Filed Under: UncategorizedTagged: CFOs, Employers, Health Care Costs, Health care spending, National Business Coalition on Health Jun 12, 2014
Filed Under: UncategorizedTagged: CFOs, Employers, Health Care Costs, Health care spending, National Business Coalition on Health Jun 12, 2014
It seems since the dawn of the consumer economy that customers and buyers have traded most heavily on a single currency – trust.
Three millennia later, our financial system still hinges on the basic premise that the game is not rigged and any trusted intermediary is defined by a practitioner who puts his client’s interests ahead of his own.
Anyone responsible for procurement of healthcare may feel like a modern-day Diogenes as they wander an increasingly complex market in search of transparent partners and aligned interests. The art of managing medical costs will continue to be a zero-sum game where higher profit margins are achieved at the expense of uninformed purchasers.
It’s often in the shadowed areas of rules-based regulation and in between the fine print of complex financial arrangements that higher profits are made.
Are employers too disengaged and outmatched to manage their healthcare expenditures?
Are the myriad intermediaries that serve as their sentinels, administrators and care managers benefiting or getting hurt by our current system’s lack of transparency and its deficit of information?Tagged: Benefits, brokers, consultants, Corporate America, Costs, Employers, Hospitals, Human Resources, Incentives, Insurers, Michael Turpin, purchasers, The ACA, the business of health care, Uwe Reinhardt Apr 10, 2014
The old conversation: “You cost too much.”
“But we have these sunk costs, patients who can’t pay … ”
“OK, how about a little less then?”
The new conversation: “You cost too much. We will pay half, or a third, of what you are asking. Or we will take our business elsewhere. Starting now.”
“But … but … how?”
Exactly: How will you survive on a lot less money? What are the strategies that turn “impossible” to “not impossible”?
The old conversation arises from the classic U.S. health care model: a fully insured fee-for-service system with zero price transparency, where the true costs of any particular service are unknown even to the provider. The overwhelmingly massive congeries of disjointed pieces that we absurdly call our health care “system” rides on only the loosest general relationship between costs and reimbursements.
It’s a messy system littered with black boxes labeled “Something Happens Here,” full of little hand waves and “These are not the droids you’re looking for.”
With bundling, medical tourism, mandated transparency, consumer price shopping, and reference pricing by employers and health plans, we increasingly are being forced to name a price and compete on it. Suddenly, we must be orders of magnitude more precise about where our money comes from and where it goes: revenues and costs.
We must find ways to discover how each part of the strategy affects others. And we need some ability to forecast how outside forces (new competition, new payment strategies by employers and health plans, new customer handling technologies) will affect our strategy.
Key Strategy Questions
For decades, whenever some path to profit in health care has arisen (in vitro fertilization, urgent care, retail, wellness and the others) most hospitals have said as if by ritual, “That is not the business we are in.” As long as we got paid for waste, few health care organizations got serious about rooting it out.
And most have seemed content with business structures that put many costs and many sources of revenue beyond their control.
In the Next Health Care, the key strategy questions become:
This month’s decision to delay the Affordable Care Act’s employer mandate until 2016 coupled with dramatic increases in health insurance premium costs assures employers will play a stronger role going forward.
57% of all companies provide health insurance covering 149 million in the population. But participation varies widely by industry and size of company.
Participation: Manufacturing (72%), Services (65%), Transportation/Utilities/Communications (62%), Agriculture/Mining/Construction (60%), Wholesale (54%), Healthcare (51%), Financial services (49%), Retail (29%) (Kaiser/HRET Survey of Employers)
Size: Smaller companies under 199 are less likely to provide health benefits than larger companies, though premiums they pay to insurers are slightly lower than their larger counterparts.
Declines in employer sponsored coverage declines are due to costs, not the Affordable Care Act. Consider: the percentage of non-elderly workers with employer-sponsored coverage decreased from 68% in 2000 to 61% in 2009 before the law passed.
Employers pay 82% of health costs for singles and 71% of costs for those in their family health plans. Over the past decade, they have shifted more financial responsibility to their employees.
Filed Under: UncategorizedTagged: Cost Control, Employer Mandate, Employers, Paul Keckley, The ACA Mar 25, 2014
T was never a star service tech at the auto dealership where he worked for more than a decade. If you lined up all the techs, he wouldn’t stand out: medium height, late-middle age, pudgy, he was as middle-of-the-pack as a guy could get.
He was exactly the type of employee that his employer’s wellness vendor said was their ideal customer. They could fix him.
A genial sort, T thought nothing of sitting with a “health coach” to have his blood pressure and blood taken, get weighed, and then use the coach’s notebook computer to answer, for the first time in his life, a health risk appraisal.
