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4 reasons for providers to start insurance plans

January 5, 2016by Robert Whitcomb in Uncategorized tagged , , , , ,

 

Paul Keckley,  managing director of the Navigant Center for Healthcare Research and Policy Analysis,  give four reasons for providers  to start their own health-insurance plans.

But first he notes:

“The most fundamental question facing hospitals and physicians in every community is this: Given the shift in accountability for costs from insurers to hospitals and physicians, does sponsoring a health plan make sense?”

“The bottom line: Physicians, hospitals and post-acute providers are at risk for managing costs and quality. The buck stops there.”

“….Arguably, what’s needed is a financial structure through which efforts to manage the sick efficiently and maintain the health of those who are well can be coordinated. That vehicle is a provider-sponsored health plan.”

Then he gives four good reasons for providers to start health plans;

“1. Mission: Managing total population health is consistent with the role and mission of community-based health organizations. Sponsoring a plan — whether Medicaid, Medicare or commercial — affords a provider organization the mechanism whereby it is able to build and sustain continuous, ongoing relationships with individuals and households (otherwise known as patients). ”

“2. Capability: The management skills, capital, infrastructure and regulatory risk associated with sponsoring a plan can be mitigated through collaboration with  {other} successful provider-sponsored plans. There’s no shortcut to competent administration of a plan, nor is it easy. Nonetheless, it’s been done successfully by many, and their lessons, resources and professionals can be tapped.

“3. Trust: The public trusts hospitals and physicians more than insurers. That does not mean a provider -sponsored health plan can charge significantly higher premiums or offer poor service. It means the community — employers, individuals, legislators and community leaders — will respond favorably if a provider-sponsored plan is offered that’s competitive.”

“4. Timing: The private health insurance industry is at a tipping point. Its margins are at risk. Its traditional market — employers — is becoming more demanding. Its once-soaring profits are shrinking and regulators are watching. As policymakers scrutinize the insurance industry’s consolidation … and as employers seek more value for their premiums, a locally sponsored plan that’s competitive on premiums and plan design with clear alignment to the local provider community is worth discussion, especially if its financial performance is tied directly to the community’s benefit rather than insurer shareholder value.”

 

Some employers paying lump sums for employees’ care episodes

January 5, 2016by Robert Whitcomb in Uncategorized tagged , , , , , , , , ,

By MICHELLE ANDREWS

for Kaiser Health News

Insurance policies that pay a lump sum if workers get cancer or another serious illness are being offered in growing numbers by employers. Companies say they want to help protect their workers against the financial pain of increasingly high deductibles and other out-of-pocket costs. But it’s important to understand the limitations of these plans before buying.

Critical-illness plans have been around for decades, but they have become more common lately as employers have shifted more health care costs onto their workers’ shoulders.

Forty-five percent of employers with 500 or more workers offered the plans last year, up from 34 percent in 2009, according to benefits consultant Mercer. Employees are generally responsible for the cost of coverage, although in some cases bosses contribute to the premiums.

“What we have seen is a very clear and steady rise in the number of employers offering high-deductible plans,” said Barry Schilmeister, a principal in the health and benefits practice at Mercer. “More employers are looking at the reality of pulling back on the value of health plans but looking to offer something else that would make people feel a little more comfortable about taking on that additional risk.”

Forty-six percent of workers covered by insurance on the job faced a deductible of at least $1,000 in 2015, up from 22 percent in 2009, according to the Kaiser Family Foundation’sannual survey of employer sponsored coverage. (KHN is an editorially independent program of the foundation.)

Critical-illness policies typically provide a lump sum if someone is diagnosed with cancer, heart attack, stroke, kidney failure or needs a major organ transplant. They may also pay benefits for other medical problems such as loss of vision or paralysis; plans have an average of 19 eligibility triggers, according to a market survey by Gen Re, a company that offers insurance to insurers to help manage the risk from underwritten policies. In addition, some employers also offer a policy that pays only in the event of a cancer diagnosis.

Nine out of 10 critical-illness policies are sold through the workplace, according to Gen Re. These plans provide an average $15,000 payout to workers diagnosed with one of the conditions covered under the policy. Plans sold on the individual market pay $31,000 on average, Gen Re said, but applicants generally have to go through medical underwriting to qualify. Employer plans usually don’t require that.

