Wednesday, May 27, 2015

The Commonwealth Fund: The Problem of Underinsured, Rising Deductibles Make It Worse

A new report from The Commonwealth Fund was issued last week finding that 31 million people with health coverage in the United States were underinsured in 2014.

The share of working-age adults who had health insurance all year but were underinsured was statistically unchanged since 2010, after nearly doubling, from 12 percent to 22 percent, between 2003 and 2010. People are considered underinsured if they have had health insurance for a full year, but have high deductibles or out-of-pocket expenses relative to their income.

The study, The Problem of Underinsurance and How Rising Deductibles Will Make It Worse, is based on The Commonwealth Fund’s Biennial Health Insurance survey, which interviewed people 19-64 years old between July and December 2014. It could not separately assess the effects of the Affordable Care Act on underinsurance because people insured all year in the survey had coverage that began prior to the law’s major insurance expansions going into effect.
The rate of growth in medical costs and insurance premiums has slowed in recent years. However, millions of consumers continue to be saddled with high out-of-pocket health care costs. While the number of underinsured people in the United States held constant in 2014, the steady growth in the proliferation and size of deductibles threatens to increase underinsurance in the years ahead.
The Affordable Care Act’s coverage expansions and protections have greatly improved the quality of insurance coverage available to people who lack job-based health benefits. In addition, cost-sharing subsidies significantly reduce deductibles for people with low incomes who buy plans in the marketplaces. But those subsidies phase out quickly, leaving families with deductibles that may be high relative to their incomes. In addition, the law has only limited ability to improve the cost protection of employer plans, which is the source of most American’s health insurance. 
Reforms and new approaches are needed to improve the cost protection of health plans. These could include innovations in benefit design that slow growth in deductibles and emphasize incentives that encourage people to utilize, rather than delay, timely health care. In addition, policymakers should identify and address holes in health plans—like out-of-network physicians in in-network hospitals—which are surprising many families with unexpected costs. Finally, systemwide efforts to lower the underlying rate of medical cost growth and share those savings with consumers will be critical.y had coverage that began prior to the law’s major insurance expansions going into effect.

Improving Care for Chronic Obstructive Pulmonary Disease

Chronic Obstructive Pulmonary Disease (COPD) is a common chronic condition that adversely affects many adults within the working age population, and can be caused or exacerbated by exposure to harmful workplace lung irritants and other environmental factors. These issues may contribute to high insurance costs, lower productivity and increased absenteeism, however, awareness about the risks of COPD is low among patients and employers. 

The National Business Coalition on Health’s (NBCH) Improving Care for COPD Patients grant program, funded by the COPD Foundation, allowed NBCH employer coalition members to educate employers about the clinical and cost impact of COPD and to design interventions to identify and address COPD within their populations. 

This final report summarizing the grantee coalition projects is now available, offering recommendations to help make COPD care improvement a broadly achievable goal for other employer coalition markets.

Friday, May 15, 2015

ACA Compliance: A Blueprint from Employers

ADP, a global provider of human capital management solutions, has developed a useful guide for employers, providing a clear explanation of the ACA's employer compliance requirements, with specific instructions on how to avoid penalties.

The brief offers actionable, practical advice and spells out how employers can adopt strategies to make well-informed decisions. By understanding their available options, employers can not only do right by their employees and save money, but also achieve full compliance with the law.

Information covered includes:
  • Avoiding the “Catastrophic Tax”
  • Avoiding the “Lesser Tax”
  • Conducting an Excise Tax Liability Analysis
  • Documenting the Offer of Coverage
  • Doing Due Diligence on Non-Calendar Year Plan

Thursday, May 7, 2015

Pare and Klepper Commentary -- Specialty drugs: What good is a treatment if it's out of reach?

A commentary by Carolyn Pare, president and CEO of the Minnesota Health Action Group, and Brian Klepper, CEO of the National Business Coalition on Health, was published on Tuesday in the Star Tribune.

