Viewing entries tagged with 'ICYMI'
ICYMI: State Employer Groups on MLR Definitions
Posted by The Campaign on June 16, 2010 at 1:23 PM
What They Are Saying – State Employer Groups:
Medical Loss Ratio Definitions
(Excerpts taken from comment letters submitted to NAIC or State Insurance Commissioners)
o “We ask that you carefully construct your MLR recommendations so that these rules do not result in premium increases, which would be detrimental to employer-sponsored health plans.”
o “The Chamber appreciates your efforts on minimum loss ratio and urges you to approach the issue in a way that will minimize disruption and maximize the kind of activities that improve the quality and affordability of health care.”
The Business Council of New York State, Inc.
o “It is essential that MLR recommendations not be narrowly constrained limiting New York employers’ flexibility in plan design and their ability [to] continue to offer affordable, quality coverage.
o “The Business Council urges you to ensure that MLR recommendations recognize the value of health plans in driving quality and ensuring that consumers continue to have access to critical activities that improve the quality and the value of their care. This is very important in New York State – often recognized as a state with among the highest costs in the country – because employers have moved more aggressively into areas which have proven effective in managing employee wellness, allowing employers to better control plan costs without compromising quality.”
o “The Business Council asks that those quality measures which are valuable to employers and their employees be included in the MLR calculation, including: wellness programs, disease management programs, fraud, waste and abuse activities, and certain health information technology tools. These measures provide valuable services to employees improving their health and the value of the care they receive. Failure to include these measures would increase costs for employers, and could jeopardize programs that are valuable to employees and beneficial to their health.”
o “Many activities undertaken already, and many that will be required as a result of PPACA, include the developing, gathering, aggregation, and analysis of data in order to measure and incentivize quality, credentialing of providers, etc. We support such activities, and believe that both quality and transparency must be paramount in order to make health care more efficient, affordable, and to improve patient care.”
o “Our objective is to ensure that New York employers are not burdened with regulations which so narrowly define an MLR as to cause plan design changes which will drive up costs even further.”
o “The MLR definitions could have a considerable impact on our member’s ability to provide coverage and result in additional premium increases that would be detrimental to employer-sponsored health plans in Ohio. Therefore, the Ohio Chamber urges you, and the other NAIC members, to carefully consider your recommendations regarding these rules.”
o “Wellness and prevention initiatives have demonstrated that they lead to lower costs for consumers by improving health and wellbeing.”
o “There are several types of programs that employers and insurers implement that are crucial to keeping the cost of insurance premiums as low as possible. We believe capturing these programs in the MLR definition of quality activities will provide an incentive for these programs to be maintained.”
o “[We are] writing because the MLR definitions could have a considerable impact on our members’ ability to provide coverage. We ask that you carefully construct your MLR recommendations so that these rules do not result in premium increases which would be detrimental to employer-sponsored health plans.”
o “…we urge you to recommend the following:
· “Wellness and prevention be included under the umbrella of quality initiatives…[w]ellness and prevention initiatives have been demonstrated to lead to overall lower costs for consumers by improving their health and wellbeing, and none of them should be considered ‘administrative.’”
· “Include all quality, fraud and abuse, and cost control initiatives that clearly improve quality and patient safety in the definition of ‘activities that improve health care quality.’
· “We are concerned that not capturing these programs in the MLR definition of quality activities means that insurers will have a strong disincentive to spend on these activities as they well increase administrative costs and reduce medical expenses.”
o “We appreciate your efforts on minimum loss ratio and urge you to approach the issue in a way that will minimize disruption and maximize the kind of activities that improve the quality and affordability of health care.”
Association of Washington Business: Washington State’s Chamber of Commerce
o “This issue is of great concern to the members of the Association of Washington Business as the final rules could significantly impact our member’s ability to continue providing health care coverage to their employees.”
o “…[we] ask that you carefully construct the MLR recommendations so that the rules do not result in premium increases, as such would be highly detrimental to employer-sponsored health plans.”
Additionally, the Connecticut Business & Industry Association, Maine State Chamber of Commerce, Missouri Chamber of Commerce and Industry, and the Wisconsin Manufacturers & Commerce all have sent letters on the MLR issue.
