Health Affairs: Engaging Health Care Consumers: The Lowe’s Experience

Worth reading and NBCH's recent study with Benz Communications is noted...

A recent post for the Health Affairs blog by Bob Ihrie, senior vice president of compensation and benefits for Lowe's, and Dr. Alan Spiro, chief medical officer for Accolade, outlined Lowe's evolution to better engage employees through its population health and benefits program.

Time will tell, but it appears that employers are not giving up on providing health insurance to their employees — even with the availability of health care exchanges. That’s at least what the results of a new study sponsored by the National Business Coalition on Health (NBCH) suggest.

Brian Klepper, CEO of the NBCH, speculated in his recent Health Affairs Blog post: “…there is an alternative view of what is possible in health care, and that self-funding and a willingness to continue trying to control the health care value monster remains alive and vibrant.”

As self-funded employers strive for a value-based health care marketplace, they’re looking at ways to drive value at an individual level — through strategies to engage employees as better consumers and managers of their own health care.

Over the last couple of decades, Lowe’s has been on a journey to encourage its employees to become engaged health care consumers. What Lowe’s experience teaches us is that health care systems are complex, and individuals value guidance from a trusted source, particularly when faced with difficult or challenging decisions...

Will Employers Favor Private Exchanges Over Coverage Sponsorship?

Originally posted 10/17/14 on The Health Affairs Blog

By Brian Klepper

Over the past couple years, health care exchanges probably have consumed more of corporate benefits managers’ time and psychic energy than any other topic. An outstanding question is whether the rank and file of American businesses will drop the hassle that employer-sponsored coverage represents, or default to private exchanges.

Private exchange offerings typically move employees from their companies’ previous self-funded health plans to fully-insured individual arrangements, purporting to offer more flexibility and choice that can adapt to the wide-ranging needs of employees and employers, while creating a more competitive health plan marketplace.

Several recent surveys have reported that employers plan to move aggressively to private exchanges. In a survey last year of more than 700 businesses, the Private Exchange Evaluation Collaborative, a group of regional business health coalitions working with the consulting group PwC, found that 45 percent of employers have implemented or are considering using a private exchange for active employees before 2018. Similarly, a February Aon Plc survey found that, while 95 percent of employers say they expect to continue offering health care for the next 3-5 years, and 5 percent of employers currently use a private exchange, 33 percent say they may consider using one in the future.

My organization, the National Business Coalition on Health (NBCH), is an umbrella for regional business health coalitions around the country, representing about 4,500 employers, unions and local governments and some 35 million people. Working with Benz Communications, an employee benefits communications firm, we surveyed 333 benefits managers, mainly in middle-market (1,000-5,000 employee lives) technology and service firms in the Western and Southeastern US, about how they intend to manage their health plans going forward.

More than half (55 percent) of the respondents indicated they will “never” stop sponsoring employee health plans in favor of giving employees money to buy coverage through a private exchange. Just 5 percent – this number syncs with other surveys – say they already use a private exchange to provide employees’ health benefits. About 8 percent say they’ll consider moving within the next three years.

It remains to be seen whether private exchanges can outperform conventional self-funding arrangements over time. New data from private exchanges – see here and here – claim 5-plus percent health plan cost savings, but we don’t know whether those numbers will be seen across the sector, or whether they’ll be sustainable.

Analyst and former health insurance executive Robert Laszewski has been openly skeptical, arguing that these structures do little to make health care cost less and much to make it cost more. In addition to the added costs of state mandates and risk management that individual, fully insured plans must deal with, individual products have higher health plan “expense factors,” meaning the costs of handling an individual an individual rather than a group policy. He notes:

Individual products operate on an expense factor of as much as 20 percent and small group plans as much as 15 percent. Moving away from self-insurance and to an individual choice platform will increase the expense factor leaving the employee less money for benefits.

There are other issues as well. While, admittedly, employer and union health plan sponsors have not, as a whole, been assertive health care purchasers in the past, they represent powerful market potential to reward organizations that deliver high value and withhold that support from those that do not. The US’ regulatory environment has effectively been “captured” by the health care industry, and a steady stream of information has made it clear that our health care delivery and finance systems are characterized by excesses that make our costs double those of other developed nations. One important question is whether, by moving the center of health care power from group to individual purchasers, we abrogate our ability to push back effectively against a health care industry already pre-disposed to excess.

I cannot explain why the NBCH/Benz survey results suggest much lower purchaser inclination to move to private exchanges. But they raise the possibility that there is an alternative view of what is possible in health care, and that self-funding and a willingness to continue trying to control the health care value monster remains alive and vibrant.

