Two Minute Drill

Target Drops PT Employee Healthcare Coverage

The debate rages on about healthcare reform and how it will impact the insurance industry. A recent article from The Fiscal Times “More Companies Dump Employee Insurance for Obamacare,” discusses how Target recently announced it has dropped insurance for part-time employees, citing changes that have to do with new healthcare laws. Target follows in the footsteps of companies like Home Depot and Trader Joe’s, who have also dumped healthcare coverage for part-time employees in order to save on healthcare costs.

The companies claim that the action ultimately benefits their part-time employees since having employer-based health insurance disqualifies them from accessing coverage and subsidies through the new health exchange.

According to a report by CNN, Trader Joe’s company officials estimated that a large majority of their part-time workforce would be eligible for plans that cost considerably less money if they purchased insurance through the new health exchange.

There are many reports of the insurance industry’s lack of optimism in regards to Obamacare and how it will ultimately impact insurance. However, Brianna Ehley, author of The Fiscal Times article cited here, writes “…industry experts say it’s too early to tell how enrollments will affect market stability and premium prices.” She closes her article pointing out administration officials also say it’s too early to tell with about three months to go in the first enrollment period and that they expect most people to wait until the last minute to sign up, as was the case in Massachusetts.

2014’s Top 10 Healthcare Issues

PwC announced during a webinar earlier this month what they believe to be the top 10 healthcare issues of 2014:

1. Companies rethink their roles in the new health economy
2. Corporate funds invade healthcare venture capital space
3. Employers explore private exchanges
4. Industry picks up the pace of price transparency
5. Social, mobile, analytics and cloud come together
6. Technology is the new workforce multiplier
7. Twenty-first century tools refresh clinical trials
8. Fail fast, frequently and frugally for true innovation
9. States pursue Medicaid managed long-term care
10. New rules combat counterfeit drugs

PwC compiled this list based on polling data they collected in Fall 2013 from 1,000 consumers and interviews with top healthcare industry executives. For more information and comments from some of the webinar attendees, read Top 10 Healthcare Issues for 2014 as it appeared in Healthcare Finance News.

No Charge For Preventive Care Services? Verify Up Front to Avoid Out-of-Pocket Costs, Billing Hassles Later

The healthcare reform law requires that most health plans now cover common preventive care services without costing covered employees or their dependents anything out-of-pocket. However, the type of preventive service covered at no charge can be a moving target, especially based on where the service is performed, who performs the service, and how it is billed by the provider.  Correcting preventive care services billed incorrectly by a provider is a real hassle.

A prime example is described in the recent Kaiser Health News article Consumers Expecting Free ‘Preventive’ Care Sometimes Surprised By Charges.

To avoid unwanted and unwarranted charges and the hassles of getting a bill corrected, first verify with your insurance carrier that the service your provider is recommending is a valid preventive care service (covered at a 100% with no associated out-of-pocket cost or copay).  They should also be able to give you the correct billing code that providers should use.  Secondly, and just as important, insist that the provider correctly bill the procedure as preventive.

Oh to be a fly on the wall…when Obama meets insurance execs

Do you ever wonder what goes on behind closed doors between president Obama and insurance company executives? I sure do.

We’ve all had to work with people we don’t like or organizations we don’t align with philosophically at some point.  It happens. Sometimes the wheels come off and sometimes everything works out okay.

The Affordable Care Act, as it currently stands, needs for the Obama administration and the insurance companies to work together. I mean really work together.

Insurance companies know that they are rarely on the Christmas list of Americans (although studies indicate that they are appreciated more than one would assume).  But ever notice that insurance companies usually remain silent when there is a pile on? They lobby hard and support politicians but they usually just fade away and keep their mouths shut in a public fight. Hmmm.

President Obama, on the other hand, has been quite vocal in his assessment of insurance companies. Some of his most forceful language in support of his law has been to point out that the carriers will no longer be able to do harm to Americans.  He has come close to declaring them flat out evil to the core (it’s up to you to decide whether he is right or wrong).

