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SPONSOR MESSAGE
November 2015
News Round the Web
Feature Stories Making News as Reported from Key Web Sites 1
Thought Leaders
Lessons From Failures of a Number of Recent Health Cooperative Plans
7
Tips
In Getting the Most Out of Your MCOL Premium Membership 14
Blogs
Study and Reference Resource on Healthcare Cost and Utilization 15
I’m Shocked, Shocked 17
Transitioning Payer Reimbursement from Volume to Value 19
The Nexus of Payviders 20
Consumers and Physicians and Technology in 2015 21
The Patient Experience of the Very Elderly 23
Factoids
Employers Expect Lower Rate of Increase in Healthcare Costs in 2015 vs 2014
25
Number of Medicare Advantage Plans Will Increase by 3% in 2016 25
healthsprocket
Actual ICD10 Codes for Turtle Encounters 26
LexisNexis: Top Providers Of Home Health Care 26
Quoted
MCOL’s Quotes of the Week during October 2015 27
In This Issue Quote of the Month
“While we have experienced several years of slower growth in health care trend, health care cost increases are still multiples of CPI. Em-
ployers are trying to balance offering valuable benefits that meet employees' needs with the looming excise tax, which makes it imperative
that they focus on areas where there are oppor-tunities to make changes while preserving qual-
ity and effectiveness.”
Brian Marcotte, President and CEO, National Business Group on Health
© 2015, MCOL. All rights reserved. This publication is exclusively for the use of MCOL premium members.
healthsprocket
Actual ICD10 Codes for Turtle Encounters
1. W5921XA Bitten by turtle, initial encounter
2. W5921XD Bitten by turtle, subsequent
encounter
3. W5921XS Bitten by turtle, sequela
4. W5922XA Struck by turtle, initial encoun-
ter
5. W5922XD Struck by turtle, subsequent
encounter
6. W5922XS Struck by turtle, sequela
7. Continue on page…….26
Source: Wall Street Journal, A Code for What Ails You
Factoid
Employer confidence in offering health care coverage 10 years from
now has nearly doubled to 44% today, from 25% in 2014.
Read more on page…….25
Source: Towers Watson
November 2015
Page 1 © 2015, MCOL. All rights reserved.
Feature stories making news as reported from key web sites, and compiled by MCOL
Obamacare Deploys New Apps, Allies To Persuade The Uninsured
NPR reports: Ten million people still don't have health insurance two years after the Affordable Care Act
went into effect. Some never bought a policy. But 20 percent went to the trouble of signing up on Health-
Care.gov, or one of the state insurance exchanges, and even made payments.
NPR, October 30, 2015
UAW-GM deal would improve newer workers' health plan
Detroit Free Press reports: UAW negotiators bargained significantly better health care coverage for about
11,000 General Motors workers hired since October 2007 and the automaker will pay for most of it.
Detroit Free Press, October 30, 2015
Feds Issue Proposed Rule On Health Information Collected By Workplace Wellness Programs
Kaiser Health News reports: Federal regulators on Thursday announced a proposed rule allowing volun-
tary employer workplace wellness programs to ask for health information, including some limited genetic
details, from participants and their spouses.
Kaiser Health News, October 29, 2015
Express Scripts and CVS Health Cut Ties With a Pharmacy Linked to Valeant
The New York Times reports: The nation's three largest drug benefit managers said on Thursday that they
would cease doing business with a mysterious pharmacy that has been bolstering sales of products made
by Valeant Pharmaceuticals International.
The New York Times, October 29, 2015
Fewer plans to be on biggest Obamacare exchange for 2016
CNBC reports: HealthCare.gov is going to see some shrinkage in 2016. The number of health insurance
plans available on that huge federal Obamacare marketplace for 2016 is decreasing by up to 12 percent
compared with this year, industry sources told CNBC.
CNBC, October 29, 2015
An Allergan-Pfizer deal could be biggest merger this year
The Los Angeles Times reports: Botox maker Allergan confirmed Thursday that it was in early talks to
combine with drug giant Pfizer Inc. in a deal that, if completed, would cap a remarkable spree of mergers
this year that's roiling the healthcare industry.
