The Growing Power Of Some Providers To Win Steep Payment Increases From Insurers Suggests Policy Remedies May Be Needed

In the constant attention paid to what drives health care costs, only recently has scrutiny been applied to the power that some health care providers, particularly dominant hospital systems, wield to negotiate higher payment rates from insurers. A study by the Center for Studying Health System Change published in the May issue of Health Affairs examines this issue. Interviews in twelve US communities indicated that so-called "must-have" hospital systems and large physician groups—providers that health plans must include in their networks so that they are attractive to employers and consumers—can exert considerable market power to obtain steep payment rates from insurers. Other factors, such as offering an important, unique service or access in a particular geographic area, can contribute to provider leverage as well. Even in markets with dominant health plans, insurers generally have not been aggressive in constraining rate increases, perhaps because the insurers can simply pass along the costs to employers and their workers. Although government intervention—through rate setting or antitrust enforcement—has its place, our findings suggest a range of market and regulatory approaches should be examined in any attempt to address the consequences of growing provider market clout.

Insurers Embrace Virtual Doctor Visits

A joint Kaiser Health News/USA Today story reports that insurers such as UnitedHealthcare, Aetna and Cigna, and large employers such as General Electric and Delta Air Lines are getting on board, pushing telemedicine as a way to make doctor "visits" cheaper and more easily available. Proponents also see it as an answer to a worsening doctor shortage. But some physician and consumer groups worry about the trend.

Although telemedicine developed more than 40 years ago as a way to deliver care to geographically isolated patients, its growth was slow. That's changed in the past decade thanks to the development of high-speed communications networks and the push to lower health costs.

Carmen Balber, a spokeswoman for Consumer Watchdog in Santa Monica, Calif., is concerned that lower co-payments, and other incentives, will spur consumers to see doctors or nurses online just to save money. "People will choose the more economical option, even if it is not the option they want," she said.

Employers, however, say they're getting mostly positive reviews.

"Our employees just love the convenience, the low cost and the efficiency," said Lynn Zonakis, managing director of health strategy and resources at Delta Air Lines, which offers NowClinic to some employees for $10 a consultation.

Employee Wellness Plans Broaden Focus to Include Employee Well-Being

This Huffington Post blog describes a shift in how employers think about wellness programs. To create healthy and productive workforces, organizations are starting to expand their benefits programs to focus on overall employee well-being. Employers are taking a more holistic approach to wellness by touching on additional aspects of an individual beyond the mere physical to include emotional/mental, spiritual and financial well-being.

A survey on Total Rewards and Employee Well-Being found that while a majority of employers offer traditional wellness programs, many are starting to sponsor programs that add to an employee's broader well-being. Indeed, it was encouraging to find that organizations are giving employees the tools they need to make behavioral changes that ultimately drive health care costs down, creating more productive and engaged employees. A majority (77 %) expect to increase the number of well-being programs and activities offered. Employer-sponsored well-being programs currently focus on physical fitness, stress reduction, work-life balance and financial education. Employers wanting to increase the chances for success ought to consider expanding eligibility for certain programs (such as financial counseling) to involve the employee's family members.

American Benefits Council's New, More User-Friendly Website

The American Benefits Council, an important strategic partner of NBCH, has announced its new, more user-friendly website. The Health Care Reform issue page is now divided into its component pages, covering the wide variety of health reform issues addressed by the Patient Protection and Affordable Care Act (PPACA). These individual topics are:

• Employer Shared Responsibility
• Market Reforms & Adult Child/Age-26 Coverage
• Preventive Care & Value-Based Design
• Quality Improvement & Delivery Reform
• Essential Benefits
• Tax & Revenue Issues
• Grandfathered Plans
• Claims and Appeals
• Summary of Benefits & Coverage
• Information Reporting/W2
• Health Insurance Exchanges
• State Innovation (including waiver guidance and activity)
• Medical Loss Ratio & Mini-Med Plans
• Automatic Enrollment
• Wellness Programs
• Accountable Care Organizations
• Non-Discrimination (under Internal Revenue Code Section 105(h))

As always, these pages are listed with the Legislative items at the top with the Regulatory items below and the Judicial items at the bottom. You can always use the links at the top of the page to instantly jump to a specific section. Members are encouraged to visit ABC's website and explore these helpful resources.

House Ways & Means Releases Report on Employer Health Coverage

The majority Republican staff of the U.S. House of Representatives Ways and Means Committee has released a report, Broken Promise: Why ObamaCare Will Force Americans to Lose the Health Care Coverage they Have and Like, surveying 71 of the Fortune 100 companies on the probable cost impact of the ACA.

