Entries in Riddle, Clive (302)

Friday
May112018

The Disconnect with Consumers and Health Plan Costs

The Disconnect with Consumers and Health Plan Costs
 

By Clive Riddle, May 11, 2018

 

eHealth this week released a new eleven page report: Costs and Consequences in the ACA Market: A Survey of Individual and Family Health Insurance Consumers, presenting findings from more than 1,700 consumers who purchased their ACA-compliant plans via eHealth that included:  (1) “Consumers’ idea of a fair price is hard to find in today’s market;” (2) Policyholders aren’t willing to pay extra for key ACA benefits;” and (3) “Voters are bringing health care frustrations to the mid-term elections this fall,” (66% said it was one of their top three issues.)

 

Consistent with a number of previous studies, there is a significant disconnect between consumers sense of where healthcare prices should be in the market, and what they actually are. Health reports that the average individual monthly premium cost during the last open enrollment was $400,  Only 3% surveyed felt $400+ was a fair price. Only 9% felt $300+ was fair. Only 25% felt $200+ was fair. So what is fair? 38% felt premiums should be $100 or less. Another 36% felt $200 or less was fair.

 

The disconnect carries over consumer sense of the value of specific benefits. 61% want mental health benefits, 60% want maternity care and 55% want birth control coverage (which are all ACA required), but only 25%, 24% and 16% respectively, want to pay for them. Even emergency room benefits experience this disconnect: 80% want the benefit and 54% are willing to pay for it.

 

ACA compliant HDHPs are prevalent in the ACA marketplace, and continue to gain the large group environment as well. Benefitfocus this week released a new eleven page survey report: The State of Employee Benefits 2018 - Industry Edition that examined benefit trends for four sectors: education, health care, manufacturing and retail, with an emphasis on examining the impact of HDHPs in each sector.

 

Benefitfocus found that regarding HDHP prevalence by sector:

·         Education: 50% of employers offer HDHPs compared to 23% in 2016.

·         Healthcare: 73%% of employers offer HDHPs compared to 56% in 2016.

·         Manufacturing: 88%% of employers offer HDHPs compared to 54% in 2016.

·         Retail: 76%% of employers offer HDHPs compared to 55% in 2016.

·         All Industries: Healthcare: 70%% of employers offer HDHPs compared to 58% in 2016.

 

When large employers offer other type plans and HDHPs side by side (many employers do not offer both), the HDHP employee enrollment rates by sector were: Education: 34% (30% in 2016); Healthcare: 27% (23% in 2016); Manufacturing: 29% (46% in 2016); Retail: 40% (27% in 2016) and All Industries: 35% (40% in 2016).

 

What would drive such different results by sector? Employee premium HDHP contributions compared to last year decreased 27% in Education, increased 4% in healthcare, increased 46% in manufacturing, increased 20% in retail, and increased 4% overall for all industries.

 

So just as in the individual marketplace, much comes down to price, even though there is a disconnect in the value that price reflects.

 
Friday
May042018

Welcome to Lifestyle Medicine

By Clive Riddle, May 4, 2018 

The May issue of Circulation includes the research article: Impact of Healthy Lifestyle Factors on Life Expectancies in the US Population, which presented findings from a study that aimed “to estimate the impact of lifestyle factors on premature mortality and life expectancy in the US population.” 

Using data from previous studies they defined five low-risk lifestyle factors

  1. never smoking
  2. ≥30 min/d of moderate to vigorous physical activity
  3. moderate alcohol intake
  4. a high diet quality score (upper 40%)

The study “estimated hazard ratios for the association of total lifestyle score (0-5 scale) with mortality,” and used available national public databases to estimate life expectancy by levels of the lifestyle score, examining mortality of 42,167 adults. 

They found the females who adopted all five of these low risk factors would at age 50 live 14.0 more years that those who adopted zero of the five; and that men at age 50 who adopted all five would live 12.2 years longer than those who adopted zero. They “estimated that the life expectancy at age 50 years was 29.0 years for women and 25.5 years for men who adopted zero low-risk lifestyle factors. In contrast, for those who adopted all 5 low-risk factors, we projected a life expectancy at age 50 years of 43.1 years for women and 37.6 years for men.” 

With these findings in mind, let’s stop by the American College of Lifestyle Medicine (ACLM), established several years ago as “the professional medical association for those dedicated to the advancement and clinical practice of Lifestyle Medicine as the foundation of a transformed and sustainable healthcare system.” They tell us that “Lifestyle Medicine involves the use of evidence-based lifestyle therapeutic approaches.” 

