Entries in health plans (56)

Friday
Oct272017

CVS, Aetna, Retail Integrated Delivery Systems and the Strange World of Frenemies

by Clive Riddle, October 27, 2017

As widely reported, including in the Wall Street Journal, CVS is making a very serious bid to acquire Aetna for more than $200 a share, equating to $66 billion. The most often cited drivers behind this deal include:

  • CVS’s strategic response to Amazon’s potential entry into the pharmacy business
  • CVS strategic response seeking growth outside core business, after antitrust regulators rejected Walgreens/Rite Aid merger
  • Aetna strategic response seeking growth outside core business after antitrust regulators rejected Aetna/Human and Anthem/Cigna mergers
  • Aetna would serve as significant source of members for CVS PBM division, customers for CVS pharmacies and patients for Minute Clinics
  • CVS and Aetna’s strategic response to competitors aligning health plans and PBMs such as UnitedHealth acquisition of Catamaran

Much attention has been given to initiatives for integrated delivery systems between hospitals and medical groups that take on purchaser functions. Does this signal a different focus – on retail integrated instead of clinically integrated systems - bringing together pharmacies, retail clinics, health care coverage, wellness services, patient engagement and care coordination?

But Wall Street experts remind us that doesn’t mean this deal is a sure thing.  Things could fall apart simply due to details in the financial terms, or because of new changes in direction by competitors or in the overall market. The Street quotes Jeremy Bryan, a portfolio manager at Gradient Investments, a minor CVS shareholder: "There's just no case study for this. There could be regulatory hurdles. But we have cautious optimism." The Wall Street Journal states “The deal almost surely would attract close scrutiny from U.S. antitrust enforcers who have expressed concern about health-care consolidation.”

Assuming however there is a clear path forward for CVS and Aetna, the question remains for them what lies in wait for them down the road? A few potential concerns include:

  • Would the deal jeopardize the recently announced Anthem/CVS relationship whereby CVS will service Anthem’s new PBM?
  • Would the deal drive other competing health plans away from the CVS PBM and pharmacies?
  • What if CVS is counting on Aetna becoming a more significant force in Medicare Advantage to drive CVS PDP business, and Aetna fails to deliver?
  • What if the Trump Administration and Republican Congress succeed in further scaling back Medicaid, causing Aetna’s significant investment in Medicaid business to erode and become a drag on CVS overall performance?
  • What if Aetna focuses its pharmacy and retail clinic network offerings on CVS locations, and loses market share to competitor plans with broader offerings?

On the other hand, maybe the deal wouldn’t cause competitors to blow up relationships with CVS or Aetna. The Washington Post quotes Adam Fein, president of Pembroke Consulting: “This is part of the strange world of the health insurance and PBM industry. Many companies are frenemies.”

Friday
Sep222017

NCQA Releases 2017-2018 Health Plan Ratings

NCQA Releases 2017-2018 Health Plan Ratings
 

By Clive Riddle, September 22, 2017

 

The National Committee for Quality Assurance (NCQA) has just released its 2017-2018 Health Insurance Plan Ratings. NCQA reports that they evaluated 1,429 health plans and rated 1,062: 498 private (commercial), 386 Medicare and 178 Medicaid.

 

NCQA’s ratings are based on a scale of 1.0 to 5.0, and they state their system is similar to the CMS Star Rating approach for Medicare Advantage plans. NCQA tells us that “the overall rating is the weighted average of a plan’s HEDIS and CAHPS measure ratings, plus accreditation standards (if the plan is accredited by NCQA), rounded to the nearest half point. Accreditation standards are given 10 percent of the weight of the valid HEDIS and CAHPS measures that a plan submits. The overall rating is based on performance on dozens of measures of care and is calculated on a 0–5 (5 is highest) scale in half points. Performance includes three subcategories (also scored 0–5 in half points): Consumer Satisfaction, Prevention and Treatment.” If you really want to get into the weeds regarding their methodology, you can click here to review their 16-page methodology report.

