Tag Archives: UnitedHealthcare

Empowering Health Through Blockchain

As the U.S. continues to wrestle with healthcare and how to provide insurance, the country seems to be in a state of flux; many individuals and employers alike question how they will ultimately be affected. Warren Buffett and Charlie Munger have identified healthcare as the biggest issue facing American businesses, and the National Federation of Independent Business ( NFIB) reports that the cost of health insurance is “the most severe” problem facing American small businesses today. The growth in healthcare costs has long been an issue in a monopolized industry controlled by the major health carriers (i.e. Blue Crosses, United, Cigna and Aetna).

The problem started spiraling out of control when insurance industry leaders, e.g. MetLife, converted from mutual company structures to stock company structures. When the best interests of the consumer become misaligned with the best interests of the service provider, we create a conflict of interest. After all, their fiduciary duty is to their shareholders, not their consumers.

The benefits system in the U.S. has been flawed for many years. It is plagued by a lack of transparency and leaves the employer powerless to fight increased premiums with each renewal, for what is most often their second largest expense next to payroll.

It’s time to collectively question the status quo and demand innovative solutions that leverage enhanced benefit plan design with emerging technology and contextual data. Business owners’ cost for healthcare should be directly correlated with the health risk and outcome of their employees. All aspects of plan design need to be transparent, and business owners and employees must own their healthcare data, so they can understand exactly what is driving costs and actually control their spending.

Viable solutions will come through companies like iXledger, a London-based blockchain insurtech start-up and collaborator with Gen Re that has partnered with online information hub Self Insurance Market to develop a marketplace for the growing self-insurance risk management sector. The marketplace leverages iXledger’s blockchain platform to navigate the complex, data-intensive processes of self-insurance, providing the visibility, workflow and resource management to receive cost-effective bids for appropriate services.

See also: What Blockchain Means (Part 2)  

The current group benefits market is primarily controlled and monopolized by the Blue Crosses, United, Cigna and Aetna (BUCAs), leading to diminishing provider networks, unclear benefits coverage and consistent premium increases over the last decade. American employees are unable to afford to participate in their own employer’s group medical plan. Aetna recently announced that it will not pay commissions to brokers on groups with fewer than 100 insured lives.

Technology alone is not the key to driving down the cost of healthcare and enhancing benefits. The famed health insurance unicorn Oscar has the technology, but only leveraging new tools with legacy processes is not going to yield significant returns. Disruption in healthcare requires a totally new approach, not just new technology to try to enhance the current, monopolized benefit plan offering.

Unfortunately, I believe Oscar will continue to lose to the BUCAs, unless it can quickly pivot. Oscar is currently losing roughly $1,750 per member, yet its last capital round provided for a $2.7 billion valuation with 120,000 insured lives, or $22,500 per member. Although Jeff Bezos and other technology leaders have defied all conventional means of valuation across the capital markets, an analysis into Oscar’s business has me a bit stifled. If you look at the member population, 48% of the New York enrollments in 2015 came from the ACA state exchange, who are often high-risk members. Perhaps that is why Oscar’s ratio of hospital costs to premiums earned was 75%, compared with 62% at UnitedHealthcare. The lack of capital relative to the BUCAs and Oscar’s existing member risk population will make it quite difficult to compete.

See also: Blockchain Technology and Insurance  

As Oscar shows, the solution to the health benefits crisis in the U.S. will not be driven with just new technology and enhanced analytics, but by integrating enhanced data and new technology, such as telemedicine, with innovative and enhanced benefit plan designs similar to what iXLedger is endeavoring to facilitate. The solution is a paradigm shift requiring new tools that compel new processes to put both employers and employees in control of their cost of healthcare while offering enhanced health benefits coverage.

The Deception Behind In-Network ‘Discounts’

Here’s a strange paradox: Healthcare costs have increased by an unsustainable rate of about 8.5% each year over the past decade, according to PwC’s Health Research Institute. Already, the average employer-based family health insurance plans costs more than $18,000 annually.

But Medicare spending has been relatively stable. Over the past three years, the program’s payouts to hospitals have increased by only 1% to 3% a year, roughly even with inflation. The prices paid for some core services, such as ambulance transportation, have actually gone down.

See also: ‘High-Performance’ Health Innovators 

To see what’s happening, we can start by pulling back the curtain on how preferred provider organizations do business. A PPO is a network of preferred health-care providers such as doctors and hospitals, typically assembled by an insurance carrier. In theory, the insurer can save money for its customers by persuading providers in the network to discount their services in exchange for driving volume to their facilities.

