Coauthors of a Commonwealth Fund survey studying health insurance costs from 2003-2011 say premiums and deductibles are increasing at an unsustainable rate, but recent slowdowns over the last two years are encouraging and may be able to continue if more organizations adopt an Accountable Care Organization model.
That news is the report's big takeaway for insurance companies. For consumers, the report starkly points out what they likely already knew: Health insurance is more expensive today than it was in the early 2000s.
"By 2011, the total annual cost of family plans sponsored by private employers averaged over $15,000/year with the majority of states above $14,000. Even in the five lowest cost states, family plans now are in the $12,500 to over $13,000 range. And, I might add, this is about equal to the total annual wages of a worker working full-time at minimum wage. It's just not affordable without employer health."
Deductibles for single or family plans also increased at both small (less than 50 employees) and large (more than 50 employees) firms. The study shows deductibles for single and family plans more than doubled since 2003, though the increase was slightly lower at large companies.
For example, an employee with a single person plan working at a small firm had an average annual deductible of $703 in 2003; it's now $1,561. At a large firm, the current average annual deductible for a single person is about $500 less at $1,010. Eight years ago, that figure was only $452.
Schoen and Commonwealth Fund President, Karen Davis, both pointed to this year's historically low rate of growth in premium costs—just 4% as proof the Patient Protection and Affordable Care Act (PPACA) is working.
"In 2014, when the health insurance exchanges are set up with standardized plans that will allow comparison shopping, we can expect to see more savings for consumers," says Davis.
"The [PPACA] has been tested by the Supreme Court and the American electorate, and we can now move forward without hesitation to speedily implement the law to ensure everyone access [to] high quality, affordable, and secure healthcare."
According to Davis and Schoen, "moving forward" means more ACOs that are similar to the models that are either up and running or will be soon.
"What we are just starting to see is a response among private insurers to start to say 'no,' and bring in new ways of paying that would hold care systems accountable for the total cost of care with long term contracts," says Schoen.
"This is happening in Massachusetts with Blue Cross Blue Shield. We've also seen the state of Michigan, the Blue Cross plan there has started to really think of paying for... higher increases if there's a return in better outcomes and higher quality care."
In another sign that ACOs are catching onto the private insurers, look no further than Florida. There, just yesterday, it was announced the state's Blue Cross Blue Shield Company will partner with Naples, FL-based NCH Healthcare System for what is being called one of the first commercial ACOs in the state. Under the new Florida Blue ACO, about 4 million patients will get to participate.
An earlier 2012 report from Oliver Wyman estimated as many as 15 million patients in the commercial market are already receiving care through an ACO that was initially established under Medicare.
The consulting firm's analysis argued that organizations using an ACO to serve Medicare patients will eventually have to roll the model out to its non-Medicare population because "virtually any provider that moves to a value-based contract with its most significant payer—Medicare—will eventually need to move all of its patients to value."
Schoen concurs, saying using a value-based model for just one segment of the healthcare population doesn't make sense. "We all get care locally and we need to be thinking about more accountable care systems as well as more accountable health insurance companies," says Schoen. "We need the various payers to be on the same page in the marketplace."
When MGMA-ACMPE (formerly Management Group Medical Association) released its annual ranking of payers in mid-November, the list of who is doing the best job keeping practice professionals satisfied looked exactly the same as last year. Medicare Part B topped the list and United came in at last place.
But a closer look at the satisfaction scores MGMA-ACMPE members assigned to payers reveals practice professionals aren't as happy as the list indicates at first glance.
For the last five years MGMA-ACMPE has conducted a poll to determine group practice professionals' attitudes toward payer interactions. This year, the 13-question survey focused on seven categories:
Overall satisfaction
Payer communications
Provider credentialing
Contracting
Payment policies
System transparency
Innovative payment models
In nearly every category, Medicare Part B and Cigna were in one of the top three positions. Stephen Mandolesi, chair of MGMA-ACMPE's Payer Contracting Society and Director of Network Management for Lifeline Vascular Access in the east, called Medicare Part B's consistency "amazing."
"About 15 years ago Medicare Part B was the worst payer," says Mandolesi. "Now what you find is a lot of practices tend to compare the contractual allowable that a health plan is going to pay them based upon what Medicare is reimbursing, so Medicare has become the benchmark for reimbursement."
Mandolesi also says in some ways, practices find dealing with Medicare Part B easier simply because the federal agency has made everything available online, including fee schedules. In fact, Medicare Part B received the highest score of the entire poll on the question of willingness to disclose fee schedules. MGMA-ACMPE members gave the agency a score of 4.18 out of 5.