The Los Angeles Times, October 29, 2015
Why Obamacare Co-Ops Are Failing At A Rate Of Nearly 50%
Forbes reports: Cooperative health insurers (or co-ops) created under a federal grant and loan program in
the Affordable Care Act seem to be falling like dominoes.
Forbes, October 29, 2015
November 2015
Page 2 © 2015, MCOL. All rights reserved.
Walgreens, Rite Aid Combo to Spread Drugstore Health Kick
AP reports: Walgreens will use its $9.41 billion takeover of rival Rite Aid to spread its philosophy on mak-
ing drugstores destinations for customers looking to stay healthy or buy beauty products.
AP via The New York Times, October 28, 2015
Agreement Is Seen as Short-Term Relief for Medicare and Social Security
The New York Times reports: The budget agreement reached by congressional leaders and the White
House this week will prevent a sharp increase in Medicare premiums for more than 15 million older Ameri-
cans and a deep cut in Social Security benefits for nine million disabled workers, but it will not alter the
long-term financial outlook for either program, lawmakers and budget experts said Tuesday.
The New York Times, October 27, 2015
Specialized healthcare may be lacking under Obamacare plans
Reuters reports: Some health insurance plans sold on the Affordable Care Act's federal marketplace may
not provide reasonable access to medical specialists, new research suggests.
Reuters, October 27, 2015
Blue Cross' Move From Fee-For-Service Medicine Doubles To $145 Billion
Forbes reports: Escalating the shift away from fee-for-service medicine, the nation's Blue Cross and Blue
Shield plans say they are now spending more than $145 billion annually - more than one-third of the medi-
cal claim dollars they pay - on "value-based" care that rewards better outcomes to keep patients healthy.
Forbes, October 27, 2015
Budget deal blunts, but doesn't erase, increase in Medicare premiums
The Washington Post reports: The tentative budget agreement forged by congressional leaders and the
Obama administration will ward off a historic spike in Medicare premiums for the coming year, but it will
nevertheless require nearly one in three older Americans to pay 17 percent more in monthly premiums for
doctors' visits and other outpatient care.
The Washington Post, October 27, 2015
Premiums For Key Marketplace Silver Plans Rising An Average Of 7.5 Percent, HHS Says
Kaiser Health News reports: Premiums will increase an average of 7.5 percent for the second-lowest-cost
silver insurance plan to be offered next year in the 37 states where the federal government operates health
marketplaces, according to an analysis by the Department of Health and Human Services.
Kaiser Health news, October 27, 2015
Healthcare.gov premiums have bigger increase for 2016
USA Today reports: About 70% of those who return to the federal insurance exchange when open enroll-
ment starts Nov. 1 will pay less than $75 a month after they receive tax credits, a government analysis re-
leased Monday shows.
USA Today, October 26, 2015
News Round The Web continued
November 2015
Page 3 © 2015, MCOL. All rights reserved.
The Largest Unpaid Healthcare Workforce You've Never Heard Of Is Going Digital
Forbes reports: This summer I was in Naples, Florida, with my 68-year-old mom who is a part-time care-
giver for her friend - an 88-year-old neighbor residing in an assisted living facility.
Forbes, October 26, 2015
Investigation Finds Errors in Coverage and Payments Under Affordable Care Act
The New York Times reports: Federal investigators from the Government Accountability Office said Thurs-
day that they had discovered many errors in eligibility decisions under the Affordable Care Act that had led
the government to pay for duplicate coverage for some people and an excessive share of costs for others.
The New York Times, October 23, 2015
Hospital Chains Skid After Community Health Warns on Quarter
Bloomberg reports: Community Health Systems Inc. fell 35 percent after the hospital chain’s preliminary
earnings report disappointed, leading analysts to cut their ratings on the stock because of diminishing
benefits from Obamacare.
Bloomberg, October 22, 2015
Why it’s so hard to find a mental health professional
The Washington Post reports: The demand for mental health services is growing nationally, and compre-
hensive mental health legislation is gaining momentum in Congress for the first time in years.
Washington Post, October 22, 2015
Hillary Clinton takes aim at Aetna-Humana merger
USA Today reports: Hillary Clinton is taking aim at the proposed merger of health insurance giants Aetna
and Humana as she ratchets up her scrutiny of U.S. corporate consolidation and its effect on consumers.
