Housing and food security programs led the way for spending on social determinants of health (SDOH) by payers between 2017 and 2021.
SDOH have been identified as worthwhile investments by health organizations, but insurers are not putting their money where their mouth is, according to a study published in the Journal of General Internal Medicine.
The research, which examines social spending by the top 20 payers in the nation based on market share rankings by the National Association of Insurance Commissioners, found miniscule investment on SDOH by insurers relative to their net income.
Between January 1, 2017, and December 31, 2021, the total spending for the top 20 insurers was at least $1.87 billion, with the top six payers by market share making up 72%. The top six, on average, spent 0.11% of their net income on SDOH in 2017 and 0.67% in 2021. Spending in 2020 peaked at 1.6%, which the researchers attribute to the COVID-19 pandemic.
To quantify social spending, researchers searched news articles and press releases that included insurer name and terms "social determinants of health" or "community health." Social spending was categorized into housing, food security, employment, education, social and community context, transportation, and "general SDOH" for ambiguous reporting.
The researchers acknowledged their method could have blind spots with missed investments by insurers not publicly posted. They also recognize they may have misclassified investments depending on when they were publicized.
Investments in mental health, substance use, domestic violence, natural disaster relief, technological infrastructure, community health workers, and racial equity initiatives without specifically mentioning SDOH were excluded from the study.
The majority of payers' spending was on housing ($1.2 billion) and food security ($238 million) programs, while $247 million was classified as general SDOH.
The areas that saw the least investment were transportation ($13.4 million), social and community context ($49.7 million), education ($57.2 million), and employment ($58.6 million).
The spike in SDOH spending in 2020 coincided with significant profit for insurers, but the researchers posit that the uptick in investment was due to urgency around the pandemic and not necessarily based on an increase in net income.
Regardless, the study suggests that payers have the capability to put more money into SDOH initiatives, though investing more in other areas may be more of a priority.
"Whether insurers should spend more on these programs is unclear considering that these dollars may be instead used to lower patient premiums and cost-sharing," the authors wrote. "The impact of insurer social spending remains equivocal, though practice patterns, such as considering SDoH in hypertension guidelines, will continue to change as payers and providers make more investments."
Healthcare financial leaders were asked if and when they calculate return on investment (ROI) on revenue cycle management (RCM) automation.
While the use of automation in RCM continues to grow, how its ROI is measured varies heavily depending on the provider, according to a survey from Healthcare Financial Management Association commissioned by revenue cycle firm AKASA.
The survey, which fielded responses from 556 chief financial officers and revenue cycle leaders at hospitals and health systems across the nation between July 8 and August 2, reveals a lack of set standards when it comes to quantifying RCM automation.
Nearly a third of respondents (32.7%) said they calculate ROI on RCM automation in-house, while 7.1% stated ROI is calculated by their RCM automation vendor. More than half (51.9%) answered that instead of calculating ROI, they focus on other key performance indicators, such as accounts receivable days. Finally, a small but not insignificant amount of providers (8%) said they don't measure for ROI at all.
There were also differences among the respondents in how often ROI on RCM automation is measured. More than a third (34.7%) said they measure ROI monthly, followed by quarterly (26.4%), annually (14%), and semi-annually (6.6%). The option of "other – write in", chosen by 18.2% of providers, indicated that ROI measurement will be determined once automation is fully implemented or on an as-needed basis.
"This survey really highlights that healthcare financial leaders are struggling with who or where to turn on ROI measurement," said Amy Raymond, VP of revenue cycle operation at AKASA. "There's a significant gap in the market for guidance and frameworks on how to get ROI right.
"As health systems mature in their automation journey, the current understanding of ROI falls short as a sole measure of success. Part of this is that not all metrics are easy to measure upon implementation — specifically those that examine the impact on the workforce or patient financial experience. There is a clear need for a new form of assessment — one that holistically looks at Total Value."
As ROI becomes more of a focus, revenue cycle leaders are turning their attention to trends and opportunities to develop best practices and evaluate their level of involvement in an array of functions.
The health system and health plan giant saw its bottom line flip in the third quarter compared to the previous year.
Kaiser Permanente experienced a difficult third quarter which included a net loss of $1.54 billion, the company announced.
The operator of hospitals, health plans, and other subsidiaries released its earnings report, revealing a significant fall to the opposite end of the spectrum from last year's third quarter profit of $1.56 billion.