The article can be accessed here.
A breakthrough is defined as a sudden, dramatic and important discovery or development. It’s hard to dispute that medical breakthroughs have changed the course of life as we know it. But what good are these breakthroughs if the people who need them can’t afford them? Such is the case with prescription drugs and, in particular, specialty pharmacy.
In the coming years, drug manufacturers will unleash an unprecedented raft of new drugs into the marketplace; some will improve the treatment of common medical problems like high cholesterol and diabetes, while others (those referred to as “specialty” drugs) will be used to treat complex conditions like multiple sclerosis, hepatitis C and cancer. The good news: These “precision therapies” provide new and, in some cases, better treatment options. The bad news: The price tag for such prescription drugs in the U.S. is breathtaking — even scandalous.
Drug companies argue that new products are harder to develop and manufacture, which justifies the additional cost. But U.S. pricing is often three to 10 times that in other developed nations. Is that really acceptable?
Human-resource and benefits leaders from 17 companies who are members of the Minnesota Health Action Group are mobilizing around the specialty-drug-pricing issue by joining a Specialty Pharmacy Care Delivery Learning Network sponsored and led by the Action Group. The goal is to effect market-based change in an informed, united way so Minnesotans can receive the right therapies, in the right place, at the right price and at the right time.
Why should employers care about specialty pharmacy and, furthermore, why should they give their precious time to help drive change? Quite simply, because if they don’t, they will eventually end up paying the price. Don’t believe us? Consider the following:
• The hepatitis C drug Sovaldi made headlines last year when a course of treatment was pegged at $84,000 in the United States, crushing previous cost and use records. The same drug is priced at $900 in Egypt and $51,000 in France.
• U.S. costs for a powerful new cholesterol management drug, PCSK9, are expected to be $7,000 to $12,000 per patient per year, compared with about $1,000 on average for conventional drug therapies. Given the number of patients who might benefit, the market for this one drug could easily reach $100 billion per year, or about 1/33 of what we currently spend on all U.S. health care. All this for a maintenance drug that comes with annual lifelong, recurring costs.
• By 2018, the cost for hundreds of specialty drugs that are flooding the pipeline is expected to account for more than half of the total U.S. drug spend, up from 25 percent in 2006. Spending on this category is growing almost 20 times as fast as non-specialty-drug spending.
Unless something changes, in a few years, we’ll spend more on specialty than nobrian-specialty drugs or, for that matter, on doctors. The likelihood that this trend could financially overwhelm health care purchasers is real.
It’s hard to know how employers and unions will cope with the new pricing. Purchasers should consider a couple of key questions. First, what new measurable value will each new drug bring? This is hardly cynical; one recent study found that cancer drugs approved by the U.S. Food and Drug Administration over the past decade lengthened life by only 2.1 months, on average. Courses of many of these drugs cost more than $100,000. As consumers, we want to know what tangible value we can expect from a purchase. But in health care, that value has proved elusive.
Second, what is the pricing tied to? What makes it more expensive to buy these drugs in the U.S.? Why, exactly, is Gilenya, a multiple-sclerosis drug, almost six times as costly here as it is in Spain?
The battle over specialty-drug pricing could come down to a standoff between drug manufacturers and purchasers. In the past, drug companies have had reason to believe employers and unions were too preoccupied with other matters to take action against specialty-drug costs.
Minnesota Health Action Group members are here to say “enough is enough.” All Minnesota employers should get informed on this issue and join us as we strive to hold drug manufacturers and sellers accountable for rational pricing practices. It’s time, yet again, for business to lead the way in health care innovation.
Benefits managers and financial officers from employers, unions and governmental agencies have been watching their specialty-drug spend and calculating. It’s possible that excessive specialty-drug costs could capsize their benefit plans, making it untenable to maintain good health coverage without severely compromising other important benefits. Just as worrisome, these costs will exacerbate their health care cost burden and cannibalize profits.
Is it possible that, in manufacturers’ zeal for ever-greater profits, specialty-drug pricing could be the straw that breaks the tolerance of the nation’s health care purchasers for excessive health care pricing? If so, maybe health care will finally change.

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

Dr. Atul Gawande's article in the New Yorker, Overkill, looks at the problem of over testing, over diagnosis and over treatment in the health system.
“Often, these are fishing expeditions, and since no one is perfectly normal you tend to find a lot of fish. If you look closely and often enough, almost everyone will have a little nodule that can’t completely be explained, a lab result that is a bit off, a heart tracing that doesn’t look quite right.” 
The full article can be found here.

Runaway Drug Prices

On May 5, The New York Times Editorial Board published this commentary, Runaway Drug Prices, examining the industry's arbitrary price increases and a lack of pricing transparency.