With Medicare Part B dominating nearly every category, it was surprising to see that their overall satisfaction score was 3.53, based on a scale of 1–5, putting it halfway between neutral and moderately satisfied. That's not exactly the same as practice professionals saying " 'Great job!' "
Mandolesi attributes the midrange score to the fact that Part B claims are processed by federal contractors. "There's probably still issues out there with the way those contractors process the claims, one; with the policies they have in place, two, and with the RAC [recovery audit contractors] audits."
Low rankings don't equal low scores
If payers who ranked high in MGMA-ACMPE's poll received a midrange score, then payers ranking low must have done terribly, right? Not really, though it is a logical conclusion.
Consider the ranking of United Healthcare on the same metric on which Medicare Part B ranked first—overall satisfaction. United was last on the list with MGMA-ACMPE members assigning it an average score of 2.77 on the 1-5 scale, putting it between "moderately dissatisfied" and "neutral."
The score indicates providers may be more apathetic than dissatisfied with payers, though it's not to say there aren't specific complaints.
Don Stumpp, an MGMA-ACMPE member and manager of payer contracting for American Health Network, a group of 200 primary care and multi-specialty physicians, says communication is a big problem.
"Payers rely on communicating through their websites, but practices do not have the time to search websites for answers," says Stumpp. "Unfortunately many payers have cut back on staffing for provider representatives who can come to your practice and help you navigate through issues. They want us [providers] to use their toll-free number that frequently does not resolve the issue. They need to bring back the reps."
Stumpp was also quick to say that providers are improving, specifically United.
"My personal experience with United Healthcare has been they now have dedicated provider advocates and town hall meetings. I think it has helped, but unfortunately the national survey did not reflect that."
Cigna has also focused on improving the experience for healthcare providers, says Julie Vayer, Cigna's chief operating officer for its Total Health & Network organization. "We decided we would spend a lot of time soliciting feedback from the healthcare community. We literally conducted between 100-200 interviews with professionals in our network," says Vayer.
The surveys Cigna collects show similar metrics as MGMA-ACMPE's. "There's no gap," says Vayer. "We discovered they [providers] really wanted to be paid quickly... transparent communication, and more information."
She says Cigna's customer service representatives receive more and specific training than they did just two years ago to meet the needs of providers. The website modifications are also aimed directly at healthcare professionals.
"We've redesigned our website to make it easier. [It] takes fewer steps to find what they're looking for. We heard from the physician community that our website is much improved," says Vayer.
What may be contributing to the mediocre scores isn't so much the antagonistic relationship between providers and payers, but the complicated nature of healthcare today. Vayer concedes "healthcare professionals are asked to do a lot of things," and believes that may be why payers are not receiving high scores.
Mandolesi goes further, saying with so many different coverage decisions and policy guidelines, providers can't help but be confused and frustrated.
"It's an interesting dynamic we live in right now in healthcare," says Mandolesi. "There [are] so many moving pieces and parts and I think the problem is that physicians just want to be able to provide services, and that when a patient walks in with an ID card they're covered under that policy, and they'll get reimbursed and everyone's happy."
For now, it seems the conclusion on both sides is to meet in the middle, which is where most of the satisfactions scores are, too.
Parkland Hospital in Dallas is making significant enough progress on its federally mandated improvements to quality and safety that it is preparing for two mock surveys, in advance of its next inspection by the Centers for Medicare & Medicaid Services.
The mock surveys will serve as practice for CMS's actual survey, which it will conduct to determine whether the safety net hospital is eligible to continue receiving Medicare and Medicaid funding.
That announcement at Parkland's board of managers meeting Tuesday is one of several benchmarks Ron Laxton, RN, chief implementation officer and interim chief operations officer, pointed to as proof that Parkland is moving forward under the hospital's Corrective Action Plan . The board is briefed on developments monthly.
"This is a different organization than when I walked in ...in March," Laxton told board members at the end of his 30-minute presentation. "Are we doing everything right? Not yet. Are we working towards our goal? Absolutely."
October's corrective action plan progress report
The consulting firm Alvarez & Marsal developed Parkland's CAP and is overseeing its implementation. Peter Urbanowicz, who heads the firm's healthcare compliance arm, was also at Tuesday's board meeting to brief members on Parkland's steps forward. He called the hospital a "very changed organization," from when his firm was hired in 2011 to develop the CAP.
"We're very impressed with progress; [there is] lots of work still to do, but where we are today versus where we were when we came in ... is markedly improved," says Urbanowicz.
Of the 499 recommendations in Parkland's CAP, the hospital has completed 454, or 91%. Among the accomplishments Laxton highlighted are new resources for Parkland's emergency department . As recommended by Alvarez & Marsal, the hospital has added:
4 triage rooms
27 seats to its waiting room (18 reclining seats to be added by end of December 2012)
Physicians to staff main ED on weeknights
The hospital also just signed a contract with EmCare for an urgent care clinic that is estimated to decrease a patient's length of stay in the ED by 75 minutes, or 20%. Already, ED LOS is down 28 minutes. "We are eating away at long wait times," says Laxton.
