assortment of D-rated tests, the company offers screens that the USPSTF hasn’t even rated, because it never, ever occurred to the USPSTF that anyone would use these tests for mass screening of patients or employees. Criticizing the USPSTF for not rating these “screens” (CBCs and Chem-20s) would be like criticizing Sanofi-Aventis for not warning against taking Ambien after parking your car on a railroad crossing.

#1 HealthFair

Let’s leave aside the fact that the majority of its other screens are harmful and focus on its screening for H.pylori, the strain of bacteria associated with ulcers.

Visit our full treatment here. In a nutshell, the majority of us harbor H.pylori–without symptoms. It may even be beneficial. The screening test is expensive and notoriously unreliable, and the only way to get rid of H.pylori is with some very powerful antibiotics, a treatment rarely even used on patients with symptoms, because of its inconvenience, ineffectiveness and potential long-term side-effects.

A Modest Proposal

So how should we as a country protect employees from these harms? Our policy recommendation is always the same and very non-intrusive. We aren’t saying wellness vendors shouldn’t be allowed to harm employees. That proposal would be too radical to ever pass Congress. If it did, the Business Roundtable would pressure the White House again, to preserve the hard-earned right to “medicalize” the workplace and show employees who’s boss.

Instead, we recommend merely a disclosure requirement. The harms of screens or (in United Healthcare’s case) screening intervals that don’t earn at least a “B” from USPSTF should be disclosed to employees, and employees should get a chance to “opt out” into something that isn’t harmful (like Quizzify, perhaps?) without suffering financial consequences.

Call us cockeyed optimists, but we don’t think employers should be able to force employees to choose between harming themselves and paying fines.

What Is the Business of Workers’ Comp?

At the risk of alienating most people within the workers’ comp world, here’s how things look from my desk:

Most workers’ comp executives – C-suite residents included – do not understand the business they are in. They think they are in the insurance business – and they are not. They are in the medical and disability management business, with medical listed first in order of priority.

That statement is bound to lead more than a few readers to conclude I’m the one who doesn’t know what I’m doing. For those willing to hear me out, press on – for the rest, see you in bankruptcy court.

Twenty-five years ago, the health insurance business was dominated by indemnity insurers and Blues plans; big insurers like Aetna, Travelers, Great West Life, Met Life and Connecticut General and smaller ones including Liberty Life, Home Life, Jefferson Pilot, Time and UnionMutual. Where are those indemnity insurers today?

With the exception of Aetna, none is in the business; the only reason Aetna survived is it took over USHealthcare, or, more accurately, USHealthcare took over Aetna. The Blues that became HMO-driven flourished, as did the then-tiny HMOs – Kaiser, UnitedHealthcare, Coventry. Why were these provider-centric models successful while the insurers were not? Simple: The health plans understood they were in the business of providing affordable medical care to members, while insurers thought they were in the business of protecting insureds from the financial consequences of ill health.

The parallels between the old indemnity insurers and most of today’s workers’ comp insurers are frightening. Senior management misunderstands their core deliverable; they think it is providing financial protection from industrial accidents, when in reality it is preventing losses and delivering quality medical care designed to return injured workers to maximum function.

That lack of understanding is no surprise, as most of the senior folks in top positions grew up in an industry where medical was a small piece of the claims dollar. Medical costs were considered a line item on a claim file or number on a loss run, and not “manageable” – not driven by process, outcomes, quality.

Think I’m wrong?

Then why is the industry focused almost entirely on buying medical care through huge discount-based networks populated by every doc capable of fogging a mirror (and some who can’t)? Even with those huge networks, why is network penetration barely above 60% nationally? Why has adoption of outcome-based networks been a dismal failure? Why do so few workers’ comp payers employ expert medical directors, and, among those who do, why don’t those payers give those medical directors real authority? Why do non-medical people approve drugs, hospitalizations, surgeries, often overriding medical experts who know more and better?

Because senior management does not understand that success in their business is based on delivering high-quality medical care to injured workers.

At some point, some smart investor is going to figure this out, buy a book of business and a great third-party administrator (TPA) for several hundred million dollars, install management who understand this business is medically driven and proceed to make a very healthy profit. Alas, the current execs who don’t get it will be retired long before their companies crater, leaving their mess behind for someone else to clean up.

End of Health Insurers As We Know Them

I want to start by saying that I am knowingly writing an article that is going to throw fuel on a fire. Being from New England, this article strikes me as the equivalent of writing an article in the Denver Post that says New England Patriots quarterback Tom Brady is better than Denver Broncos quarterback Peyton Manning. Letters will be written. Darts will be thrown. So, I will make sure I put on my steel vest before I publish.