The average annual premium was $283 for $25,000 worth of coverage in 2013, according to financial-services research company LIMRA.

In addition to deductibles and cost-sharing for pricey drugs and treatment, the payments can be used to help cover many expenses associated with serious illness that even generous employer health plans don’t cover, including travel costs to see a specialist, time off from work and extra charges for out-of-network doctors or hospitals.

But benefits from the critical-illness policies can be limited by very specific requirements, so it’s important to understand the coverage before you buy. Here are some of the details to look for:

Pre-Existing Conditions

If you’ve had cancer or a heart attack in the past, check to see whether the plan will cover those conditions in your case or impose a waiting period before doing so.

Excluded Benefits

“Understand that maybe not every cancer and heart attack is covered,” said Stephen Rowley, vice president at Gen Re. For example, non-invasive prostate or breast cancers may be excluded from some policies. However, a growing number of critical illness insurers are covering such early-stage cancers, said Karen Terry, assistant managing director for insurance research at LIMRA.

Partial Payouts

Rather than excluding coverage altogether, plans may make a partial payout for things like non-invasive cancer, heart-bypass surgery or angioplasty.

One-Time vs. Repeat Payouts

If you get cancer a second time, will the plan pay out again, in full or in part? Does it matter if the second incidence is the same or a different type of cancer?

Unrestricted vs. Specified Schedule Of Benefits

Critical illness policies typically pay out a lump sum to use as the policyholder wishes. Cancer policies may do the same or pay set amounts for hospitalization, chemotherapy or radiation treatments, for example.

Age-Related Benefit Reductions

Some plans reduce how much they pay out after policyholders turn 65 or 70.

Waiting Periods

Plans typically won’t pay benefits for 30 to 90 days after a policy becomes effective.

As people’s financial exposure for medical care has increased, “they’re really spooked, especially when they’ve had a serious illness in their family, and they know all that goes along with that,” said Bonnie Burns, a longtime consumer-health advocate and a policy specialist with California Health Advocates, which assists Medicare beneficiaries. “I think these [coverage] holes are going to proliferate and people are going to fill them where they can.”

However, some researchers suggest that the increasing interest in critical-illness policies does not compensate for less generous health insurance policies. “Why don’t they just offer people a better [health insurance] policy in the first place?” said Karen Pollitz, a research fellow at the Kaiser Family Foundation.

 

In R.I., an apparent big ACO success

December 28, 2015by Robert Whitcomb in Uncategorized tagged , , ,

hope

The Rhode Island flag.

Read how a Rhode Island clinicians group, Coastal Medical, is making an Accountable Care Organization work.

As Felice Freyer, of The Boston Globe, reported: “Coastal Medical, now in its fourth year, stands as an example of an ACO that seems to be making it work: In 2014, it saved $7.2 million while maintaining high ratings for quality.” ACOs, by taking on the financial risk of caring for a population, can be financially rewarded by the Centers for Medicare & Medicaid Services when it saves money.

Some of the things Coastal does, reports Ms. Freyer:

“To prevent needless emergency room visits, Coastal has office hours 365 days a year and stays open till 9 on weeknights.

“To help keep sick and recovering patients at home, nurse care managers work in hospitals and nursing homes to ensure patients have the services they need when they’re discharged.

“When a Coastal patient shows up in the emergency room, the hospital has immediate access to a Coastal doctor who can see the patient’s medical record and help with treatment decisions.”

Ms. Freyer continues:

“{A}ccording to federal data, Coastal (whose patients include residents in nearby Massachusetts) ranked highest in overall quality of care among the 19 ACOs working in Massachusetts and third-highest in the nation. The Medicare program measures quality based on 33 criteria, from percentage getting flu shots and mammograms to how well patients’ diabetes or heart disease is being managed.

“At the same time, Coastal saved money, trimming the cost of care for its Medicare beneficiaries by 7.25 percent in 2014, by reducing the use of hospitals, emergency departments, and nursing homes.”

“The ACO concept aims to encourage providers to take care of all their patients, not just those who come in with complaints, and to keep track of how patients are faring.”

“That means reaching out to patients with serious health conditions — diabetes or congestive heart failure, for example — and urging them to come in for care.

“It also means careful data-gathering and tracking, a task made easier at Coastal by an electronic medical records system in place since 2006.”