Changes in the ED are also expected to have a positive effect on patient flow, which had been an area of concern. Other progress noted by Laxton included:
Revised nursing policies and procedures
Implementation of a patient relations dashboard to resolve grievances and complaints
Filled vacancies in nursing leadership
Executive rounding throughout the hospital
"We're not finished"
There are still major hurdles Parkland must overcome before its CMS survey, which will be unannounced but complete by April 2013.
For example, the hospital still hasn't found someone to fill the position of a newly-created Chief Patient Rights and Safety Officer (CPRSO), which according to Alvarez & Marsal's CAP analysis would help Parkland "elevate the role of protecting patient rights and safety within the organization."
The CPRSO will head, also newly-created, the department of Patient Rights and Safety, which requires a reorganization of the hospital's Quality department. Laxton says Parkland is actively interviewing recognized leaders for the CPRSO position; however, even job candidates are questioning exactly what they'd be responsible for since it requires gathering so much information that isn't currently shared.
Laxton says the hiring delay is purposeful. "So that we get the role right; we are not alarmed by it."
Other, more serious recommendations that haven't yet been implemented are in the case management area. Parkland hasn't been able to improve the volume of patients discharged before 11 AM, and it has only completed 17% of measures recommended to improve patients' continuum of care beyond the acute setting.
Next Steps
CMS put Parkland under a systems improvement agreement in September 2011. It's a rare course of action saved only for those healthcare organizations that are in danger of losing Medicare certification and funding because of serious infractions that could harm patients. Cape Fear Valley Medical Center in Fayetteville, N.C., is the only other hospital currently operating under an SIA.
When asked about Parkland's progress, CMS spokesman Bob Moos emailed a statement indicating the federal agency was pleased with what the hospital had accomplished.
"Parkland is continuing to progress through the elements of the Corrective Action Plan. The focus now shifts toward making sure that those practices are embedded into the hospital's operations to ensure sustainable compliance with federal requirements."
CMS gave Parkland an April 2013 deadline to improve its performance or lose certification and therefore funding. That's just four months away, but Laxton and Urbanowicz are doing everything they can to hammer the message that Parkland is a safe place for patients.
They're training hospital staff to be ready to respond to a pair of mock surveys. The first one is to take place next month, the other in February.
"We're trying to emulate the kind of activities a surveyor would do, such as going out to each unit at all shifts. We have people on our team who will come in Saturday night at 9:00 or early morning hours on a Monday morning," says Urbanowicz.
Board members were generally pleased with October's progress report.
The board also approved a two-month extension of interim Chief Executive Officer, Robert "Bob" Smith's term. Smith is a retired executive from Dallas-based Tenet Healthcare Corp. His original four-month contract will now last for at least six months, with the option to be approved on a monthly basis after February. Smith is Parkland's second interim CEO.
He declined to be a candidate for a permanent CEO, in a recent interview, saying "... it's not something I am interested in. If I were at a younger stage in my career it would be an attractive position."
A new survey shows consumers willing to participate in the new individual insurance market in 2014, yet unwilling to take some personal responsibility to drive down healthcare costs. How can consumers be made to connect the dots? Part of the answer lies in how insurers approach them.
This past June, the consulting firm Accenture surveyed three consumer groups expected to make up the largest chunk of the individual market that will participate in the health insurance exchanges: adults under 65 who are uninsured, individually insured, or insured through an employer with less than 100 workers. The survey found that 72% cited affordability as their main concern when it comes to health insurance.
These results aren't surprising considering the recession Americans have been weathering. But that same survey found consumers reluctant to change their behaviors to save money. For example, less than half—43%—said they'd switch to a cheaper prescription, and only 23% said they'd switch primary care doctors.
Perhaps the biggest indicator that reducing overall healthcare costs will remain a hurdle is the entrenched behavior of those eligible for subsidies. Among that group, 81% said they wanted help getting healthier, but only 40% consider regular primary care checkups a priority.
The findings of Accenture's survey expose both the knowledge and behavior of U.S. consumers about healthcare as a chronic weakness. Similarly, a poll from the Kaiser Family Foundation released last month reported 41% of consumers saying they were "confused" about healthcare reform.
Are they the only ones?
No. Employers' understanding is lagging, too. A Deloitte survey in July showed 51% of employers describing themselves as having "some," "limited," or no understanding "at all" of the Patient Protection and Affordable Care Act. The larger the organization, the more likely the executives were to understand the scope of healthcare reform, but consider that only 26% of benefits administrators said they had a "good" understanding of PPACA.
So what do these survey findings mean when considered as a sum? Clearly, there is a lot of confusion among employers and consumers about what's coming. However, it also opens the door for insurers who are prepared to offer easy access to simple information that puts them in the role of educator instead of seller, at least initially.