He found many of the questions oddly personal: how much did he drink, how often did he have (unprotected) sex, did he use sleeping pills or pain relievers, was he depressed, did he have many friends, did he drive faster than the speed limit? But, not wanting to rock the boat, and anxious to the $100/month bonus that came with being in the wellness program, he coughed up this personal information.
The feedback T got, in the form of a letter sent to both his home and his company mailbox, was that he should lose weight, lower his cholesterol and blood pressure, and keep an eye on his blood sugar. Then, came the perfect storm that T never saw developing.
His dealership started cutting employees a month later. In the blink of an eye, a decade of service ended with a “thanks, it’s been nice to know you” letter and a few months of severance.
T found the timing of dismissal to be strangely coincidental with the incentivized disclosure of his health information.Tagged: Al Lewis, data breaches, Employers, personal health records, Privacy, Vik Khanna, Wellness, workplace wellness programs Mar 25, 2014
A recent blog on HBR.org proposed to deliver “The Cure for the Common Corporate Wellness Program.” But as with any prescription, you really shouldn’t swallow this one unless all your questions about it have been answered. As a physician, a patient, and a businessman, I see plenty to question in Al Lewis and Vik Khanna’s critique of workplace wellness initiatives.
With their opening generalization that “many wellness programs” are deeply flawed, the authors dismiss a benefit enjoyed by a healthy majority of America’s workers. Today, nearly 80% of people who work for organizations with 50 or more employees have access to a wellness program, according to a 2013 RAND study commissioned by the U.S. Department of Labor and the U.S. Department of Health and Human Services.
It’s not clear whether the authors are intentionally dismissing or simply misunderstanding the wealth of data that shows how wellness programs benefit participating employees. The RAND study summarizes it this way: “Consistent with prior research, we find that lifestyle management interventions as part of workplace wellness programs can reduce risk factors, such as smoking, and increase healthy behaviors, such as exercise. We find that these effects are sustainable over time and clinically meaningful.”
Lewis and Khanna, however, don’t focus on such findings. Instead, they question the motives of a company for even offering a wellness program, which they slam as an “employee control tool” and “a marketing tool for health plans.” And, in perhaps the most baffling statement of all, the authors suggest that workplace wellness initiatives are “trying to manipulate health behaviors that are largely unrelated to enterprise success” (emphasis mine).
Let’s consider that piece by piece. What are the behaviors that corporate wellness initiatives are trying to influence? According to the RAND study, the most common offerings — available in roughly 75% of all wellness initiatives — are on-site vaccinations and “lifestyle management” programs for smoking cessation, weight loss, good nutrition, and fitness. In short, companies want to reduce the risk that their workers will get the flu, develop lung cancer, or suffer from the many debilitating conditions linked to overweight and a sedentary lifestyle. How could these initiatives be deemed “largely unrelated” to the company’s success?Tagged: corporate wellness, Employers, Rajiv Kumar, workplace wellness programs Feb 21, 2014
I keep stumbling upon situations, where, what used to be up is now down and what used to be down is now up.
No one seems to know for sure how things will settle out under the new reality created by Obamacare and the even more unpredictable reactions to the law by health care companies, employers and, most especially, you and me.
I’ve started using the term “weightlessness” to describe this state we’re in. Picture the astronauts on the international space station, floating through a room, flipping at will, as likely to settle on a wall or on the ceiling as on the floor.
That’s what life is like under Obamacare now—for physicians, hospital administrators, insurance executives, benefits brokers and employers.
Here are a few examples:
1. I wrote last week about how a chunk of workers, even at large employers with generous benefits, would actually get a better deal on health insurance from the Obamacare exchanges than from their employers. So their employers are starting to consider whether they should deliberately make health benefits unaffordable for those low-wage workers, so they can qualify for Obamacare’s tax-subsidized insurance.
That could be good for both employers and employees. The effect on taxpayers, which would switch from granting a tax credit to employers to instead granting it to the employees, is unclear.
2. Even though insurers were certain that price would be king on the Obamacare exchanges, that hasn’t led most customers to buy the plans with the cheapest premiums. As I wrote Friday, 76 percent of those shopping on the exchanges in my home state of Indiana have picked the higher-premium silver and gold plans, with only 24 percent picking bronze plans.
“There are a few geographies where we believe we are gaining share despite lower price competition which points to the value of our local market depth, knowledge, brand, reputation and networks,” WellPoint Inc. CEO Joe Swedish said during an January conference call with investors.