USA Today, October 21, 2015
Are Medicare ACOs Working? Experts Disagree
Kaiser Health News reports: A key strategy for Medicare is encouraging doctors, hospitals and other health
care providers to form accountable care organizations (ACOs) to coordinate beneficiaries’ care and pro-
vide services more efficiently.
Kaiser Health News, October 21, 2015
Health co-ops' struggles could bring higher costs
Marketplace reports: Shareholders in Humana and Aetna signed off on a $34 billion mega-merger Tues-
day afternoon. This deal and the one between Anthem and Cigna are raising questions whether there’s
enough competition in the healthcare industry.
Marketplace, October 20, 2015
Outpatient Medical Care Prices Are Rising, Study Shows
The Wall Street Journal reports: As hospitals have acquired more doctor practices, prices for outpatient
medical services have gone up, according to a new study that will fuel debate over the impact of the
merger boom sweeping through health care.
Wall Street Journal, October 19, 2015
News Round The Web continued
November 2015
Page 4 © 2015, MCOL. All rights reserved.
UPDATE 1-Aetna, Humana shareholders approve proposed merger
Reuters reports: Health insurer Aetna's proposed $37 billion acquisition of smaller rival Humana Inc was
approved by the shareholders of both companies.
Reuters, October 19, 2015
A health law fine on the uninsured will more than double
AP reports: The math is harsh: The federal penalty for having no health insurance is set to jump to $695,
and the Obama administration is being urged to highlight that cold fact in its new pitch for health law sign-
ups.
AP via the Washington Post, October 19, 2015
Advocates, lawmakers see momentum for mental-health reform in Congress
The Washington Post reports: Months of deadly mass shootings are pushing mental-health legislation for-
ward in Congress, with advocates and lawmakers describing a momentum for change that they haven’t
seen for nearly a decade.
Washington Post, October 18, 2015
N.Y. Attorney General Reaches Agreement With Urgent Care Clinics In First 'Surprise Medical Bill' Action Kaiser Health News reports: Four companies running urgent care centers in New York have agreed to dis-close more fully which insurance plans they accept, following an inquiry by the state's attorney general that found unclear or incomplete information on their websites that could result in larger-than-expected bills for consumers. Kaiser Health News, October 16, 2015 U.S. government sees 10 million people with Obamacare insurance by end '16 Reuters reports: U.S. health officials said they expect 10 million people to be enrolled in healthcare plans through insurance marketplaces by the end of 2016, with more than one-quarter of eligible uninsured Americans signing up during this fall's open enrollment period. Reuters, October 15, 2015 UnitedHealth again looks to fast-growing businesses in 3Q AP reports: UnitedHealth Group's third-quarter profit slipped, but the nation's largest health insurer still beat Wall Street expectations due partly to fast growth in pharmacy benefits management and other areas outside its core business. AP via The Washington Post, October 15, 2015 Telemedicine holds promise of cheaper, wider medical care The Herald reports: Samantha Cunningham was halfway through a five-hour road trip to a music festival in Bradley, Calif., when she realized she'd left her asthma inhaler back home in Sacramento.... a friend on the trip suggested she try American Well. The Herald, October 14, 2015 Bipartisan Effort Revises Health Law Provision For Small Businesses Kaiser Health News reports: President Barack Obama signed legislation last week that makes a significant change in the health law's small business rules, following a rare bipartisan effort to amend the health law. Kaiser Health News, October 13, 2015
News Round The Web continued
November 2015
Page 5 © 2015, MCOL. All rights reserved.