“Unlike many ACOs, Coastal isn’t working with Medicare alone. It has similar shared-savings arrangements with the three major health insurers in Rhode Island, and it offers the extra services to all its patients.”

 

Dangerous new risks at rural hospitals

December 26, 2015by Robert Whitcomb in Uncategorized tagged , , , ,

 

Medicare financial incentives are driving more and more inpatient orthopedic surgeries to be  performed at rural hospitals (often called critical-access hospitals). But these institutions generally do not do this sort of work as  often or as well as general hospitals, which are mostly in urban and suburban areas. This imperils the health of some patients.

In an investigative piece, The Wall Street Journal reported that “Patients getting the five most common major orthopedic procedures at critical-access hospitals, including joint replacements, were about 34% more likely to die within 30 days than those getting the same services at typical general hospitals during the period from 2010 through 2013, according to the {Medicare} billing data.”

 

 

Senators release paper on managing chronically ill seniors

December 24, 2015by Robert Whitcomb in Uncategorized tagged , , ,

 

Fierce Healthcare reports that a bipartisan group of U.S. senators has released a paper outlining policy initiatives “aimed at Medicare patients with multiple chronic diseases such as heart disease and diabetes” with the aim of improving treatment and controlling costs as payers and regulators continue the long slog toward emphasizing preventive care and pay-for-value to replace pay for  episode-by-episode service.

The idea, of course, is to replace the traditional episode-by-episode approach with a population-health-based management system,

The proposals are divided into several categories, including, summarizes FierceHealthcare:

  • “Patient and caregiver empowerment during the care delivery.
  • “High-quality home care.
  • “Expanding benefit innovation and technology access.
  • “Expanding interdisciplinary, team-based care access.
  • “Population-health management for chronically ill patients.

Fierce reports that “{s}pecific policy proposals include reducing care coordination barriers within Accountable Care Organizations (ACOs), extending hospice benefits to Medicare Advantage beneficiaries and expanding home-care models. The group also proposes giving Medicare Advantage and ACOs more flexibility to deliver essential non-health services for beneficiaries with multiple complex conditions.”

 

 

 

 

The growing number of medical schools

December 21, 2015by Robert Whitcomb in Uncategorized tagged , , , , , , , , , , ,

By JULIE ROVNER

For Kaiser Health News

The  announcement by Kaiser Permanente that it plans to open its own medical school in Southern California has attracted a lot of attention in the healthcare community.

But Kaiser is actually at the trailing edge of a medical-school expansion that has been unmatched since the 1960s and 1970s, say medical education experts. (Kaiser Health News is not affiliated with Kaiser Permanente.) In the past decade alone, according to the Association of American Medical Colleges, 20 new medical schools have opened or been approved.

That’s no coincidence. In 2006, the AAMC called for a 30 percent increase in medical-school graduates by 2015 to meet a growing demand, both through expanded class sizes and newly created medical schools.

“We’re on track to meet that 30 percent increase in the next three or four years,” said Atul Grover, AAMC’s chief public-policy officer. “Enrollment is already up 25 percent since 2002.”

Many of the new schools focus on producing more primary-care physicians — those specializing in pediatrics, family medicine or general internal medicine. In fact, Kaiser Permanente already has a partnership with the University of California at Davis in the northern part of the state on a fast-track training program for primary care.

But Kaiser leaders say their new school (projected to enroll its first class in 2019) is about more than just primary care.

“We need to prepare physicians for the way healthcare is delivered in the future,” said  Edward Ellison, M.D., executive medical director for the Southern California Permanente Medical Group. He said students need to learn not just medicine, but about integrated systems of care and how to work in a much different medical environment. “Our advantage is we can start from scratch,” he said.

Another advantage is the HMO’s deep pockets.

“They’ve got huge resources,” said George Thibault, president of the Josiah Macy Jr. Foundation, which focuses on medical education. “This is a grand experiment, but if anybody can do it, Kaiser can.”

Kaiser Permanente is far from the first healthcare provider to launch its own medical school — the Mayo Clinic has had one since 1972 and is about to expand that school from its home base in Minnesota to its satellite campuses in Arizona and Florida.

Thibault said health-provider systems are already heavily involved in the new medical schools, often as partners with degree-granting universities, “which itself is a new trend.” For example, on Long Island, the North Shore-LIJ Health System co-launched a medical school with Hofstra University in 2011.

