Entries in Trends & Strategies (95)


Employer Surveys Project 2018 Cost Increases in the Five Percent Range

Employer Surveys Project 2018 Cost Increases in the Five Percent Range

by Clive Riddle, August 11, 2017


The National Business Group on Health has released results from their Large Employers’ 2018 Health Care Strategy and Plan Design Survey, which projects the total employer cost of providing medical and pharmacy benefits to rise 5% for the fifth consecutive year in 2018. The total cost of health care is estimated to be $13,482 per employee in 2017, and is projected to increase to $14,156 in 2018, with employers funding 70% of these costs. What is driving cost increases? The most often listed top driver was specialty pharmacy (26%) and 80% of employers ranked this among the top three cost drivers.


Similarly, last week Willis Towers Watson released preliminary findings from their 22nd annual Best Practices in Health Care Employer Survey, which found that "Employers expect health care costs to increase by 5.5%* in 2018, up from a 4.6% increase in 2017."


The NBGH 2018 survey also produced this grab-bag of interesting employer survey responses regarding health benefit strategies, regarding telehealth, onsite care, value based care, and CDHP:


·         96% will make telehealth services available in states where it is allowed next year

·         56% plan to offer telehealth for behavioral health services

·         20% of employers are experiencing employee telehealth utilization rates of 8% or higher

·         21%s plan to promote ACOs in 2018, and another 26% are considering offering them       

·         54% will offer onsite or near site health centers in 2018        

·         88% expect to use Centers of Excellence in 2018 for certain procedures        

·         40% of employers have incorporated some type of value-based benefit design

·         18% will use value-based benefit design to steer employees toward telehealth in 2018 (16% in 2017)

·         66% of companies will offer medical decision support and second opinion services in 2018

·         90% will offer at least one Consumer Directed Health Plan (CDHP) in 2018.

·         40% of employers will offer a CDHP as the only plan option in 2018, compared with 35% this year

·         28% pair a HDHP with a Health Reimbursement Arrangement


Health Care's Kodak Moment

by Kim Bellard, July 26, 2017

For those of us of a certain age, a "Kodak moment" connotes a special event that should be captured by a photo.  For younger generations, the term probably doesn't mean anything, because they don't know what Kodak is.  That's why, for some, "Kodak moment" has come to suggest a turning point when big companies and even entire industries can become obsolete. 

Health care could soon be at such a point.

Anthony Jenkins, a former CEO of Barclay's, recently warned that banks could face a Kodak moment soon.  He said they're already seeing a "Uber-moment," where smartphones and contractless cards are transforming the industry.  "The Kodak moment is completely different," Mr. Jenkins explained.  "That’s where customers realize there’s a totally better and different way of doing what they want to do, and the incumbent becomes obsolete."

In a separate speech, Mr. Jenkins elaborated that, due to new technologies, "we can imagine total transformation of the banking system."  He predicted banks have 5 to 15 years to face these challenges, or become irrelevant to their customers.

The "good" news, he added, is that: "Banks can avoid that, but they have to act now, and what they really need to do is think about innovation, but also transformation, doing something radically different."

For "bank" or "banking system" feel free to substitute "doctor/hospital" or "health care system"

Incumbents all-too-often grow protective and/or fail to take advantage of new opportunities.  The irony of disruption, Mr. Jenkins noted, is that it is "actually a great growth opportunity," and that "incumbents are best positioned to seize disruptive opportunities."  

Health care has a number of legacy problems that make it ripe for disruption.  Innovators look at these problems and see opportunities.

The opportunities -- or, threats, depending on one's point-of-view -- on health care's horizon are numerous.  They include:

  • Digital health makes real-time information and communication feasible, such as with wearables and telehealth.
  • Big Data will help us finally understand what is happening with patients and predict with better accuracy how we can manage our health.
  • Robots will take over health care tasks/jobs that humans either don't want to do or lack the required precision to do.
  • Artificial intelligence (AI) will be able to make sense of all that Big Data and all the various research studies, and can serve to either augment or, at least in some cases, replace physicians.
  • 3D printing will allow us to replace an ever-increasing number of body parts, even systems, and do so with unprecedented speed and affordable cost.
  • Nanotechnology will allow us to monitor and maintain us down to a cellular level.

Meanwhile, traditional health care companies -- from providers to middlemen to manufacturers to insurers -- are waiting with some trepidation to see what 21st century behemoths like Amazon or Apple are going to do in their space.  

Disruption might come from innovators within the health care industry, but it might also come from unexpected sources -- and in unexpected ways.  Kodak didn't take digital photography seriously enough, and it certainly wasn't expecting smartphones as the new camera.  

Health should have a number of the old-fashioned Kodak moments -- the birth of a child, a miraculous recovery, achievement of a health goal, and so on.  Whether health care organizations or even the entire health care system suffer the other kind of Kodak moment depends on how (and when) they respond to the disruptive opportunities now available to them.  


Healthcare 2017 Viewed Through Brokers’ Lens

by Clive Riddle, July 7, 2017

With the onset of the ACA at the start of this decade, if one asked how brokers would view the world of healthcare seven years later, some would have answered “who cares – they will become irrelevant.” But flash forward to 2017 and here they are, continuing to play the role they have always played, even though the landscape has certainly shifted. Despite disintermediation, public exchanges, technology and a host of other challenges, brokers remain at bat, swinging away.

