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Entries in Surveys & Reports (153)

Friday
Jun212019

Ten Takeaways From PwC’s Medical Cost Trend Behind The Numbers 2020

By Clive Riddle, June 21, 2019 

PwC's Health Research Institute has just released their 14th annual report on medical cost trends: Medical cost trend: Behind the numbers 2020, which projects the 2020 trend to be a six percent cost increase. As PwC's HRI describes their 47-page report, they project "the growth of private medical costs in the coming year and identifies the leading trend drivers.... based on the best available information through June 2019. HRI conducted 55 interviews from February through June 2019 with health industry executives, health benefits experts and health plan actuaries whose companies cover more than 95 million employer sponsored large group members about their estimates for 2020 and the factors driving those trends. Also included are findings from PwC’s 2019 Health and Well-being Touchstone Survey of more than 550 employers from 37 industries as well as PwC HRI’s national consumer survey of 2,500 US adults."

Here’s Ten Takeaways from their 2020 report: 

  1. Small Uptick: The Medical Cost trend, still rounding to double digits in 2007 (11.9%) and 2008 (9.9%), trended downwards subsequently, to round to six percent since 2016 (6.2%), but have ticked up since the low-water mark of 5.5% in 2017 (and 5.7% in 2018-2019.)
  2. Price, Not Utilization: “Prices have been a larger component of employer benefit costs than utilization since 2004; utilization has hovered around zero percent growth since 2006. Utilization by individuals with employer-based insurance decreased by 0.2 percent from 2013 to 2017 while prices rose 17 percent during that time.”
  3. Impact of High Deductibles: “Average deductibles for employer-sponsored plans tripled between 2008 and 2018. This increase likely has led to a low utilization trend because employees are delaying or forgoing care due to their deductible.”
  4. Stall in HDHP Growth: “The shift to HDHPs by employers seems to have stalled. With 84 percent of employers offering an HDHP option in 2019 and a tight labor market, employers may not be as quick to push HDHPs in 2020.
  5. Acceleration in Retail Rx Spending: “Starting in 2020, retail prescription drug spending growth for private health insurance will begin to increase, hitting between 3 percent and 6 percent annually through 2027.24 The growth in spending can be attributed to the waning impact of generics on the market and the introduction of new drugs.”
  6. Specialty Drug Million Dollar Drugs Pipeline: The portion of total retail drug spending on specialty drugs continues to grow. “We are at an inflection point with drugs in the pipeline. We thought hep C was expensive at nearly $100,000 per treatment. Many drugs in the pipeline are life-altering and come with a price tag of $1 million to $2 million per treatment.”
  7. Growth in Chronic Disease Spending: "Spending by employers on individuals with chronic diseases is nearly quadruple [3.5x] that of healthy individuals while spending on individuals with complex chronic diseases is eight times higher" [8.2x].
  8. Growth in Onsite Clinics: “38 percent of large employers offered an onsite health clinic in 2019, up from the 27 percent that offered a clinic in 2014. An additional 13 percent said they were considering adding one.”
  9. Telehealth Potential: “49 percent of consumers with employer coverage said they are willing to use telehealth in place of an in-person visit.”
  10. Underutilized Wellness and Prevention programs: “For decades, employers have invested in health and wellness and prevention, yet participation remains low.....The small population of employees who participate in their employers’ health and wellness programs generally believe the programs have had a positive impact on their health.”

 

Thursday
Jun132019

Analyzing Blue Cross Blue Shield Plan Administrative Costs

By Clive Riddle, June 13, 2019

Sherlock Company in the June issue of their Plan Management Navigator examines administrative cost trends for Blue Cross Blue Shield Plans, analyzing year end 2018 vs 2017 data.  They found that costs “increased by 5.5% per member, up from an increase of 5.1% for 2017. Reweighting to eliminate the effects of product mix differences between the years, per member costs increased by 6.7% as compared with 5.9% in 2017. ASO/ASC increased as commercial insured membership declined. Medicare Advantage continued to grow rapidly.”

 Their key findings included:

  • Most clusters of expenses grew at rates less than last year.
  • Uniquely, Account and Membership Administration’s growth rate increased.
  • Growth in Information Systems was the single most important reason for administrative expense increase in 2018.
  • The shift in favor of products and market segments that are lower cost to administer muted the real growth.

 

Sherlock’s benchmarking study “analyzes in-depth surveys of 14 Blue Licensees serving 37 million members. Surveyed Plans comprise 52% of the members of Blue Cross Blue Shield Plans not served by publicly-traded companies.” 

