NEW PEEC SURVEY: Despite Delay in Excise Tax, Employers Continue to Explore Value of Private Exchanges

According to a survey of employers conducted by the Private Exchange Evaluation Collaborative (PEEC), 46% have implemented or are continuing to look at private health insurance exchanges to offer health benefits for their covered populations. Over the last few months PEEC has polled employers for a broad study on their views and intentions related to exchanges. A second shorter study was conducted in January to gauge strategies in light of the two-year delay in the implementation of the excise tax.

Under the Affordable Care Act, employers whose health benefits cost more than $10,200 for individuals or $27,500 for families have to pay an excise or “Cadillac” tax of 40% on the amount above those figures. Prior to the extension of the excise tax implementation, employers were modeling whether their plans would hit the tax thresholds, and if so, when that would take place. Over 40% of employers expected to be exposed to the tax in 2018.

"Overall, interest in private exchanges remains strong. This year’s results show interest is highest among small and mid-market employers, with 50% showing interest” says Barbara Gniewek, Principal at PricewaterhouseCoopers (PwC). “Interestingly, these employers are thought to have the most to gain from a private exchange, but noted a lack of available information and education on the solutions. 36% of employers over 10,000 have or are considering private exchanges.”

Key findings

• When asked if they would consider using a private exchange for full-time active employees before 2019, 6% of employers responded they have contracted with an exchange, the same percent as in 2014 and somewhat fewer (40% versus 41%) indicated they are still considering this strategy.
• Over half of employers (53%) agreed that if an industry peer moved to a private exchange they would be more likely to do so.
• The rate of employers considering the public exchange for full-time active employees did not change year over year (16% in 2014 and 2015).
• Key attributes considered when evaluating private exchanges have remained stable from 2014 to 2015, with high priority placed on cost of moving to an exchange, customer experience, and networks available from the exchange plans.
• Almost half of early adopters of exchanges said they were able to save money.
• Company size is a determining factor in whether or not a company will consider a private exchange, with greater interest from small and mid-sized firms than larger ones.
• While over 60% of employers anticipate the excise tax will be repealed, employers continue to aggressively look at ways to reduce their exposure to the tax law.

An executive summary of the findings along with additional details can be accessed here.

“Employers are more invested than ever in the value of their health care dollar,” said Larry Boress, president and CEO of the Midwest Business Group on Health. “Motivated by high medical care costs and their potential exposure to the ACA's excise tax, interest remains high among health care purchasers in exploring the potential value of private exchanges and other strategies to reduce their exposure to the tax. Many are focused on improving employee engagement through a suite of tools and services that will ultimately enhance the health of their population.”

Survey details

These results come from two online surveys of employers’ views on health insurance exchanges conducted in November 2015 and January 2016. More than 350 employers (28% had less than 500 employees, 21% had 500 – 2,499 employees, 23% had 2,500 – 9,999 employees, and 28% had over 10,000 employees) from 34 different industries across the nation participated in the November survey. PEEC also surveyed 129 employers in January 2016 after the delay in the excise tax implementation was announced, to understand how this delay may have changed their views or intentions related to private exchange and other benefit and worksite activities.

About the Private Exchange Evaluation Collaborative (PEEC)The Private Exchange Evaluation Collaborative (PEEC) is an initiative launched in 2013 by four leading nonprofit business coalitions, Employers Health Coalition, Inc. (Ohio), Midwest Business Group on Health, Northeast Business Group on Health, and the Pacific Business Group on Health – all independent coalitions representing employer health care interests –and PricewaterhouseCoopers (PwC) (not an exchange provider). PEEC will solicit and provide unbiased, comparative information and support on private exchange strategies and purchasing decisions.

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Midwest Business Group on Health Releases Annual Employer Survey on Specialty Pharmacy

Today the Midwest Business Group on Health (MBGH) released the results of its fourth annual survey on specialty drug management finding employers are considering unconventional strategies to manage double-digit cost increases while shifting more cost to employees.