Jean-Pierre Stephan, healthcare senior executive for Accenture, says what insurers will likely struggle with is gauging what consumers want.
"It's one thing to have a transparency tool deployed to market because an employer group requests it or requires it," he says. "It's another thing to have the consumers decide whether or not they're going to use it or choose you for your transparency tool. I think they [payers] realize the game has changed and the requirements for these tools and information have gone up, because it's really about the individual consumer now."
While the PPACA puts new wrinkles into the already complex government regulations insurers have to deal with, they are in the best spot to help consumers understand what's available.
The question for each insurer is whether they are ready to capitalize on consumers' shallow grasp of what healthcare reform means for them personally? Stephan says it's a major transformation.
Insurers are "going to now start to worry about this holy grail of healthcare around consumer engagement," he says, "because the behaviors of these consumers, once they have them as members, are pretty different from the behaviors of their current population right now."
Medicare Part B remains the highest ranked payer among executives of physician practices, a Medical Group Management Association survey finds.
MGMA released its fifth annual survey of group practice attitudes toward their interactions with the country's seven largest payers: Aetna, Anthem, Cigna, Coventry, Humana, Medicare Part B, and United Healthcare. Allison Brennan, senior advocacy advisor for MGMA's government affairs says Medicare Part B has consistently scored higher than the other six.
"Medicare might not always be the best payer, but their policies are easier to find, easier to understand, and the fee schedule and the regulations are a bit more transparent," says Brennan.
The overall satisfaction ranking this year remains unchanged from last year. The payers that scored highest on overall satisfaction with physician practice executives are:
Medicare Part B
Cigna
Aetna
Medicare Part B led in satisfaction for most of the 13-question survey, which gauged communication with payers, contracting, payment policies, transparency, and overall satisfaction. It fell below to the bottom of the pack, however, in the area of provider credentialing. There it earned a score of 2.90 based on a 1–5 scale with 1=completely dissatisfied and 5=completely satisfied.
Cigna, the other payer consistently ranked at the top on overall satisfaction in most areas, used to be a Part B contractor until it sold its CGS unit to Blue Cross Blue Shield of South Carolina last year.
In a statement, Mark Slitt, spokesman for Cigna said, "We appreciate report cards like this because they point out where we're doing well, and where we have opportunities to improve the experience that health care professionals and their professional staff have with Cigna."
MGMA provides all payers with the survey results as well as the comments that responders provided that are specific to the payer's organization. Nearly 800 physician practice professionals answered the survey, which is down from close to 1,000 in recent years.
Brennan attributed the lower response rate to the increased demands on practices. "There is growing frustration with the complexity in our healthcare system, and a lot of our members are frustrated by that complexity and the red tape," says Brennan.
MGMA added two new questions this year on innovative payment models.
"These things really are gaining more traction and increased focus in the industry as a whole so we wanted to see what our members' perceptions are of working with payers on these types of models and whether or not they're beneficial to practices," says Brennan.
This part of the survey is where every payer scored badly. On the question that asked about the willingness of a payer to engage in a new model such as ACO, medical home or payment bundling, MGMA members scored each one as being somewhere between completely and moderately unfavorable.
Brennan says members are in no rush to join the new reimbursement models still largely in the development stage, but the survey can help payers know what physician practices are thinking. "For payers... some of the feedback that will be helpful to them is to understand that practices have to view any type of innovative payment model as being favorable for the practice."
"This is a perception survey, so we may get payers who say, 'What we are providing absolutely is 100% beneficial,' and that may be the case but what they need to understand is that if it is not perceived as being beneficial for the practice that's going to be a hindrance for the payers and for practices moving forward with these types of new models."
There was one bright spot for all the payers. All seven scored highest in the area of how promptly claims are paid.
Still, Brennan says, there is work to be done in payer communication.
"What we really saw as the biggest predictors of overall satisfaction were the payer's abilities to answer questions quickly, accurately, and consistently."
She says a lot of MGMA members commented on long, drawn-out automated processes, getting to the right person, and offshore calling centers, though on that last point there has been some improvement.
"A couple of payers [are] bringing call centers back to the U.S. rather than continuing to have them located in other countries. There were a lot of complaints about dealing with language barriers and communication issues, so that is something that we've been pleased to see," says Brennan.
United Healthcare added call center jobs to its locations in Miami and Buffalo earlier this year.
The relationship between physician practices and payers isn't rosy, but Brennan hopes the survey will open the door to more dialogue between the two groups.
"We want to work with them to improve these relationships. There is a lot of frustration out there and there are a lot of areas we can work together on," says Brennan.
Despite the lingering resistance many states have to setting up their own health insurance exchanges, some health plans are moving forward to prepare for the influx of consumers looking for health insurance products.