BenefitsPRO has just released they annual broker survey, with responses from 350 brokers representing the spectrum of industry sectors. One might have thought brokers of all people, would firmly be in the camp of ACA repeal, 50% “would like to see the ACA retained and repaired, while 28 percent prefer a gradual repeal and replace, and 22 percent want it repealed and replaced immediately.”

One insight is that brokers business has evolved so that the public exchange market isn’t a material part of their business. When asked, “how have state exchanges’ struggles impacted your business,” 48% said there was no effect, 35% replied it hurt a little or significantly, and 17% said it helped a little or significantly.” The individual market has gravitated away from brokers, with 34% not involved, 37% reporting minimal demand, and less than ten percent stating “enrolling individuals on the public exchange is worth the effort.” Private exchanges aren’t a dominant force at this point, as “nearly 6 in 10 of those responding say they do not have a private exchange partner for enrollment and benefits administration.”

While technology has facilitated some disintermediation, brokers continue to attempt to enhance their value offering a personal touch that online tools can’t offer. The survey report noted that 53 “percent of respondents say meeting in a group setting at the worksite is the primary enrollment technique, while 36 percent cited one-on-one meetings in the workplace. However, 39 percent say their top method is using an electronic enrollment tool independently.”

But losses of individual and other health insurance market share have been offset by growth in the voluntary benefit sector, with 57% identifying with the statement that “they will use voluntary benefits to offset anticipated commission losses from health insurance this year.”

Looking toward the future, consolidation looms large, just as in all other healthcare sectors, as “27% expect their organization to acquire or merge with another broker/agent organization,” while 14% “ look for another broker/agent to acquire their organization” and “14% also say their company will leave the health insurance brokerage business.”

Brokers focus for the future includes 84% “promoting ancillary insurance coverage,” 58% “promoting health plan consumer engagement and health and wellness programs,” 43% “promoting third-party consumer engagement and health and wellness programs, while 53% will be concerned about the threat of “the new wave of disruptive companies entering the industry.” A particular innovation they are concerned with is payroll companies with direct benefits distribution, with 57% viewing this a concerning.


Top Challenges Facing Healthcare Executives  

By Claire Thayer, June 29, 2017

Complying with government requirements and mandates continues to be one of the top challenges healthcare executives face along with health insurance affordability. Healthcare providers rank quality and patient safety outcomes, electronic health records,  privacy and cybersecurity as top priorities for their organizations.

This weeks’ edition of the MCOL Infographic, co-sponsored by LexisNexis, offers highlights of these and other pressing concerns for healthcare executives today:

MCOL’s weekly infoGraphoid is a benefit for MCOL Basic members and released each Wednesday as part of the MCOL Daily Factoid e-newsletter distribution service – find out more here.


Health Care Goes to the Mall

Health Care Goes to the Mall

by Kim Bellard, June 29, 2017


It's either auspicious or ironic: decades after other retail industries, health care is coming to the mall.

These are not, generally, good days for the malls.  We've all seen strip malls that were never finished or that have simply fallen on hard times, but in recent years those stalwarts of American shopping -- enclosed malls -- are sharing that fate.  Credit Suisse 
says that 20-25% of the 1,100 U.S. malls will close over the next five years.

The Wall Street Journal predicts that "the mall of the future will have no stores."   They cite malls filling empty spaces with churches, schools, even offices or apartments.  E.g., Ford is leasing 240,000 square feet at a suburban Detroit mall for new offices. The New York Times had a similar report on the changes to malls.  As one developer told them, "Dining and entertainment is the new anchor — not Sears, not Macy’s."  


One thing that many agree upon: malls of the future will include: health care.


Another Wall Street Journal article focused specifically on health care moving to malls, and included several examples:

·         Dana-Farber Cancer Institute has leased 140,000 square feet of a 286,000 square foot Boston-area mall, which also has several other health and wellness tenants.

·         The Maury Regional Cancer Center has been in the Columbia Mall (Columbia, TN) since 2012.

·         The Biggs Part Mall in Lumberton NC has Southeastern Regional Medical Center as a key tenant.

·         UCLA Health operates primary care centers in the Village at Westfield Topanga.

·         Vanderbilt Health has been part of the One Hundred Oaks mall in Nashville TN since 2009.


Other examples include Cedar Sinai (The Runway at Playa Vista -- LA) and Prime Healthcare (Plymouth Meeting -- Philadelphia), according to Bloomberg.  


Johns Hopkins Medical President Gill Wylie told Bisnow that he watches retail vacancies for opportunities: "We do urgent care and primary care.  So I'm sitting there thinking, 'Gee if all these Staples end up closing, there might be space out there.'"  They've already snapped up four former Blockbuster locations for urgent care facilities.  


Mr. Wylie said he also pays attention to big department stores and malls, citing their infrastructure, parking, and ADA compliance as givens.  


Fady Barmada, of Array Advisors, led the conversion of New York City McDonald's to an urgent care center, and noted that: "Health systems know that, by co-locating themselves with well-used and well-attended retail facilities, they can increase the visibility of their facilities and become platforms for the creation of unique and interesting programs."


But moving to retail locations won't, in itself, make health care organizations more patient-centered.  To do that, they'll have to make the patient experience easier (if not always enjoyable), give them clear choices, and truly treat them like valued customers.


Moving is easy.  Changing is hard.  

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