ACLM and Blue Shield of California have just announced a collaboration “to provide Lifestyle Medicine continuing medical education and other training tools to the nonprofit health plan’s in-network healthcare providers.” They tell us that “with this new collaboration, Blue Shield becomes the first health plan to offer its in-network healthcare professionals access to discounted ACLM courses, membership, conference registration, board certification review coursework and registration for the American Board of Lifestyle Medicine exam.” 

In November last year, ACLM announced the first physicians and health professionals to be board-certified in the field. They also have developed True Health Initiative (THI), “a coalition of world-renowned health experts committed to cutting through the noise and educating on only the evidence-based, time-honored, proven principles about lifestyle as medicine. The ultimate mission of the THI is to eliminate as much as 80% of all lifestyle-related chronic disease through lifestyle as medicine.”

 

Friday
Apr272018

Nine Things to Know Jump Out of Leapfrog Hospital Safety Grade Report

Nine Things to Know Jump Out of Leapfrog Hospital Safety Grade Report
 

By Clive Riddle, April 27, 2018

 

In May talk of frogs would lead one to the annual Calaveras Jumping Frog Jubilee (check out www.frogtown.com). But in April, talk of frogs leads one to The Leapfrog Group, who just released the spring 2018 edition of the Leapfrog biannual  Hospital Safety Grades. Leapfrog tells us their “grading assigns “A,” “B,” “C,” “D” and “F” letter grades to general acute-care hospitals in the U.S., and is the nation’s only rating focused entirely on errors, accidents, injuries and infections that collectively are the third leading cause of death in the United States.”

 

Here’s nine things to know from the Leapfrog report card results they have shared:

1.     Five “A” hospitals receiving this grade for the very first time this spring had an “F” grade in the past

2.     46 hospitals have achieved an “A” for the first time since the Leapfrog Hospital Safety Grade began six years ago

3.     89 hospitals receiving an “A” at one point had received a “D” or “F”

4.     Of the approximately 2,500 hospitals graded, 30 percent earned an “A,” 28 percent earned a “B,” 35 percent a “C,” six percent a “D” and one percent an “F”

5.     The five states with the highest percentage of “A” hospitals this spring are Hawaii, Idaho, Rhode Island, Massachusetts and Virginia

6.     Rhode Island, Hawaii, Wisconsin, and Idaho once ranked near the bottom of the state rankings of percentage of “A” hospitals but now rank in the top ten

7.     Hospitals with “F” grades are located in California, Washington, D.C., Florida, Iowa, Illinois, Maryland, Michigan, Mississippi, New Jersey and New York

8.     There are no “A” hospitals in Alaska, Delaware or North Dakota

9.     Impressively, 49 hospitals nationwide have achieved an “A” in every grading update since the launch of the Safety Grade in spring 2012

 

In addition to staterankings, you can search for specific hospital safety results at their webaite: http://www.hospitalsafetygrade.org

 
Thursday
Apr122018

Long Term ACO Impact: Medicare vs. Medicaid vs. Commercial

Long Term ACO Impact: Medicare vs. Medicaid vs. Commercial
 

By Clive Riddle, April 12, 2018

 

Commercial accountable care – value based payment arrangements between purchasers and providers seem to be spreading virally. States Medicaid accountable care initiatives are proliferating.  Will Medicare continue to consumer the greatest share of healthcare stakeholder attributed ACO patients and financial resources?  The April issue of Accountable Care News Thoughtleaders Corner ask a panel this question: “Which type of ACO activity will have more impact on stakeholders in the long term: Medicare, Medicaid  or commercial?”

 

Kirit Pandit, Co-Founder & Chief Technology Officer of VitreosHealth responds that “I think Medicare ACO activity will have the most impact in the long term based on where incentives are maximized. Fully capitated plans such as Medicare Advantage and managed Medicaid plans will have the highest incentive to reduce costs and maintain high quality scores. This is where ACO activity will produce the best outcomes. The per member per month costs are high to make it attractive for providers to participate in these performance-based contracts.  However, compared to Medicare ACOs, Medicaid has higher churn rates. This makes it challenging for the providers to manage these members with a long-term perspective. If the churn rates are high, chronic care management activities will not have enough time to impact patient behavior and outcome. So the Medicare ACO plans that are fully capitated and have minimal member churn will have the highest impact.”