The exchanges are due to come online in 2014, and with the election results making certain the remaining components of the Affordable Care Act are here to stay, reality is setting in.
Florida's Republican Governor Rick Scott reportedly has softened his opposition to setting up an exchange. If other states follow Florida's lead (I'm looking at you Texas, Alabama, Missouri, and Kansas), the federal government will wait.
The Department of Health and Human Services announced last week that it would delay the deadline for states to decide whether the exchanges would be run by the state or the federal government.
But that's politics, not business. At Florida Blue, that state's largest health plan with seven million members, the company is preparing for what it believes the exchanges will bring: more consumers to the marketplace.
"There will be a lot more focus on the retail end of the healthcare transaction. More, B-to-C [business-to-consumer] than B-to-B, [business-to-business] and even where you have a B-to-B transaction, the employers are doing more cost-sharing with their employees, and so individuals are being much more involved in the decisions they have to make on their healthcare choices," says Pat Geraghty, President and CEO of Florida Blue.
Healthcare consumerism has already been playing out with the onslaught of retail clinics, online comparison tools, and various hospital ranking guides. But Florida Blue is taking it to a whole new level.
Setting up shop
In 2007, Florida Blue opened its first retail center initially aimed at selling only its health insurance products. There are now 11 Florida Blue retail centers across the state, and, Geraghty says, the centers have evolved to be a sort of all-in-one insurance information center.
"You can walk in with your claim, your EOB, and we will walk you through it, line–by-line so you fully understand what the transaction was. We have customer service folks who can teach you to use online tools. We also have clinicians. We have nurses who will do a health risk assessment and then tailor that health and wellness fitness program for that particular member," says Geraghty.
If you're thinking Florida Blue's focus on building a physical presence is counterintuitive compared to what online tools can offer for the cost, Geraghty says you're not alone.
"I was challenged in one of these center openings when someone said, ‘Why would you spend money on bricks and mortar?' And my very simple response back was, "Why did Apple open Apple stores? They can sell everything they do online."
It really is about the experience. And we know, our product and healthcare is much more complex and much more personal, and we think there are a lot of reasons to create that connection to the customer."
One of the biggest reasons, of course, is Florida's five million seniors. These retail centers are tailor-made for selling Medicare Advantage policies, and the data seems to bear that out.
"The last annual open enrollment period that finalized for 1/1/12, we added 30,000 Medicare Advantage members, which is the largest year we've ever had. Now can you attribute all of that [to the retail centers]? We certainly know there's been an impact," says Geraghty.
It's not like selling a toaster
Without a retail model for health insurers in place, Geraghty says Florida Blue looked at the how banks and investment firms operate retail store fronts and he says they looked at other states.
"One of the things we did was study what was happening in Massachusetts, and what was happening there was very few people finalized the transaction while they were online. They would go, they would look, they'd see their options and then they would go talk to somebody—either a broker, a physician, a family member, somebody... because the choice is complex, it's not like selling a toaster," says Geraghty.
No, buying health insurance is certainly not like buying a toaster. First of all, consumers, for the most part, have been pretty laid-back about buying health insurance because the complicated part of the decision—which company will cover costs—has been left to the employer or the federal government.
The increase in cost-sharing from employers along with the rise of health savings accounts and high deductible plans have given consumers more choices, but some would argue that's translated into a more confused consumer, instead of a more informed one.
HIX as a catalyst for change
Geraghty says the retail centers have also helped prime the marketplace for the industry shift in reimbursement.
"We're in discussions all over the state for ACOs [Accountable Care Organizations], and when I sit down with a hospital and talk with them about changing the reimbursement model into one that pays for value versus volume, they like the notion that I've got a center near their facility and that I'm reaching out to my population to keep it healthy in the first place," he says.
Two of the retail centers that opened this year also take a cue from coordinated care and include primary care physicians.
"We had to really talk to the delivery system in the area about what we were doing and how we could be a collaborative partner with an on the ground delivery system. We're watching those pilots as well to see what the data will tell us," says Geraghty.
Some of the data that Florida Blue already has from its retail store fronts includes:
15-20% of individual product sales (under 65 and Medicare Advantage) take place at centers
Approximately 50% of consumers who visit the Florida Blue centers do so to discuss purchasing health care coverage; the others come for health & wellness offerings and for customer service
Geraghty does not have on rose-colored glasses when it comes to healthcare reform. But, he says, Florida Blue is betting on a side effect of the law which gives individuals more choices and is meeting them in a space where they already buy products—online and in a traditional store. In fact, the company is expecting to at least double its sales of individual products because of the health insurance mandate.
"We've made a very distinct play to not be just an online service. We believe healthcare is local, is personal, and that is a very important place for us not to ignore," Geraghty says.