ICYMI: AHIP Statement on AMA "Report Card"
Posted by The Campaign on June 14, 2010 at 1:54 PM
Statement from AHIP Press Secretary Robert Zirkelbach on the AMA report card:
"Health plans and providers share the responsibility of making the innovations and investments needed to improve efficiency in our health care system. A recent AHIP survey found that nearly one-fifth of all provider claims are not submitted to health plans electronically, and more than 1 in 5 claims are submitted by providers at least 30 days after the delivery of care.
"Health plans are investing in cutting-edge technologies to make it easier for providers to submit claims electronically and receive payment quickly. For example, health plans are working with providers in New Jersey and Ohio to implement portals that would simplify administrative processes and enable doctors in these states to spend more time with their patients.
"Government data show that soaring medical costs - not health plan administrative costs - are the key drivers of rising health care costs. In fact, the percentage of premiums going toward health plans' administrative costs has declined for six straight years."
Of Note:
According to AHIP's most recent health care claims receipt and processing time survey:
- Nearly one-fifth of all provider claims are not submitted to health plans electronically.
- There is often a notable lag before health insurance plans receive claims from health care providers. In 2009, 22 percent of claims were received from health care providers more than 30 days after the date of patient service, and 12 percent of claims were received more than 60 days after the date of service.
- Health insurance plans processed nearly 99 percent of "clean" claims within 60 days, and 97 percent within 30days.
- In 2009, approximately 75 percent of claims were adjudicated automatically -- that is, using automated verification and validation processes that do not require manual intervention -- up from 68 percent in 2006 and 37 percent in 2002.
According to AHIP's survey on out-of-network charges:
- "Some out‐of‐network providers are charging exorbitant prices - several hundred or even over a thousand percent of the Medicare reimbursement for the same service in the same area. Recent examples: $4,500 for an office visit when Medicare would have paid $134; $14,400 for removal of a gallbladder when Medicare would have paid $656; and $40,000 for a total hip replacement when Medicare would have paid $1,558."
ICYMI: Expert Highlights Lessons to Be Learned From MassCare
Posted by The Campaign on June 09, 2010 at 1:42 PM
This OpEd from a employee benefits expert in Massachusetts is a little delayed in being posted, but is still incredibly relevant. It is written by Mark Gaunya who has over 20 years experience in the employee benefits field.
Gaunya argues that Massachusetts is a perfect test case of what to expect from the new health care reform law. He writes:
"Almost four years after implementing the Massachusetts health care reform law (MassCare), the private market is 'wrestling' with state government to address rising health insurance costs. What was lost in the national debate and threatening the sustainability of MassCare is the fact that health insurance is expensive because health care is expensive."
While this observation is not new, it certainly carries a lot of weight coming from someone who is living the experience of expanded access without controlling costs.
In fact, Gaunya argues that a lot of the rhetoric used against health plans is off the mark, writing "Pointing the finger at health insurers is politically convenient, but significantly misguided."
He also offers a series of five lessons that can be learned from Massachusetts' health care reform law, concluding with this: "MassCare created an unsustainable 'access' model, because it didn't address cost at the same time as access."
Sound familiar? That's because it was the same argument made by hundreds of experts about what will happen at the national level if costs are not addressed.
And it leads to Gaunya's conclusion:
"One thing is clear - health insurance is expensive because health care is expensive."
The fortunate thing the nation has going for it is we can see firsthand what happens if we do address costs at the same time as expanding access. It's not too late, but the question is will policymakers heed the warning and learn the lessons of recent history?
ICYMI: The New York Times Highlights The ‘Incidentaloma’ Problem
Posted by The Campaign on June 09, 2010 at 1:16 PM
Over the past year here at the blog we have shined the spotlight on some of the problem areas in our health care system that lead to higher costs and no corresponding increase in quality of outcomes or patients' care. And even in some cases potentially causing patients to become sicker.
No where is this more of an issue than in the explosion of medical tests and imaging over the past 10 years. In fact, many recent studies have come out highlighting the potential negative impact of medical tests and imaging on patients including potentially more cases of cancer.
Today's New York Times focuses on this topic and coins a phrase for it "The 'Incidentaloma' Problem". The article highlights the story told by Nicholas Kristoff's experience with CT scans. The article notes:
"His tale also brings to the fore a conundrum the medical community confronts with increasing urgency, given the pressing need to deploy expensive imaging technologies in a manner that balances risks and costs with benefits."