It’s possible that’s a result of older and sicker patients being the earliest buyers on the exchange, and that as healthier people buy coverage, they’ll gravitate to the low-cost bronze plans. But that hasn’t happened—which, as I wrote on Friday, has proved wrong hospitals’ concerns about the super-high deductible bronze plans.
Filed Under: UncategorizedTagged: Benefits, Employers, Insurers, J.K. Wall, Milliman, Obamacare, Risk adjustment, Subsidies, the business of healthcare Feb 18, 2014
The proposal was unveiled last Monday by Republican Senators Richard Burr, (NC), Tom Coburn (OK), and Orrin Hatch (UT).
The Republican plan targets many of the most unpopular parts of the Affordable Care Act such as expensive mandated benefits and the resulting lack of choice, the individual mandate, the employer mandate, and age-rating disruptions.
My sense is that most independent voters––the ones that matter in an election-year––don’t want Obamacare repealed; they want it fixed.
The problem for Republicans is that they have such a visceral response to the term “Obamacare” that they just can’t bring themselves to fix it. The notion that Obamacare might be fixed and allowed to continue as part of an Obama legacy and as a Democratic accomplishment is something they can’t get past.
So, the only way Republicans can propose an alternative to Obamacare is to first wipe the health insurance reform slate clean and start over.
Filed Under: THCBTagged: Employers, Insurance Subsidies, Medicaid Expansion, Obamacare, Pre-Existing Condition, Republicans, Robert Laszewski, Tax Exclusion, The ACA Feb 4, 2014
President Obama rarely shies away from an opportunity to tout successes in U.S. health care, but in last night’s State of the Union oddly omitted any mention of the new and optimistic report about U.S. health spending from actuaries at the Centers for Medicare and Medicaid Services (CMS).
The finding: from 2009 through 2012, health care spending in the U.S. grew at the slowest rate since the government started collecting this data in the 1960s.
The actuaries found that in 2012 spending “stabilized,” growing by 3.7 percent in 2012, and health care accounted for a slightly smaller percent of GDP than the prior year, 17.2 percent versus 17.3 percent in 2011.
Perhaps an actuarial report proclaiming stable growth doesn’t make for much of an applause line for a State of the Union speech. But for confessed policy wonks like me, it’s as good as a Hollywood blockbuster.
So get out your popcorn, here are five Hollywood moments in the report.
1. Ninja Combat
When the report came out in early January, the Obama administration quickly ascribed the good news to Obamacare. But, lo and behold, the actuaries wielded their slide rules like weapons.
They respectfully disagreed with their president, pointing out that few of the provisions in the health reform law were actually in place during the slow-growth years in question. The actuaries conclude that most of the cost stability results from the economic recovery process.
Given the silence in the State of the Union, they may have been given the last word on the subject.
Filed Under: THCBTagged: CMS, Employers, health deductible health plans (HDHP), Health Plans, Healthcare spending, Leah Binder, SOTU 2014, The ACA Jan 29, 2014
Facing thousands in extra insurance costs, smokers appear to be the Affordable Care Act’s (ACA) biggest losers. Employers are allowed charge smokers up to 50% more for their medical coverage than nonsmokers , starting in 2014.
On November 25, Fox News put it best: “Obamacare Policies Slam Smokers,” , noting that “smokers are the only group with a pre-existing condition that Obamacare penalizes.” THCB itself has headlined: Smokers Face Tough New Rules under Obamacare.
And these headlines are absolutely accurate — meaning that, with the possible exception of the e-cigarette, ACA is the best thing that has happened to employed smokers ever.
Here is how we arrive at this conclusion. The data is mixed on whether smokers incur much higher healthcare costs or just slightly higher healthcare costs during their working ages than non-smokers do. None of the data shows that their costs are lower, but let’s say there is no impact on health spending.
Nonetheless, the following is incontrovertible: smokers take smoking breaks.
Remarkably, there are no laws specifically governing smoking breaks, and like most other quantifiable human resources issues, no one has quantified them. But we all observe these breaks, and about a fifth of us participate in them. They reduce productivity. By definition, if you are outside smoking, you are not inside working.
Sure, some smokers make up the time by working harder when they aren’t smoking…but (1) many non-smokers work hard too and (2) some workplaces, such as inbound call centers, don’t offer the luxury of catching up later because they operate in real time. Lacking quantification, fall back on your imagination…and imagine what you would do if you ran a company in which non-smokers spent as much time mulling around outside as smokers do. That should give you an understanding of the impact of smoking breaks on productivity.Tagged: Al Lewis, Employers, smoking, smoking cessation, The ACA, Vik Khanna, Wellness Dec 1, 2013