In an election season where undecided voters were courted like last chance prom dates and political rhetoric was at an all time high (or low depending on your point of view), the growing number of voters who just wanted the election to be over included an unlikely, but massive block of businesses: health insurers.
Jim Fox, a healthcare consultant at Warbird Consulting Partners, says the uncertainty over who would preside over the next phase of healthcare reform left health insurers feeling like they were on the sidelines.
"It's less on who gets elected as somebody getting elected and a direction gets established for the country and the payers to understand where it's going and what role they're going to play in that future," says Fox.
"Quite frankly, health plans have been—hospitals and large health systems—have had to deal with government regulations and oversights and review for a long time, so for them it's figuring out what direction the government goes... then figuring out how to deal with [it]," says Fox.
Now that health plans know President Barack Obama will continue to oversee healthcare reform, insurers can come up with the best strategy for slowing down, or in one case, repealing, parts of the Patient Protection and Affordable Care Act. Both Fox and the Association of Health Insurance Providers say their top issues all revolve around affordability.
1.Repeal the health insurance premium tax. AHIP has been railing against this tax, which begins in 2014 and is assessed against health insurance providers to help pay for PPACA. The Congressional Budget Office estimates insurers will end up paying $14 billion in taxes by 2018.
Other studies show that cost getting get passed on to consumers by way of increased premiums. AHIP President Karen Ignagni, in testimony to Congress, said the premium tax would also hit Medicare Advantage enrollees hard.
She cited an Oliver Wyman study commissioned by AHIP. "Medicare Advantage plans will pay $220 per member in 2014 and $450 per member in 2023 as a result of this tax, for a total tax burden of $3,590 per member over ten years. For Medicare Part D plans, the tax will increase premiums by an estimated $9 in 2014 and $20 in 2023, for a total increase of $161 over 10 years."
The rate of increase on premiums for everyone else such as families and individuals ranges from 2.8% to 10% by 2016. There is currently a U.S. House bill with more than 200 co-sponsors supporting the repeal of the tax, though it got little play this past session and won't likely get looked at again until the new Congress is sworn in next year.
2.Loosen age-rating restrictions. Starting January 1, 2014, the most a health insurer can charge an older person for coverage is three times the amount of a younger person. This is significantly lower than the ratio allowed now by most states, which is now 5:1.
The thinking behind the age-rating ratio is that older people use more services, so they pay more. Health insurers argue that reducing the amount they're able to charge doesn't decrease the amount the services cost, so, again, insurance premiums will rise for younger people who will be subsidizing a large chunk of care.
With an aging baby boomer population, insurers see this as a road to nowhere good.
3.Give states two years to transition to essential health benefits.
States have already been submitting their plans for what will be covered in addition to the list of 10 benefits mandated by PPACA.
The problem, says Fox, "is that creates a complexity for large companies, multi-state companies, where before you had a health plan, now you might need—if you're dealing in all 50 states—you might need 50 health plans for each state.
Fox also theorizes that if benefits are too complex or high in a state, then health plans will leave and reduce competition, leading to again, higher costs passed on to consumers. AHIP advocated for a two-year transition period so that states could have time to craft an EHB package that is affordable for everyone.
In a letter to the U.S. Department of Health and Human Services, Dan Durham, AHIP's executive vice president for policy and regulatory affairs, wrote, "If states select a benchmark plan that features more comprehensive and extensive benefits than is typically covered under small group plans today, many small businesses and families would be unable to afford coverage and could be priced out of the marketplace."
There are numerous other issues health plans would also like to see changed, says Fox, such as the mandatory rebates insurers have to pay out if they fail to meet the medical loss ratio. "That still has quite a bit of complexity in it for health plans to figure out how to do that, and I don't think people have fully figured out all the unintended consequences of that going forward," says Fox.
Removing prior authorization for emergency services is a concern as is the U.S. Supreme Court's ruling giving states the power to opt of out of expanding Medicaid. Fox says insurers question how PPACA reform can truly make healthcare more affordable for individuals, businesses, and families when there are so many places that premiums are removed from the current revenue cycle.
He says its simple math.
"If the health plans can't increase premiums enough to cover the costs that they're paying out, they will struggle economically. So their only choice is to increase premiums... which then start to make the costs prohibitive for individuals who will opt out into the state or federal subsidized programs. And that creates [another] whole set of questions of when does the state or federal governments get into being the health plan?"
Pharmacy giant Walgreens announced a program Tuesday that it believes will help hospitals reduce readmissions by using pharmacists to coordinate patient care during admission and discharge.
Hospitals are under the gun to lower readmission rates since the Centers for Medicare and Medicaid Services (CMS) started assessing financial penalties October 1.
