Kaiser Family Foundation Survey: Health Insurance Deductibles Outpacing Salaries

This week the Kaiser Family Foundation/Health Research & Educational Trust (HRET) released its 2015 Employer Health Benefits Survey, an annual survey of employers that provides a detailed look at trends in employer-sponsored health coverage including premiums, employee contributions, cost-sharing provisions, and employer opinions.

The research found that single and family premiums for employer-sponsored health insurance rose an average of 4 percent this year, continuing a decade-long period of moderate growth. Since 2005, premiums have grown an average of 5 percent each year, compared to 11 percent annually between 1999 and 2005.

The study also found that the average annual premium for single coverage is $6,251, of which workers on average pay $1,071, and the average family premium is $17,545, with workers on average contributing $4,955.

Laurel Pickering, chief executive, Northeast Business Group on Health, and David Lansky, chief executive, Pacific Business Group on Health, weighed in on the research for an article written by Reed Abelson, a reporter for The New York Times.

WSJ: More Health-Care Insurers Seek Big Premium Increases

On Monday the Obama administration published more information about hefty premium increases for 2016 sought by large insurers selling plans under the health law.

An article in the Wall Street Journal by Louise Radnofsky and Stephanie Armour reported major carriers from around the country are proposing big increases in the premium rates paid by consumers who buy insurance policies on their own.

Noted in the article which can be found here: 

Blue Cross and Blue Shield of Illinois is looking to raise rates by averages of 29% or more. In Pennsylvania, Highmark Health Insurance Co. is asking for 30%, according to proposals submitted by insurers for the year ahead. Around the country, some of the main market leaders are looking for double digit increases.

The new requests for premiums come at a time when the political and legal future of the law hangs in the balance. The Supreme Court is set to issue a decision later this month on the validity of the law’s tax credits to offset the cost of premiums for lower-income consumers in most states in the country. 

Dr. Atul Gawande explores why too much medical care is bad for your health, and your budget

Dr. Atul Gawande's article in the New Yorker, Overkill, looks at the problem of over testing, over diagnosis and over treatment in the health system.

“Often, these are fishing expeditions, and since no one is perfectly normal you tend to find a lot of fish. If you look closely and often enough, almost everyone will have a little nodule that can’t completely be explained, a lab result that is a bit off, a heart tracing that doesn’t look quite right.” 

The full article can be found here.

BenefitsPro: Businesses must be solution to health crisis

NBCH CEO Brian Klepper was a keynote at the recent Human Resource Executive Health and Benefits Leadership Conference.

Covering the conference for BenefitsPro, Kathryn Mayer wrote an article summarizing Klepper's comments which can be found here.

Brian Klepper doesn't just think the nation's health care system is flawed; he thinks it's broken.

But the good news, he said, is there is a solution: businesses. 

Klepper urged benefits managers to meet with their C-suite, talk about just how serious the health care problem is, and band together to take action to fight the health care industry and rein in exorbitant costs.

"The most important people in saving health care and saving America is businesses," he said.

CBGH Infographic: Are you buying healthcare like any other service? Or, just paying the price?

To view larger infographic or download, click here.

ConsumerAffairs: Rising cost of drugs gets new scrutiny

Mark Huffman, a writer for ConsumerAffairs, recently penned an article on the increased scrutiny by health care policymakers on the high price of medication.

At a time when health care is more accessible, many consumers are finding the drugs that are being prescribed are prohibitively expensive. Even generic drugs, which are cheaper than their name brand equivalents, often aren't that much cheaper.

Read the full article here.

“It is unacceptable that Americans pay, by far, the highest prices in the world for prescription drugs. Generic drugs were meant to help make medications affordable for millions of Americans who rely on prescriptions to manage their health needs. We’ve got to get to the bottom of these enormous price increases."

Senator Bernie Sanders (I-VT)

NASI: Little Evidence Integrating Hospital and Physician Care Helps Promote Quality and Reduce Costs

The National Academy of Social Insurance, a nonprofit, nonpartisan organization made up of the nation's leading experts on social insurance, has released the results of a recent study of the performance of Integrated Delivery Networks (IDNs).

Conducted by a team led by Jeff Goldsmith, the premise of the analysis was that any examination of the role that hospitals play in health care cost growth is complicated by the fact that in most large markets, the significant hospitals are part of larger, multi-divisional health enterprises.