 

 Michael Millenson, President, Health Quality Advisors; adjunct associate professor of medicine at Northwestern University’s Feinberg School of Medicine and author of the book Demanding Medical Excellence has this to say: “Right now, it’s synergistic. Medicare is by far the nation's largest payer, but joining an ACO is voluntary. However, Medicare’s clout and standardization are critical. On the other hand, Medicaid and private payers can both push their programs on providers (a state or large employers can choose only ACOs) and be much more innovative. Statutorily, CMS could switch all Medicare to ACOs without additional congressional authorization. If that ever happens – with implicit Congressional approval and definitely in the long term – this question will have answered itself.”     

 

William DeMarco, Founder and President, Pendulum HealthCare Development Corporation, which has advised a wide range of ACO clients shares that “We think after all the dust settles, Medicare will offer the biggest impact on stakeholders. This considers total dollars and the fact that 10,000 Baby Boomers turn 65 every day and total cost of care will continue to rise ahead of inflation – so it will always be a big number. Medicaid will continue to be in a constant state of change on a state-by-state basis, but will slowly follow the ACO transition that may very well lead to more Special Needs and Dual-Eligible strategies being promoted by states and offered by insurers, as well as provider-led health plans that see the advantage of receiving a large capitated sum from Medicare and Medicaid for eligible patients. I say this based upon the number of Section 1115 waivers being sought to permit states to offer above and beyond Medicaid benefits through ACOs and CCOs. Commercial will always be in transition, as self-funded and fully insured are finding big deductibles do not work and the fiduciary accountability starts to weigh heavily on many of the purchasers of care. What employers are interested in are ACOs that can manage the active workers and retirees at a predictable cost. Health plans and insurers are seeing their profitability is linked with these ACOs that can take partial or full risk for the medical portion of the premium, and this allows the health plan to improve administrative cost savings – plus predict total cost of care.”

 

So, some collective wisdom seems to point towards Medicare continuing to hold the strongest magnetic force attracting ACO activity.

 
Friday
Apr062018

The PBM side of CVS

The PBM side of CVS
 

By Clive Riddle, April 6, 2018

 

Assuming the CVS acquisition of Aetna clears all final hurdles, perhaps the most attention given to the merged company is in respect to the retail synergies. But the CVS Caremark PBM also deserves considerable attention. After all, Cigna’s big merger recently announced with Express Scripts was purely a PBM play.

 

With that in mind, its interesting to poke through the just released 14-page CVS Health Drug Trend Report 2017. Similar to Express Scripts previously released 2017 report, the CVS Health report was certainly positive, and they touted that drug prices for clients  rose “at a minimal 0.2 percent, despite manufacturer price inflation near 10 percent.”

 

But it must be noted that the touted 0.2 percent increase was just for prices. There was 1.7% cost growth due to utilization, yielding a total pmpy drug trend in 2017 of 1.9%, still quite a positive trend.

 

Here is additional data CVS shared about their client experience in 2017:

·         While CVS drug price growth was 0.2%, the manufacturer AWP inflation rates were 9.2& for traditional brands, 8.3% for specialty brands, and 0.4% for generics.

·         The CVS generic dispensing rate was 86.1%.

·         CVS traditional and specialty brands accounted for 14% of prescriptions dispensed, but 69% of pharmaceutical spend.

·         The CVS specialty trend consisted of 3.7% price growth plus 9.2% utilization cost growth for a total 12.9% 2017 specialty trend.

·         CVS gross client costs pmpm were 108.42 pmpm in 2017 compared to $104.10 in 2016.

·         For CVS Clients with managed formularies, costs were $88.94 pmpm compared to $87.43 pmpm in 2016.

·         The managed formulary differential in overall drug trend for 2017 resulted in a 1.7% trend with managed formulary clients compared to 4.2% trend for other clients.

·         42 percent of CVS Health commercial PBM clients spent less on their pharmacy benefit plan in 2017 than they had in 2016.

·         For clients aligned with the company's managed formularies, drug price declined by 0.1 percent, in 2017, as compared to the overall 0.2 percent drug price growth.

·         Member out of pocket costs pmpm declined from $11.99 in 2016 to $11.89 in 2017.

·         In 2017 24% of members had zero out of pocket costs (no claims), 49.4% of members had out of pocket costs under $100, 14.6% had out of pocket costs between $100-$299, 5% had out of pocket costs between $300 - $499, 4.3% between $500-$599 and 2.7% above $1,000.