Saturday, May 2, 2015

BenefitsPro: Businesses must be solution to health crisis

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

Covering the conference for BenefitsPro, Kathryn Mayer wrote an article summarizing Klepper's comments which can be found here.
Brian Klepper doesn't just think the nation's health care system is flawed; he thinks it's broken.
But the good news, he said, is there is a solution: businesses. 
Klepper urged benefits managers to meet with their C-suite, talk about just how serious the health care problem is, and band together to take action to fight the health care industry and rein in exorbitant costs.
"The most important people in saving health care and saving America is businesses," he said.

Kaiser Family Foundation: American’s opinion of the health care law closely divided

The Kaiser Health Tracking Poll for April found public opinion of the Affordable Care Act (ACA) continues to be almost evenly split, with 43 percent reporting a favorable view and 42 percent reporting an unfavorable view.

Among the key findings, when asked what the next health care priority should be for the White House and Congress, 76 percent of Americans responded "making sure that high-cost drugs for chronic conditions, such as HIV, hepatitis, mental illness and cancer, are affordable to those who need them."

Figure 1

Tuesday, April 28, 2015

RAND Corporation and AMA study: Physicians need support and guidance to further advance delivery reforms

Physician practices are engaging in new health care payment models intended to improve quality and reduce costs, but are finding that they need help with successfully managing increasing amounts of data and figuring out how to respond to the diversity of programs and quality metrics from different payers, according to a joint study released in March by the RAND Corporation and the American Medical Association.

Both the federal government and private payers are changing the way they pay physicians and other health professionals, moving to innovative models intended to improve quality and reduce costs.

Many physician practices are responding by partnering or merging with other medical practices or hospitals in order to better support the investments necessary to succeed in new payment models, such as care managers and information technology. Practices say that realigning their operations to the goals of the new payment strategies can be challenging when necessary data are not available or different payment models conflict with each other.

Researchers performed case studies of 34 physician practices in six diverse geographic markets to determine the effects that alternative health care payment models are having on physicians and medical practices in the United States.

The payment models include episode-based and bundled payments, shared savings, pay-for-performance, capitation and retainer-based practices. Accountable care organizations and medical homes, two new organizational models, also were examined.

The findings are intended to help guide system-wide efforts by the AMA, the study's sponsor and co-author, and other health care stakeholders to improve alternative payment models and help physician practices successfully adapt to the changes.

The study found that alternative payment models generally have not changed the core content of physicians' clinical work. Efforts to improve efficiency by delegating some tasks to non-physicians has had the unintended consequence of increasing the intensity of physicians work, raising concerns about burnout.

The project conducted interviews between April and November 2014, speaking with 81 people from 34 physician practices in six markets throughout the country: Little Rock, Arkansas; Orange County, California; Miami, Florida; Boston, Massachusetts; Lansing, Michigan; and Greenville, South Carolina. Researchers also spoke to leaders of 10 payers, nine hospitals or hospital systems, seven local medical societies and five Medical Group Management Association chapters.

The report, “Effects of Health Care Payment Models on Physician Practice in the United States,” is available at

Sunday, April 26, 2015

New research on views of 2,000 employees on their perceptions and preferences around health and wellness benefits

Americans highly value and depend on their employee benefits — health insurance in particular — but lack the savvy and initiative to ask doctors, “How much will it cost?” That question could mean the difference in thousands of dollars for consumers, and millions for U.S. companies. 

These are among the findings from a recent national survey of more than 2,000 employees, led by Benz Communications, a marketing firm that specializes in employee benefits, and Quantum Workplace, a leading technology firm focused on employee satisfaction and engagement surveys.

The goal was to get clear, actionable data for U.S. companies on how to improve their efforts around managing and communicating health and wellness benefits. Top level findings can be found in the infographic below. A deeper dive into the data, including four topical fact sheets, can be found here.

To view full size click here.

Saturday, April 25, 2015

ConsumerAffairs: Rising cost of drugs gets new scrutiny

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

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

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

Friday, March 27, 2015

2015 County Health Rankings Released

The County Health Rankings & Roadmaps is a collaboration between the Robert Wood Johnson Foundation and the University of Wisconsin Population Health Institute. The program helps communities identify and implement solutions that make it easier for people to be healthy in their homes, schools, workplaces, and neighborhoods.