The report offers sobering information:

There is little evidence that integrating hospital and physician care has helped to promote quality or reduce costs. Indeed, there is growing evidence that hospital-physician integration has raised physician costs, hospital prices and per capita medical care spending. Similarly, hospital integration into health plan operations and capitated contracting was not associated either with clinical efficiency (e.g. shorter lengths of stay) or financial efficiency (e.g. lower charges per admission).

 From the provider perspective, the available evidence suggests that the more providers invest in IDN development, the lower their operating margins and return on capital. Diversification into more busi­nesses is associated with negative operating performance. This is consistent with the management literature, which shows that diversification increases a firm’s size and complexity, in turn increasing its cost of coordination, information processing, and governance/monitoring.

 Moreover, there are few or no scope economies within health plans, hospitals, or physician groups — let alone between these lines of business contained within IDNs. Provider-sponsored insurance plans face similar problems regardless of whether they were formed by hospitals or physician groups: poor capitalization, lack of actuarial and underwriting expertise, limited marketing capability both to employers and consumers, adverse selection risk, and an inability to reach minimum sufficient scale of enrollment.

Despite more than 30 years of public policy advocacy on behalf of IDN formation, there is scant evidence in the literature either of measurable societal benefits from IDNs or of any comparative advantage accruing to providers themselves from forming IDNs. We have similarly found no such evidence in our analysis of 15 IDNs. Serious data limitations hamper anyone attempting to evaluate IDN performance based on publicly disclosed information. IDN financial disclosures obscure the operating performance of their hospitals and physician groups.

There does not appear to be a relationship between hospital market concentration and IDN operat­ing profit. However, if the performance of the IDN’s flagship hospital is any indicator of overall sys­temic efficiency, the IDNs’ flagship hospital services appear to be more expensive, both on a cost-per-case and on a total-cost-of-care basis, than the services of its most significant in-market com­petitor. This runs counter to the theoretical claim of IDN operating efficiency. Further, the flagship facilities of IDNs operating health plans or having significant capitated revenues are more expensive per case (Medicare case-mix adjusted) than their in-market competitors.

Download a copy of the report, Integrated Delivery Networks: In Search of Benefits and Market Effects, here.

Is The Affordable Care Act Working?

Brian Klepper

The New York Times has published a major, multi-article piece, on different aspects of the Affordable Care Act's (ACA) performance. Here's the overview:

"After a year fully in place, the Affordable Care Act has largely succeeded in delivering on President Obama’s main promises, an analysis by a team of reporters and data researchers shows. But it has also fallen short in some ways and given rise to a powerful conservative backlash."

C-suite must band together to rein in health care costs

Steve Twedt's article today in the Pittsburgh Post-Gazette features comments from NBCH CEO Brian Klepper's keynote at the Pittsburgh Business Group on Health's annual symposium.

Dr. Klepper called on C-suite executives to band together if they are to overcome the power of the health care industry and to rein in health care costs.

"Business leaders need to develop a national health care data warehouse and analytics platform that will arm them with information showing which plans and providers produce the best value for the money as far as quality, safety and cost. They have to come together to work as one, to be a counterweight to the health care industry."

Klepper Q&A in Business Insurance

Joanne Wojcik, a senior editor for Business Insurance, recently spoke with NBCH CEO Brian Klepper about mechanisms underlying America’s health care cost crisis and what employers can do to address them.

Here's a link to the Q&A article.

Finding Consensus on Policies to Slow Health Spending Growth

The United States spends $2.7 trillion on health care each year. While this is by far the most in the world, our health outcomes generally aren’t better than those of other countries. Fortunately, there a number of policies that could potentially control our health spending.

The Commonwealth Fund recently asked researchers at George Washington University to identify major areas of consensus among seven prominent proposals advanced in the past year to contain U.S. health costs and transform the health care delivery system. To learn what they found, view our new online matrix, Comparing Health Care Cost-Containment Proposals, which organizes the policy options by category and by payer. A companion blog post by The Commonwealth Fund's Stuart Guterman and Rachel Nuzum, meanwhile, highlights the key commonalities, from improving market competition to setting spending targets.

The organizations with proposals analyzed for this project include: 

• Bipartisan Policy Center 
• Brookings Institution 
• Center for American Progress 
• The Commonwealth Fund Commission on a High Performance Health System 
• National Coalition on Health Care 
• Partnership for Sustainable Health Care 
• Moment of Truth Project

Should "Value" Be the New Mantra in Health Care?