New Data Shows Large Insurer Losses On Obamacare Plans Forbes reports: Risk corridor data released on October 1 by the administration shows that insurers lost a lot of money on Affordable Care Act (ACA) plans in 2014. Forbes, October 12, 2015
U.S. sued over Medicare reimbursement rate for hospitals Reuters reports: More than 250 hospitals affiliated with four healthcare systems have sued the U.S. gov-ernment over its formula for calculating Medicare reimbursement, claiming that they have been systemati-cally underpaid for more than a decade. Reuters, October 12, 2015 Retail health clinics should be backup to regular MDs, U.S. doctors say Reuters reports: As U.S. health insurers chart an unprecedented consolidation of the industry, hospitals are taking a fresh look at becoming insurers themselves to keep more of their patients' healthcare dollars in house. Reuters, October 12, 2015 Insurance Dropouts Present a Challenge for Health Law The New York Times reports: Ms. Douglas, 50, who was working about 30 hours a week as a dollar store cashier and a services coordinator at an apartment complex for older adults, soon realized that her insur-ance did not fit in her tight monthly budget. New York Times, October 11, 2015 Medical Prices Higher In Areas Where Large Doctor Groups Dominate, Study Finds
Kaiser Health News reports: Prices for many common medical procedures are higher in areas where phy-
sicians are concentrated into larger practice groups, according to a new study.
Kaiser Health News, October 9, 2015
Medicare Advantage star ratings reveal mix of high, low performers
Modern Healthcare reports: More Medicare Advantage plans nabbed top quality marks for their 2016 plans
than last year, a potential sign that private insurers are trying to meet the federal government's standards
for high-quality products and coordinated healthcare for seniors.
Modern Healthcare, October 8, 2015
Drugs Could Soon Come With a Money-Back Guarantee
Bloomberg reports: In late June, Susan DeVore asked an auditorium filled with medical-industry executives
if any would be willing to link the prices of the drugs and devices they sell to how well those products work.
DeVore, whose company, Premier, helps 3,400 U.S. hospitals make purchasing decisions, recalls seeing
about a half-dozen hands go up.
Bloomberg, October 8, 2015
Whistleblower Doctor Warns About Hospitals Hiring Physicians
Kaiser Health News reports: There is a good chance that your once-independent doctor is now employed
by a hospital. Dr. Michael Reilly, a Fort Lauderdale, Fla., orthopedic surgeon, does not believe this is good
for physicians, patients or society.
Kaiser Health News, October 7, 2015
News Round The Web continued
November 2015
Page 6 © 2015, MCOL. All rights reserved.
Medicaid Plan Operational Administrative Costs Increased by 6.3% in 2014
Business Wire reports: In 2014, core operational administrative expenses (Core expenses exclude Sales
and Marketing) under the control of management of Medicaid plans increased at a median rate 6.3% per
member, the second highest in the past five years.
Sherlock Company via Business Wire, October 7, 2015
Obama signs law preventing premium hikes under health law
The AP reports: President Barack Obama has signed legislation aimed at preventing premium increases
that some smaller businesses were expecting next year under his signature health care law.
AP via Yahoo News, October 7, 2015
CMS issues final rules on meaningful use for electronic health records
Healthcare Finance reports: New final rules to advance electronic health records make significant changes
in current requirements, offering providers and physicians greater flexibility in meaningful use require-
ments, according to the Centers for Medicare and Medicaid Services.
Healthcare Finance, October 6, 2015
Race and employment tied to U.S. clinic wait times
Reuters reports: Minorities and the unemployed spend more time traveling to and waiting for medical care,
according to U.S. data from 2005 to 2013.
Reuters, October 5, 2015
Congress and Obama Administration Seek Ways to Limit Increase in Medicare Premiums
The New York Times reports: Congress and the Obama administration are frantically seeking ways to hold
down Medicare premiums that could rise by roughly 50 percent for some beneficiaries next year, according
to lawmakers and Medicare officials.
New York Times, October 5, 2015
Hospital Care Unaffected By Quality Payments, GAO Finds Kasier Health News reports: Medicare's quality incentive program for hospitals, which provides bonuses and penalties based on performance, has not led to demonstrated improvements in its first three years, according to a federal report released Thursday. Kaiser Health News, October 2, 2015
Newly Insured Treasure Medicaid, But Growing Pains Felt Kaiser Health News reports: The Affordable Care Act unleashed a building boom of community health cen-ters across the country. At a cost of $11 billion, more than 950 health centers have opened and thousands have expanded or modernized. Kaiser Health News, October 2, 2015
Rift Over Drug Protections Complicates Trans-Pacific Partnership Trade Talks The Wall Street Journal reports: A fight over how long to protect certain high-end drugs from lower-cost imitators has emerged as the leading obstacle to negotiations aimed at completing a 12-nation trade agreement spanning the Pacific. Wall Street Journal, October 1, 2015
News Round The Web continued
November 2015
Page 7 © 2015, MCOL. All rights reserved.