I already started writing on this topic, in a recent article titled, “Apple HealthKit – The Next Step to the End of Employer-Based Health Insurance.” In this article, I will provide a more detailed analysis of why the premise presented in my first article may come true — that within five to 10 years employers will be out of the health risk business. I will then provide a plan for what I think benefit brokers should do to prepare. Taking action may be the difference between those that survive and thrive in this new health insurance world vs. those that may struggle or even fail.

What do I mean when I say employers will be out of the health risk business? To repeat what I said in my last article, “By health risk, I mean the cost of the employee’s health insurance will not be priced by the employer. It won’t be a function of average age of the employee population, claims experience or any of the standard underwriting/pricing rules today.” In fact, health insurance will most likely become an individually purchased product, and the insurers of the future may not be the companies that dominate the market today.

As a consultant to benefits brokers, I educate them on technology and advise them on how they can maintain a competitive position. My future depends on brokers’ remaining significant, so I am as concerned about their future as any broker would be. If you study the significant market events over the past few years, you get a picture of what the future may be like. While many may think Obamacare is the big market change, I believe that the health insurance market is going to change much more dramatically and that, while the government may be nudging things along, competitive market forces will drive the change.

So let’s get to the point. I believe that within five to 10 years health insurance will be delivered primarily through staff model health maintenance organizations (HMOs). These will be Kaiser-like plans where the providers of care will also be the risk takers/insurers. Individuals will pay a fee directly to a healthcare system that will be responsible for the health, wellness and treatment of the person. Employers may still give employees money to pay for some of the cost, but they won’t be in the “risk” business. We are beginning to see this evolution today through the expansion of what people are calling accountable care organizations (ACOs). However, the future will go well beyond the limited risk sharing of today’s ACOs.

Four Catalysts to Change

If you had been in the health insurance business in the ’80s, you would say we tried this before, and it didn’t work. Well, today, things are different. There are four major differences that will be the catalysts for the coming changes:

Changes in consumer buying behavior

In the ’80s, employers often paid for 100% of an employee’s health insurance and a large part of the family’s. When cost wasn’t an issue for employees, they looked at access to providers as the No. 1 variable. So, all the HMOs and preferred provider organizations (PPOs) tried to expand their networks to appease more people. Today, cost is the No 1 issue. As a result, we are seeing networks shrinking to save cost.

Expansion of government health insurance programs, combined with the reduction in Medicare and Medicaid reimbursements to providers.

If I am a healthcare provider and am getting less money to perform services on a growing population, then I need to do things differently. I need to get money from healthy people and from people needing less care. I would also need to keep people healthy or provide care in more cost-effective settings.

Advancing mobile technology

With advancing technology, it will be easier for providers to have real-time access to a patient’s medical information. Things like weight, blood pressure and blood glucose levels can be measured in the home, sent via Bluetooth to a mobile device, and immediately be available to the primary care physician in the individual’s web-based medical/wellness record. Other health metrics will also soon be possible. Systems can automatically notify the responsible physician of any changes in the metrics that warrant attention. Information will help provide proper treatment in a timely manner.

Change in tax laws, allowing personally purchased insurance on a pre-tax basis

With Republicans taking over Congress, the idea of making an individually purchased insurance policy tax-deductible is now on the table. While this is not a necessary catalyst for change, it certainly would put the nail in the coffin and get employers out of the health risk business.

Not only is there a perfect storm forming for the coming changes, but I believe the majority of the participants in today’s healthcare market will welcome this change. We have all heard the saying that “healthcare should be between the doctor and her patient.” We know the government wants this. I think employers, employees and healthcare providers would want this, too. It is the insurers, and by extension benefits brokers, that may not want this. However, as we all know, there is little sympathy for the insurance companies.

Employers would want this because I don’t think employers got into the health insurance business after World War II to be in the position they are in today. While I don’t think they mind giving employees money to pay for health insurance, they don’t want their profit margins affected by the health of their employees. Bad claims experience, and their profits go down. Every year, they agonize over the health insurance renewal, deciding whether to charge their employees more or make changes in plans (delivering bad news, either way) or absorb increases in the business. I don’t think employers want to be in the wellness business, either. They may want to provide wellness programs to make people feel better, be more productive at work or boost morale, but not to control or reduce healthcare costs.

Employees want change, too. Do employees want their employers asking for things like health risk assessments? My health should not be my employer’s business. To me, there is a slippery slope as it is. I do want my physician to care about my health. I want my doctor to know my weight and blood tests and care whether I got a colonoscopy when I turned 50. I often joke that I get an email from Jiffy Lube saying that my car is due for an oil change, but my doctor never sends me an email to get a check-up, test or whatever is needed to keep my engine running the right way.