Published online the Rankings help counties understand what influences how healthy residents are and how long they will live. The Rankings are unique in their ability to measure the current
overall health of each county in all 50 states. They also look at a variety of measures that affect the future health of communities, such as high school graduation rates, access to healthy foods, rates of smoking, obesity, and teen births.

Nationally, this year’s Rankings show that the healthiest counties in each state have higher college attendance, fewer preventable hospital stays, and better access to parks and gyms. The least healthy counties in each state have more smokers, more teen births, and more alcohol related car crash deaths. This report also looks at distribution in income and the links between income levels and health.

The County Health Rankings & Roadmaps program offers data, tools, and resources to help communities throughout their journey to build a Culture of Health. Also part of the program is the RWJF Culture of Health Prize which honors communities that are working together to build a healthier, more vibrant community.

Communities can use the Rankings to garner support for local health improvement initiatives among government agencies, health care providers, community organizations, business leaders, policy makers, and the public.

Wednesday, March 18, 2015

Biosimilars: What employers need to know

Earlier this month, Novartis’ Zarxio was the first biosimilar product approved in the United States, ushering in a new era for the drug industry, consumers and third parties who manage medical and drug benefits.

Given the confusion over the U.S. Food and Drug Administration’s approval process and specialty-related product availability, Cheryl Larson, vice president for the Midwest Business Group on Health, and Randy Vogenberg, principal for The Institute for Integrated Healthcare, wrote an article on questions employers should be asking related to biosimilars.

So what’s an employer to do?
1. Have a conversation with your pharmacy benefit management organization and/or health plan regarding their coverage approach or policy related to biosimilars. If you have questions about how biosimilars are different, ask them.

2. Review your vendor contract and coverage of specialty drugs to determine the impact on current or future plan costs to your organization.

3. Review your own plans’ drug use patterns and if this type of approval would make a cost savings difference to your members.

4. Determine if this will make any difference on annual cost trend for the plan versus just the unit cost of a particular drug for an individual medical condition like cancer-related anemia.

5. Continue to advocate for full cost transparency on all specialty drug products by your vendors.

The full article published in Employee Benefit News can be found here

Additionally, MBGH offers free tools and resources to help plan sponsors stay current on issues related to specialty pharmacy drugs, benefit design and contracting strategies at

Wednesday, March 11, 2015

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

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

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

The report offers sobering information:
There is little evidence that integrating hospital and physician care has helped to promote quality or reduce costs. Indeed, there is growing evidence that hospital-physician integration has raised physician costs, hospital prices and per capita medical care spending. Similarly, hospital integration into health plan operations and capitated contracting was not associated either with clinical efficiency (e.g. shorter lengths of stay) or financial efficiency (e.g. lower charges per admission).
 From the provider perspective, the available evidence suggests that the more providers invest in IDN development, the lower their operating margins and return on capital. Diversification into more busi­nesses is associated with negative operating performance. This is consistent with the management literature, which shows that diversification increases a firm’s size and complexity, in turn increasing its cost of coordination, information processing, and governance/monitoring.
 Moreover, there are few or no scope economies within health plans, hospitals, or physician groups — let alone between these lines of business contained within IDNs. Provider-sponsored insurance plans face similar problems regardless of whether they were formed by hospitals or physician groups: poor capitalization, lack of actuarial and underwriting expertise, limited marketing capability both to employers and consumers, adverse selection risk, and an inability to reach minimum sufficient scale of enrollment.
Despite more than 30 years of public policy advocacy on behalf of IDN formation, there is scant evidence in the literature either of measurable societal benefits from IDNs or of any comparative advantage accruing to providers themselves from forming IDNs. We have similarly found no such evidence in our analysis of 15 IDNs. Serious data limitations hamper anyone attempting to evaluate IDN performance based on publicly disclosed information. IDN financial disclosures obscure the operating performance of their hospitals and physician groups.
There does not appear to be a relationship between hospital market concentration and IDN operat­ing profit. However, if the performance of the IDN’s flagship hospital is any indicator of overall sys­temic efficiency, the IDNs’ flagship hospital services appear to be more expensive, both on a cost-per-case and on a total-cost-of-care basis, than the services of its most significant in-market com­petitor. This runs counter to the theoretical claim of IDN operating efficiency. Further, the flagship facilities of IDNs operating health plans or having significant capitated revenues are more expensive per case (Medicare case-mix adjusted) than their in-market competitors.

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