Most of the decline was due to other income and expense totaling a loss of $1.5 billion for the quarter, which the company said was driven by investment market conditions. The operating loss, meanwhile, was $75 million.
Despite the downturn, organization leadership expressed encouragement about the maneuvering through the current financial climate.
"I am proud of our ability to navigate the challenges of the past few years including a global economic crisis, the high cost of goods and services, supply chain issues, labor shortages, and the pandemic while serving our 12.6 million members," Kaiser Permanente chair and CEO Greg A. Adams said in a statement.
"I continue to be inspired by the unwavering commitment and dedication of our Kaiser Permanente teams who through this unprecedented and unpredictable 3-year period continue to provide high-quality, affordable care and service to our members and communities."
The company's membership has experienced modest growth of nearly 40,000 during the calendar year, with the total sitting at 12.6 million at the end of the third quarter.
Kaiser Permanente continues to pour into capital spending, which totaled $820 million for the quarter, compared to $878 million for the third quarter in 2021. Year to date, the company has capital spending of $2.5 billion.
"Kaiser Permanente's integrated model of care and coverage continues to provide long-term stability amid changing market conditions," stated Kathy Lancaster, Kaiser Permanente executive vice president and CFO. "In the third quarter of 2022, we remained committed to our members, patients, and the communities we serve while controlling spending and investing in our capital program."
The American Hospital Association (AHA) finds administrative policies are increasingly overburdening providers.
Some commercial health insurers are using policies that can delay patient care and create burden for providers, causing relationships with hospitals to worsen, according to a survey by AHA.
The association fielded responses from more than 200 hospitals in 2019 and from 772 hospitals between December 2021 and February 2022, creating data that both predates COVID-19 and represents the lasting effects of the pandemic.
With hospitals strained by the challenges of the labor shortage, the survey highlights how insurer tactics are stretching providers even thinner through administrative tasks.
Of the hospitals and health systems surveyed, 95% said there have been increases in staff time spent seeking prior authorization approval, while 84% reported the cost of complying with insurer policies is increasing.
The time and energy spent by providers is unnecessary, however, as 62% of prior authorization denials and 50% of initial claims denials that are appealed are ultimately overturned.
The result is deteriorating relationships with payers, as 78% of hospitals and health systems said their experience with insurers is worsening. Less than 1% said it was getting better.
"These survey results are stark evidence that some commercial health insurers deny care while hospitals and health systems focus on providing care," said AHA president and CEO Rick Pollack. "Patients deserve comprehensive health coverage with the protections they were promised when they signed up. Congress and the Administration need to act now to hold commercial insurers accountable for actions that delay patient care, contribute to clinician burnout and workforce shortages, and increase costs."
Medicare Advantage (MA) has especially come under scrutiny for often unnecessarily denying or delaying care. AHA pointed to a report by the Office of Inspector General from April which found that 13% of MA prior authorization denials met Medicare coverage rules and 18% of MA payment denials met Medicare coverage and Medicare Advantage organization billing rules.
To push for fairer coverage for both patients and providers, AHA wrote a letter to HHS secretary Xavier Becerra and Department of Labor secretary Martin Walsh asking for more oversight of insurers.
A study by the American Medical Association (AMA) highlights the consequences for patients and providers.
Medicare Advantage (MA) markets are largely uncompetitive and deserve scrutiny from regulators and lawmakers, according to a study by the AMA.
In the 2022 edition of Competition in Health Insurance: A Comprehensive Study of U.S. Markets, AMA examined health insurers in 380 metropolitan statistical areas (MSAs) in the U.S., including MA plans for the first time. Researchers captured 2021 data from commercial enrollment in preferred provider organization (PPO), health maintenance organization (HMO), point-of-service (POS), consumer-drive health plans (CDHP), and public health exchanges.
The findings reveal just how little competition is present in MA markets, with 79% of MSAs having markets that were ranked as highly concentrated in 2021.
Market competition is based on the Herfindahl-Hirschman Index (HHIs), a calculation that factors in market size and distribution. Markets with an HHI score of less than 1,500 are considered unconcentrated, while an HHI between 1,500 and 2,500 correlates to a moderately concentrated market. An HHI score above 2,500 means the market is highly concentrated and therefore uncompetitive.