In a guest post on the Harvard Business Review blog, Commonwealth Fund president David Blumenthal and senior researcher Kristof Stremikis write that while "putting value at the forefront of health care reform may seem obvious and non-controversial," a number of challenges need to be met before we can "turn the promise of value measurement into the reality of better care at lower cost." What seems special about it is that, seemingly simple, it is actually complex and subtle. Under its umbrella, a wide range of interested parties can find the things they hold most dear, from improved patient outcomes to coordination of care to efficiency to patient-centeredness. And it is intuitively appealing. As Thomas Lee noted in the New England Journal of Medicine, "no one can oppose this goal and expect long-term success." The question, of course, is whether the term will help spur the fundamental changes that our health care sector so desperately needs. In this regard, a closer examination of the value concept confirms its appeal but also exposes the daunting challenges facing health system reformers.

Two New Studies on the High Costs of Unnecessary Care

Two new studies have put a price tag on health care services considered of little benefit to patients. In both reports, researchers raised questions about the role that health care providers play in delivering potentially unnecessary care.

One study examined the cost of care for patients who were taken by ambulance to the most sophisticated, well-equipped trauma centers despite injuries that required far less intensive care. The study looked at where nearly 300,000 patients in the Pacific Northwest, California, Utah, and Colorado received emergency medical care after calling 911. The analysis found that emergency responders delivered one out of three low-risk patients to the most intensive trauma centers, known by the designations level one and level two. The cost of care in level one trauma centers, per average episode, was about $5,600 more than treatment provided by non-trauma hospitals, the researchers wrote. Reducing the number of patients who were treated in level one or level two trauma center, but did not need such intense care, would save about $136.7 million a year across the study's locations.

A second study, published online by the Journal of the American Medical Association Internal Medicine, sought to estimate the cost of critical care that physicians consider “futile.” The cost for one health system totaled $2.6 million for three months, or an average of $4,000 a day. The study authors acknowledged that criteria for futile treatment—in this case, derived from descriptions by 13 doctors—are subjective and patients' families may not agree with them. For their purposes, researchers defined futile care in a half-dozen ways. One definition was care for which the burden was “grossly” greater than any benefit. It was the criterion most frequently cited by doctors who were surveyed for the study. Nonetheless, clinicians continued to provide care they considered futile, but they admitted they didn't know why.

Truven Health Analytics Study Identifies Leading Drivers of Employer Health Costs

Twenty specific “medical episodes” account for 41 percent of overall growth in employer healthcare spending, according to a new study from Truven Health Analytics (free registration required). The study examined medical claims data for over 8 million commercially insured individuals under the age of 65 from 2006 to 2011, including those covered by large employers who are self-insured. It found that during the five year period, employer healthcare costs increased by an average of 4.3 percent per year, driven largely by spending on preventive health services; osteoarthritis (except spine); multiple sclerosis; childbirth (Cesarean section); and complications of surgical and medical care. The majority of spending growth was driven by an increase in the cost per case, primarily attributable to medical and surgical procedures. Other cost drivers that show up in the data are the steadily increasing cost of specialty drugs and the ongoing obesity epidemic, which is an underlying driver of many of the diseases noted in the report.

Study: Doctors Look To Others To Play Biggest Role In Curbing Health Costs

When it comes to controlling the country’s health care costs, doctors point their fingers at lawyers, insurance companies, drug makers and hospitals. But well over half acknowledge they have at least some responsibility as stewards of health care resources.

In a study, published in the Journal of the American Medical Association, Mayo Clinic researchers surveyed more than 2,500 doctors to assess their views of different approaches to rein in the nation’s health care costs. The doctors were randomly selected from an American Medical Association database.

Based on the findings, 59 percent of doctors believe they have some responsibility in holding down health care costs. Only 36 percent think they have a major role. More than half of doctors, however, said each of five other groups carry “major responsibility:” trial lawyers, health insurance companies, pharmaceutical companies, hospitals and patients.

When asked about options to reduce health care costs, most doctors viewed efforts to improve the quality and efficiency of care most favorably. For example, 98 percent are enthusiastic about efforts to promote care coordination for people with chronic diseases. Doctors were also mostly in favor of improving conditions for evidence-based decisions, including efforts to prevent corporate influence of physicians’ decisions and promoting head-to-head trials of competing treatments. They were less enthusiastic about changing current payment models. Only 7 percent, for example, were very enthusiastic about eliminating the traditional fee-for-service payment system, while another 23 percent were somewhat enthusiastic. About a third of the physicians expressed enthusiasm for bundled payment systems.