The report’s key finding is that the 71 companies surveyed could collectively save an estimated $28.6 billion in 2014 alone (and $422.4 billion from 2014 to 2023) by eliminating health insurance coverage for their more than 5.9 million U.S. employees and instead paying the $2,000 (in 2014) per full-time employee fine under the ACA (the "pay or play" provision). Individually, these major employers could save an average of $402.3 million in 2014 alone (and $5.9 billion from 2014 to 2023). The report states: "The Democrats’ health care law contains a number of policies that create perverse financial incentives for employers to stop offering health insurance to their employees, perhaps none more so than the employer mandate,” the report says.

While the report describes the cost savings that would result from dropping coverage, it does not assert the likelihood of these companies to do so, nor does it address various ancillary matters that would provide context for such a decision. For example, the Congressional Budget Office (CBO) has consistently assumed in its official estimates that most employers would be compelled to increase wages or other compensation, plus pay a penalty, if they chose not to provide health coverage. While this assumption may or may not be correct, it is not addressed by the Ways and Means report or figured in its calculations. In fact, as the Ways and Means report makes clear, these employers were not actually asked if they were likely to drop health coverage or the circumstances under which they might do so.

Increasing Use of Digital Gaming in Employers' Wellness Programs

The Wall Street Journal reports that a growing number of workplace prevention and wellness programs are borrowing techniques from digital games in an effort to encourage regular exercise and foster healthy eating habits. The idea is that competitive drive—sparked by online leader boards, peer pressure, digital rewards and real-world prizes—can get people to improve their overall health.

A survey of employers released in March by the consulting firm Towers Watson and the National Business Group on Health found that about 9% expected to use online games in their wellness programs by the end of this year, with another 7% planning to add them in 2013. By the end of next year, 60% said their health initiatives would include online games as well as other types of competitions between business locations or employee groups.

Researchers say using videogame-style techniques to motivate people has grounding in psychological studies and behavioral economics. But, they say, the current data backing the effectiveness of workplace "gamification" wellness programs is thin, though companies including WellPoint Inc. and ShapeUp Inc. have early evidence of weight loss and other improvements in some tests.

Co-Ops Moving Forward Despite Setbacks in Congress

The House Energy and Commerce Committee last week voted to zero out the unobligated funds left in the $3.4 billion program, which has already been slashed twice in budget negotiations from its original $6 billion appropriation in the ACA. The oversight subcommittee also announced it would investigate an estimated $845 million announced so far in subsidized loans to 10 CO-OPs operating in 10 states, citing a potential default rate as high as 50 percent.

The CO-OPs themselves are moving ahead despite these recent developments. “They’re just playing politics, and we’re out here in the real world, doing real work,” said Jerry Burgess, who is heading a Consumer Operated and Oriented Plan in South Carolina. “I’ve got a fiduciary responsibility to set up a new nonprofit, consumer-driven health plan in the private market, and I’m going to keep at it. As far as I’m concerned, it’s a Republican idea,” Burgess said.

Employers Debate Use and Efficacy of Wellness Incentives

When it comes to wellness, employers are moving toward cash incentives as a way to motivate employees, but it's still unclear whether positive or negative reinforcement works best -- and whether such efforts are seen by workers as encouragement or intimidation. A Human Resource Executive article examines the questions employers face when offering wellness incentives, including:

• How much financial incentive is enough?
• Is negative reinforcement OK?
• Who should be targeted: the well, the at-risk or the sick?
• Do financial incentives distract from what some experts say is the ultimate incentive, the employee's intrinsic desire for health?

The article mentions the Health & Productivity conference held this past February in San Francisco, and co-hosted by NBCH and the Integrated Benefits Institute.

An Increase in Self-Insurance Could Have Implications for State Insurance Exchanges

The growth in self-insurance could spell trouble for state insurance exchanges, Businessweek reports. Companies with younger and healthier workers may decide they're better off self-insuring to avoid subsidizing others with higher medical costs. With premiums for traditional policies continuing to rise, small businesses are increasingly ready to roll the dice. Some 20 percent of companies with 50 to 199 workers self-insured in 2010, up from 14 percent four years earlier, according to a Rand Corp. analysis commissioned by the U.S. Department of Labor.

That could spell trouble for the state insurance exchanges expected to launch in 2014. In those markets, premiums will reflect the total risk of all the people insured, so companies with younger and healthier workers may decide they’re better off self-insuring to avoid subsidizing others with higher medical costs. Self-insured plans are governed by federal law and not states, which typically oversee health insurance.

