Mercer Weighs in on Employer Health Benefit Cost Projections

By Clive Riddle, November 16, 2012

Here’s what Mercer has to say about the rise in  health benefit costs:  “growth in the average total health benefit cost per employee slowed from 6.1% last year to just 4.1% in 2012. Cost averaged $10,558 per employee in 2012. Large employers – those with 500 or more employees – experienced both a higher increase (5.4%) and higher average cost…. Employers expect another relatively low increase of 5.0% for 2013. However, this increase reflects changes they plan to make to reduce cost; if they made no changes, cost would rise by an average of 7.4%.”

This is based on results from Mercer’s annual National Survey of Employer-Sponsored Health Plans, which includes public and private organizations with 10 or more employees; with 2,809 employers responding in 2012. The full survey results will be released in April 2013.

 How does this compare to what other major human resources/benefits consulting firms are estimating? Here's what we reported in our Tidbits column in the October 6th edition of MCOL weekend:

Aon Hewitt reports that "the average health care premium rate increase for large employers in 2012 was 4.9 percent, down from 8.5 percent in 2011 and 6.2 percent in 2010. In 2013, however, average health care premium increases are projected to jump up to 6.3 percent."  Towers Watson's survey "projects a 5.3% net increase in total health benefit plan costs after any plan changes are taken into account, increasing the average cost per active employee from $10,925 in 2012 to $11,507 in 2013. Of the 2013 total, employees will pay an average of $2,596, or 22.6%, up from $2,436 in 2012." The Segal Company  projects 8.8% increases in 2013 for open access PPOs (10.0% in 2012; 8.2% increases in 2013 for HMOs (9.6% for 2012) and 9.1% increases in 2013 for HDHPs (10.4% in 2012.)

Mercer makes particular note of the impact of CDHPs in the employer benefit arena. They state that “with a growing number of employers now positioning a high-deductible, account-based consumer-directed health plan as their primary plan – or even their only plan – employee enrollment jumped from 13% to 16% of all covered employees in 2012. Many employers see these plans as central to their response to health care reform provisions that will raise enrollment. Over the past two years, offerings of CDHPs have risen from 17% to 22% of all employers, and from 23% to 36% of employers with 500 or more employees. Well over half (59%) of very large organizations (20,000 or more employees), which typically offer employees a choice of medical plans, now offer a CDHP. With the cost of coverage in a CDHP with a health savings account is about 20% lower, on average, than the cost of PPO coverage – $7,833 per employee compared to $10,007 -- employers are increasing willing to make the CDHP their primary or even their only plan. Among large employers that offer an HSA-based CDHP, average enrollment rose from 25% to 32% in 2012. And, when asked if they expect to offer a CDHP five years from now, 18% of large employers say they expect to offer it as the only plan, up from 11% in 2011.”


What’s Happening at MCOL | Health Insurance Exchanges HIX Learning Kit

By Claire Thayer, November 13, 2012

Health Insurance Exchanges are coming -  enrollment starts in October 2013 for health insurance coverage that begins January 1, 2014.  We’ll get you and your organization up to speed on learning all about the exchanges with the Health Insurance Exchange Learning Kit!

Watch video clip:

Using this learning kit, you can view a number of insightful presentations from national experts covering a variety of issues concerning HIXs, reference federal and state regulatory documents, browse a HIX Primer or Thought Leader commentary, consult a map indicating HIX state status, or view an infographic on exchanges.


  • Welcome Video Clip
  • Video of Nine Faculty Presentations with almost nine hours of instruction on HIX topics (slide presentations synchronized with audio) with option to print presentation slides
  • Documents library providing full text of the 3 applicable sections of the Affordable Care Act pertaining to HIXs plus applicable HIX legislation from sixteen states
  • Primer offering an overview on Health Insurance Exchanges
  • Thought Leader commentary on the impact of HIXs from seven national experts
  • Map indicating status of states regarding HIX grant status and establishment of HIXs
  • Infographic with facts and figures regarding HIX's

Learn more at:


Some Lessons from Sandy

By Kim Bellard, November 8, 2012

I have no doubt that many very smart people, and especially ones who were more directly impacted by Sandy than I was, will be doing extensive debriefings about Sandy’s impacts, and coming up with lots of far-reaching recommendations for next big disaster.  Still, I wanted to throw in a few thoughts about a couple lessons Sandy has for HIT.