In the AMA study, the average HHI for MA markets was 3,331,down from 3,923 in 2017. The median HHI for 2021, meanwhile, was 3,068.
Thirty-four percent of MA markets had one insurer with a share of 50% or more and 6% had one insurer with a share of 70% or more.
The 10 largest insurers by MA market share were UnitedHealth Group (28%), Humana (19%), CVS Health (11%), Kaiser Permanente (7%), Elevance Health (6%), Centene (4%), Cigna (2%), Blue Cross Blue Shield of Michigan (2%), Highmark (1%), and SCAN Health Plan (1%).
The 10 states with the least competitive MA markets were Vermont, North Dakota, Wyoming, Montana, Rhode Island, South Dakota, West Virginia, District of Columbia, Nebraska, and Louisiana.
"High levels of market concentration can result in diminished competitive constraints on insurers," said AMA president Jack Resneck, Jr. "Unchecked market power among insurers is a formula for higher premiums, lower coverage, and inadequate levels of patient care, concerns of great relevance to Medicare Advantage. Most large Medicare Advantage insurers are accused of fraud and flouting the authority of federal agencies.
"The new AMA study shines a light on the lack of competition in Medicare Advantage markets across the country and will help regulators and lawmakers better scrutinize anticompetitive insurer behavior that harms patients and physicians in an industry where exploitative business practices are already commonplace."
In response, America's Health Insurance Plans (AHIP) strongly disputed the study, labeling AMA's report "simply false and wrong."
AHIP pointed to the average number of MA plans per county increasing by 68% over the past decade, as well as the number of competing MA companies increasing by 15%.
"Here is the bottom-line truth: MA and the Exchange marketplaces are prime examples of the government and free market working together to deliver lower costs, more choices, and better outcomes for the American people."
How to best leverage it is something organizations are learning on the fly. But for healthcare leaders and workers, it's just as important to understand what technology can't and shouldn't do.
Tackling those misconceptions is critical, explains University Health's vice president of health information management and revenue cycle Seth Katz.
Katz spoke with HealthLeaders about implementing technology in revenue cycle, why automation is not a plug-and-play solution, and medical coding as the next strategy to leverage.
This interview has been edited for clarity and brevity.
HealthLeaders: How do you see technology's role in the patient financial experience?
Katz: I think it's growing. Technology has been part of everything for years now, but specifically the automation side of things is definitely growing. I think the last two years have taught a few things. One was with the pandemic, on the negative side, you can say people got sick. You can also say there's a lot of extra work. And then people are just burnt out in general. Not even just from COVID, but from what I call button-mashing. Nobody goes to school to be a cash poster or to be a denials analyst. You find yourself in those roles. It doesn't excite people and I think it shows a lack of creativity on the revenue cycle side. So when we look at automation specifically and we've implemented some, that's what it's about. It prevents us from having people work menial tasks over and over so we can automate those. It's a really big positive. People need to invest in it.
You hear all the time about doctors and nurses and people say we want them to practice at the top of their license, right? But we don't look at that in the back end. I want them to work at the top of their skillset too. I want them spending time on things that matter more, that bring in more cash, that are the problem. So I think it has a huge opportunity. It's still fairly new which is a little surprising that it's taking a little longer to catch on and I think some of it just misunderstanding. People don't understand what automation is. But it's absolutely vital. You have to do it. You're not going to be able to find enough staff, retain them, pay them, all that stuff. So it's huge.
Pictured: Seth Katz, vice president of health information management and revenue cycle, University Health.
HL: How does automation have to be used and deployed? Does there still need to be a balance between automation and the human touch?
Katz: So number one is go back to that point about staff. I use this example a lot. Amazon has more automation than everybody and they keep adding more. They want drone delivery. There's all those robots working in the warehouse, right? But at the same time they're on pace this decade to pass Walmart as the world's largest employer. So that's the way to look at this. Now they might not need as many people in the warehouse. But that doesn't mean you need fewer people just because you've automated. In some ways you need more. You have different new roles that you never would have thought of before.