UnitedHealthcare Choice Plus, for instance, boasts that its PPO—a network of more than 780,000 professionals—cuts the cost of typical doctor visits by 52%, while saving 69% on MRIs. Pull back the curtain, and you’ll see these discounts are an accounting trick. To allow PPOs to advertise big discounts, providers simply inflate their billed charges on a whole range of services and treatments.

Don’t insurers have a natural incentive to keep provider prices down, even if they don’t end up paying the list price?

In fact, no—at least not since the Affordable Care Act took effect. That law established a “medical loss ratio,” which requires insurers covering individuals and small businesses to spend at least 80 cents of every premium dollar on medical expenses. Only 20 cents can go toward administrative costs and profit. (For insurers offering large group plans, the MLR rises to 85%.)

If a provider raises the cost of a blood test or medical procedure, insurers can charge higher premiums, while also boosting the value of their 20% share. Insurers can make more money only if they lower their administrative expenses or charge higher premiums.

In this way, the MLR rule encourages insurers to ignore providers’ artificial price hikes. Insurers can continue to attract customers with the promise of steep discounts through their PPO plans—and providers can continue to ratchet up their prices. By hoodwinking their customers, both insurers and providers make more money. Since insurance costs are merely a derivative of health-care costs, the result has been a steady rise in insurance costs for millions of working families.

For employers caught in this price spiral, there is a way out: partial or full self- insurance. When businesses self-insure, they pay employee health claims directly. That creates an incentive for businesses to question—and push back on—providers’ price increases. Self-insuring businesses can strengthen their leverage by using “reference- based pricing,” which caps payments for “shoppable”—nonemergency—services at the average price in a local market. Members who use providers with prices below the limit receive full coverage. If they use a provider that charges more than the limit, they pay the difference out-of-pocket.

This setup creates a strong incentive to control costs: Patients have a reason to shop around for the best value, while providers are pressured to keep their prices below the cap. The most expensive doctor is not always the doctor with the best outcomes.

See also: High-Performance Healthcare Solutions  

That’s what happened when the California Public Employees’ Retirement System adopted a reference-pricing approach a few years ago. The agency had noticed that provider charges for hip and knee replacements varied from $15,000 to $110,000. In 2010, Calpers established a reference price of $30,000 for the procedures. Predictably, patients flocked to providers charging that price or less and shunned higher-cost facilities. Over the next couple of years, the number of California hospitals charging below $30,000 for a hip replacement jumped by more than 50%. In the first year Calpers saved an estimated $2.8 million on joint replacements.

What worked for Calpers can work just as effectively for small and midsize businesses. Today’s medical inflation is exactly what one would expect from health policies that reward insurers and providers for raising prices. Employers shouldn’t accept this status quo. By self-insuring and setting their own reference-based reimbursement, businesses can sidestep the traditional insurance model that continues to bleed them dry.

Why Mobile Health Must Be a Priority

Mobile has drastically changed the way we shop, travel, pay our bills and even pay each other. But there’s one area of our lives that it hasn’t changed enough: the way we manage our health.

Mobile-focused health represents one of the biggest challenges – and opportunities – facing the healthcare industry. As more consumers connect their homes and lives across devices, particularly their phones, healthcare professionals must harness mobile health technologies and move toward a complete, mobile-optimized user experience. While most insurers already offer mobile apps, they often fail to create an experience that is both functional and intuitive.

As our 2016 Digital Healthcare Survey revealed, digital health resources have been embraced by Americans of all ages, especially by younger Americans, with 82% of Gen Y and 67% of Gen X having accessed at least one digital health resource in the past 12 months. Of the digital resources offered by health insurers, mobile apps have the greatest potential to enhance Gen Y and Gen X member understanding and autonomy, but awareness of the apps and their functionality is low. Many Gen Y and Gen X members consider mobile access to their insurance a key resource, but only one-third (32%) are actually aware of whether their insurer even offers a mobile app.

This represents a significant missed opportunity, for insurers and consumers alike.

See also: A Road Map for Health Insurance  

Fortunately for insurers, creating a mobile app doesn’t need to be overly complicated. The fundamental function of a health plan app is to provide members with access to the resources that are applicable to and useful for the mobile experience. However, many apps present far more than this – plan information, including balances, claims data and ID card information as well as coverage and benefits rates for health services, profile and account management options and customer service centers. For most customers, mobile apps don’t need all the resources and attributes of full sites – customers just want a mobile health experience that is intuitive, functional and fits in with their daily routine.

So, what functionalities should insurers be looking to include in their latest mobile app versions?

Take a page from financial apps, such as PayPal and Venmo, and offer a way for consumers to pay with ease. Incorporating payment features for claims and premiums, as well as push notifications alerting members to coming bills, would likely lead to more timely payments. UnitedHealthcare is one of the few providers that allow members to pay for a claim on its app directly by entering bank account information and then pre-filling most other important information, such as amount and payment recipient.

