Alice: Cheshire-Puss, would you tell me, please, which way I ought to go from here?
Cheshire Cat: That depends a good deal on where you want to get to.
Alice: I don’t much care where.
Cheshire Cat: Then it doesn’t matter which way you go.
Alice: —So long as I get somewhere.
Cheshire Cat: Oh you’re sure to do that if you only walk long enough.
Lewis Carroll, The Adventures of Alice in Wonderland
2013 has arrived and employers now find themselves on the other side of a looking glass facing the surreal world of healthcare reform and a confusion of regulations promulgated by The Accountable Care Act (ACA) and its Queen of Hearts, HHS Secretary Sebelius. Many HR professionals delayed strategic planning for reform until there was absolute certainty arising out of the SCOTUS constitutionality ruling and the subsequent 2012 Presidential election. They are now waking up in ACA Wonderland with little time remaining to digest and react to the changes being imposed. A handful of proactive employers have begun, in earnest, to conduct reform risk assessments and financial modeling to understand the impacts and opportunities presented by reform. Others remain confused on which direction to take – uncertain how coverage and affordability guidelines might impact their costs.
If reform is indeed a thousand mile journey, many remain at the bottom of the rabbit hole – wondering whether 2013 will mark the beginning of the end for employer sponsored healthcare or the dawning of an era of meaningful market based reform in the US. HR and benefit professionals face a confusion of questions from their companions — CFO’s, CEOs, shareholders and analysts.
Continue reading “Alice in Healthcareland”
Filed Under: Health Plans, THCB, The Business of Health Care
Tagged: 2012 Election, Affordable Care Act, Defined contribution, employee benefits, employer-sponsored health insurance, health care reform, Michael Turpin, risk management, wellness incentives
Jan 4, 2013
“Change, before you have to…” Jack Welch
We live in a society that loathes uncertainty – particularly the unintended consequences that sometimes result from a catastrophic event or in the case of PPACA, landmark legislation. Wall Street and the private sector crave predictability and find it difficult in uncertain times to coax capital off the sidelines when the overhang of legislation or geopolitical unrest creates the potential for greater risk. Despite our best energies around forecasting and planning, some consequences, particularly unintended ones – only reveal themselves in time.
In the last decade, employers have endured an inflationary period of rising healthcare costs brought on by a host of social, political, economic and organizational failures. There was and remains great anticipation and trepidation as Congress continues to contour the new rules of the road for this next generation’s healthcare system. Optimists believe that reform is both a way forward and a way out of a mounting public debt crisis and a bypass for an economy whose arteries are clogged by the high cost of medical waste, fraud and abuse. Cynics argue reform is merely a Trojan Horse measure that offers an open invitation for employers to drop coverage and for commercial insurers to “hang themselves with their own rope” as costs continue to spiral out of control — leading to an inevitable government takeover of healthcare.
Meanwhile, leading economic indicators are flashing crimson warning signs as recent stop-gap stimulus wears off and long overdue private/public sector deleveraging results in reduced corporate hiring, lower consumer confidence and increased rates of savings. The symptoms of a prolonged economic malaise can be felt in unemployment stubbornly lingering around 9.2% and a stagnating US economy that is struggling to come to grips with the rising cost of entitlement programs. Across the Atlantic, the Euro-Zone is teetering as Italy and Spain (which represent more credit exposure than Greece, Portugal and Ireland combined) stumble toward default. Despite these substantial head winds, US healthcare reform is forging ahead – – right into the teeth of the storm.
Continue reading “Employers and Health Reform”
Filed Under: The Business of Health Care
Tagged: Employers, health care reform, Michael Turpin
Jul 21, 2012
The scene opens with a fit, thirty-something man running down the hallway of an office building. His white shirt is stained on right side by what appears to be orange juice. He frantically looks behind him to see if anyone is following him and knocks over a female colleague – spraying papers into the air. He spins, tumbles, hesitates and then runs through a door marked, “ Human Resources – Compensation and Benefits”
He bursts into an inner office where a 50ish woman is on the phone – laughing. She frowns glancing at him as he shuts the door and peers between her Levolor blinds.
Carol: (Covering the phone) What the hell are you doing, Johnson ? Aren’t you supposed to be downstairs conducting the annual benefit enrollment meetings?
Johnson (Terrified, turning to show his stained shirt) : Are they coming? Did you see anyone? Those five women – you know the ones who go walking every day at lunch – one of them threw an orange at me right in the middle of my presentation.
Carol: (Swivels in her chair, turning her back on Johnson and is about to speak into the phone when she sees all her phone console lines blinking at once. Her cell phone begins to vibrate in her purse. She speaks into the phone)
Tim, let me get back to you. Something seems to be going on here at Corporate. (she hangs up and let’s her phone start to ring. )
Continue reading “The Great Wellness Revolt of 2011″
Filed Under: THCB
Tagged: Michael Turpin, Wellness programs
Jun 7, 2011
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During the course of 2009, an alarming trend line was broken. For the first time ever, more employers under 50 employees were not offering medical insurance to employees than those who continued to provide employer sponsored healthcare.