 

NCQA share that the “Top Ten States with the Highest-Rated Health Plans (receiving a 4.5 or 5.0 out of 5 rating) for Three-Year Average:

1.     Massachusetts

2.     Rhode Island

3.     Maine

4.     New Hampshire

5.     Wisconsin

6.     Minnesota

7.     Hawaii

8.     New York

9.     Vermont

10.  Iowa

 

NCQA also tells us that “high and low performers Are rare: of the 1,062 rated plans, 103 (10%) received a top rating of 4.5 or 5.0 out of 5. Twenty-three (2%) earned the ratings of 1.0 to 2.0.

 

Digging into their website, we compiled this list of health plans with 5.0 overall ratings for Private, Medicaid or Medicare:

 

·         BCBS MA (Private)

·         Johns Hopkins US Family MD (Private)

·         Kaiser Northern California (Private)

·         Tufts MA, NH, RI (Private)

·         Jai Medical Systems MD (Medicaid)

·         Group Health Plan MN, WI (Medicare)

·         Gundersen Health Plan IA, WI (Medicare)

·         Kaiser Southern CA (Medicare)

·         Kaiser Northwest OR, WA (Medicare)

·         Kaiser Washington (Medicare)

·         Kaiser Hawaii (Medicare)

·         Medical Associates Health Plan WI (Medicare)

·         Medical Associates Health Plan IL, IA (Medicare)

 

On the flip side, here’s the plans we identified with ratings of 2.0 or less:

 

·         Cigna NM  (Private 2.0)

·         Cigna Utah (Private 2.0)

·         Connecticut General NM (Private 2.0)

·         Human Puerto Rico (Private 2.0)

·         Anthem BCBS Nevada (Private 2.0)

·         Triple S Salud PR (Private 1.5)

·         UnitedHealthcare of Texas (Private 1.5)

·         Tokio Marine Pacific Guam (Private 1.0)

·         Union Health Service IL (Private 1.5)

·         Aetna Better Health IL (Medicaid 2.0)

·         Family Health Network IL (Medicaid 2.0)

·         Health Plan of Nevada (Medicaid 2.0)

·         South Florida Community Care Network (Medicaid 2.0)

·         Aetna Better Health NJ (Medicaid 1.5)

·         Community Care Alliance IL (Medicaid 1.5)

·         Cook Children's Health Plan TX (Medicaid 1.5)

·         Affinity NY (Medicare 2.0)

·         Atrio (Medicare 2.0)

·         Community Care Alliance IL (Medicare 2.0)

·         Elderplan NY (Medicare 2.0)

·         Gateway KY, NC, OH (Medicare 2.0)

·         Group Health Inc. NY (Medicare 2.0)

·         Inland Empire CA (Medicare 2.0)

·         Meridian IL (Medicare 2.0)

·         United Healthcare of New York (Medicare 2.0)

·         Virginia Premier (Medicare 2.0)

·         VNS Choice NY (Medicare 2.0)

 

To be fair to the above plans rated 2.0 and less, there were 367 NCQA evaluated but did not rate due to only partial or no data available – and it is quite possible that a number of these would have received low ratings as well.

 
Tuesday
Sep192017

Need to drive MA plan membership? Don’t ignore your Marketing and Sales strategy

By Ben Kline, Business Development and Joel Andersen, Vice President, Marketing - Lumeris, September 19, 2017

After considerable due diligence, your organization has decided to launch a Medicare Advantage (MA) plan. You evaluated the market and current MA enrollment. You examined market competitors, such as provider-sponsored organizations, regional insurance firms, and large national organizations. You gauged potential competitor responses, trying to figure out if launching a plan would disrupt current market dynamics.

At this point, many organizations begin to shift their attention to enrollment and financial projections. As with any business endeavor, your organization needs to capitalize on its investment and understand where the membership threshold to breakeven lies. The sooner you can reach that membership threshold, of course, the better. However, many organizations fail to realize that the longer you go with low membership, the harder it becomes to garner traction. Meaning, your approach prior to launch and over the first year becomes increasingly important. You only have one chance to enter the market, and when you do, you want to capture your audience—providers, health systems, brokers, and consumers.