Create visual representations, such as charts, graphs and progress meters, to help consumers better understand aspects of their plans like deductibles and coinsurance. Presenting plan balances and claims data not only improves the aesthetics of a page, but also provides members with a summary of data that may be easier to process. For example, rather than displaying how much of the plan’s deductible and out-of-pocket maximum the member has met, has remaining and has in total within a list format, use an interactive chart or graph to provide expedient summaries of data without sacrificing any detail – a particularly important feature on a mobile app given the limited space.

Integrate health data from wearables to mobile apps (and vice versa) to encourage consumers to exercise regularly or eat healthy. Health assessments and connecting fitness apps to track movement are the most commonly rewarded activities, currently recognized by a majority of insurance platforms. Some insurers, such as UnitedHealthcare and Humana, are ahead of the curve, offering separate health and wellness reward program apps that employ push notifications to remind members to keep up with goals, such as “remember to get between seven and eight hours of sleep tonight” and “you have 2,000 more steps until you reach your goal for today.”

See also: A Road Map for Health Insurance  

While the healthcare industry overall still has a long way to go, digital health companies and startups have leveraged advancements in technology to enhance the mobile health experience for consumers. As functionality continues to improve and usage increases among younger members, the need for effective member support will become critical. Insurers should take note and make mobile health a priority – including functionalities and resources to help members better manage their health. We’ll all be better off as a result.

Looming Caregiver Crisis in the U.S.

AARP’s Project Catalyst recently released a study in collaboration with HITLAB, the healthcare innovation and technology lab based in New York, that shows a very high family caregiver interest in using new technologies to help care for loved ones (71%), but the actual usage today of technology by caregivers is very low (7%) due to the lack of awareness of viable options and the time challenges involved.

According to Laura Pugliese, deputy director of HITLAB and member of the research team, the study is “a call to action regarding the tremendous challenges facing our society and unpaid family caregivers, who are unsung heroes. We are helping to put together a road map for innovative companies to produce technology products and services in the caregiver marketplace to address unmet needs. We want to find out what works and what doesn’t.”

That is the basic goal of AARP and its partners in Project Catalyst, including the medical researchers at HITLAB. The staggering statistic in this study is that by the year 2020 there will be 117 million Americans (including the aging baby boomers) who will need assistance with daily living and healthcare issues. The problem is that, although 117 million people will be in need of a wide range of assistance, it is projected that only 45 million family members will be available to help care for their loved ones. These family members are not only unpaid, but lose $522 billion in income, according to the study (“Caregivers and Technology: What They Want and Need”).

As a former caregiver for both my mother and father, who served in WWII and who were part of America’s greatest generation, I can’t even begin to share how stressful, time-consuming and emotionally draining the process is and the profound impact it played in both my personal and professional life.

As a caregiver over the span of several years, I became involved in finances, banking, wills, estates, taxes, power of attorney, selling a home, healthcare directives, Social Security, Medicare, Medicaid, senior housing, assisted living, nursing homes, DNR orders (Do Not Resuscitate), doctor appointments, surgery, emergency room visits, hospital stays and end-of-life decisions, in addition to just being a son and a brother. I wouldn’t have it any other way, of course.

The only technology available to me was my cellphone and answering machine, but AARP Project Catalyst has identified nine frontiers for innovative technology companies to address:

  • Medication Management
  • Vital Signs Monitoring
  • Diet and Nutrition
  • Aging With Vitality
  • Healthcare Navigation
  • Social Engagement
  • Physical Fitness
  • Emergency Detection and Response
  • Behavioral and Emotional Health

These nine frontiers certainly identify the key areas of concern of a caregiver. However, as I thought about all the time and effort involved from my own personal experience, what is lacking is overall caregiver support. I was often asked, How is your mom? How is your dad? Nobody ever asked how I was doing.

Nothing can prepare you for this caregiver role. In the middle of intense professional obligations as a vice president with responsibilities to major clients, I had to sell a house, find good doctors, get power of attorney, prepare financial statements, pay bills and find cleaning services while seeing that my parents were getting the best healthcare available at the right time and place and taking all the right medications.

Being a caregiver is at minimum like having a part-time job, unpaid. The AARP/HITLAB study found that on average a caregiver spends 20 hours a week on a wide variety of tasks. From my experience, that is about right on a good week.