Unfortunately, achieving affordability is often a zero sum game and the current system often fails the weakest and most disenfranchised of its stakeholders. While the burden of spiraling healthcare costs has effected virtually every employer, the weight of cost increases has been borne disproportionately by individuals and smaller employers (1-250 employees). The opaque science of risk pooling, cost shifting and risk selection has as much to do with unacceptable increases as poor consumerism, over treatment and inefficiency. As we march toward insurance exchanges and pooled purchasing for employers in 2014, we will continue to witness a game of pass the parcel leaving smaller employers holding the bag.
Healthcare cost shifting begins at the highest levels with federal and state governments routinely cost shifting to the private sector by serially under-reimbursing specialists and hospitals for the cost of their services. Doctors and hospitals, in turn, shift cost to the private sector charging higher fees for services to make up for underfunded Medicare and Medicaid rates. Health systems have consolidated along with multi-specialty medical groups gaining critical bargaining power that results in higher contracted rate increases negotiated with insurers. Insurers, attempting to keep rising medical trends down, must exact concessions from less well leveraged providers such as community based hospitals and primary care doctors. The result is an Darwinian landscape where only the large survive.
As core medical trends hover between 7%-8%, insurer insured book of business medical trends have climbed into and remain in double digits. Larger employers remain more immune from peanut butter spread book of business trends due to their own unique claim credibility and in many instances, due to the simple act of self insurance. Lack of size and actuarial credibility leaves smaller employers and individuals to be underwritten within pools of risk — pools that continue to pass on the rising costs of care at an alarming rate. To add insult to injury, as states and the Federal government become increasingly larger medical payers (already representing over 50% of all medical spend in the US), cost shifting will only accelerate in the private sector resulting in higher medical trends impacting smaller employer pools. Continue reading “A Case for Self Insuring Small Business”
Filed Under: Health Plans, OP-ED, THCB
Tagged: Costs, Medical cost shifting, Michael Turpin, Private sector, Self-insuring, Small Business
Apr 8, 2011
“In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed” Charles Darwin
As the legislative reform volcano rumbles and angrily spews magma into the Washington night, nervous industry stakeholders competing for survival on this unstable island of American healthcare are still betting that the seismic activity is merely a false eruption.
Survivor contestants are using every possible means to ensure they are not voted off the island. The stakeholders are a veritable who’s who of personalities – the powerful, the wealthy, the prima donnas, the tough love advocates, the national health zealots, the well-intended academics, the bellicose politicians, the under-employed, the overweight, and the disenfranchised. It remains to be seen whether Congress, market forces or the American people will be the ultimate judge of who stays and who goes.
If the contestants cannot change in the next five years, 2015 will find them staring at a terrifying wall of regulation and governmental intervention that will be more destructive than the changes from the 2010 proposed legislation. Continue reading “Survivor”
Filed Under: Health Plans
Tagged: Affordable Care Act, Michael Turpin, Obamacare, PPACA
Feb 22, 2011
It’s high noon for private healthcare. Over the last decade, large, medium and small employers that procure and manage over $1T of private healthcare spend for an estimated 180M Americans have been engaged in an expensive game of Texas Hold ‘Em – – wagering with and against a continuum of stakeholders that all seem to possess more powerful hands. As providers consolidate, insurers retrench and the government wrestles with obligations of an uncontrolled fee for service Medicare, the costs of staying at the final table are taking its toll.
To many veteran observers, it appears that employers may be on the brink of folding their cards. As finance and HR professionals consider the table stakes and costs to remain in the game, the Affordable Care Act (ACA) has suddenly provided a potential golden opportunity to step away from a fifty year obligation without incurring onerous near term financial consequences.
As individuals and small business have continued to lapse into the ranks of the uninsured, those small and mid-sized businesses choosing to continue to offer health insurance are coming to the realization that the Affordable Care Act will not result in the moderating of double digit medical trends. In the near term, some contend costs will continue to rise by much as 25-40% before the launch of 2014’s guarantee issue health exchanges.
Larger employers are already cynical to whether reform will actually work for them or against them. Bigger firms and collectively bargained plans are beginning to understand that if small and mid-sized employers drop out of offering private healthcare, the decline of employer plans will leave them as the sole remaining source for private insurance cost shifting. As the cards are turned, the outcomes are far from certain – – and as we have come to discover, business hates uncertainty.
Continue reading “High Stakes Health Reform – Employers: In or Out?”