But, the article continues, this is the problem with with screening by imaging "...medical scans pick up incidental findings that may be benign, leading to complications that make an otherwise healthy person ill."
The author of the article, Dr. Peter Libby, further notes "...it's important to think rigorously about the benefits versus the risks and costs of medical procedures, rather than relying on impressions or remarkable individual cases. The medical literature indicates that incidental findings leading to follow-up medical procedures occur in more than 8 percent of cardiovascular imaging studies."
Dr. Libby concludes that while medical imaging is useful when used correctly, all of the benefits must weighed against all of the potential PROBLEMS that could arise. He writes "...we should bear in mind the potential risks they entail if used indiscriminately. In most situations, a prior consideration of risk for disease using non-imaging markers like medical history, physical exams and simple blood tests may help us target imaging in a way that better balances risks with benefits, and help us avoid in particular encountering those 'incidentalomas' best left undetected."
ICYMI: The Milliman Medical Index -- Costs Keeping Rising
Posted by The Campaign on May 12, 2010 at 10:04 AM
Everyday seems to bring to light new information about rising health care costs and the impact of the new health care reform law on costs (HINT: It is going to increase them.) The latest information comes from the Milliman Medical Index, an annual report that shows "total annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program."
The report provides further evidence that health care costs continue to rise at an unsustainable rate and are being driving by soaring prices for medical services.
Here are some nuggets from the report:
"Increasing healthcare costs remain a challenge for both employers and employees and are largely driven by increases in the underlying cost of care."
"The 2009 to 2010 hospital inpatient annual rate of increase grew from 7.7% to 9.8%. Most of the inpatient annual rate of increase is driven by average unit costs; we are seeing very little change in utilization. The hospital outpatient annual rate of increase grew from 10.2% to 11.6%, mostly because of increased average unit costs. Hospital outpatient care is the area of highest growth for the second year in a row."
"Most of the hospital and physician cost increases identified in this year's MMI have been driven by average unit cost, not utilization, which frames the coming effort to control costs. Provider/payor negotiations will be more visible and intense in the reform environment and as regulators put more pressure on the premium rate-setting process."
"Only about 17% of this year's increase in pharmacy spending is due to increased utilization, and the other 83% of the increase is due to average unit cost increases."
"While employers are making the immediate changes required to their benefit plans and adapting their longer-term benefit strategy to the new regulatory environment, healthcare costs continue to increase at rates exceeding most other costs of doing business."
"Efforts to enforce insurance rate controls may have indirect impact on the growth in healthcare costs but still do not address the underlying cost of care."
"While underlying cost drivers as yet remain relatively unchanged, there are some changes that will have a predictable effect on cost. The most immediate changes, such as increasing dependent coverage up to age 26 and elimination of lifetime and annual benefit maximums, will cause a direct shift in costs from employees to employers."
To read the whole report, click here.
ICYMI: The New York Times on the Need to Bring Down Underlying Medical Costs
Posted by The Campaign on April 21, 2010 at 5:49 AM
With each passing day, there seems to be a greater and greater recognition of the fact that health care costs are growing out of control. And it is these costs that are driving the icnreases in premiums. Thus if the country is going to get premium growth under control it has to design a strategy to get these underlying costs under control.
The New York Times picks up this line of argument today in its editorial "Health Care Reform and Massachusetts." First, the NY Times recognizes that premium caps are "a short-term fix."
The editorial goes on to argue:
"Like the rest of the nation, the state needs to deal with the underlying issue: the relentlessly rising prices charged by health care providers. Those are driven in part by costly new technologies and treatments. In Massachusetts, it is exacerbated by the outsized bargaining power of prestigious teaching hospitals and regionally dominant community hospitals."
This argument follows closely to the points made by AHIP in yesterday's hearing in front of the Senate HELP Committee. The Committee held a hearing on premium increases. The New York Times covered the hearing and picks up AHIP's point of view here:
"Congress, [AHIP's President and CEO Karen Ignagni] said, has largely ignored the cause of rising premiums: the explosive growth of medical costs and the power of hospitals and other health care providers to dictate prices. Ms. Ignagni said the law imposed new requirements, taxes and fees on health plans, which could further drive up costs."
ICYMI: Leap of Faith and Health Care Costs
Posted by The Campaign on April 19, 2010 at 5:43 AM
Much has been written and discussed about the impact of the new reform laws on costs and in particular premiums. The NY Times continues this discussion by looking at New York state and the impact of reforms implemented several years ago on premiums, costs and coverage.