Perspectives on a selected key topic
Today’s Topic
hat lessons from failures of a number of recent Health Cooperative plans are important to consider for new provider owned or venture capital backed health plans under development?”
Mark Lutes
One lesson to be drawn is one that has been learned time and time again ---
health plan development and operation is “not for the faint of heart.” While there
are currently interesting opportunities for provider sponsored plans in government
payor markets, they are not to be attempted without access to sufficient capital to
get the new plan through the years necessary to get to scale.
Health plan costs (principally claims expense) are difficult to manage even during
commercial underwriting cycles (or phases in government program rate setting)
when there is play in the premium. If one endeavors to underwrite a population of
unknown and highly variable risk characteristics at the scale of a start up, the en-
deavor is fraught with danger. Prudent players do not “jump in head first” but
learn the characteristics of the population that will enroll and adopt their pricing
accordingly.
In the Medicare Advantage world, some of the actuarially risk is moderate by HCC risk adjustment. How-
ever, that is only the case to the degree to which condition codes relevant to the population that ends up
enrolling have been adequately captured in the years prior to operation. The cost of service can to a de-
gree be moderated through discounts to the provider sponsored plan but having a well oiled medical man-
agement program is also important. New plans, whether they be coops or MA players, need to be very
well run to have such a well oiled medical management program in their early years.
The opportunity to capture the “arbitrage” flowing from managing utilization has long been and remains
attractive to provider systems who see themselves as the lynch pins of attaining those savings. That said,
the startup years are replete with challenges such that “high wire” act analogies come to mind. It would be
surprising to few observers that coop plans, walking that wire above population risks, pricing pressures,
new management and systems and scale too limited to command favorable discounts from providers or to
spread experience across large volumes of enrollees, would fall off the wire.
Mark E. Lutes
Chair, Board of Directors /
Member of the Firm,
Epstein Becker Green
November 2015
Page 8 © 2015, MCOL. All rights reserved.
Thought Leaders continued
Vicky Parikh
Background The Consumer Operated and Oriented Plans (CO-OP) program originated from the Affordable Care Act. The objective was to create additional, non-profit, untradi-tional, competitive health plans to individual and small group markets; to focus on "patient-centered care" and compete with the large commercial insurance compa-nies. By the end of the first year of operation (2014) there were 23 CO-OPs with a million members. 21 of 23 co-ops had ended up with net losses in the first opera-tional year 2014. Financial aspect - Originally the CO-OPs were started with 6 billion dollars for funding but over time the money was decreased by legislation to 2.4 billion, which was all in the form of loans which had restrictions on use (could not be used for advertising) and inflexible payback requirements. Funding was then decreased further by only paying for the CO-OP's that were currently operating. In order for a new insurance company to compete with the well-established mammoth insurance companies, a realistic budget to start ground up and inclusion of gestation period towards sustainability should have been accounted for in the program. Such pro-gram(s) should be allowed to seek additional investment from private investors
(per state) especially if the original budget was decreased. Timeline - some states were slower to get the organization started for these CO-OPs. An immense amount of planning and structure with timeline and finances have to be in place before such a huge under-taking could be completed successfully. The timeline to design and implement such programs may need to be revisited. Advertising - Advertising is an essential component for a successful enrollment process and the amount of advertising that was in place depended on where you lived and as noted earlier was restricted because start-up funding could not be used. The advertising varied from local papers to internet to healthcare facili-ties, television and simply word of mouth. Marketing a product is absolutely critical to compete and at least a certain portion of the funds should be allocated for the same. Unbalanced Enrollment and Ceiling - If the CO-OP has no enrollment then the operating expenses are increased to assist in getting the CO-OP going. This has led to CO-OPs being distressed and liquidated. If an immense amount of enrollment- the amount of staff needed to assist may not be enough to cover (supply vs. demand). Many CO-OPS were successful in enrolling thousands of people. It might have been helpful to have an incremental ceiling with a concrete timeline on the enrollment for this new companies. Enrollment ceiling would help to mitigate some risk while gaining experience and market foothold. Competition - To assist individuals and groups, who would like to have lower cost health insurance vs. Private Health Insurance Companies, prices for the coverage needs to be lower then what they are cur-rently paying. Unfortunately, decreasing the prices of services and tweaking the benefits design may lead to having insufficient funds towards claims or paying back loans. Many of the CO-OPs had to be closed and liquidated due to this issue. Ongoing business - Start having auditors, specifically trained in CO-OP or equivalent, that can reach the various CO-OP areas and evaluate the companies before a financial breakdown ensues. Retain third party contractors to evaluate each subsidiary and work with the CO-OP to keep the business running success-fully.