Although the vast majority of employers (88%) still rely on traditional plan designs (co-pays and coinsurance), many are ready to focus on new and novel approaches to managing specialty drugs costs.

Survey results indicate a significant number of employers (68%) are considering using a narrow network to manage patients, while less than 10% offer one. In addition, with 16% carving out their specialty drug benefit, 63% are considering moving towards this strategy. The biggest trend, however, is cost shifting. Over half of employers are considering shifting more costs to employees with 18% already doing so. In addition, 43% of the employers who shifted costs over the last three years, increased them by 50% in 2014.

Additional findings are included in the news release and supporting slides which can be found on MBGH’s website.

Biosimilars: What employers need to know

Earlier this month, Novartis’ Zarxio was the first biosimilar product approved in the United States, ushering in a new era for the drug industry, consumers and third parties who manage medical and drug benefits.

Given the confusion over the U.S. Food and Drug Administration’s approval process and specialty-related product availability, Cheryl Larson, vice president for the Midwest Business Group on Health, and Randy Vogenberg, principal for The Institute for Integrated Healthcare, wrote an article on questions employers should be asking related to biosimilars.

So what’s an employer to do?
1. Have a conversation with your pharmacy benefit management organization and/or health plan regarding their coverage approach or policy related to biosimilars. If you have questions about how biosimilars are different, ask them.

2. Review your vendor contract and coverage of specialty drugs to determine the impact on current or future plan costs to your organization.

3. Review your own plans’ drug use patterns and if this type of approval would make a cost savings difference to your members.

4. Determine if this will make any difference on annual cost trend for the plan versus just the unit cost of a particular drug for an individual medical condition like cancer-related anemia.

5. Continue to advocate for full cost transparency on all specialty drug products by your vendors.

The full article published in Employee Benefit News can be found here. 

Additionally, MBGH offers free tools and resources to help plan sponsors stay current on issues related to specialty pharmacy drugs, benefit design and contracting strategies at www.specialtyrxtoolkit.com.

The Leapfrog Group Releases Maternity Care Report

This week The Leapfrog Group released its Maternity Care Report, an in-depth examination of hospital quality and safety for early elective deliveries, episiotomies and high-risk deliveries, with data analysis by Castlight Health.

Though the analysis of hospitals nationwide demonstrates substantial progress in recent years, it also reveals significant room for improvement on maternity care standards. In fact, less than a third of hospitals meet Leapfrog’s standard for high-risk deliveries of very low birth weight babies, while rates of episiotomies are still too high at 35 percent of birthing hospitals.

The report is the first in a series of six reports examining key quality and safety measures at hospitals nationwide based on data from the 2014 Leapfrog Hospital Survey of 1,501 U.S. hospitals.

Several NBCH-member coalitions have focused on preventing medically unnecessary early elective deliveries. The Midwest Business Group on Health received a grant from NBCH and the United Health Foundation to convene health care stakeholders in Illinois and develop a community action plan to reduce the high number of early inductions and C-sections performed. And the Virginia Business Coalition on Health Foundation also has a program focused on education to ensure babies are born full term.

Choosing Wisely® Employer Toolkit now available

To make it easier for employers to educate their employees about the importance of talking with their physicians about their medical care, the National Business Coalition on Health (NBCH) and Pacific Business Group on Health (PBGH) released the Choosing Wisely® Employer Toolkit. 

Developed in collaboration with Consumer Reports and with participation from the Midwest Business Group on Health and the Minnesota Health Action Group, the Toolkit was developed to assist employers in educating their employees about Choosing Wisely®. The program is the ABIM Foundation’s initiative to encourage physicians, patients and other health care stakeholders to think and talk about medical tests and procedures that may be unnecessary, and in some instances can cause harm. 

More than 25 leading medical specialty societies are working with the ABIM Foundation to create recommendations for physician/patient discussion. Consumer Reports leads the consumer-facing communication of the ABIM Foundation’s multi-year initiative by translating the clinical recommendations gathered into insightful tips and free resources for the general public.