Health Care Price Transparency: Can It Promote High-Value Care?

The latest edition of The Commonwealth Fund's Quality Matters is out.

Prices for health care services vary significantly among providers, even for common procedures, and it's often difficult for patients to determine their out-of-pocket costs before receiving care. Some consumer advocates, employers, and health plans are pushing for greater reporting of the prices of health care services as a way to encourage consumers to choose low-cost, high-quality providers and to promote competition based on the value of care. In spite of the challenges, price transparency may be spurred by the growing number of health care consumers who are being required to pay a larger share of their medical bills.

Read the full article here.

Price shopping for health care

As consumers we have the ability to do price and value comparisons for our homes, cars and the majority of good and services we buy. While we still have a long way to go, strides are being made to help Americans do the same for health care.

The Healthcare Blue Book, a free resource for consumers, publishes what it determines to be a "fair price" for various medical services, based on a review of claims data as well as consumer-submitted reports.

Employers and insurance companies can pay for access to a version that lists in-network providers ranked by value. Recently, Healthcare Blue Book launched a subscription service for patient-centered medical homes, so that primary care physicians can work with their patients to make referrals to high-quality, lower-cost providers.

There are also free mobile apps available.

PCORI Amends its Research Agenda

The board of the Patient-Centered Outcomes Research Institute has voted to amend PCORI's draft research agenda in response to 15 major themes that emerged from more than 450 public comments on its proposed agenda, released in February. NBCH was among the organizations providing comments. The board did not recommend any changes in the quasi-governmental agency's National Priorities for Research, saying the public comments did not identify significant gaps in the five proposed priorities. PCORI plans to incorporate the revisions and vote on the final agenda and national priorities next month. The board also approved $30 million in funding over two years for a slate of 50 pilot projects that will address a broad range of questions about methods for engaging patients in various aspects of the research and dissemination process. Once the research agenda is finalized, PCORI plans to distribute $120 million of research funding by the end of the year.  According to the statute that establishes PCORI, about half of its funding comes from $2-per-covered-life assessments on employers, both insured and self-insured.

Employers Should Incorporate ACO Concepts into Worksite Medical Care

The American College of Occupational and Environmental Medicine is encouraging workplace health programs to adopt elements of accountable care organizations and patient-centered medical homes in a position statement that appears in the April issue of the Journal of Occupational and Environmental Medicine.

"By extending the well-conceived integrative concepts of the PCMH model and ACOs into the workforce via occupational and environmental medicine physicians, the power of these concepts would be significantly enhanced," write the physician authors of the official statement, including lead author and former ACOEM President Robert K. McLellan, MD.

The authors argue OEM provides an infrastructure to achieve PCMH and ACO goals. Since many people spend most of their day at work, the workplace should be a key component of an integrated healthcare delivery model. OEM physicians will need to develop innovative solutions that address primary care, workers' compensation and disability management within PCMH and ACO models, according to the authors of the article.

Alliance of Community Health Plans Report on Readmissions

As hospitals wrestle with ways to bring down readmission rates, a new Alliance of Community Health Plans report looks at five key steps that improve patients’ odds of being able to go home and stay there. Though the program is still in the early stages, some data suggest that ACHP members with care transition programs are bringing down readmission rates and reducing costs. Still, only a few AHCP plans found “concrete” cost savings from their programs so far.

 

The report discusses five practices that plans identified as key facilitators of their programs’ success, helping to break down silos of care, promote coordination among providers and engage patients to facilitate effective transitions from hospital to home:

• Using data to tailor care transition programs to patients’ needs
• Anticipating patients’ needs and involving them early in the transition process
• Engaging providers to become program partners
• Leveraging technology to improve care transitions
• Incorporating care transitions into broader quality initiatives

NBCH Contributes to 7-Step Guide to Starting an Employee Wellness Program

The Change Agent Work Group (CAWG) recently published a seven-step guide to starting an employee wellness program. As global competition continues to rise, employers are increasingly finding the importance in a healthy and productive work force. Employees’ health has both a direct and indirect impact on an employer’s bottom line, and to battle these costs, more employers are focusing on wellness programs, according to CAWG.

NBCH's President and CEO, Andy Webber, is a member of the CAWG, whose mission is to identify high impact policies, principles and strategies that will accelerate improvement in workforce health status, productivity, and quality of life; harmonize the divergent messages with a common language and definitions to make the information more actionable; and communicate the work product to those seeking guidance on improving the health status and productivity of their workforce.