I can envision existing and future technologies having the ability to better monitor medication regiments. My father, who suffered from congestive heart failure, a blocked carotid artery, diabetes, arthritis, sleep apnea and other ailments, was given so many medications that I had to work with the hospital pharmacy department to develop a check list of what medications he should be or not be taking, what for, why and how often. I developed a handmade chart on his refrigerator door and put numbers on his prescription drug bottles. My handwritten instructions were take # 1, 2, 6, 8, 10 and 12 in the morning, another set in the afternoon and another set at night. It worked, but I had to do this myself by hand with help of a pharmacist.

Initially, the doctors wanted to amputate my father’s legs due to poor circulation from congestive heart failure, but by getting a second opinion we learned that his cardiologist was prescribing the wrong medications. I got him a new cardiologist and the right medications. A dad whose sons didn’t have our healthcare background and connections would have needlessly lost his legs and his quality of life.

Although there are technologies in use today, the actual usage based on this real world study is only 7%. The ability to monitor vital signs, especially for people with sleep apnea, congestive heart failure and other chronic conditions along with glucose levels for a diabetic can bring both peace of mind to a caregiver and potential lifesaving capabilities for the patient.

This study should be a call to action, and I’m sure there are many potential technologies in the pipeline or on the drawing board. I am also glad that people like AARP and HITLAB and the sponsors of Project Catalyst, including Pfizer, UnitedHealthcare, Medstar Health and the Robert Wood Johnson Foundation, are working on this road map.

Project Catalyst is actually reaching out to caregivers themselves to determine what their needs are and what works and what doesn’t. HITLAB medical researchers literally went to people’s homes to interview them to determine their daily needs and their use of technologies as a caregiver. I believe a very comprehensive list of potential technologies should be developed and tested. I see that healthcare technologies and apps are being developed and tested now to address health monitoring such as vital signs and glucose levels. My fear is that this potential use of technologies will be fragmented and require multiple companies, each addressing one of the nine identified frontiers, and may be cumbersome or expensive.

A major issue will also be the ability of medical providers to monitor these vital health signs and other health issues in real time. In addition, will the health insurance industry, including Medicare and Medicaid, be in position to pay primary healthcare providers for this monitoring?

I would also like to see innovative companies provide a comprehensive list of capabilities to help with all the non-direct healthcare needs of a caregiver, such as selling a home, power of attorney, healthcare directives and finding professional caregivers such as visiting nurses, assisted living and nursing homes.

Stan Kachnowski, chairman at HITLAB, stated; “Our goal is to help bring the best technologies to the caregiver marketplace in order to make a positive impact where the patient (and their caregiver) comes first and profits last.”

AARP and HITLAB plan to continue their research and will conduct a series of pilot programs to test new technologies.

This is something that will eventually affect almost everyone either as a patient, caregiver or both. When doctors say there is no known cure for congestive heart failure, diabetes or Alzheimer’s or other chronic conditions, they mean it.

Why Doctors Don’t Trust Insurers

Having health insurance and dependable healthcare is one of the biggest concerns for people all over the world, but, unfortunately, there are many doctors who simply don’t trust the health insurance their patients use. No matter if you currently have health insurance, knowing what your doctor feels about your coverage can give you a deeper insight into just how well (or poorly) insured you truly are.

One of the main reasons physicians don’t trust health insurance providers is because they feel insurance companies prevent them from offering patients the absolute best care. It’s understandable to be upset at the idea of not being able to perform your job to the best of your abilities.

Insurance providers that are considered the most trustworthy include Blue Cross Blue Shield and Cigna, while those deemed the least trustworthy are UnitedHealthcare and Humana. These results stem from a 2015 survey conducted by the ReviveHealth Payor Trust Index, with responses from more than 600 specialists and primary care physicians. One thing to note is that Blue Cross Blue Shield earned a combined trust index rating of about 60 out of 100, which was the highest score but which also leaves an abundance of room for improvement.

The Future of American Health Insurance

The two most important factors physicians cited as influencing their opinions about how health plans help or hurt the quality of care they deliver were the level of coverage and number of claim denials.

Physicians might also soon have to contend with new medical insurance companies made up of two or more of the most difficult companies to deal with, such as through the proposed merger of Anthem and Humana. If the deal goes through, physicians might find health insurance companies to be downright insufferable.

Additional Reasons

Besides having their hands tied, doctors provided the ReviveHealth Payor Trust with several more reasons they distrust health insurance companies. Physicians also don’t believe insurance providers do their best to honor commitments made to policyholders. Nor do they believe that companies advertise themselves accurately or honestly. Respondents to the survey also said insurance providers take advantage of doctors.

If even doctors don’t trust insurance companies, where does that leave their patients? Not only do doctors have a better idea than their patients about how the human body works, doctors also have a better idea about how the health insurance industry works. If you’re considering health insurance plans, or if you’re thinking about switching insurance providers, ask your doctor for recommendations.