The new Toolkit will also distribute a broad array of consumer-focused health resources available from Consumer Reports including patient-education materials based on dozens of topics identified by medical specialty societies for the Choosing Wisely® initiative.

New specialty Rx online tool and research released

The Midwest Business Group on Health released a new online toolkit to support employers in better understanding and managing specialty pharmacy benefits. Additionally, they made available new research onemployers' views on biologics and specialty pharmacy finding that 49 percent said they have an above average understanding of specialty pharmacy. This is a significant increase over a similar 2011 survey where 78 percent claimed to have a low to moderate understanding of this challenging benefit.

“With costs estimated to make up 40 percent of an employer’s total pharmacy spend by 2020, it’s essential that they focus their attention on managing this benefit – doing nothing is no longer an option,” said Cheryl Larson, MBGH vice president. “Since employers primarily fund health care benefits for employees, their understanding of specialty drugs and related costs will be a key factor in resolving current challenges.”

Additional details including key findings can be found here.

Midwest Business Group on Health Employer Survey on Biologics/Specialty Pharmacy

Advances in biotechnology have led to the development of new medical therapies for a variety of diseases. Among these advances is a category of medications called specialty drugs, which include biologics that treat life-threatening diseases like cancer, hemophilia and HIV/AIDS, and complex chronic conditions like rheumatoid arthritis and multiple sclerosis.

It’s predicted that in the next 5 to 8 years, specialty drugs will represent approximately 40% of all pharmacy benefits spend. Not only are drugs in this category very expensive but they are also being produced for a rising number of complex and chronic conditions, with a very robust pipeline.

The Midwest Business Group on Health (an NBCH sister coalition) is conducting an employer research project focused on helping employers better understand and manage this challenging benefit, and learn which approaches to benefit plan design and vendor management and contracting are optimal for their organization and employee population.

MBGH will do its best to pull out a report specific to the employers who completed the survey based on the state they indicate they are located. Regardless, all coalitions who participate will receive a copy of the final report.

The survey completion deadline is Monday, October 8th. Respondents who provide their contact information will receive a copy of the survey results. Respondents who complete the entire survey will be eligible to win one of five $100 gift cards!

Click on this link to complete the survey: Specialty Pharmacy Survey  (Please note, there are TWO PAGES to the survey and it’s important that you complete ALL of the questions.)

Participate in employer survey on reform/complying with ACA

The Midwest Business Group on Health in conjunction with the Benfield Group is conducting a survey of employers from around the country to gather benchmarking information on what businesses are planning to do now that the Supreme Court has made its decision upholding the Affordable Care Act (ACA).

To complete this 10-minute survey, go to: Benchmarking Employer Actions After the Supreme Court Decision.

The deadline is Friday, August 17. Those responding will receive a comprehensive summary of key findings. No individual company information will be released.

NBCH member coalitions are invited to have their employer members complete the survey and results will be provided to those organizations that have more than 20 responding employers for their state.

For questions or additional information, contact Larry Boress at lboress@mbgh.org.

U.S. Physician Groups Identify Commonly Used Tests or Procedures They Say are Often Not Necessary

Nine physician organizations have each identified five tests or procedures that may be overused or unnecessary as part of the Choosing Wisely campaign led by the ABIM Foundation, with Consumer Reports in an effort to improve health care quality and patient safety.

Patient advocates are calling the move a significant step toward improving the quality and safety of health care.

The lists of “Five Things Physicians and Patients Should Question” include:

Financial Impact of Health Reform on Employer Benefits not as Significant as Anticipated

In spite of employer fears, the financial impact of the provisions in the Affordable Care Act (ACA) have not been as significant as anticipated for most businesses and fewer U.S. employers responded that they plan to drop coverage due to the law’s mandate than was reported in 2010. These are some of the key findings from a new 2012 employer survey conducted by the Midwest Business Group on Health (MBGH) and co-sponsored by the National Business Coalition on Health (NBCH), Business Insurance and Workforce Management.