Here are some key highlights from the article:
"New York’s insurance system has been a working laboratory for the core provision of the new federal health care law — insurance even for those who are already sick and facing huge medical bills — and an expensive lesson in unplanned consequences. Premiums for individual and small group policies have risen so high that state officials and patients’ advocates say that New York’s extensive insurance safety net for people like Ms. Welles is falling apart."
"The problem stems in part from the state’s high medical costs and in part from its stringent requirements for insurance companies in the individual and small group market."
The article then lays out specifically how premiums began to increase -- a combination of adverse selection and skyrocketing medical costs. From the article "Healthy people, in effect, began to subsidize people who needed more health care. The healthier customers soon discovered that the high premiums were not worth it and dropped out of the plans. The pool of insured people shrank to the point where many of them had high health care needs. Without healthier people to spread the risk, their premiums skyrocketed, a phenomenon known in the trade as the 'adverse selection death spiral.'"
These policies have led to two very serious problems:
- "Since 2001, the number of people who bought comprehensive individual policies through HMOs in New York has plummeted to about 31,000 from about 128,000, according to the State Insurance Department."
- "At the same time, New York has the highest average annual premiums for individual policies: $6,630 for single people and $13,296 for families in mid-2009, more than double the nationwide average, according to America’s Health Insurance Plans, an industry group."
So surely policymakers at the national level must have taken some lessons from New York when writing the new reform law? Sort of. The article does mention the coverage requirement that is part of the new law but notes "...analysts say that provision could prove meaningless if the government does not vigorously enforce the penalties, as insurance companies fear, or if too many people decide it is cheaper to pay the penalty and opt out."
And for this to work, Mark Hall a professor at Wake Forest University says "You have to sort of take a leap of faith..."
ICYMI: The Economist looks at the impact of health care reform on health care costs
Posted by The Campaign on March 26, 2010 at 7:27 AM
Today, The Economist published several articles on the now passed health care reform law. As The Economist has done over the past year, it has drawn a lot of attention to the issue of costs and what health care reform means for costs - particularly the impact on America's employers.
These articles all highlight the glaring omission from reform - real cost containment that will keep underlying medical costs under control and make reform sustainable over the long run.
Here are some key excerpts from these articles:
Missed Opportunity -
- "Because the bill does almost nothing to control costs, it was a huge missed opportunity. American business, which anyhow feels unloved by this White House, will suffer the consequences."
(American politics after health reform: Now What?, 03/25/10)
Far too little done to drive down costs -
- "They will also do far too little to rein in the underlying drivers of America's roaring health inflation."
- "Analysis by RAND, an independent think-tank, suggests that the reforms will actually increase America's overall health spending-public plus private-by about 2% by 2020, in comparison with a scenario of no reform (see chart). And that rate of spending was already unsustainable at a time when the baby-boomers are starting to retire in large numbers."
- "If coverage is the new law's strong point, cost control is its weakness."
- "...the new law carves out a ten-year exemption for hospitals-appalling, when one considers that runaway costs and misaligned incentives in hospitals lie at the very heart of the cost problem."
- "Indeed, by adding tens of millions of people to an unreformed and unsustainably expensive health system, this reform makes it all the more urgent to tackle the question of cost."
(Signed, sealed, delivered, 03/25/10)
American public is still concerned it will drive up costs -
(Miracle or monstrosity, 03/25/10)
"Looming disaster for American business" -
- "From Main Street's point of view the Obama administration has done too little to control the costs of this flawed system."
- "The administration has also talked endlessly about 'bending the cost curve downward'...[A]lmost all of the curve-bending measures have been abandoned in the fight to pass the bill."
- "The most reasonable assumption for Main Street is that health-care costs will either continue to grow at the same pace as for the past decade-or accelerate. This is a looming disaster for American business."
(The health-care squeeze, 03/25/10)
ICYMI: What They Are Saying About Health Care Costs
Posted by The Campaign on March 24, 2010 at 11:47 AM
While the House has passed health care reform legislation, experts continue to point out concerns about what the legislation will mean for costs and premiums.