Brian Klepper is the CEO of the National Business Coalition on Health.

Health Affairs October Issue Focuses on Specialty Drugs

The October issue of Health Affairs - released today - takes on the topic of specialty drugs, highlighting a number of studies that look at the high costs associated with the increasingly prevalent use of these pharmaceuticals.

Check out the contents of the October issue online.

Employer-Sponsored Family Health Premiums Rise 3 Percent In 2014

Average annual premiums for employer-sponsored family health coverage reached $16,834 this year, up 3 percent from last year, continuing a recent trend of modest increases, according to the Kaiser Family Foundation (KFF)/Health Research & Educational Trust (HRET) 2014 Employer Health Benefits Survey released today. Workers on average pay $4,823 annually toward the cost of family coverage this year.

Read more via Health Affairs Blog. 

From Health Affairs Blog: The Arkansas Payment Reform Laboratory

The Health Affairs Blog has launched a series, which will run over the next year, looking at payment and delivery reforms in Arkansas and Oregon. The posts will be based on evaluations of these reforms performed with the support of the Robert Wood Johnson Foundation. Check out the first post in the series - written by part of the team evaluating the Arkansas model, the Arkansas Payment Improvement Initiative.

Health Affairs Article on Consumer Engagement

The August 2013 issue of Health Affairs features an article co-written by NBCH Annual Conference keynote speaker Reed Tuckson on UnitedHealthcare's experience with new patient engagement techniques. Patient engagement is crucial to better outcomes and a high-performing health system, but efforts to support it often focus narrowly on the role of physicians and other care providers. Such efforts miss payers’ unique capabilities to help patients achieve better health. Using the experience of UnitedHealthcare, a large national payer, this article demonstrates how health plans can analyze and present information to both patients and providers to help close gaps in care; share detailed quality and cost information to inform patients’ choice of providers; and offer treatment decision support and value-based benefit designs to help guide choices of diagnostic tests and therapies. As an employer, UnitedHealth Group has used these strategies along with an “earn-back” program that provides positive financial incentives through reduced premiums to employees who adopt healthful habits. UnitedHealth’s experience provides lessons for other payers and for Medicare and Medicaid, which have had minimal involvement with demand-side strategies and could benefit from efforts to promote activated beneficiaries.

Many State-Run Health Insurance Exchanges Set to Exceed Requirements for Plan Choice, Quality Reporting

Consumers and small businesses in states that have opted to run their own health insurance exchanges will likely have a greater ability to make informed choices regarding their coverage as well as more information about plan quality than what current federal regulations require, a new Commonwealth Fund report finds. The report, by researchers from Georgetown University's Health Policy Institute, examines the key design decisions made by the 17 states that, along with the District of Columbia, chose to establish their own exchanges. Use the Commonwealth Fund's interactive map to explore how health insurance exchanges are shaping up across the U.S., or read a Health Affairs primer on the exchanges and what lies ahead.

EBRI Research on Effectiveness of Consumer-Directed Health Plans

Consumer-directed health plans (CDHP), designed to make employees make more cost-and health-conscious decisions, have been shown to reduce the long-term use of outpatient physician visits and prescription drugs, according to new research by the nonpartisan Employee Benefit Research Institute (EBRI) authored by a team led by Paul Fronstin, Ph.D. (past speaker at the March 2013 NHLC meeting in Dallas, TX).

The research used data from two large employers—one that adopted a health savings account (HSA) plan for all of its employees in 2007, and another with no CDHP—and found that after four years under the HSA plan, there were 0.26 fewer physician office visits per enrollee per year and 0.85 fewer prescriptions filled, although there were 0.018 more emergency department visits (all of which are considered statistically significant). Additionally, the likelihood of receiving recommended cancer screenings was lower under the HSA plan after one year and, even after recovering somewhat in later years, still lower than baseline at the study’s conclusion.

The theory behind CDHPs is that as participants are exposed to a high deductible before insurance benefits are triggered, enrollees will be induced to make better health care use decisions, such as not going to an emergency department when a visit to a physician would suffice. Although usually offered alongside more traditional health plan designs, CDHPs are slowly increasing as employers’ only health insurance offering.

The research findings are published in the June 2013 issue of Health Affairs, and can be accessed online here. This work was conducted through the EBRI Center for Research on Health Benefits Innovation (EBRI CRHBI). The following organizations provided the funding for EBRI CRHBI: American Express, Blue Cross Blue Shield Association, Boeing, CVS Caremark, General Mills, Healthways, IBM, John Deere & Co., JP Morgan Chase, Mercer, and Pfizer.