New Infographic from the Public Health Institute

Skyrocketing health care costs and escalating chronic disease rates place a huge economic burden on America’s business owners. Yet 75% of America’s health care costs come from diseases that are preventable. Health matters in the workplace: A healthier workforce brings higher productivity, fewer work days missed and lower health insurance costs. Creating a healthier workplace makes a difference, but healthy people live in healthy communities—and businesses flourish when they help build healthier communities, too.

Prevention Means Business, a new infographic created by the Public Health Institute in partnership with the American Public Health Association, graphically illustrates the connection between healthy places and thriving businesses. View, download and share the infographic here.

HFMA Releases Proposed Guidelines for Patient Financial Interactions

The Healthcare Financial Management Association (HFMA) has announced the release of a draft of new best practices that will bring more consistency, clarity, and transparency to patient financial interactions.

The guidelines were released during ANI: The Healthcare Finance Conference on June 16 in Orlando, Fla. The proposed best practices were created by a steering committee that met monthly over the past year and included leaders from HFMA, the National Patient Advocate Foundation, the American Hospital Association, Harvard Medical School, and America’s Health Insurance Plans, among others.

The proposed best practices focus on financial interactions when medical services are scheduled as well as when emergency and non-emergency care is delivered. These practices provide guidance regarding when and how communication should take place about patient insurance coverage, financial counseling, patient financial responsibility for service, and any existing balance the patient may have. The best practices emphasize open and early communication, the sharing of clear information, and the identification of a path for financial resolution that is fair for patients and health care organizations alike.

The draft of Patient Financial Interaction (PFI) best practices can be viewed online, where comments on the proposed best practices may be submitted through July 31. Patient feedback also will be solicited in the coming months. The resulting final practices will be released in the fall for voluntary adoption by health care organizations across the country.

New York Times Article on Reference Pricing

The New York Times has published a story on the efforts underway by employers to include reference pricing in plan designs.  The story, which has a generally favorable view on the concept, describes reference pricing and mentions a few examples of reference pricing programs in place, including CalPERS.  Both cost AND quality are discussed as important factors when designing and implementing reference pricing programs.

New Brookings Report on Person-Centered Care

A working group including former Senator Tom Daschle and former HHS Secretary Michael Leavitt was convened by the Brookings Institute and has published a new white paper on person-centeredness in health care reform. The report argues that person-centered health care is the best way to improve care and health while also bending the curve of health care cost growth. The report is focused on truly system-wide reform, including specific discussions on improvements to Medicare and Medicaid, and recommendations for the private sector to achieve more person-centered care. The report also recommends changes to the health care delivery system, including improved cost and quality transparency, and increased anti-trust enforcement.  The authors suggest that private employers can do more to support multi-payer financing reforms, including contributing consistent data to more comprehensive and effective ways to measure quality and continuing to innovate in reforms in benefit design to promote higher-value care.

Startup Helps Health Insurance Cards Go Digital

In an era of e-tickets, bitcoins and app-based banking, it seems pretty antiquated that we still have to fumble through our wallets for an insurance card each time we go to the doctor's office. But USA Today reports on a Philadelphia-based start-up that has a plan for making those flimsy pieces of cardboard digital — and the upside isn't just the potential for going paper-free.

With the rise of high-deductible plans, patients are increasingly on the hook for more of their medical expenses than they've ever been before. For patients, that means a bigger need for tools that provide more transparency about health care costs. And for doctors, particularly independent physicians, said Medlio co-founder and CEO David Brooks, that means a growing problem with collecting payment.

According to a 2007 report from McKinsey, hospitals and providers usually only collect about 50 percent of the postinsurance balance (or the amount owed by the patient beyond what insurance covers or what they pay at the time of treatment). That's not because patients are inherently delinquent, Brooks emphasized, it's often because they're either too confused about what they need to pay or they don't believe that they were billed correctly.

The company, which is part of the new Dreamit Health start-up accelerator, said the first version of its app is still a few months away. But the initial plan is a free mobile app that enables patients to check in from their smartphones. Instead of handing over a physical card, patients would use the app to provide doctors with their insurance information and the app would automatically verify insurance eligibility for the provider. Medlio also intends to give patients an estimate of their treatment's cost before they receive it, and it enables patients to initiate (and doctors to collect) payments directly through the app.