I believe doctors and other healthcare providers want change, too. They want to practice health care. This would include helping their patients make the right lifestyle decisions and keeping them informed about what is good for them vs. what is not. Providers don’t want the paperwork. They don’t want third-parties telling them what to do, and they are getting tired of reduced reimbursements from the government.

The Market Reacting

I am not the only one using the term “Kaiser-like.” Emanuel Ezekiel, one of Obama’s healthcare advisers, expects healthcare insurers to be obsolete by 2025. According to Ezekiel, “ACOs and hospital systems will become integrated delivery systems like Kaiser or Group Health of Puget Sound. Then they will cut out the insurance company middle man — and keep the insurance company profits for themselves.” (Source: New Republic – March 2014)

Now, I am not going to just listen to Emanuel as my source. I am listening to the market. Hospital systems have been acquiring physician practices and entering the insurance business across the country. In my own backyard, there was this acquisition highlighted in the Boston Globe.

State insurance regulators Friday signed off on Partners HealthCare System Inc.’s acquisition of Neighborhood Health Plan, a transaction that will put the state’s largest hospital and physician organization into the health insurance business for the first time.” (Source: Boston Globe September 2012)

In Massachusetts, this is very big news. Partners HealthCare owns some of the leading hospitals in the country, including Mass General and Brigham and Women’s Hospital.

Hospital systems getting into the health insurance business is not limited to Massachusetts. In New York, New Jersey, Pennsylvania, Maryland, Michigan and all across the country hospitals are getting into the health insurance business. (See Kaiser Health News.)

Concurrently, insurance companies are getting into the healthcare business. According to Hospital and Health Networks Magazine January 2012, the following insurers have made healthcare acquisitions:

  • WellPoint bought CareMore.
  • Optum bought Orange County’s Monarch HealthCare and two smaller independent physician associations (IPAs).
  • United Healthcare acquired a multispecialty group in Nevada in 2008.
  • Humana purchased Concentra, which provides occupational care and other medical services.

Aetna Making Moves

What I have find most interesting is the acquisitions by Aetna and some of the comments by CEO Mark Bertolini. Let’s first look at some of the comments Bertolini has been making over the past few years.

“The end is near for profit-driven health insurance companies. The system doesn’t work, it’s broke today. The end of insurance companies, the way we’ve run the business in the past, is here.”

“We need to move the system from underwriting risk to managing populations,” he said. “We want to have a different relationship with the providers, physicians and the hospitals we do business with.”

In his presentation titled “The Creative Destruction of HealthCare,” he states:

“Not too far away from now – in the next six to seven – 75 million Americans will be retail buyers of healthcare. And they’ll come to the marketplace with their own money and either a subsidy from their employer or a subsidy from their government. And it doesn’t much matter – they’ll be spending their money.”

Aetna is not just talking. If you look at Aetna’s acquisitions and partnerships over the past few years, you can see that Aetna is preparing for the future that Bertolini describes. The company has spent billions of dollars acquiring technologies that can be critical to the future in managing healthcare and healthcare information, including:

  • iTriage – Mobile App for employee to check symptoms – Find doctor – Make appointment
  • ActiveHealth – View and update personal health record (PHR) – Personalized alerts and content – Communicate with doctor
  • Medicity – Promotes coordination of care – Real-time patient data

(Source: Aetna 2013 Investor Presentation)

According to Aetna’s website, Aetna was ranked #52 on InformationWeek’s 2013 list of the 500 leading technology innovators, surging ahead of many of the top names associated with technological innovation. Aetna ranked first among health insurers.

To move to this new model, healthcare providers will need to add capabilities that insurance companies currently have. For example, hospitals provide care but don’t have the actuarial skills to price their patient population in the event they were to get into the risk business. Many also don’t have the capital to assume risk. Those with enough capital can simply buy an insurance company. Others will have to partner with an insurance company that has the capital and reserves to share risk and provide the needed services.

So if I am an insurance company, I can either buy providers to stay viable or provide some products, services or capital that the new healthcare systems will need. Buying hospitals or physician groups across the country can be very expensive. So it may appear that a company like Aetna is setting itself up to be the technology, actuarial, reinsurer and other service provider for these future healthcare systems. I won’t claim to know if Aetna thinks the market will move as far as I am saying, to a Kaiser-like model, but the company certainly is preparing for a different healthcare model.

Some may think that this is somewhat what insurance companies are doing today. Here is the critical difference. Today, the risk-sharing arrangements are still in a fee-for-service environment. In the future, a hospital system may be in close to a 100% capitation environment (where the system receives a set amount per period for each person covered by the arrangement). Provider systems that purchase these services or develop a risk-sharing relationship with an insurance company in such an environment can’t have two such relationships. They will need a single risk pool to properly manage the population and risk. There won’t be a Blue Cross version, a United HealthCare version and an Aetna version of a local ACO/staff model system.