Based on our experience, most organizations underestimate, and often ignore, the importance of the sales and marketing strategy for launching a Medicare Advantage (MA) plan. Why? Some organizations that already manage insurance products in other lines of business may believe that traditional sales tactics will be sufficient for an MA launch. Others might think insurance marketing is purely an actuarial exercise and rely on the price point to drive membership.

From our experience in Medicare Advantage, two items are essential for growing membership:

  1. Sales and marketing must be involved, and part of, the strategic planning process. They should be involved in all critical strategic decisions regarding the product launch, including advising on the design of your benefit plans.
  2. A disruptive sales and marketing strategy helps you generate enrollment to ultimately win in your market. Successful plans pinpoint an unmet market need or gap in the market and leverage it—but this requires a highly tailored strategy.

Let’s walk through a common pitfall. In quite a few markets, we see the majority of new MA plans fall into the “me too” trap. They design their plans with a similar benefit structure and provider network to an existing MA product within the market. Their plan may have a slightly lower member cost share, but to the naked eye it appears identical to incumbent plans. To drive plan switching behavior among beneficiaries, you must provide a compelling reason to switch and those reasons must be visible to the consumer.

Many new MA plans also fail to realize that they are not just marketing against other market MA plans, but also against Medicare fee-for-service, Medicare Supplement insurance (Medigap), and standalone Prescription Drug Plans. While identifying competing benefit points is important, addressing the shortfalls of these other coverage options including how your plan addresses those shortfalls is critical. Educating the market on how your MA plan is innovative and transformative (and better than the status quo) can go a long way.

From here, it is critical to design a selling strategy that aligns with your sales channels. The more time you spend with your channel partners, the better. Handing off your new MA product to a series of brokers is not going to be enough. You will likely need to spend time educating your sales channel on Medicare Advantage, and the unique attributes of your plan. Moreover, how you design your product will dictate how you want to sell it. For example, you may have designed your product around a carefully crafted narrow network of providers. Narrow network MA plans call for an entirely different approach, and employment of classic MA sales and marketing approaches will often yield mixed results.

Medicare Advantage provides an attractive opportunity to deliver better care to seniors. To create a competitive advantage, don’t underestimate the power of a disruptive marketing and sales strategy.

Friday
Aug252017

Fighting Over Who The Healthcare Punching Bag Should Be: Health Plans vs. Pharma

By Clive Riddle, August 25, 2017

Earlier this month the Doctor-Patient Rights Project released Not What the Doctor Ordered: Barriers to Healthcare Access for Patients an eighteen page report presenting consumer survey results regarding health insurance coverage denials. The Project issued statements in conjunction with the report including from Stacey Worthy, Executive Director of Aimed Alliance and one of the Project’s founding members, who said “our research reveals a hidden healthcare crisis. The current debate about healthcare reform has focused on getting more Americans covered. Yet, the real crisis is among patients with chronic illnesses who tell us that insurance is worthless when their insurance providers withhold coverage of essential treatments prescribed by a doctor.”

The Project highlighted that the survey found:

  • Insurance plans denied treatment coverage 24% of patients with a chronic or persistent illness or condition
  • 41% of these patients denied coverage were denied once, while 59% were denied multiple times.
  • 55% of those denied treatment said they were denied a prescription medication
  • 41% of those denied treatment said they were denied a diagnostic or screening test
  • 24% of those denied treatment said they were denied a medical procedure
  • 53% of those denied coverage for a treatment of a chronic or persistent illness appealed the denial
  • 49% of those appeals were ultimately successful
  • 70% of the denied treatments for chronic or persistent illnesses were for conditions described as “serious
  • 43% were for treatment of patients described as “in poor health”
  • 29% of patients initially denied coverage reported that their condition worsened
  • 34% denied coverage had to put off or forego treatment altogether

What isn’t clear at all in the report, is what the overall denial rate was for the 1,500 consumers surveyed. One wonders why that information wasn’t shared. The report focuses on denials for those responding that they had a chronic or persistent medical illness or condition, or on types of denials for the overall population surveyed.

The report tells us that 55% of the denials were for prescriptions, with 37% of these for formulary exclusions, while 12% required prior authorization, 9% required step therapy and 5% involved therapeutic substitutions. It becomes less clear from the report what portion of these denials still resulted in an alternative covered prescription, or ultimate coverage of the requested prescription after qualifying conditions were met.

