Entries in Benefits & Premiums (31)

Friday
Mar232018

Animal Farm Meets Health Care

Animal Farm Meets Health Care
 

By Kim Bellard, March 23, 2018

 

 

In George Orwell's classic Animal Farm, the animals revolt against their human masters, and establish a classless society with the inspiring principle, "All animals are equal."  As events play out, their society devolves into a dictatorship with a ruling elite, and the principle becomes "All animals are equal, but some are more equal than others."

This, surprisingly, makes me think of health care.  

 

I am old enough to remember when maternity coverage was at best only very limited even in employer group health plans.  It took the Pregnancy Discrimination Act (1978) to require them to treat maternity the same as any "illness," and, even then, individuals plans often did not include it until ACA required it Similarly, coverage for mental health was typically skimpy until the Mental Health Parity Act (2008) required parity.

Preventive services were usually only available for (the small percentage of) people enrolled in HMOs, until network-based managed care plans grew more widespread in the 1990's.  The same happened with prescription drug coverage, which used to only be available to the minority of people with "major medical" coverage.

It took the Affordable Care Act to standardize what "essential benefits" should be included in health plans.
For services like dental, vision, or hearing, not so much.   Evidently, some services are more equal than others.

We've managed to push our rate of people without health insurance to 
around 11%, but it's more than double that for dental insurance, and worse yet for vision coverage.  For seniors, the figures are significantly worse

The real question should be, why do we have separate coverages for services like dental or vision, especially when many lack them?

This matters.  
According to NCHS, 14% of Americas report hearing trouble, 9% vision trouble -- and 7% have no natural teeth left (25% for those over 75).  There is a well documented link between oral health and our overall health, yet a study found that dental care had the highest financial barriers to care, compared to other health services.

 

If you break a bone, you'll see a doctor; if you break a tooth, you'll see a dentist.  If you have problems with your throat, you'll see a doctor; if you have problems with your gums, you'll see a dentist.  If you want to correct your vision with glasses, you'll see a optometrist; if you want to correct it with Lasik, you'll see a physician.

 

Specialization is understandable, as most physicians end up doing, but I have to wonder why some types of specialization start at the beginning of training, rather than after the basic medical training (see my previous article on balkanized medical education).

We accept all this because, well, that's the way it always has been.  That doesn't mean it makes sense, or that it is best for our health.

We each only have one body.  Although some health issues are fairly specific, we are increasingly realizing that many are systems issues involving multiple parts of the body.  It's time to stop drawing artificial distinctions between what care we get, who gives it to us, and how those professionals get trained. 

Health is not equal to health care.  Health care should not be limited to medical care.  We need to get past "historical accidents" and focus on what is best for our health, and our care.

Unless you actually do believe that all health services, and all health care professionals, are equal, but some are more equal than others.

 

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

 
Friday
Jul212017

State Employee Benefit Plans Provide Insight Into Overall Group Benefit Trends

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By Clive Riddle, July 20, 2017

 

The Summer 2017 edition of Data, Segal Consulting’s publication providing research findings on public sector employee benefits, presents findings from their 2017 State Employee Health Benefits Study. As states are one of the largest employers, and their benefit decision making is directly impacted by policy makers, monitoring the pulse of state employee benefit plans provides insight into benefit trends for group coverage as a whole.

 

Andrew Sherman, Segal’s National Director of Public Sector Consulting, tells us “health benefits have become more important to state leaders as the cost of coverage outpaces overall inflation, placing budget pressure on health plan funding and underscoring the need for ongoing cost-management efforts. Examining what other states offer can be helpful for these leaders when they make difficult decisions about potential changes in coverage.”

 

The 23-page issue exclusively presents their study which involved a review of the websites for all 50 states and the District of Columbia in the fourth quarter of 2016, capturing medical, prescription drug, vision and dental plan information, as well as wellness and tobacco-cessation programs, including 105 PPOs/POS plans, 83 HDHPs/CDHPs, 149 HMOs/EPOs and five indemnity plans.

 

One insight from the study was “there are stark geographic discrepancies to where it is offered. According to the study, 13 Southern States offer HDHP/CDHPs, compared to just two in the Northeast. They are offered in eight states in the Midwest and seven in the West.” This equates to 22% of the states in the Northeast, 76% in the South, 67% in the Midwest and 54% in the West offering consumer driven plans.

 

Single premium increases averaged 8% for HMO/EPO plans, 10% for PPO/POS plans and 14% for HDHP/CDHP plans. The average single monthly premium was $780 for HMO/EPO plans, $713 for PPO/POS plans and $563 for HDHP/CDHP plans. Single deductibles averaged $194 for HMO/EPO plans, $483 for PPO/POS plans and $1,997 for HDHP/CDHP plans.

 

For the prescription benefit, single copayments averaged $9 for generic, $29 for brand formulary, $53 for brand non-formulary, and $101 for specialty drugs.