And the second part, it's still a computer system. It's garbage in, garbage out. If you don't set it up right, if you don't train on it properly, if you don't maintain it, it's not going to work. You have to keep training, you have to keep updating it, you have to keep it in sync, you have to learn about it. If you don't do those things and support it then you're going to fall short of your expectations. It adds efficiency, it adds improvement, but it also comes with other things you have to do. It's not a plug-and-play and it's also not one-size-fits-all. Meaning you might have a couple of different automation companies. The company you choose to help automate prior authorizations, I can tell you will not be the same company that we're looking at to do artificial intelligent medical coding. You might have multiple automation vendors working at the same time too.
HL: What type of technology has University Health implemented on the back end of revenue cycle and how has that affected outcomes?
Katz: We started with prior authorizations. We're expanding into some inpatient notifications, eligibility running, claim status checking, stuff like that. As a whole it's going very well. To go live is probably two-and-a-half months of letting that automation run in the background and learn and see how we do things. But within about two months of kicking off it started GI and started going to payer websites and logging requests for prior authorizations by taking that information out of our EMR. So it's going very well. We're happy. We're looking to continue to expand it. You've to get creative with this. Prior authorization is a big one that a lot of people start with. It's a repetitive task. It's taking discrete data from your EMR and putting it out to a payer portal. So it's very systemic. But I was starting to get to a point of what else can we automate? What are things that are maybe outside the box?
HL: Are there additional strategies you plan to leverage in the future?
Katz: People are trying to leverage more information exchanges. In healthcare, there's still a lot of manual moving of data between hospitals, even though there's health information exchanges. Participation isn't necessarily strong. You're starting to get more and more players trying to automate that. So we're actually part of a pilot project where when a person applies for Social Security assistance, they would of course ask for their records. They'll be able to pull that information via a secure API and so they can get it done faster, they get the information faster, they can approve the request faster. I think it's things like that, trying to get the information to flow faster.
On the revenue cycle site, the biggest one is the medical coding. I think there's a number of players growing in that space doing AI coding. It's very early. It is still a job that there are oftentimes shortages, that it relies on contract coders which are very expensive. So I think this is a really interesting opportunity there in the next couple of years. And what's more interesting is it's all new players who are driving this. We've done a lot of deep dive on that, done a lot of testing, met with a lot of vendors, but it's coming, it's coming quickly and I want us to be at the front end of that. This train is not slowing down anytime soon. I think those who adopt to it quickly are going to see returns quickly.
The company is growing five-star rated Essence Healthcare to Indiana, Kentucky, Arkansas, Georgia, and Ohio.
Lumeris will offer its Medicare Advantage plan, Essence Healthcare, in five new states in 2023, the a value-based care managed services operator announced.
The expansion is due to Essence's customer and provider satisfaction with the plan and its benefits, allowing the MA offering to move beyond Illinois and Missouri.
Beginning January 1, Essence will be available in Indiana, Kentucky, Arkansas, Georgia, and Ohio marketplaces.
"We are passionate about our vision to create the system of care every doctor wants for their own family," said Michael Long, chairman and CEO of Lumeris. "While the health care delivery system in the United States has struggled to balance quality, cost, and patient and physician satisfaction, Lumeris has demonstrated that it is not only possible, but also scalable. We are pleased to expand our provider partnerships to bring Essence Healthcare to a growing number of seniors."
Essence received a five-star rating for the second consecutive year from CMS, which released Medicare Advantage plan ratings based on 38 quality measures.
"Our strategically aligned partnerships with providers are creating a new standard for how healthcare can be delivered and financed," said Umar Farooq, president of Essence Healthcare. "Through these deep-rooted partnerships, Essence Healthcare has demonstrated that when providers are the table in co-designing managed care solutions, we can together achieve highest quality star rating designated by CMS."
A Kaufman Hall report highlights pandemic-related impacts of the past year on revenue cycle challenges.
As the labor shortage continues to hamper healthcare organizations, outsourcing has become a common strategy to mitigate costs.
Nearly one-third of hospital and health system leaders (63%) have pursued at least one outsourcing solution, with revenue cycle functions at the top of the list (27%), according to Kaufman Hall's 2022 State of Healthcare Performance Improvement report.
Revenue cycle was ahead of other outsourcing solutions like environmental services (23%) and IT services (21%) among the 86 hospital and health system leaders surveyed from across the country.
The medical billing outsourcing market in particular is set to hit record growth this year, a study published by Future Market Insights in August found.
The research states that the market is anticipated to increase at a compound annual growth rate of 16% from 2022-2032 and hit a valuation of $55.6 billion by the end of 2032.