At its core, Walgreen's program, called WellTransitions, lifts the burden of medicine reconciliation off of the patient, and off hospital staff. Exact details about medications are easy for patients to forget, and nurses need the information to do a proper workup, says Joel Wright, Vice President of Health Systems Operations for the retailer.
"When a patient is admitted, we would be brought in, and we would help provide medication history, rather than starting with a blank sheet of paper. You know, my dad went in and he's like, 'Well, I'm on a blue pill for my water.' So, this gives that nurse a starting point to have that conversation with the patient to really understand what that patient is on," says Wright.
The effort doesn't stop there. Wright says when the patient is ready to be discharged, a Walgreens pharmacy staff member will make bedside deliveries of medications a patient will need to take home. After that, a clinician will follow up with regular phone calls to make sure the patient is taking medication properly, and see that an appointment has been made with their primary care physician.
"The goal of this is to be closer to the patient and be closer, as well, to the prescribers and… leverage those pharmacists to be more a part of the healthcare team and work more collaboratively and really even work with the system to help patients get, stay, and live well," says Wright.
There are about a dozen hospitals participating in the program now. The Walgreens wants to roll it out nationwide, and Wright says they're in the contract phase with "many" providers.
Sarasota Memorial Health Care System has been in partnership with Walgreens' WellTransitions program for over a year. Susan Gaillard, RN, a heart failure specialist for Sarasota Memorial says the program has had an "absolutely huge impact" at the hospital.
"I'm a heart failure nurse and my job is to counsel people on their heart failure and make sure that they have all the tools they need to take care of themselves. Medication noncompliance is a really big cause of readmission."
Gaillard said she had no hard data on how the pharmacy program affected its readmission rate, but another participating hospital, Washington Adventist Hospital in Takoma Park, WA. does, says Wright.
"We only took the high risk patients, so the patients they felt were most likely to readmit, and of the first 48, only three of them readmitted. If you just look at heart failure, for example, the national average around that would be 20 percent."
Retailers are expanding their role in the healthcare continuum. Retail pharmacy chains such as Walgreens and CVS, started moving closer to patients and providers years ago when they unveiled walk-in clinics. This month Wal-Mart announced that beginning in January 2013, it will pay for cardiac and spinal surgeries for its employees through a bundled payment arrangement with six hospitals.
Both Walgreens and Wal-Mart are promoting the programs as no additional costs to patients.
"WellTransitions does enter into an agreement with the health system, so the health system does participate, and it's all covered through the fee reductions or penalty reductions or avoidance through the Medicare healthcare reform," says Wright.
Acceptance of these programs from patients who recognize brands they trust may move the coordinated model of care forward.
Emergency room physicians say overcrowding and visits from frequent users could be reduced with a coordinated approach to care.
The American College of Emergency Physicians released several studies Tuesday analyzing data about patients who visit EDs frequently. Robert O'Connor, MD, FACEP, and ACEP board member as well as Chair of Emergency Medicine at the University Of Virginia School Of Medicine in Charlottesville, says each study focuses on a different aspect of frequent ED visits, and as a result pointed to a difficult, complex problem.
"Despite the widespread belief that these patients can be easily redirected in the healthcare system for less expensive care, and that these patients are somehow abusing the system, the reality is much more complicated," says O'Connor.
Patients considered frequent ED visitors varied from study to study because each used a different definition. One California study considered a frequent user to be a one who visited the ED two to three times within six months, while another study in Wisconsin identified a frequent user as someone visiting an ED seven or more times within a year.
O'Connor did not express concern about the lack of uniformity among the studies. In some ways, it reinforces ACEP's position that frequent users are not abusers of the ED.
"Regardless of the definition, most studies found frequent users to be a very small percentage of the total number of emergency patients, although these patients did make a disproportionate share of emergency department visits," he says.
The study O'Connor authored, Characteristics of Repeat Emergency Department Users at a University Medical Center, found that frequent ED users made up 20% of all the patients, but nearly 40% of visits. Other studies had lower percentages of frequent ED visits, as O'Connor said, but those visits made up a larger share of the total.
Results of the studies also show that high repeat users, once admitted to the hospital, are more likely to require readmission, and that worries ACEP President, Andrew Sama, MD, because of the recently enacted rule than penalizes hospitals for 30-day readmissions.
"We need to focus on implementing plans to attempt to manage these patients better. What does that mean? Physicians, family members, social workers, and home care personnel have to work together and attempt to try to manage [patients] better and prevent them from being hospitalized," says Sama.
Despite varying definitions of who is a frequent user, the studies reveal a telling picture of who is a frequent ED visitor. It's patient who are likely to have limited access to routine healthcare and primary care physicians, which could keep them out of the ED. They're also likely to have a chronic illness, complicated health problems, and mental health emergencies.
The solution, says like the problem, is multi-faceted, says Sama, "This is not a single hospital problem. It's a community resource issue."
