Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers: providers of financial vehicles through which consumers pay for their own healthcare. Among the signs of the change is the growth in health savings accounts, which allow individuals and families to pay out-of-pocket medical expenses from tax-exempt savings. As with individual retirement accounts and 401(k) plans, the money in HSAs tends to sit for long periods and can be invested in mutual funds and securities.
Metro government employees will be able to use Nashville's hospital at reduced rates under an incentive plan approved by the Metro Council. Council members said the incentive plan should benefit both the hospital and the government. The hospital is expected to gain an unknown number of insured patients, improving a payer mix that often leans too heavily toward uninsured patients. That change should increase the facility's revenues, said proponents.
One of the biggest question in the national debate over health reform is how, or whether, to get more employers to provide a company health plan, according to this blog posting in the Wall Street Journal. But a new survey from the consulting group Mercer finds that the majority of employers that do not offer health benefits say they would not pay anything or could not pay more than $50 a month to cover an employee. The findings, says Linda Havlin, a Mercer partner, suggest "how tough it's going to be to ask very small employers to voluntarily take on the expense of providing health coverage."
People without medical insurance are not the primary cause of the overcrowding that is typical in emergency rooms at U.S. hospitals, new research indicates. "There is a commonly held belief that uninsured patients abuse the emergency department, coming in for 'non-urgent' complaints, are overwhelming the system. This is simply not true," said lead author Manya F. Newton, MD. Crowding in the ER is due to many things, including an increased amount of ER use by everyone, fewer emergency departments, and fewer inpatient beds, Newton said.
Researchers have found that more than 3% of U.S. children and adolescents are uninsured or underinsured at some point during any given year, despite having at least one parent with health insurance. That translates into almost 3 million U.S. children with no medical care at all and no access to prescription drugs. Slightly more than half of that number qualify for public coverage but aren't enrolled, the study found. Overall, more than 9 million U.S. children are uninsured, and approximately 18 million have a coverage gap at one time or another, according to the study.
Aetna Inc. is becoming the first health insurer to team with Microsoft Corp. to give its customers an Internet-based vault for storing medical records they can access even if they change jobs or leave their health plan. Aetna will allow some customers to transfer electronic personal health records to Microsoft's HealthVault, a platform that lets providers look at the information if they have patient permission. The vault will give the insurer's customers continuous access to their claims information and anything the patient wants to add, like clinical data or past medical records, said Aetna representatives.
Employer-based health insurance membership has eroded by more than 5% since 2000 and a growing number of new small businesses do not even provide health benefits from the start.
This combination has left millions of Americans uninsured or turning to public programs for help. And it's led small business advocates to tell health plan providers that they need to offer a better product.
If health plans expect to grow in the future, they will need to do a better job of reversing (or at least slowing) this trend. This means creating programs and offering plans that small employers want, and limiting as much cost to the little guys as possible.
"Given that the majority of American workers are employed by small business and that the erosion of insurance coverage is among small employers, insurers are keenly interested in understanding what all employers want and how they can adapt plan designs and service offerings to better meet their needs," said Michael J. Thompson, principal at PricewaterhouseCoopers' human resources services group, in a statement.
What do small employers want? PricewaterhouseCoopers released a report last week that answered that question. Here are some interesting findings:
About half of small employers (250 or fewer employees) surveyed don't see the importance of wellness programs though health insurers and disease management companies are promoting the programs as a way to save money in the long run.
Employers would live without customized health benefits if they can receive "significant, direct cost savings." Health plan customization adds administrative costs, and small employers said they would only accept less customization if it results in 10% or greater savings. (Interestingly, larger employers are willing to take a smaller savings to do away with customization.)
Employers want to work with fewer vendors to manage all of their health-related benefits. This shows the need for health plans to create a one-stop shop.
Vince Ashton, executive director of HealthPass, a New York City-based company that helps businesses with two to 50 employees get a wider variety of health benefit options, tells Health Plan Insider small employers don't want programs that add costs and don't have an immediate impact. Take wellness for instance. Small businesses don't see a quick return on the investment so they're not interested.
"[Wellness programs] would be nice and it can have an effect on the back end with less absenteeism and healthier workers, but there is no financial incentive at the end of the day to want those," says Ashton about small businesses' view of wellness programs. Another example is the personal health record (PHR). Health insurers promote PHRs as a product that will improve care and Ashton acknowledges that PHRs can help long-term, but for small employers it's just another added cost to their healthcare bills.
On the topic of customization, Ashton says small employers are not impressed with smaller administrative fees because healthcare costs have doubled in the past nine years. A 10% savings doesn't mean much to them when overall costs have increased by 100%. Amanda Austin, manager of legislative affairs for Washington, DC-based National Federation of Independent Business, tells Health Plan Insider administrative costs are highest in the small group market. Small businesses want choices, but don't need so many that it adds costs, she says.
"I think generally they want high quality and they want the choices, but they don't need 50 of them," says Austin.
One way health insurers can help small businesses is lending a hand in the benefits/human resources arena. Most small employers don't have that department. Instead, the owner provides those services so providing guidance and limiting the amount of employer administrative work helps small businesses.