One of the unexpected learnings from hurricane Katrina in 2005 was a boost in the perceived need for electronic health records, as many paper records were lost or destroyed by the storm, and as Louisiana residents widely dispersed across the country.  The paper and place systems for health information were found severely lacking, and Katrina was a clarion call to move health information into the 21st century.

Seven years later, we have, in fact, seen much progress on that front.  HITECH was passed to stimulate the adoption and “meaningful use” of EHRs.  Over 300,000 physicians and4,000 hospitals received HITECH incentive payments through 3Q 2012 – some $7.7b.  Those numbers are expected to grow rapidly, and the increasingly tough meaningful use standards will drive better use of the data in the EHRs.

That’s all good news, and it would be easy to see how HIT should have helped mitigate some of the woes from Sandy.  Instead, what we’ve seen makes me wonder if we’ve learned anything at all. 

Sandy caused hundreds of hospitalized patients transferred, with some entire hospitals closed due to flooding.  That’s obviously not good for patients, but understandable under the circumstances.  I couldn’t help but wonder what was happening with their records.  Did all their information travel to the new hospitals, or was everyone forced to start from scratch? 

Best case scenario, the patient might have transferred to a sister hospital that used the same systems.  The worst case scenario, of course, was that the records were only on paper which was lost or destroyed.  The most frustrating scenario, though, would be that both the old and new hospital had electronic records, but that the respective hospitals couldn’t communicate.

Unfortunately, this latter scenario is all too likely.  David Whitlinger, the health of SHIN-NY, the statewide HIE for New York, cited disasters such as Sandy as why we need health information exchanges (HIEs).  He’s exactly right, of course – but even he couldn’t say how many of the impacted New York hospitals were participating in SHIN or were able to take advantage of its capabilities.  I suspect that if they had any big success stories from Sandy, they would be touting them.

I’m not picking on SHIN-NY.  HIEs are facing problems in many places.  In Michigan, for example, there are two statewide HIEs, which can’t communicate with each other.  According to the eHealth Initiative, HIEs biggest concerns included developing a sustainable business model, and competition from other HIEs.  Most of them still aren’t doing anything as sophisticated as transmitting entire patient records.  It would be comical if it wasn’t so depressing, and if my federal tax dollars weren’t subsidizing these efforts.

HIEs are supposed to ensure interoperability and transmission of patient and clinical data, but those battles are still being fought.  A recent report from KLAS Research indicates that providers express dissatisfaction with their HIE vendors, including their ability to move data between multiple EMRs.  Respondents mentioned, for example, that Epic scores well for connectivity, but not with non-Epic installations…which sort of makes the capability moot.

Then there is mHealth, a term that was only just beginning to be used when Katrina hit in 2005.  It’s now a big deal: the mHealth market is estimated to double in 2012, to over $1.3b, with literally thousands of mHealth apps on the market, from the trivial to the FDA-approved.  It is no wonder that mHealth has taken off; over half of the U.S. population now has a smartphone, with two-thirds of new purchases being smartphones.  According to the Pew Internet & American Life project latest findings, almost 20% of smartphone users have health apps.

Sandy showed us that we’re not quite ready for prime time on this front either.  Let’s start with the availability of mobile networks.  The New York Times reported on the spotty service and infuriated customers.  As one impacted resident said, “not having hot water is one thing, but not having a [cell]phone? Forget about it.”   The Times pointed out that one of the recommendations from Katrina was better emergency back-up mechanisms for the wireless carriers, such as longer-lasting emergency batteries, which have not been widely adopted.  The wireless carriers have resisted many of the regulators’ efforts, and were not routinely providing their outage statistics the way, say, the power companies were during Sandy.  The Wall Street Journal had a similar story

So much for having any of those fancy mHealth apps; just think about any chronically ill patients who might have been being remotely monitored by their physicians when Sandy hit.  The wireless carriers are not yet seeing their mission as providing life-critical support to their customers, and it is getting harder and harder to understand why.

Sandy emphatically illustrated that wireless service is one that emergency planners will have to take very seriously going forward.  It has obvious implications for contacting friends and family, getting status updates on the disaster and recovery efforts, and helping direct affected people to assistance.  I only hope they take mHealth equally into consideration.  Not just for the things it does every day, but how to further take advantage of its capabilities when providers and their places of care are unavailable or limited.  Just think of how telehealth, remote monitoring, prescription history, and other applications could be useful in the aftermath of a Sandy.