However, now they have to work — I mean really work — together to make the
ACA operate well for the American people.

So, here is what I would love to know: Behind closed doors, does the conversation between President Obama and insurance execs go like…

Obama door number 1.  “Ok, guys and girls, I need to beat the hell out of you in the public eye but we need to get this thing done. We will all thrive if we work together.  Just don’t pay any attention to my rhetoric. You with me?”

Obama door number 2. “Well, this is the law that got passed.  I tried to obliterate you but I had to compromise, so you better play the game.”

Obama door number 3. “You know where I’m  headed here.  You have have a half life left. You need to decide if you want that to be a long half life or a
short one. You got me?”

On the flip side, are insurance company execs thinking…

Insurance door number 1. “This law will be SO awesome for us!”

Insurance door number 2.  “There is NO way we can survive without the federal government supporting us and our efforts.”

Insurance door number 3. “We are SO screwed and the only hope we have for long term survial is if this ACA law implodes.”

Oh, I wish I were a fly on the wall in the room when these SEEMINGLY strange bedfellows meet behind closed doors…

Mike

Keep Your Doctor? Your Preferred Hospital? Do Your Homework Before Selecting A Plan.

With healthcare reform and the Affordable Care Act almost in full bloom, more potentially game-changing unintended consequences are starting to emerge.  One such consequence stems from the introduction of “narrow networks.” Initially intended for healthcare.gov or Exchange based products, most carriers have utilized the narrow networks to round out the low end of their 2014 individual and employer sponsored group plan offerings.

Employers changing plans in 2014 will have to pay closer attention to network selection. Or, potentially pay the price when you or your employees learn that preferred, familiar, closest and, in some cases, the best doctors and hospitals may not be in your plan’s network.

Until now, network size has not been a huge determinant in selecting carriers and plans. Most of the major insurance companies in the group market provided access to a vast selection of doctors and hospitals, especially those providers with the best reputations. With the advent of the Affordable Care Act and its impact on rate structures, benefits, and plan designs, carriers have less discretion on plan designs and rate setting. As a result, they are turning to these “skinnied” down networks as a primary means to manage costs, differentiate, and vary premium across their respective plan offerings.

In order to gauge the impact, I checked the online directories of two of the major group health plans in one large county in the Tampa Bay market where I reside. While decidedly informal and unscientific in nature, it nevertheless highlights the contrast.

I compared a few key categories of each respective carrier’s heretofore “staple” network (still offered; higher rates than the narrow network plans) against the new skinnier network offering (newly offered; lower rates than staple network plans). In both cases the “staple” networks contained a significantly greater number of providers, were described as open access, and did not require referrals. The new skinnier networks offered fewer participating providers, required designation of a Primary Care Provider (“PCP”), and required PCP referrals to obtain other services.

In comparing several categories of specialists, the narrow networks were on average comprised of about 50% fewer specialist physicians than the traditional networks.  However, the biggest difference between the customary networks and the newer narrower networks came when comparing participating PCPs and hospitals.  Here’s the breakdown:

Carrier 1

Carrier 2

OA Network

Narrow Referral-Driven  Network

OA Network

Narrow Referral-Driven  Network

Primary Care

1280

227

1300+

325

Hospital Primary and Secondary

12

3 (includes 1 major)

18

10 (includes 1 major)

We’ll be monitoring further developments, reporting more on this issue in future posts as well as discussing practical alternative strategies to this growing cost vs. access issue (eg. direct contracting, plan customization, buying a lower cost plan and supplementing, etc.).

In the meantime, what can you do?

When it comes to changing to new plans, look before you leap.  Or, at least plan on doing some homework.

To read more about this topic go to these recent articles in the Washington Post, Insurers Restricting Choice of Hospitals and Doctors to Keep Costs Down,” and at Health Care Policy and Marketplace Review, If You Like Your Doctor You Will Be Able to Keep Your Doctor. Period.”