Vicky Parikh
MD, MPH
Executive Director- Popu-
lation Health
Medstar Shah Medical
Group
November 2015
Page 9 © 2015, MCOL. All rights reserved.
Thought Leaders continued
Lindsay Resnick
You can’t sell a dollar loaf of bread for 80¢ and expect to stay in business.
Take numerous pricing missteps, add the government’s downward shift on paying
its risk corridor obligations, wrap it in high start-up administrative costs, and you
have a formula for disaster. Not only for the growing number of Co-Ops calling it
quits, but a lot of other players in the individual medical market are struggling, from
the highly touted VC-funded start-ups to regional provider-owned plans to Blues to
national mega-plans where the Individual market is only a small part of their vast
product portfolios.
The individual medical business has always run on very tight margins. Actuarial
101 tells us that premium revenue has to exceed claims expense…first year and
especially in renewal years. In the good old days of medical underwriting, success-
ful companies in the Individual market could balance the influx of preferred first year medically underwritten
risk (accept/reject or rate-up based on pre-ex conditions) with their renewal rating strategy to manage an
“aging” block of business. Of course, as long as they kept their administrative costs under 10% (i.e., IT,
customer service, billing, medical management, marketing). Now, with mandated medical loss ratios and a
“take all comers” marketplace, those are onerous conditions for a start-up.
Many health plans, new and legacy insurers alike, are struggling with ACA profitability. In this new world
with many “moving target” rules, discipline around a few key areas can go a long way to protecting a start-
up’s business –
Perform consumer analytics to understand every member’s LifeTime Value.
Coordinate marketing/sales and actuarial to improve prospect targeting.
Activate new members with proper risk assessment and care management.
Create a more differentiated, personalized member customer experience.
Let’s face it, a start-up health insurance company is in a tough competitive situation today, and tomorrow
looks even tougher. With 36 Blue Cross Blue Shield Plans covering over 100 million people and the next
10 largest commercial health insurance companies covering another 100 million, the result is 45 states
where two health insurers already have 50% or more market share.
That said, all’s not lost. Growth and profitability in the Individual market can co-exist under the Affordable
Care Act. It takes the convergence of a reengineered risk management approach, data-driven customer
insights, direct-to-consumer marketing rigor, and aggressive care coordination, particularly around chronic
conditions. Taking data and turning it into structured information that can be interpreted to inform and cre-
ate an actionable ACA strategy across the member lifecycle can be a powerful weapon in today's ultra-
competitive landscape.
Lindsay Resnick
Chief Marketing Officer,
KBM Group: Health
Services
November 2015
Page 10 © 2015, MCOL. All rights reserved.
Thought Leaders continued
Peter R. Kongstvedt
There are several important lessons to be learned from the recent CO-OP failures, but the most important remains the one that keeps fading from memory:
It Ain’t Called Risk for Nothin’*
Unlike the early HMOs that formed with the protections and financial support pro-
vided under the HMO Act of 1973, CO-Ops entered a pretty mature market in
which existing competitors were anything but contented and complacent, and in
which there were no relatively easy ways to reduce costs substantially, to say
nothing more about Congress suddenly de-funding programs meant to provide
support to CO-Ops.
Non-CO-OP provider-owned and venture capital-backed new plans face a similar
but not identical set of challenges. Too many to list, much less discuss in this re-
sponse, so I’ll limit them to three and a half: three affect both types of start-ups,
and a cultural challenge facing provider-owned start-ups.