Why does this benchmarking matter? Because the non-publicly traded BCBS plans provide a meaningful universe to benchmark, and plan administrative expenses are highly scrutinized, and certainly more controllable than medical expenses. As Doug Sherlock states, “in the current environment, optimizing administrative expenses is a high priority for health plan managers. Plans have completed their adaptation to the Affordable Care Act and the bulge in Exchange and Medicaid members. Plus, administrative expense visibility has been heightened by the rhetoric of presidential candidates.”

Here’s some key specific data from their report:

 

  • For the universe as a whole, the median total costs were $38.51 per member per month, higher than last year’s $34.99. 
  • By functional area, median pmpm costs were: Sales & Marketing $9.21; Medical & Provider Management $5.03; Account and Membership Administration $16.10 and Corporate Services $5.92
  • Median pmpm costs by product categories included: Commercial insured $49.84; Commercial ASO $28.32; Medicare Advantage $112.08; and Medicaid $46.08.
  • The median administrative expense ratio was 9.0% compared with 8.9% last year.
  • The median administrative expense ratio by product categories included: Commercial insured 10.8%; Commercial ASO 7.1%; Medicare Advantage 12.5%; and Medicaid 9.3%.
  • Staffing ratios increased by 6.8%, especially in Information Systems. 
  • Approximately 19 FTEs serve every 10,000 members in the commercial products. 
  • Compensation, including all benefits except OPEB, increased at a median rate of 3.8%. 
  • The median proportions of FTEs that were outsourced was 11.0%.
  • After the effect of the Miscellaneous Business Taxes, total administrative expense PMPM increased by 17.9% compared with a decline of 2.3% in the prior year 

 

 

 

Friday
Jun072019

Consumer Surveys on SDOH Experiences: Kaiser, McKinsey and Waystar

By Clive Riddle, June 7, 2019 

Kaiser Permanente has just released results of consumer SDOH survey they commissioned entitled Social Needs in America, which found “68% of Americans surveyed reported they experienced at least one unmet social need in the past year. More than a quarter of those surveyed [28%] said that an unmet social need was a barrier to health, with 21% prioritizing paying for food or rent over seeing a doctor or getting a medication.”  In two other recent consumer SDOH survey reports, one [Waystar] found the same exact percentage [68%] reporting one or more unmet needs, while the other [McKinsey] found a lower figure [53%.] 

Here’s some of the Kaiser survey’s other detailed findings:

Respondents that frequently or occasionally experience stress include:

  • 39%  over meeting their family’s needs for food/balanced meals;
  • 38% over social relationships needs;
  • 35% over meeting housing needs; and,
  • 32% over transportation needs

Respondents believe these factors are important to overall health:

  • stable housing (89%)
  • balanced meals (84%)
  • reliable transportation (80%); and
  • supportive social relationships (72%) 

35% lack confidence that they could identify the best resource if they or a family member needed to use community resources relating to transportation, food, housing, or social isolation. 

42% would turn to their medical services provider when looking for information on community resources to help with social needs, and 30% would turn to their health insurance provider for this information.

Respondents are supportive of medical service providers assessing social needs;

  • 93% say their medical provider should ask about access to
  • food and balanced meals;
  • 83% say their medical provider should ask about safe and stable housing;
  • 78% say their medical provider should ask about social relationships and
  • isolation; and
  • 77% feel that their medical provider  should ask about transportation to work, school, appointments, or activities

Mckinsey examined consumer interest in SDOH offerings and how SDOH impacted healthcare utilization rates in their 2019 Consumer Social Determinants of Health Survey report, released in April, which found 53% reported they were adversely impacted by at least one SDOH factor, with food security being the most commonly reported unmet need (35%), followed by safety (25%) housing (21%) social support (17%) and transportation (15%). McKinsey found that 45% of respondents with unmet social needs reported high healthcare utilization, compared to 21% of respondents reporting no unmet needs. 85% of respondents indicated they would use a social program offered by their health plan.

Waystar released results of their consumer SDOH survey in December, finding:

  • 68% of consumers have at least some level of SDoH challenge and 52% have a moderate to high SDoH risk in at least one category.
  • Patients with SDoH issues are 2.5 times more willing to talk about those issues with clinicians than they are with payers
  • Patients with high SDoH risk are more than 20 times more likely to miss a medical appointment at least once a month
  • Medicare and Medicaid, have the largest high-stress share with 33 percent having high stress in three or more areas, compared to 21 percent of the commercial insurance population being "high risk."