Did you hear Baxter the dog has health insurance?

There is a story that circulated last week on Twitter that a guy enrolled himself on healthcare.gov but the welcome letter that came was addressed to his dog, Baxter. Apparently they mistook his password for his name.

That got me thinking…

Two months ago I had a doctor’s appointment and I had to take my cat (a good old guy) to the vet.  My doctor is phenomenal. He works his tail off.  I received excellent care but he quickly moved on to the next patient. He seemed to be maxed out with time and the demands on him from his medical practice.

My veterinarian is also a phenomenal person. The visit for the cat took approximately the same amount of time. Yet the vet was more relaxed and seems to have more capacity in his practice.

The vet bill was $63 bucks cash.

The doctor’s office filed the claim through my insurance plan and it was knocked down from $120 to $65 bucks.  I paid the $65 bucks to my doctor’s office about 45 days AFTER the date of my appointment.

As I read about how physicians are creating concierge practices, operating outside insurance and considering leaving Medicare, I can’t help but think of those two visits.

I wonder if there is a way to make low dollar costs in healthcare more transparent and efficient. Maybe even the ACA could move in this direction instead of focusing on low copay plans in most of the advertising.

I wonder why we, as a society, seem to be more accepting to pay cash for a vet visit but less likely to be responsible for the full cost of a routine doctor’s office visit — when often they net out to roughly the same cost.

Here is a recent article that appeared in The Wall Street Journal about concierge medicine, titled Pros and Cons of Concierge Medicine.

Happy Thanksgiving to you and yours from all of us at BBG!

Khan Academy Primer on PPACA or Obamacare

The Barrett boys (and their dad) have used Khan Academy to enrich all their learning. I recommend it strongly. Most people reading this post may not need this PPACA/Obamacare primer, but it is very good and bias free.  Check it out and more important, please pass it along to someone who can benefit from a better understanding of the structure of this law that is currently creating such cultural consternations. Enjoy!

https://www.khanacademy.org/humanities/american-civics-subject/american-civics/v/ppaca–or–obamacare

Where Are Our Healthcare Dollars Being Spent?

Quite often in the course of working with our clients on practical and innovative approaches to lower their healthcare costs or mitigate pending increases, we are asked two questions:

“Why is healthcare so expensive?” And “where is the money going?”

The first question is so hugely complicated there may not be enough bandwidth on the internet to analyze it and address it in writing. The second question was addressed in a recent study published by the Agency for Healthcare Research and Quality and related in easier to read fashion in a joint Kaiser Health News/Washington Post article.

While this is really big picture stuff, in answering the question on where the money is being spent, they present some interesting (perhaps only to analytical geeks like me) and startling facts worth taking a moment to contemplate:

  • In 2010, Americans spent @ $1.3 TRILLION on healthcare (This addresses direct payments for care provided during the year.  It jumps to $2.8 TRILLION when you include health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care).
  • 1% of the population accounted for 21% of the $1.3 TRILLION spent.
  • 5% accounted for 50% of all healthcare expenditures.  And, 10% are credited with 66% of the healthcare spend.
  • Contrast that with the 50% of the folks in the U.S. that accounted for less than 3% of the costs.

Our BBG world is micro and hyper-intensively focused on helping mid-size and small employers control costs and improve outcomes one employer at a time. We can’t even begin to suggest we know where the big picture solution lies. That’s for folks a lot smarter and better equipped. It does appear clear however, even to this lay person, that to put a dent in this ever growing cost curve, the lion’s share of the resources and efforts must laser focus on solving the 5% accounting for 50% cost equation…

For more on the study or the article, go here:

http://meps.ahrq.gov/mepsweb/data_files/publications/st421/stat421.shtml

And, here: www.kaiserhealthnews.org/stories/2013/october/08/one-percent-of-costliest-patients.aspx

Page 12 of 14« First...5...1011121314
Facebook Iconfacebook like buttonTwitter Icontwitter follow buttonVisit Our LinkedIN Profile