One big question is whether all these new schools will eventually produce more students than there are residency positions, which are necessary to complete the training. The federal government, which funds the majority of those residencies through the Medicare program, capped the number of residencies it would fund in the 1997 Balanced Budget Act.

Currently there are about 27,000 residency slots available each year, which are filled by students who have earned M.D. or D.O. degrees (doctors of osteopathy) in the U.S., as well as foreign medical-school graduates and U.S. citizens who have graduated from medical schools overseas.

Between the new M.D.-granting schools and a rapid expansion of osteopathic medical schools, AAMC’s Grover said, demand will soon outstrip supply. Residency slots “are growing at about 1 percent per year,” he said (mostly funded by health systems themselves since Medicare will not), “while undergraduate medical education is growing about 3 percent per year.”

But Edward Salsberg of George Washington University, who has spent a career documenting health workforce trends, said any potential conflict is still a long way off.

“When you start with an excess of 7,000 slots” of residencies over graduating U.S. medical students, “it takes a very long time” to consume that excess, he said. By the year 2024, he and others concluded in a recent article in the New England Journal of Medicine, there will still be 4,500 more slots than graduates.

“So yes, U.S. medical students will have a slightly more limited range of specialties to choose from,” said Salsberg, “but still plenty of room.”

There are also questions about whether there even is a physcian shortage that all these new schools are aiming to alleviate.

Grover, whose organization has led the call for more physicians, said the anticipated shortage of primary-care physicians might not be as acute as originally thought. That’s because the U.S. is producing dramatically more nurse practitioners and physician assistants, who also provide primary care.

That’s probably a good thing, at least in supply terms, said Thibault of the Macy Foundation. Because it turns out that many students graduating from new primary-care-focused school’s programs are in fact opting to become specialists instead.

“The career choices in the new schools look remarkably similar to career choices of more traditional schools,” he said. The graduating medical students “are responding to the same set of signals and stimuli” about prestige, income and lifestyle.

Baby Boomers on Medicare: Living longer and sicker

December 17, 2015by Robert Whitcomb in Uncategorized tagged , ,

By LISA GILLESPIE

For Kaiser Health News

After the last of the Baby Boomers become fully eligible for Medicare, the federal health program can expect significantly higher costs in 2030 both because of the high number of beneficiaries and because many are expected to be significantly less healthy than previous generations.

The typical Medicare beneficiary who is 65 or older then will more likely be obese, disabled and suffering from chronic conditions such as heart disease and high blood pressure than those in 2010, according to a report by the University for Southern California’s Schaeffer Center of Health Policy and Economics.

Adjusted for inflation, overall Medicare spending is projected to more than double between 2010 and 2030 to about $1.2 trillion. A massive influx of Baby Boomers into Medicare will be the main driver. With the last Baby Boomers turning 65 in 2029, Medicare rolls are expected to number 67 million Americans in 2030, the Schaeffer Center said.

But costs per beneficiary could grow by 50 percent over the same time due to longer life expectancies, shifting health trends and medical cost inflation, the report said. In inflation-adjusted dollars, Medicare is projected to spend 72 percent more for the remaining lifetime of a typical 65-year-old beneficiary in 2030 than a 65-year-old in 2010.

“It’d be one thing if there was an increase in life expectancy while maintaining health, but this is different. If you have more people that are disabled, it’s more costly, and we’re paying more because they’re living longer,” said lead researcher Dana Goldman at the University of Southern California.

“In some ways, we are victims of our success” in extending lives and preventing mortality, he said. “We’ve done such a good job of preventing cardiovascular disease that now we have more cancer and Alzheimer’s.”

The average life expectancy for 65-year-olds is projected to rise by almost a year from the 2010 norm, to 20.1 years in 2030. People with disabilities at 65 will extend their old ages, too – by more than a full year, to 8.6 years in 2030, the Schaeffer Center said.

Obesity is likely to surge, affecting 47 percent of Medicare elderly beneficiaries by 2030, up from 28 percent in 2010, according to the report.

“The people about to become eligible are more sick and obese [than past beneficiaries], even though there are treatments that will keep them living longer,” said Etienne Gaudette, a lead economist from the Schaeffer Center.

Significant increases in beneficiaries with these chronic conditions are also forecast by 2030:

  • Hypertension – 79 percent vs. 67 percent in 2010.
  • Heart disease – 43 percent vs. 36 percent.
  • Diabetes – 39 percent vs. 24 percent.
  • Three or more chronic conditions – 40 percent vs. 26 percent.