Sandy has also firmly re-enforced Katrina’s lesson about health records.  We heard that lesson, and have spent much time, effort, and money on it since Katrina, but we find ourselves not much better off in making health records more fluid.  The EHR/HIE industries and their various customers need to step up their efforts and fix this problem -- hopefully before the next Sandy. 

I like the point that Brian Dolan of Mobihealthnews made in a recent post: technology is forcing us to rethink the classic concept of “point-of-care,” focusing more on where the patient is, not where the provider is, or even if the patient and provider are physically in the same place.  He was writing more from a mHealth perspective, but the paradigm shift applies broadly, as those evacuated Sandy patients could attest.

In the 21st century, health information can’t be tied down to paper or even to place, but has to be able to follow the patient wherever he/she receives care.


Post-Election Health Reform: The Future Is Now

By Lindsay Resnick, November 7, 2012

A year from now you may wish you had started today.

The major hurdles to healthcare reform’s Affordable Care Act – June’s Supreme Court decision and re-election of Barack Obama – are now history. Obamacare is here to stay. While obstacles and legislative fixes lie ahead (regulatory definitions, implementation timelines, funding appropriations), advancing a strategy of “repeal & replace” is now off the table. Expect political wrangling to shift focus to more pressing issues facing the country such as sequestration, budget reconciliation, tax cuts, and 2014 mid-term elections.

For health plans the next 14-months will be an intense period of preparation, planning and positioning. Today’s health insurance marketplace: 154 million employer-based, 14 million individually purchased, 47 million Medicaid, 49 million Medicare, and 49 million uninsured – will see profound change. New operating rules—State/Federal Exchanges, premium subsidies, elimination of pre-existing condition restrictions, rating limitations, Medicaid expansion, tax assessmentsdemand new thinking!

Confidence is the feeling you have before you understand the situation.

A winning health reform strategy starts by knowing your customers (and potential customers) better than your competitors. It means a data-driven direct-to-consumer approach to maximize reform’s opportunities and buffer risks…whether playing defense to protect your membership base, or setting-up a marketplace offensive to claim your fair share of new customers with a short-term land grab under current rules, and then starting 2014 in a position of strength.

Why? With product standardization, regulatory constraints and price transparency leveling the playing field and neutralizing brands, health insurers need to refresh their approach to customer acquisition and retention. The center of power is rapidly shifting into the hands of the customer. Millions of consumers will be shopping for coverage and migrating between market segments. They’ll be talking about you, price checking you, and recommending you…or not. Tomorrow’s customers will have a wide-ranging choice, and they will determine your value. Forward thinking marketers are making sure existing and prospective customers are engaged in their health care decision-making as they seek support from branded, personalized resources delivered by trusted local partners. 

First movers may sometimes fail, but last movers don't survive.

Based on a health plan’s core customer segments, product portfolio range, and distribution channel mix every Plan needs to design a customized, strategically sound approach to survive, and thrive as Obamacare advances through its implementation phases (see attached). The clock is ticking.

To compete in the new customer-centric healthcare retail game, success will come from taking a 360° view of your customer, differentiating your brand position, moving from a B2B to direct-to-consumer marketing orientation, distribution outlet “retailization”, and most importantly, developing an actionable framework to serve as the roadmap for your health reform enterprise plan.


What’s Happening at MCOL | Patient Centered Medical Homes: Outcomes & Cost Research

By Claire Thayer, November 5, 2012

Medical Homes have been increasingly embraced by stakeholders as a key component of 21st century health care delivery. The challenge now, is to demonstrate the validity of quality and value from PCHM care being delivered.  HealthCore's study of Empire BlueCross BlueShield PCMH pilots, including Westchester-based WestMed Medical Group, provides significant evidence that medical homes better managed their patients’ diseases, ordered fewer high-cost imaging tests, reduced patient emergency room visits and hospitalizations and reduced costs of care for patients overall.

On Thursday, this week, please join Healthcore's Director of Research Operations Andrea DeVries, PhD, Empire BlueCross Blue Shield's Chief Medical Officer Scott Breidbart, M.D., and Dr. Barney Newman, Medical Director for WESTMED Medical Group for this important event co-sponsored by Medical Home News, as they share detailed results from their hallmark PCMH research findings and experiences. 

We hope you’ll join us!