Friday
May172019

The Short List of Major Healthcare Implications from A Declining Birth Rate

By Clive Riddle, May 17, 2019

Like most of the industrialized world. the U.S. birth rate is declining, as evidenced in the new  CDC National Center for Health Statistics National Vital Statistics System May 2019 report on "Births: Provisional Data for 2018."  (the final birth report is scheduled to come out this fall.) The big news from the report is the number of births was the lowest in 32 years, and the fertility rate reached another record low.

Here's highlights from the report: 

  • The provisional number of births for the United States in 2018 was
  • 3,788,235, down 2% from 2017 
  • The general fertility rate was 59.0 births per 1,000 women aged 15–44, down 2% from 2017 a
  • The total fertility rate declined 2% to 1,728.0 births per 1,000 women in 2018
  • Birth rates declined for nearly all age groups of women under 35, but rose for women in their late 30s and early 40s
  • The birth rate for teenagers aged 15–19 was down 7% in 2018 to 17.4 births per 1,000 women
  • Rates declined for both younger (aged 15–17) and older (aged 18–19) teenagers
  • The cesarean delivery rate decreased to 31.9% in 2018; the low-risk cesarean delivery rate decreased to 25.9%
  • The preterm birth rate rose for the fourth year in a row to 10.02% in 2018
  • The 2018 rate of low birthweight was unchanged from 2017 (8.28%)

In a Q&A session with report author Brady E. Hamilton, Ph.D. posted in the NCHStats blog, Hamilton is asked if there was a specific finding that surprised him, which he replied "the record lows reached for the general fertility rate, the total fertility rate and birth rates for females aged 15-19, 15-17, 18-19, and 20-24 are noteworthy. In addition, the magnitude of the continued decline in the birth rate for teens aged 15-19, down 7% from 2017 to 2018, is also historic." Hamilton was non-committal about the trend going forward, stating “these data do not answer the question of why the number of births dropped in 2018 or if the decline will continue.”

  

But assuming the trends do continue, which certainly the opinion of many, there are certainly major implications for healthcare, including this short-list: 

  • Impact of reduced demand for hospital and physician OB services
  • Impact of increased births from higher-age mothers, with greater care complexities involved
  • Longer range reduced demand for hospital and physician pediatric services
  • Longer range reduced available Medicare funding from employed workforce, with growing imbalance of senior retired population compared to working population
Friday
May102019

Consumer Insights and Kaiser Initiative on SDOH

By Clive Riddle, May 10, 2019

McKinsey has just published various insights from their 2019 Consumer Social Determinants of Health Survey, which found that compared to those whose social need is met, respondents (2,010 surveyed with government program coverage or uninsured and below 250% of federal poverty level) that:

  • Reported food insecurity were 2.4 times more likely to report multiple ER visits, and 2,0 times more likely to be hospitalized
  • Reported unmet transportation needs were 2.6 times more likely to report multiple ER visits, and 2,2 times more likely to be hospitalized
  • Reported unmet community safety needs were 3.2 times more likely to report multiple ER visits

Encouraging news from the survey for health plan advocates of SDOH was that 85% of respondents reporting unmet social needs said they would use a social program offered by their health insurer. Regardless of their social needs, respondents were interested in these types of health plan SDOH programs as follows: 

  • 50% were interested in grocery store discounts for healthy foods
  • 48% were interested in free memberships at local gyms
  • 45% were interested in a wellness dollar account used towards wellness services of their choice
  • 41% were interested in total reimbursement of home improvement purchases to address health issues
  • 40% were interested in after-hours drop-in clinics at lower or no cost 

Speaking of health plans, Kaiser Permanente has just announced their new Thrive Local initiative, a “a social care coordination platform” with “a network of public agencies and community-based organizations that will support” Kaiser “members to meet their social needs.”

 

Kaiser says that “starting this summer, closed-loop and bidirectional communication will provide confidence that referral, follow-up and ongoing patient/family engagement happen. Improved cross-sector collaboration and communication will also reduce the unintentional trauma and stigma that our patients and families may experience. Beyond Kaiser Permanente members and patients, community-based organizations will also benefit through improved decision support, automation, and relevance of the referrals they receive from their health system. This connectivity and interoperability between health care and social organizations and agencies will redefine the meaning of ‘provider network’ in this new world as the network of providers of health, health care, and social needs to address total health of our communities.”

 

Kaiser Permanente is partnering with Unite Us to launch the program, as tells us that Thrive Local within three years “will be available to all of Kaiser Permanente’s 12.3 million members and the 68 million people in the communities Kaiser Permanente serves.