Smaller increases are forecast for elderly beneficiaries with cancer – 26 percent vs. 21 percent – and stroke – 19 percent vs. 14 percent in 2010. Lung disease is expected to see the slowest growth of all, about one percentage point to 16 percent.

That change is mostly due to Americans’ declining smoking habits. By 2030, 52 percent of Medicare’s beneficiaries will be lifelong non-smokers; only 43 percent were in 2010, the report said.

The Schaeffer Center’s report was published Nov. 28 in the Forum for Health Economics and Policy.

Study upends assumptions about healthcare costs

December 15, 2015by Robert Whitcomb in Uncategorized tagged , ,

A new study casts big doubts on where the best places are for cheaper healthcare in the United States.

Readers can perhaps best understand this very important new study by reading this New York Times graphics-rich analysis of it.

As The Times noted, “The research looked not only at Medicare but also at a huge, new database drawn from private-insurance plans – the sorts used by most Americans for health care. And it shows that places that spend less on Medicare do not necessarily spend less on healthcare over all.”

The paper is scheduled to be released by the National Bureau of Economic Research this month.

The study’s writers concluded: “First, information about Medicare spending and the factors that drive it to vary are of limited use in understanding health spending on the privately insured. There has been a general assumption both by policy-makers and in the literature that what we observe for Medicare broadly applies to spending on the privately insured. Our work shows that this is clearly not the case. Indeed, many geographic areas that have received public attention for being low spending on the Medicare population, such as Grand Junction, Colo., La Crosse, Wis., and Rochester, Minn., {home of the Mayo Clinic} have high spending on the privately insured.

“Second, much more research is needed in order to analyze the spending and 34 prices facing the privately insured. Our work represents an initial foray into understanding the cross sectional variation in health care spending, but more work is needed to better understand the factors driving the growth in private spending over time.

“Third, it is important to assess the causal drivers of hospital transaction prices, particularly the role of provider market structure and public payment rates. In terms of policy, our work suggests that vigorous antitrust enforcement is important and that hospital prices could be made more transparent. There is evidence that higher deductibles and cost sharing alone will not likely encourage shopping by patients ….

However, more information, such as recent efforts in Massachusetts to make hospitals’ prices public, could help patients and their agents make more informed choices over treatment and put downward price pressure on more expensive hospitals in a sector of the economy where consumers (patients) presently know almost nothing about what they or their insurer will pay for care. ”

 

Article details hospitals’ use of ‘observation status’

December 2, 2015by Robert Whitcomb in Uncategorized tagged ,

 

This Wall Street Journal investigation shows how hospitals, to maximize their Medicare revenue in the face of federal efforts to reduce readmissions, use ingenious billing tactics.

The story notes that “Patients on observation status can remain in the hospital for days, and typically receive care that is indistinguishable from inpatient stays, experts say. But under Medicare billing rules, the stays are considered outpatient visits, and as such, don’t trigger penalties under the health law.

“The Journal’s analysis of Medicare billing data shows that increases in observation stays can skew the readmission numbers, letting hospitals avoid penalties even if patients continue to have complications and return for repeat visits. Observation stays generally are cheaper for the government, but in some cases they can lead to big bills that are the patient’s responsibility.”

HHS official looks at healthcare-policy future

November 24, 2015by Robert Whitcomb in Uncategorized tagged , , ,

 

Video and text: Leslie Dach, a former Wal-Mart executive, is a senior counselor to Health and Human Services Secretary Sylvia Mathews Burwell. He discussed with The Wall Street Journal how  how healthcare policy is evolving.

Among his remarks:

“{W}e want to incentivize the system to pay for quality and not quantity. We want to incentivize care to be integrated and organized.

“The hip-and-joint bundle is a perfect one announced in final form yesterday. Billions of dollars are spent every year in America under Medicare and private insurance on hip and joint [replacement]. These are operations that can be quite painful. Recovery takes time. Under the old system, we would reimburse for the operation. The concept here is to ask the provider to be responsible for a 90-day period, an episode of care, so that they integrate the care down through rehab. If they do that well, they make more money. If they don’t do it as well, they have an economic risk. And that’s been welcome, frankly, by the hospital system and others.”

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