The health insurance industry counters that runaway prescription costs are what we should be focusing on. The Blue Cross Blue Shield Association, AHIP and others have regularly produced reports highlighting the prescription cost problem. AHIP, for example one month ago posted Myth vs. Fact: What’s Behind Drug Prices on their website, in which AHIP goes about “fact-checking some of the pharmaceutical industry’s main arguments for why they have to charge hundreds of thousands of dollars for a course of treatment.” They cite reports and articles to support statements including: “High prices have little or nothing to do with drugs’ innovation or efficacy for patients”; “Pricing is based on what already exists, and competitors use shadow pricing to drive each other’s prices higher”; and “Instead of promoting true medical advances, a common business strategy in the pharmaceutical sector is to buy the rights to older drugs and then immediately jack up the prices.”

Morning Consult wrote about the dustup between the two sides this week, stating that health insurers are “alleging it [the Project Report] is part of a campaign by the pharmaceutical industry to distract the public from rising drug prices,” and that “Insurers say the coalition [Project] is tied to pharmaceutical companies.” The article quotes AHIP: “Big Pharma initiated another long-rumored political ad campaign in its attempts to distract from skyrocketing drug pricing, AHIP spokeswoman Cathryn Donaldson said in an email Monday, adding that instead of spending money on advertising campaigns, pharmaceutical companies should address high prescription drug prices.”

The article also quotes the other side punching back: “PhRMA spokeswoman Holly Campbell said pharma companies spend 20 percent of their revenue on research and development, fueling economic growth and bringing patients new treatments. In contrast, the insurance industry invested $0 in R&D and instead spend nearly 20 percent of premium dollars on administrative costs, she said in a Monday statement.”

Friday
Aug182017

Medicare Advantage plans are rethinking member experience

Kristin Rodriguez, Health Plan Alliance. August 18, 2017

One of my favorite moments during our Medicare Advantage Value Visit, July 19-21 was when Melissa Smith, Vice President, Stars & Quality Innovations with Gorman Health Group said the highest performing health plans are the ones “making old school new again.” The point she was making? That which sets high performing health plans apart is the ability to execute at the member level.  The flavor of how health plans are tackling that member-level execution differed with each case study we explored during our time together last month, and yet the same theme presented again and again, with every conversation.  Elevating and protecting the member experience is paramount to ensuring strong market position, better outcomes and higher star ratings.

The “member experience” is a relatively new, hot topic for MA plans, though really it’s just a consolidation of the efforts we’ve been making for a long time, reframed into a global strategy that is bringing leaders from across the enterprise together to tackle challenging issues like these: making member facing materials more palatable, leveraging digital channels to enhance engagement, evaluating our MA portfolio with an eye on social determinants of health and guarding against chronic loneliness, building dashboards our provider partners actually care about, so they can deliver the care to those members that need it most, and, finally, ensuring appropriate payment so that we can finance that care.

 

The challenge facing all Alliance member health plans and our provider partners as we seek to “execute at the member level” are the barriers we and our members face, which have traditionally been outside any health plan’s influence or control.  With the industry transformation to value based purchasing and the steady march of quality ratings programs’ focus to outcomes and experience, health plans must drive care from the clinic to the community, and forge partnerships that empower care for the “whole person.”  Our MA members face crippling chronic conditions like depression and diabetes, not to mention persistent loneliness.  And even for our healthy senior population, ensuring a benefit mix that supports long term health and happiness can be challenging when it comes time to submit a bid that both differentiates your plan and is sustainable.

Experts like John Gorman agree that Medicare Advantage is a sound investment for health plans, with strong market growth providing solid opportunity for health plans looking to diversify and perhaps stabilize their portfolio.  To become a high performing MA health plan, however, organizations must be willing to identify and remove barriers preventing them from executing at the member level.  No matter what’s potentially holding you back, you can bet another Alliance member health plan is facing a similar challenge, or perhaps has even found a way to solve it. Through ongoing networking in-person and virtually, and by sharing our tools and lessons learned, we can help one another make “old school new again.”