Here are what some independent experts have said:
Associated Press: “...there’s very little reason to think premiums will go down.” (Associated Press, 03/24/10)
Uwe Reinhardt, Economist, Princeton University: "What drives prices is the amount of services people are getting, plus the prices doctors and hospitals charge for those services." (Health Day/Harris Interactive, Poll Finds Americans Blame Insurers, Drug Companies for Rising Health Costs, 03/24/10)
Dan Mendelson, Avalere Health: "You'll continue to see premium rates go up because there are so many aspects of the system that are still increasing prices." (AP, Health Overhaul Promises Pain, Gain for Businesses, 03/22/10)
Drew Altman, Kaiser Family Foundation: "Premiums will continue to go up." (The Washington Post, Ezra Klein, An interview with Kaiser's Drew Altman, 03/22/10)
Uwe Reinhardt, Economist, Princeton University: "This thing will not get us off the hook cost-wise." (The Washington Post, Ezra Klein interview with Uwe Reinhardt, 03/22/10)
ICYMI: AHIP Letter to HHS Secretary Sebelius
Posted by The Campaign on March 16, 2010 at 11:31 AM
AHIP sent a letter to HHS Secretary Sebelius yesterday to respond to her request for specific cost savings recommendations that could be included in the current legislation. Below are a few highlights from the letter:
Increased Transparency
To address your request for greater transparency, we immediately began working with the National Association of Insurance Commissioners (NAIC) to develop a template our members can use across the country to provide information on the factors that are driving premium increases.
As you request transparency from our members, we urge you also to consider pursuing transparency for hospitals, physicians, pharmaceutical and device companies, and other suppliers.
First Do No Harm
We are particularly concerned that there are inadequate incentives in the legislation to bring everyone into the system, that new age-rating requirements would drive up costs for younger families, and that the proposed premium tax on health insurers would further drive up costs for consumers in the individual and small group markets.
Limiting the amount by which premiums can vary by age can have particularly significant effects for young adults, as moving from a 5:1 to 3:1 rating band...raises rates for adults under age 30 by approximately another 30 to 50 percent beyond that projected for the population as a whole.
Enacting insurance reforms and coverage expansions without meaningful cost control will bring more people into an unsustainable, unaffordable system.
The Senate legislation would establish a new commission to review Medicare and private sector health care spending. That is a start, but it will not provide the comprehensive oversight needed because it would exempt Medicare payments for hospitals, physicians, and other key services from review during the first five years.
Payment Reform
Within a comprehensive framework for cost containment, we recommend broadening and expediting certain provisions of the Senate bill that focus on realigning incentives and promoting innovation. The following are several specific examples:
- To reduce preventable hospital readmissions, we recommend strengthening the Senate bill's proposal to require modest Medicare payment reductions for hospitals with unnecessary risk-adjusted readmissions for three conditions. Increasing the amount of the payment reduction and applying it to a broader range of conditions will create stronger financial incentives for improvements in patient care, thereby reducing unnecessary admissions that are contributing to higher costs while also improving patient safety and quality.
- To reduce hospital-acquired infections, we recommend building upon the Senate's proposal to reduce Medicare payments by one percent for the worst performing hospitals on medical conditions identified by the Secretary. The Senate proposal would be more effective if it established a stronger financial incentive and applied to all "never events" identified by the National Quality Forum.
- To accelerate the adoption of payment reform and quality improvement, incentives under the Value-Based Purchasing program should be accelerated forward to begin in 2011 with final recommendations by 2015. By building on existing collaborations to tie hospital performance on quality measures to common high-cost conditions (AMI, Heart Failure, Pneumonia, etc.), we can more rapidly move away from traditional fee-for-service structures.
- To advance new payment reform models on a system-wide basis, we recommend that the Senate proposal for a CMS Innovation Center be expanded beyond Medicare and Medicaid. Focusing solely on public programs will not improve the overall health care system.
- To improve the value of comparative effectiveness research and the proposed Patient Centered Outcomes Research Institute, we recommend that such research focus on both the clinical and cost effectiveness of treatments.
Provide Malpractice Protections for Doctors
To reduce the burden of defensive medicine, a fresh approach to medical liability reform should be adopted that combines a safe harbor for following evidence-based medicine and a system to ensure that harmed individuals are compensated adequately. As an alternative to the existing litigation system, we recommend an approach that offers protections for providers who follow established best practices and implement safe, accountable care models based on the latest scientific evidence.