Sama says better access to mental health services would be huge step in diverting some of the patients from the ED.
Better coordination of care is also among the findings of a separate study of the Medicare population from the Medicare Payment Advisory Commission. MEDPAC found that 60% of ED visits were preventable, as well as 25% of hospital admissions.
The Centers for Medicare & Medicaid Services is attempting to address the issue. In June, the federal agency's innovation arm announced a $14.3 million grant to Rutgers University's Center for State Health Policy.
Over the next three years, the Center will work with hospitals in Pennsylvania, Colorado, California, and Missouri, to coordinate care for "hot spotters," patients who visit EDs four times within a year. The team-based approach involves nurses, social workers, and community health workers.
Model sites, all current safety net providers, include:
Neighborhood Health Centers of the Lehigh Valley (NHCLV), Allentown, PA
Metro Community Provider Network (MCPN), Aurora, CO
Truman Medical Centers (TMC), Kansas City, MO
MultiCultural Primary Care Medical Group (MPC), San Diego, CA
Rutgers estimates the model will save $67.7 million by diverting 2,500 high frequency ED users to more appropriate channels of care.
As electronic medical records systems make their way into healthcare's regular workflow, two recent, but separate surveys show that physicians may be buying into the value of joining health information exchanges.
Perhaps what is significant about this survey is not what it shows, but what it doesn't. The barriers to using and exchanging health information electronically are no longer rooted in maintaining the status quo. The fear of change that often accompanies shifts from manual systems to digital processes seems nearly gone.
Instead, physicians now say the challenges lie in the limitations of technology. That's a noteworthy change in attitude considering that in 2010 less than 50% of physician groups were using EMRs, according to the fourth annual Ambulatory Electronic Health Record & Practice Management study.
That number is now at 69%. That same survey also shows 56% percent of hospital-owned physician groups say they plan to join a state, hospital, or regional HIE.
Both reports together show EMRs and HIEs gaining ground, due, in no doubt, to meaningful use requirements and industry changes. Michael Barr, MD, Senior Vice President of the Division of Medical Practice, Professionalism and Quality for the American College of Physicians, is on the advisory board of Doctors Helping Doctors.
He says the secure movement and availability of patient data is increasingly important because of the focus on population health management.
"New models of care, such as the patient-centered medical home and the medical home neighborhood are based upon building teams inclusive of patients, families and caregivers, and the success of these new models will depend on health IT infrastructure that supports seamless coordination of care, patient engagement, and clinical information. You can't do team-based care unless everyone has access appropriately."
The survey that Barr's group analyzed showed the top three barriers to sharing information electronically, according to physicians were:
Lack of interoperability among other systems
Lack of information exchange infrastructure
Cost of setting up and maintaining interfaces
What's missing from the list? The business case, though to be fair, it still is a concern. And, while HIEs are not so widespread and mature as to collect decades-worth of ROI breakdowns, there is anecdotal evidence of savings.
If physicians' perspectives of inoperability and infrastructure challenges can be overcome, then stand-alone physician groups may be more apt to join HIEs. That group was less likely to join an HIE.
Janet Marchibroda, Chair of the Health Information Technology Initiative at the Bipartisan Health Center, which worked with the Doctor Helping Doctors, says consolidation may force smaller practices to evolve, technologically.
"I think that there's a lot of evidence that indicates that the adoption of electronic health records is difficult for small physician practices because it can be capital-intensive. That may be a driver for a physician practice to either join with other, larger practices or to utilize an EHR system provided by a hospital," she says.
Marchiboda also says stage 2 meaningful use requirements will help overcome the obstacles most physicians named.
"The good news is stage 2 actually has very robust requirements to certify EHR technology. Technology being federally certified before it can be sold for clinicians to use will help address concerns about interoperability," says Marchiboda.
Stage 2 MU requirements, recently released and delayed by a year, are not without detractors. On Thursday, four Republican U.S. House members sent a letter to HHS Secretary Kathleen Sebelius asking her to halt MU incentive payments, in part, because of interoperability concerns. The letter states, "We believe that the Stage 2 rules are, in some respects weaker than the proposed Stage 1 regulations released in 2009."
The letter is signed by Dave Camp, Chairman of the Ways and Means Committee, Wally Herger, Chairman of the Ways and Means Subcommittee on Health, Fred Upton, Chairman of the Energy and Commerce Committee, and Joe Pitts, Chairman of the Energy and Commerce Subcommittee on Health.
It's not clear if the federal certification requirement Marchiboda referred to alleviates the concerns expressed by the congressmen.
In his address at the Bipartisan Policy Committee's event discussing its survey results, Farzah Mostashari MD, National Coordinator for Health Information Technology, said, "Stage 2 is you start sharing. Over the past two years, we worked really hard to make it possible to have standards, consensus standards."