Filed Under: Superhealthanomics
Tagged: health care reform, Michael Turpin
Dec 15, 2010
Christmas is the time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell government what they want and their kids pay for it. ~Richard Lamm
The day after a mid-term tidal wave of anti-incumbency sentiment swept through Congress resulting in the GOP reclaiming a controlling majority in the House and closer parity in the Senate, a seemingly contrite President Obama took personal responsibility for his party’s dismal showing at the polls. In a carefully worded conciliatory message, the President shared that, “the American people have made it very clear that they want Congress to work together and focus their entire energies on fixing the economy.”
Newly minted House Majority leader, John Boehner, subsequently reconfirmed that the GOP would not rest until Congress had reined in government spending. This would be partly achieved by deconstructing the highly unpopular and “flawed” Patient Protection and Affordable Care Act – a “misguided” piece of legislation that would actually increase costs for employers thereby reducing the nation’s ability to jump-start an economy that relies on job creation and consumer spending. In Boehner’s mind, government is not unlike the average American, overweight – it’s budget deficits bloated by the cost of financial bailouts, Keynesian stimulus spending and failure to discuss the growing burden of fee for service Medicare.
The President’s failure to acknowledge healthcare reform in his speech was interpreted by many as deliberate and only served to cement the perception that in Washington, it will impossible to have constructive dialogue around the imperfections and potential unintended consequences of PPACA. The White House’s resolve to defend its hard-fought healthcare legislation is likely to extend the polarizing partisanship that has come to characterize Congress. The impasse may very well spark a two-year period of bruising, bellicose finger-pointing over how to fix rising healthcare costs.
Continue reading “The War Between the States”
Filed Under: Uncategorized
Tagged: After Reform, Medicaid, Medicare, Michael Turpin
Nov 10, 2010
As the first snowflakes of change fall on the eve of health reform, HR professionals may soon wake up to an entirely transformed healthcare delivery landscape. The Patient Protection and Affordable Care Act (PPACA) clearly will impact every stakeholder that currently delivers or supplies healthcare in the United States.
While the structural, financial, behavioral and market-based consequences of this sweeping storm of legislation will occur unevenly and are not fully predictable, this first round of healthcare legislation is designed to aggressively regulate and rein in insurance market practices that have been depicted as a major factor in our “crisis of affordability” and to expand coverage to an estimated 30 million uninsured. However, fewer than 30 percent of employers polled in a recent National Business Group on Health survey believe reform will reduce administrative or claims costs.
Yet, it is unlikely that reform will be repealed. For all its imperfections, PPACA is the first in a series of storm systems that will move across the vast steppe of healthcare over the next decade resulting in a radically different system. Whether reform concludes with a single payer system or emerges as a more efficient public-private partnership characterized by clinical quality and accountability remains obscured by the low clouds and shifting winds of political will. One thing is certain during these first phases – inaction and lack of planning will cost employers dearly. Continue reading “Human Resources and Surviving Health Reform”
Filed Under: Health Plans
Tagged: Engagement, Human Resources, Michael Turpin
Sep 16, 2010
Why do they lock gas station bathrooms? Are they afraid someone will clean them?” Anonymous
Growing up in the era of “Walk It Off” parenting, I was never
allowed to get too in touch with my hypochondria. Occasionally, I might
get my hands on a National Geographic magazine that would feature
Amazon explorers, tribes that had never been touched by the outside
world or an expedition into the heart of darkest Africa. To properly
frame the perilous nature of uncharted corners of the world, the
articles would relate the hazards associated with indigenous people,
nasty flora, unpredictable fauna and myriad microscopic predators that
could all kill a man – often in bizarre and horrific ways.
I did not just want to know about the 1000 ways in which I could die
– – I wanted to witness them. The fact that most of these diseases,
parasites and insidious bacteria were transmitted through unclean
drinking water, monkey bites, and unnatural encounters in dark,
forbidden places did not matter to me. I was certain these germs were
Continue reading “Monsters Inside of Me”
Filed Under: The Insider's Guide To Health Care
Tagged: Commentology, Michael Turpin
Jun 16, 2010
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Charles Darwin
In her 1969 Book, On Death and Dying, Dr Elisabeth Kübler-Ross describes the five stages of grief. Over a 27 year career marked by mergers, acquisitions, and perpetual change, I have come to accept these five stages as necessary rites of passage that humans must endure as they navigate the inevitable shoals of change. It seems we all must endure denial, anger, bargaining and depression before we finally break through to acceptance.
While we all intellectually agree that our healthcare system is broken and is in profound need of change, most preferred that all the heavy lifting required to reduce healthcare costs as a percentage of US GDP, occurred on someone else’s watch. As Woody Allen once quipped, “ I don’t mind dying. I just don’t want to be there when it happens.” Continue reading “Getting Over The New Normal”
Filed Under: Uncategorized
Tagged: Insurance, Insurers, Michael Turpin
Apr 2, 2010