New Study on Patients' Willingness to Consider Costs in Medical Decision Making

A new study in the latest issue of Health Affairs found that a majority of patients were reluctant to consider cost when making medical decisions, nor did they want their doctors to do so. Researchers investigated the attitudes of 211 focus group participants in Washington and Santa Monica, Calif. Participants were asked to weigh their own out-of-pocket costs as well as the costs borne by their insurer. The participants, researchers said, did not generally understand how insurance works and felt little personal responsibility for helping to solve the problem of rising health-care costs. They were unlikely to accept a less expensive treatment option, even if it was nearly as effective as a more expensive choice.

Specifically, the study identified the following four barriers to patients’ taking cost into account: 

• A preference for what they perceive as the best care, regardless of expense;
• Inexperience with making trade-offs between health and money; 
• A lack of interest in costs borne by insurers and society as a whole; and 
• Behavior characteristic of a “commons dilemma,” in which people act in their own self-interest although they recognize that by doing so, they are depleting limited resources. 

Surmounting these barriers will require new research in patient education, comprehensive efforts to shift public attitudes about health care costs, and training to prepare clinicians to discuss costs with their patients. Campaigns such as Choosing Wisely, as well value-based purchasing programs like reference pricing can help start to educate patients about appropriate utilization of services.

New Research on Corporate Wellness Programs: Do They Work?

More employers are launching wellness programs to encourge healthy behaviors among their workers and control health care spending. But can these initiatives deliver on their promise?

In the new issue of Health Affairs, Commonwealth Fund–supported researchers led by Gautam Gowrisankaran, Ph.D., report on their study of one wellness program begun in 2005 by a St. Louis hospital system. Their findings show a substantial decrease in hospitalizations for targeted conditions, but they also reveal that the associated cost-savings were counterbalanced by increased spending for prescription drugs and outpatient care, not to mention the costs of the program and incentives themselves. At least in the short term, it appears that while wellness programs may improve employee health and productivity, they're unlikely to lead to substantial reductions in health care spending.

This research is important to learn from as employers move more toward an approach of population health management.  In addition, it remains to be seen whether the new stronger ACA incentives for health-contingent wellness programs have the potential to show substantial reductions in health care spending.

Health Affairs Study: CDHP Enrollees Unaware of Free Preventive Services

The authors of this Health Affairs study surveyed people in California who had a consumer-directed health plan and found that fewer than one in five understood that their plan exempted preventive office visits, medical tests, and screenings from their deductible, meaning that this care was free or had a modest copayment. Roughly one in five said that they had delayed or avoided a preventive office visit, test, or screening because of cost. Those who were confused about the exemption were significantly more likely to report avoiding preventive visits because of cost concerns. Special efforts to educate consumers about preventive care cost-sharing exemptions may be necessary as more employers and health plans, including Medicare and some Medicaid programs, adopt this model.

Health Affairs Article on Shared Savings Programs

An article in the September issue of Health Affairs, co-authored by Joel Weissman, Michael Bailit, Guy D'Andrea, and Meredith Rosenthal, discusses "lessons learned" from early adopters of shared savings programs. Shared savings programs reward providers for holding spending below specific targets, thus introducing a level of financial accountability for physicians not present in strictly volume-based payment models, such as fee-for-service. The article examines the design and application of shared savings formulas across a range of actual programs. It also presents a more detailed description of one particular shared savings program—the Massachusetts Patient-Centered Medical Home Initiative—focusing on key trade-offs between payers and providers that eventually led to agreement on specific aspects of the program. The article concludes with recommended principles for the design of future shared savings arrangements and consideration of issues that will confront decision makers as these efforts mature and expand.

Health Affairs Article Says True Reform Comes Through System Transformation, Not Just Payment Reform

In this month's Health Affairs, Martin Sepulveda and Helen Darling analyze historical attempts at delivery system transformation through the lens of large employers as payers and argue that payment reform alone will not cut costs and re-engineer care. They discuss large employers’ perspectives on three particular challenges that payment reform alone, as important as it is, may not be sufficient to address: high health care prices, inefficient and complex systems, and an outdated work environment ill designed to meet the pressing goals of better health care at lower cost. They argue that policies that support health care organizations in redesigning work processes will be essential to reducing prices and simplifying interactions in care delivery. They also state that health care organizations will need to redesign their compensation systems to align their employees’ pay with improvements in performance. As an example, they describe the major transformation that IBM underwent in the 1990s to position itself to compete in a radically changed computer marketplace. The article also offers several policy recommendations to support health care organizations in making the necessary changes.