A good example of healthcare financing is my own healthcare. Since I moved back to Massachusetts 16 years ago, I have had the same primary care physician and used the same hospital facility on a number of occasions. Yet I have had seven different health insurance programs. Assuming an average insurance premium of $10,000 per year for my family, over the 16 past years I have paid $160,000 in premiums. I understand insurance, spreading the risk and all the other insurance arguments about where that money goes, but think of how it could be different if all $160,000 went to the system that was actually providing care to my family and me.

What Benefit Brokers Can Do

Okay, so the world may change. What would I do if I were a broker today to prepare for this change? First, change does not happen easily and overnight. The whole country of healthcare consumers, distributors and providers will need to adapt. As a benefits broker, your buyer may no longer be the employer but the employee. If this is the case, then some existing services may not be needed.

  • No more risk analysis/actuary and underwriting
  • No more claims analysis tools
  • No more wellness programs to reduce healthcare costs
  • No more disease management programs
  • No more company medical renewals

Before someone points out the obvious to me, I will say that I do know that most groups with fewer than 100 employees are community-rated and those with more than 100 employees are experience-rated. Small employers are still faced with balancing budgets based on their healthcare renewal. This anxiety will go away.

Most of these types of services are a core competency of many of the national benefits firms and the larger independent brokerage organizations. These services are viewed as key differentiators. For these firms, change may be even more dramatic because providing these types of analytical skills is part of their culture.

So let’s talk about the things brokers can do. I am going to break this down to a list of tasks.

1.       Understand what the players in your market are doing – Brokers should start analyzing their local medical market and see what the providers are doing in this area. Have they made acquisitions? Have they created new partnerships? What is their leadership saying publicly? Whatever they say or do, believe them.

2.       Add an employee call center – Employers will welcome the support in helping employees move to a new environment. Provider systems will welcome and pay for the support in helping those same employees navigate the market.

3.       Add personal financial consulting – It is estimated that close to 40% of employees lose some productivity at work because of financial stress. The healthcare insurance purchase is going to be a major decision for an employee, and it should be made in the context of an employee’s entire financial position.

4.       Understand the new technologies – How many of you who have read this up to this point understand what Aetna’s technologies for the consumer are? Do you know how to “Bluetooth” your weight from a scale to a smartphone? The place of employment can also be a great place to help employees with technology to track health information. Could an employer have a scale at work that is Bluetooth-enabled to send a person’s weight to their smartphone? Could the employer have a blood pressure machine at work? How about setting up a private room with teleconferencing capabilities so an employee can consult a doctor face-to-face via the web without leaving the place of employment? Could a broker make himself available to consult employees one-on-one as to how this whole system will work?

5.       Develop technology engagement and education strategy – After you learn what you need to know about the new technologies, are you ready to deliver? I believe the provider systems (the new Kaisers) will welcome the opportunity to educate the population through the employer. At the employer level, you can reach a large amount of people fairly easily. And the employers will care that their employees understand this new healthcare delivery system. Employers don’t want stressed employees, because stressed employees are not as productive. I believe employers and these new provider systems will pay to help these individual consumers.

6.       Invest in new internal technology and processes – If your entire infrastructure is geared around engaging the employer, then things will need to change. Can you record a phone call? Can you engage in online chat with an employee? Are you prepared to sell individual insurance? To sell a high volume of individual policies and service employees, you will need extremely efficient internal operations.

7.       Start thinking about helping employers exit the risk business – Rather than advise employers how to control costs and mitigate risk, should you start advising them on how to get out of the risk business? I guess private exchanges and defined contribution plans are the start. However, if the healthcare market changes, the pace will accelerate because there will be more options for the employer to get out.

8.       Engage new providers – Carrier reps are always calling on brokers, but these new organizations may not call on brokers in the same way. You may need to reach out to them. If you have something of value for the new provider system, you will need to engage the carriers.

To move to this new model, it will require that brokers invest in technology and people. To attract the provider systems benefits, firms will need to have the services, size and scale to deliver. Most independent benefits firms either don’t have the capacity or capital to move to this model. They will either have to sell to a larger firm or join forces with peers who share the same vision and are willing to collectively invest in preparing for the future. The national firms and larger independent firms with the capital and resources will need to have the will to change.

In today’s environment, many brokers may not feel the need to make these changes. Other firms have already started preparing for a much different future. For example, several national firms have opened call centers for employees. Whether that is for a future market I have described, or simply to service employees today, I don’t know, but the centers are a sign that the benefits game is changing.

I may not end up being right with my market predictions, but my advice is to pay close attention. There is change going on out there, and I think a picture of the future is being drawn that looks much different from the healthcare market today.