Many survey respondents indicated support for the ACA provisions that enable changes in provider payment, medical care coordination and providing medical cost and quality information for consumers. The survey also revealed divergent views among employers on whether the Supreme Court will or should strike down the individual mandate or the entire Act. This is the third national survey in a series conducted by MBGH since 2010 to gain an understanding of areas of most concern to employers related to health reform, and to help educate and inform purchasers and policymakers.

MBGH Employer Survey: Benchmarking Open Enrollment Practices

The Midwest Business Group on Health is conducting a survey of open enrollment practices to assist employers in determining what others are doing and how to improve this vital part of benefits management.

Please take 2 minutes to complete the survey. Results will be sent to those responding. Click here for the survey: http://www.zoomerang.com/Survey/WEB22F43NEYS62

The results will also be part of an MBGH workshop on open enrollment practices being held March 15th from 8:30 AM- Noon CST. Go to http://www.mbgh.org/ for more information and to register.

Thank you for your participation.

Larry Boress
President and CEO
Midwest Business Group on Health

DMEC Behaviorial Risk & Wellness Survey of Employers

To better understand the trends and best practices in the area of Behavioral Risk Management, the American Psychiatric Foundation's Partnership for Workplace Mental Health and the Disability Management Employer Coalition (DMEC) are requesting the participation of employers in a brief survey to explore the developing expertise, trends and best practices in the area of behavioral risk and wellness management.

Employer members of DMEC, Partnership for Workplace Mental Health (APF), Mid-America Coalition on Health Care, Center for Health Value Innovation and the Midwest Business Group on Health (MBGH) are joining as research partners in order to generate a broader field and larger number of survey participants.

At the conclusion of the survey (March 19), a $10 Starbuck’s gift card will be awarded to the first 100 respondents. All survey participants shall also receive a copy of the final results upon request.

Please go to http://www.surveymonkey.com/s/G8HGCF8 to participate in the survey.

Participation Requested: National Employer Survey on ACA

We would like to invite you to include your views in a national survey intended to collect and report on how employers are responding to the Affordable Care Act (ACA) health reform law.

By completing this survey, you will receive a copy of the results in the form of valuable benchmarking information on how other employers of your size and industry are designing their health benefit strategies and programs. It will also provide business advocates with information on how to best represent employer interests and concerns about the law.

To start the survey, click on the following link: Health Reform's Impact on Employer Health Benefits.

The survey is sponsored by the the Midwest Business Group on Health, National Business Coalition on Health, Business Insurance, Workforce Management, Aon Hewitt and Buck Consultants

What do employers offer around smoking cessation?

The Midwest Business Group on Health is conducting a survey to help employers benchmark what they offer in terms of smoking cessation policies and benefits.

If you'd like to participate, please complete the survey by March 1st: Benchmarking Survey on Smoking Cessation Programs.

A free copy of the results will be sent to all who respond.

A special website -www.tcyh.org- offers employers free information and resources on creating smoking cessation programs and policies. MBGH has also produced an Employer's Toolkit on Smoking Cessation available upon request at info@mbgh.org.

For questions, comments or additional information, please contact Larry Boress at lboress@mbgh.org.

Employers can help employees be more responsible for their health: Analysis

The Midwest Business Group on Health has released a series of recommendations to better structure the design, communication and delivery of benefits, wellness incentives and health management activities.

The recommendations are included in a white paper based on the findings of a five-year research project focused on understanding employer and employee perspectives on health care and health benefits. Read the full article...

Private biz profits when public health improves

We know that obesity and other health problems like diabetes and asthma are often compounded by an unhealthy environment: neighborhoods with no safe place to walk or bike, communities with lots of opportunities to buy unhealthy food or cigarettes but no place to purchase fresh produce, and environments where polluted air can trigger asthma and other ailments.

We also know that the health of our local economy depends on a healthy workforce. Chicago employers must join with leaders in transportation, housing, energy and other sectors to find solutions to these unhealthy environments. We must start investing in building healthy places for people in the Chicago area to live—and work. Read the full article featuring Larry Boress...