 
Friday
Feb192016

Two Employee Benefit Studies Don’t Agree on Everything – But Do Agree on 52% HDHP Adoption

By Clive Riddle, February 19, 2016 

Benefitfocus has just released the “Benefitfocus State of Employee Benefits 2016,” based on benefit selection data from 700,000+ people at 500 large employers, based on actual behavioral versus self-reported data. They cite that 52 percent of large employer clients now offer high-deductible health plans (HDHPs). 

The report notes that “millennials—born between 1980 and 1989—selected HDHPs more than any other age group. However, while approximately 44 percent of employees in this group chose HDHPs, a much smaller number of these employees took full advantage of health savings accounts (HSAs.)”

In addition, the report found that their clients “should be well positioned to navigate the Cadillac tax to be levied on higher-cost health care plans in 2020 under the Affordable Care Act. Total premiums across all 2016 plans averaged $14,974 for family coverage and $6,096 for individual coverage—both well below the tax’s respective target thresholds of $27,500 and $10,200.” 

While voluntary benefits have receiving much publicity as a popular solution and offering in consumer driven plan environments, they report that “only 36 percent of large employers offered such voluntary benefits for 2016, and only 14 percent of employees actually enrolled.” 

Meanwhile, Wells Fargo Insurance  has just released their Employee Benefits Trend Study surveying 650 middle-market companies and large corporations, which painted a somewhat different picture. They found that “fifty eight percent of employers surveyed expect their medical plan costs to exceed the thresholds for the Affordable Care Act (ACA) excise tax, or “Cadillac” tax, which was originally to take effect in 2018, but has been delayed until 2020.” Their findings state that “As more employers offer high deductible health plans, the C-suite is also aware of the financial exposure that employees face with these types of plans. As a result, they are looking to mitigate those costs by offering voluntary benefits solutions (e.g. critical illness and accident insurance).” 

But the Wells Fargo survey did agree to the penny with the Benefitfocus study on one item – HDHP adoption, citing that “half of the employers in the study said they will continue to make changes to their plans either this year or in 2017 by adding a high deductible plan option (52 percent), increasing the employee contribution percentage (56 percent), or increasing co-insurance features (55 percent).

Thursday
Nov122015

Someone Must Be On Drugs

By Kim Bellard, November 11, 2015

As is probably true for many of you, I'm busy looking at health plan open enrollment options for 2016. The past few years I've been guilty of just sticking with the same plan, so it has been too long since I've had to shop. Plus, I'm helping my mother pick her Medicare options for next year. All in all, I'm awash with health plan options.

I've got different levels of HMO, POS, and PPO options, from multiple carriers. My mother has many choices of Medicare Supplements, with Part D options, as well as Medicare Advantage options (both HMO and PPO), each from multiple health insurers.

It's not that there aren't plenty of options. It's just that, well, the options are so damn confusing.

Austin Frakt recently wrote in The New York Times about this problem. He cited a few studies specifically on point about health insurance, such as:
 

  • One study found that 71% of consumers couldn't identify basic cost-sharing features;
  • Less than a third of consumers in another study could correctly answer questions about their current coverage;
  • Researchers found that consumers tended to choose plans labeled "gold" -- even when the researchers switched the "gold" and "bronze" designations, keeping all other plan details the same.

Many consumers tend to stick with their existing choice even when better options are available, simply because switching or even shopping is perceived as too complicated.

I'm most frustrated with prescription drug coverage. Not that long ago, the only variables were the copays for generic versus brand drugs. Now there are often five or six different tiers of coverage -- such as preferred generic, other generic, preferred brand, other brand, and "specialty" -- with different copays or coinsurance at each tier, each of which can also vary by retail versus mail order, and for "preferred pharmacies." 

Moreover, the health plan's formulary, which determines what tier a drug is in, can change at any time. Plus, as has been illustrated recently, the prices of any specific drug can change without notice, sometimes dramatically. If either of those happens to one of your drugs, say goodbye to your budget.

It's all enough to make your head spin.

The health plans would no doubt argue that their various approaches to prescription drug coverage are necessary in their efforts to control ever-rising costs for prescription drug costs. Well, they aren't working.

Prescription drug prices continue to soar, even for generic drugs. They have become a political issue, with the Senate now launching a bipartisan investigation into prescription drug pricing and the Presidential hopefuls from both parties being forced to take positions on how they would control them. For once, politicians are in sync with their constituents; the latest Kaiser Health Tracking Poll found that affordability of prescription drugs tops their priority list for Congress and the President.

I've long thought that the pharmaceutical industry was ahead of the rest of the health care industry. They were doing electronic submission of claims over forty years ago. They pushed for direct-to-consumer advertising in the late 1980's, and quickly jumped on that bandwagon. While providers only grudgingly adopted EHRs, they quickly moved to e-prescribing.  Other health providers had to move away from discounted charges twenty years ago, whereas drug companies still mostly use that approach and are only starting to tip-toe into more "value-based" approaches, as with the recent Harvard Pilgrim-Amgen deal.

And the backroom rebate deals between drug manufacturers and payors put a lie to any claim that at least drug pricing is transparent.

It's not only prescription drug coverage that is increasingly complicated, what with narrow networks, gatekeepers, different copays for different types of medical services, bundled pricing, or numerous other gimmicks used in health plan designs.  The collateral damage in the ongoing payor-provider arms race is consumer understanding. 