What's a health plan to do? PricewaterhouseCoopers researchers provided a number of recommendations:
Collaborate with employers to reduce unnecessary customization and tell employers about the "true cost of customization," which can include referral and authorization requirements, deductible structures, and data integration from other sources
Streamline processes to reduce redundancy and resources that are not deemed valuable
Improve the "right" technology, such as real-time claims adjudication, which results in faster payments, and review whether other kinds of technology, such as personal health records, are worthwhile for customers
Collaborate with employers to educate employees about making healthy and cost-effective decisions
Improve transparency and reporting to improve quality of care and assisting members to make educated healthcare cost decisions
Health insurers should remember this about small businesses: If a program adds value and doesn't increase costs, small businesses like it. A problem for small businesses (and all employers for that matter) is the unpredictably of healthcare costs.
"It's the most unidentifiable foreseeable cost every year at renewal. They really don't have any idea what it's going to be so it's hard for them to prepare," says Austin.
Blue Cross Blue Shield of Minnesota recently announced its SureBlue plans that will allow employers with 51 to 249 employees to lock in rates for the second and third year of a three-year contract with the agreement that the businesses would ultimately move their employees into consumer-directed health plans. Austin says those types of programs provide small businesses some stability.
Health insurers can also help by implementing physician pay for performance programs that reward doctors for providing optimal care and not pay them for errors. The current system makes "the poor outcome something that is advantageous to the person who is going to be reaping the benefits from that on the doctor side or hospital side," Ashton says. Health plans could implement programs and provide more transparency that would shed a light on quality of care and allow consumers to make educated healthcare decisions.
Any area in which health insurers can find savings interests small businesses, says Ashton.
"We're talking about groups that are struggling to find ways to make insurance work. Every penny counts," says Ashton.
Les Masterson is senior editor of Health Plan Insider. He can be reached at lmasterson@healthleadersmedia.com.Note: You can sign up to receive Health Plan Insider, a free weekly e-newsletter designed to bring breaking news and analysis of important developments at health plans and other managed care organizations to your inbox.
Health officials in England are concerned that medical tourists' pursuit of less expensive healthcare could ultimately put them at risk. While a survey of British patients found that at least 75% of them are happy with treatment they're getting in countries like Hungary and Poland, officials worry about the lack of adequate provision if something goes wrong.
Neither of the healthcare reform plans offered by Senator Barack Obama and Senator John McCain addresses the core problems of the system, William Jessee, MD, president and CEO of the MGMA, said Tuesday.
Although both Senators have proposals—based on differing philosophies and financing methods—for expanding coverage and reshaping healthcare, both are tinkering with the current system when a more comprehensive overhaul is needed, Jessee said. "Real change is not apparent in the healthcare plans of either candidate."
He pointed to the payment system, and the perverse incentives it creates for hospitals and physicians, as the real problem. Keeping people healthy and out of hospitals under the current system reduces income, which is counterproductive, he says.
MGMA did not take a position on which of the candidates' healthcare reform proposals it favors. Instead, Jessee outlined four principles that it will advocate for in any healthcare reform efforts after the new president is elected:
1. Universal coverage is a basic human right. Jessee echoed sentiments expressed by Senator Obama in the second presidential debate, saying all Americans should have access to healthcare.
2. The way we reimburse providers must change. A new payment system must reward physicians for keeping patients healthy, rather than creating incentives for increasing the quantity and complexity of procedures.
3. We can reduce administrative wastes. In 2007, administrative costs accounted for about 30% of healthcare spending—roughly $690 billion. If that could be reduced by 30%, we could afford to purchase coverage for all of the currently uninsured.
4. Financial incentives must be aligned. We can't afford a system where one party profits only when another loses, Jessee said. Incentives must be aligned for patients, providers, and insurers.
The partisan divide and complacency in Washington make such a comprehensive overhaul difficult and unlikely. Jessee encouraged MGMA members to vote and actively lobby for change after the election, and said true reform would take political courage, the wisdom of many people, and a new way of thinking.
Every leader has different comfort zones—types of problems they are better at dealing with than others. Effective leaders are able to respond to context and varying levels of complexity in medical practices, said Alan Winkler, vice president of clinic operations for St. Vincent Health System during an MGMA breakout session.
Winkler took principles from "complexity theory," a leadership approach used by other industries and government agencies, and applied it to medical groups and the healthcare industry.
Most groups encounter four types of problems, each of which requires a different leadership approach:
Simple. Problems with a straightforward cause and effect relationship fit into this category. Answers are often straightforward, and leaders whose comfort zone is day-to-day operations often excel at this type of leadership. However, there's a danger that problems can be oversimplified and larger issues may be overlooked.
Complicated. These problems may have multiple right answers, and "good practice" may be preferable to "best practice" to capture the benefits of flexibility, Winkler said. Complicated leaders tend to be analytical and are able to listen to conflicting advice.
Complex. Complex problems often don't have clear-cut solutions, and responding requires greater levels of interaction and communication with multiple people. Winkler offered the example of a group whose compensation plan was ineffective and needed to be revamped—it doesn't have to happen right away and may require a big-picture approach. "As the context gets more complicated, you have to talk more, you have to solicit feedback more. You may have to call the whole staff together," he said.
Chaotic. Chaotic situations are essentially emergencies. Decision-making must be quick and clear, and analysis is often done after the fact. Leaders have to look for what works at the moment, rather than for a right answer.
Although most leaders excel at managing one or more of these types of problems, the best are able to adapt to all situations. "The problem is we get comfortable with our preferred mode of thinking and when context changes we try to deal the same way," Winkler says.
It's also important to recognize employees' skills. An employee might excel at simple problems, for example, but then struggle after a promotion that leads to more complex problem-solving.