The Kaufman Hall report also reveals that revenue cycle challenges have only picked up over the past year.
Only 7% of respondents said they saw no pandemic-related impacts on the last 12 months, compared to 25% reporting no impacts in 2021.
Claim denials especially skyrocketed as 67% of respondents reported an increased rate, more than double who reported increased denials in 2021 (33%).
Meanwhile, more than half (51%) reported an unfavorable change in payer mix, with a lower percentage of commercially insured patients, and 41% reported an increase in bad debt or compensated care.
More than half of leaders (52%) said that inflationary pressures have impacted bad debt and uncompensated care.
As leaders navigate the current environment, it's clear placing an emphasis on revenue cycle can lead to better outcomes and positive margins.
Quality and reliability of mobile apps continue to lead the way for experience benchmarks in health insurance.
Humana paces the country's largest health insurers in customer satisfaction after climbing the rankings over the past year, according to the American Customer Satisfaction Index Insurance and Health Care Study 2021-2022.
The rankings are based on interviews with 12,841 customers between October 2021 and September 2022, with respondents evaluating their recent experiences with the companies.
After slotting behind leaders Blue Cross Blue Shield and Kaiser Permanente in 2021, Humana jumped to the top spot for 2022 with an index rating of 77 out of 100.
Cigna, meanwhile, was ranked lowest of the major insurers, though the company improved on its 2021 rating, from 68 to 71.
Health insurance as an industry saw no change in its customer satisfaction rating (73), which placed it 33 out of 47 industries measured.
The rankings of payers by customer satisfaction:
Aetna (CVS Health)
Blue Cross Blue Shield
*Scale is 0-100
The survey also revealed the most important experience benchmarks for customers when using products and services of companies.
Once again, quality of mobile apps and reliability of mobile apps were the highest-rated benchmarks at 80 apiece, building on their leading score of 79 from 2021. Those were followed by access to primary care doctors and website satisfaction, both rated 77 for the second consecutive year.
Of least importance to customers was call center satisfaction (73) and range of plans available (73).
The report showed that while older generations mostly consider price, medical benefits, and network coverage when picking a payer, younger adults place a greater value on experience factors like customer service.
Nearly two-thirds of survey respondents also don't now if their providers offer financial resources.
Price transparency protects patients financially, but it can also affect their decision to seek out care in the first place, according to a YouGov survey commissioned by revenue cycle firm AKASA.
The survey of 2,026 Americans between March 9 and March 14, 2022, found that respondents are more discouraged from pursuing necessary care if they are left in the dark about pricing information.
More than a third (35%) said they would be deterred from seeking out care for themselves if they were unaware of pricing, while 40% said they wouldn't be dissuaded and 25% answered they didn't know if it would affect them.
Inaction due to a lack of pricing information was less prevalent when it came to dependents (18.3%) and parents/guardians (20%).
Hospitals have been slow to adhere to the price transparency rule, which went into effect January 1, 2021, but facilities appear to be making progress. A recent report by Turquoise Health found that 76% of hospitals have posted a machine-readable file (MRF), 65% have posted an MRF with negotiated rates, and 63% have posted an MRF with cash rates.
Payers, meanwhile, have generally adapted quicker than hospitals, and the Turquoise Health report found 80 insurers to have published rates.
In addition to price transparency's affect on patients seeking care, the YouGov survey revealed that almost two-thirds of respondents (64%) don't know if their physicians or hospitals offer payment plans or financial assistance for medical bills.
That figure increased significantly for uninsured Americans (80%), indicating that more needs to be done to create awareness and improve the patient financial experience.
"A positive experience is directly tied to an organization's reputation and ratings. It increases utilization, improves loyalty and retention, and, as a result, boosts their bottom line," said Amy Raymond, vice president of revenue cycle operations at AKASA. "Yet improving the patient financial experience in healthcare is one area that continues to lag behind other industries. If the reactive nature of medical billing continues to be the status quo, patients can miss out on opportunities to prevent medical debt which creates unnecessary hardship.
"As hospitals and healthcare systems continue to grapple with slim profit margins, workforce shortages, rising denials, and a high cost-to-collect, they must prioritize the patient financial experience and rethink medical billing and revenue cycle as a front-end, patient advocacy function rather than a reactive, back-end process."