Making things more complicated for consumers is not the answer.

In typical fashion, the health care industry has tried to address the confusion by creating a new industry that doesn't actually solve the problem but does manage to introduce new costs. Many enrollment sites --the Medicare plan finder, public exchanges, private exchanges, broker sites like ehealth, or health insurer sites -- offer tools that purport to estimate your costs under your various health plan options. Yet consumers still don't understand their options.

We keep treating health care as a multi-party arrangement between providers/health plans/employers/government/consumers, which is why everything ends up so complicated. Drug company rebates or medical device manufacturers' payments to providers are prime examples of the kind of insider trading that goes on. It's usually the consumers that come last. And that's the problem.

I think back to 1990's cell phone plans. Consumers never knew what their next bill would bring, between peak/non-peak minutes and the infamous roaming charges. No one liked it, no one understood it, and for several years no one did anything about it. Then AT&T came out with a flat rate plan that essentially said, "we'll worry about all those for you," and soon all carriers had to adopt a version of it.

I keep hoping for that kind of breakthrough with health insurance.

This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting

Wednesday
Aug262015

Independent Pharmacy Accountable Care Organizations 

By William DeMarco, August 26, 2015

The competition for Pharmacy Services has become brutal as large chain stores such as Walgreens and CVS, as well as big box stores like Target and Walmart, attempt to develop exclusive service contracts with large insurance carriers and Pharmacy Management Companies (PBMs). At the same time, employers are faced with rapid increases in specialty drug costs for diseases such as Hepatitis and similar chronic illness drugs that may cost as much as $50,000 to $75,000 per year.

For example on July 24th the FDA approved a new class of cholesterol lowering drugs known as PCSK9. Many health plans were anticipating a price point of $10,000 per year, but the approval came with a recommended $14,600 annual price target. This would translate to a $6.71 per-member, per-month (PMPM) for Commercial and a $15.16 PMPM for Medicare, depending on the patients other conditions according to a Prime Therapeutics public analysis released in June.

While the clinical side of this evaluation proves these targeted drugs do work, the cost to public and private payers is changing the landscape of how employers deal with these services.

PBMs initially established a very good solution for a very complex problem by integrating costs, necessity and quality with outcomes. However, the mark up on PBM services and ability for PBMs to buy wholesale and resell retail has made some employers believe there may be better options they should consider.

In addition, the generic substitution strategy that saved employers millions in the early 1970s has worn away and generic prices are climbing - making the spending for both specialty and routine pharmacy a very large concern.

One solutions being attempted in several areas around the country is the development of an Accountable Care Organizations (ACO) like network of independent pharmacists.

In this segment of the delivery system, most pharmacies are owned by one or more families and are often one man drug stores, or represent small chains covering one or more counties. These pharmacies offer personalized service and a tradition of being a patient advocate - often providing answers to their customer's questions regarding medications, looking out for adverse reactions and communicating with the physician when a question of dosage or reaction occurs.

Organizing these smaller entities into a network with contractual obligations to a central agency that acts as a Management Services Organization (MSO), which in turn, contracts with purchasers, has employers intrigued and supportive because many of these hometown stores can also be an advocate for the employer - a resource needed more and more as value based payment emerges.

These independents not only offer dispensing, but also agree to offer Medication Therapy Management (MTM) to help the patient reconcile drugs, vitamins and even nutrition that may be playing a part in their drug therapy. Many of these stores can also offer medical appliance and durable medical equipment at less than the hospital outpatient cost. In addition, as a local provider, they are predisposed to working closely with PCPs to help introduce alternative drug therapies that may be less costly to the patient and the employer, but are just as effective as standard therapies.

Even if this connectivity is missing electronically, one can still work with purchasers to make sure the patient is adherent and getting their 30 day supply refilled on time. This can be a mutual responsibility between payer and pharmacists. The savings of substitution, the ability to control use of specialty drugs as necessary, and the coordination of care to assure adherence are all part of this new model.

Where does the PBM fit? The PBM can still process drug claims for the employer and share this with the pharmacy MSO, but it relinquishes control of the network to the employer. The employer may decide to run two networks—one of independents (the high performance network) and one of the big box and chains (the general network). If the employer really wants to test the effectiveness of the networks, they could also pay 100% of the high performance network prescription and MTM fees and 80% of the non-high performance network. This gives employees the choice but also incents new business to those who have little preference, but want to save money. It secures the patients for the local pharmacy, which creates competition for the chain stores.

Drug stores as care outlets versus retail vendors can make a very big difference in areas of managing drug costs and adherence. The leading cause of readmission to a hospital is non-adherence to drug therapy - which puts people in the ER. This is a classic example of a Preventable and Avoidable Cost (PAC) that could be better managed on an outpatient basis by having care coordinated by the pharmacists and the PCP.

While the cost of pharmacy will continue to rise as medical research promotes more effective drugs, we know employers and health plans can better manage utilization and patient experience at the delivery point of care, and that is, for many, the local home town pharmacist.