Study Finds Consumers Choose High-Value Health Care Providers When Given Good Cost and Quality

When asked to choose a health care provider based only on cost, consumers choose the more expensive option, according to a new study funded by HHS’ Agency for Healthcare Research and Quality (AHRQ) that appeared in the March issue of Health Affairs.

The study found that consumers equate cost with quality and worry that lower cost means lower quality care. But higher costs may indicate unnecessary services or inefficiencies, so cost information alone does not help consumers get the best value for their health care dollar

"An Experiment Shows That a Well-Designed Report on Costs and Quality Can Help Consumers Choose High-Value Health Care," found that when consumers were shown the right mix of cost and quality information, they were better able to choose high-value health care providers—defined as those who deliver high-quality care at a lower cost.

Study Finds Consumers Choose High-Value Health Care Providers When Given Good Cost and Quality Information

When asked to choose a health care provider based only on cost, consumers choose the more expensive option, according to a new study funded by HHS’ Agency for Healthcare Research and Quality (AHRQ) that appears in the March issue of Health Affairs.

The study found that consumers equate cost with quality and worry that lower cost means lower quality care. But higher costs may indicate unnecessary services or inefficiencies, so cost information alone does not help consumers get the best value for their health care dollar, according to the study."

More information is available here.

U.S. health spending growth slows for 2nd year; totaled nearly $2.6 trillion in 2010

U.S. health care spending experienced historically low rates of growth in 2009 and 2010 according to the annual report of national health expenditures (NHE) from the Centers for Medicare & Medicaid Services (CMS) published in the January issue of the journal Health Affairs.

Analysts at CMS report that the increase in spending for 2009 represents the lowest rate of increase in the entire 51 year history of the NHE. The low rate of growth, the data show, reflects lower utilization in health care than in previous years. The report notes that U.S. health care spending grew only 3.9 percent in 2010, reaching $2.6 trillion or $8,402 per person, just 0.1 percentage point faster than in 2009.

Private businesses financed $534.5 billion, or 21 percent of total health spending in 2010, down from a 23-percent share in 2007.

Additional details and the full report can be accessed here.

Implementing Reform: Funding And Flexibility For States On Exchanges

As 2011 comes to a close, we draw ever closer to January 1, 2014, the day when the most significant changes wrought by the Affordable Care Act will come into effect. Indeed, we are only weeks away from the halfway point between March, 2010, when the ACA was signed into law and October, 2013, the date when the exchanges will open for enrollment. Read the full post...

ACO Final Rule

ACO Final Rule Addresses Perceived Barriers To Participation
The Centers for Medicare and Medicaid Services today released the long-awaited final rule on the Medicare Shared Savings Prorgram, which sets standards for the creation of accountable care organizations. ACOs are designed to encourage physicians, hospitals, and other providers to coordinate with each other and provide better quality care more efficiently.

Value-Based Payment, Accountable Care, And The ACO Final Rule: Are We Making Progress?
With the Final Rule, CMS again has made a significant contribution to the national dialogue on accountable care and the important role ACOs can have in helping to achieve the Triple Aim. Moreover, while all stakeholders may not agree with every revision made in the Final Rule, CMS clearly has responded carefully and thoughtfully to the over 1,300 comments received by stakeholders on the Proposed Rule. At the very least, this represents a healthy public-private dialogue on an important topic, which is how rulemaking is supposed to work.

Essential Health Benefits: Balancing Costs, Coverage, And Necessity

The much anticipated Institute of Medicine Report on essential health benefits (EHB) was released last week with a series of recommendations that answered some questions and raised many more. The report offers a very important opportunity for researchers, policymakers, providers and patients to fill in some of the white space between the recommendations. Read on for the full post...

Related Articles:

• Health Policy: Latest News- IOM Issues Recommendations on Essential Health Benefits
• More from this week's NBCH Health Policy Update

New Approaches In A New World, Starting With ACOs

By Debra Ness and William Kramer

If it’s time to discard the old ways of doing business, there’s no better place to start than with Accountable Care Organizations, or ACOs. At the very heart of the philosophy that underlies health reform, and with a history of support from both Republicans and Democrats, ACOs are a model of care that incentivizes medical groups and hospitals to reduce costs while providing high-quality care.

An ACO is a network of health providers – hospitals, primary care doctors, specialists, advanced practice nurses, physician’s assistants, home health care providers and others. Some are private; others are public. Under the terms of the Affordable Care Act, an ACO contracts to meet the health care needs of at least 5,000 Medicare beneficiaries for a minimum of three years. Read the full post...