1. Undercapitalization. Health insurance is heavily leveraged, meaning the effects of profits and losses are
magnified beyond those of a simple investment. A plan must have far more than the minimally required
assets to operate safely, and it doesn’t take a lot of financial losses for a small plan to deplete their re-
serves to the level where the state declares them impaired; think Bill Paxton in the movie Alien, shouting
“Game over man! Game over!” On the other side, the ACA places strict limits on how much profit an in-
surer can make or keep through the MLR limits, and prohibits an insurer from trying to subsidize losses in
future premiums beyond such things as the cost of capital and the like.
2. Rapid Growth. All business must grow to thrive or even survive. But growth can be too rapid; think dan-
delions or cancer. Rapid growth in a small company quickly overwhelms everything: IT systems, account-
ing and IBNR calculations (a geeky thing to say, but critical nevertheless), member and provider services,
provider payment. Everything.
3. Adverse Selection. This is a bigger challenge for provider-owned start-up health insurers, but both types
share it. New insurers under the ACA generally must access the market through the public health ex-
changes, which have proven to be the adverse risk magnets they were predicted to be. Congress made
this particular magnet a super-magnet by defunding money that was to be used to reduce its impact in the
first years of exchange operations. See Challenge #1.
3.5. Think Members, not Patients. Provider-owned start-up plans think of people as patients, not members,
because they are in the business of caring for patients. But it undercuts the obvious need that any plan
needs more members than patients in order to fund its medical costs. Focusing, even subconsciously on
patients and “frequent fliers” is a way to ensure that Challenge #3 becomes half again as large as it is to
begin with, and it’s back to Challenge #1.
* Any new entrants into the business of accepting and managing the risk for health care costs should be required by federal law to
have this statement tattooed across their foreheads in reverse letters so they have to read it every time they look in a mirror. OK,
that would be fun to see but probably not practical.
Peter R. Kongstvedt
MD, FACP
Principal, P.R.
Kongstvedt Company,
LLC
November 2015
Page 11 © 2015, MCOL. All rights reserved.
Thought Leaders continued
Cyndy Nayer
The promise of the Health Care Cooperatives was superb: let’s provide a way for
consumers to design the health plan they want. It’s a true disappointment to see
so many “failures” in the communities that created them.
There are three main learnings from the demise of the HC Coops:
1. Funding. Funding by grant dollars is a roll of the dice. While it is certainly grand
to receive a grant to start a business, there must be a detailed plan for viability. No
health plan is sustainable within a year or two of launch, which we have seen in
new plans that launched under the new regulations of the ACA (Oscar is one such
plan in the Northeast). There must be a viable and achievable 5-year plan that
holds the owners accountable for achievement. Grant dollars provide organization
and communication coverage for the first years, if lucky, but the company must be
constantly building the pool of resources that will sustain the effort.
2. Realistic goals. New companies must be focused. Goals must be stated in simple terms and achieve-
ment must be assigned to willing individuals or groups. In launching a health coop, various talents are
needed for design, for risk management, for marketing, for fundraising/accounting, and the startup folks
may not be the right folks for ongoing management. Therefore, there must be a plan that shows the transi-
tion from X team to Y team and the steps needed (along with the technology) to make the handoff secure.
3. Competencies must grow. A new company requires constant monitoring, evaluating, and adjustment.
Part-time oversight by owners will not get to 3-year goals, and road bumps will derail the possibilities for
adjustment, if not the whole project.
The rules of business and strategy apply to new efforts in refining the health care delivery and payment
systems in the US. They cannot be ignored, or put off for “near-future” consideration. Startups are combus-
tible, need constant monitoring and innovation, and most importantly, need rapid communication to the
stakeholders as well as the shareholders. Value and quality are hard to achieve; design and delivery com-
pound the difficulties. But commitment and communication can go far to advance the cause of the new de-
livery/payment systems that are developing.
Cyndy Nayer
President,
CyndyNayer.com
Founder/CEO of Center of
Health Engagement
November 2015
Page 12 © 2015, MCOL. All rights reserved.
Thought Leaders continued
Douglas B. Sherlock
Some lessons from the travails of Health CO-OPs:
1. It is easier to be successful in strategically contiguous markets than it is to be
successful as a start-up. A few examples of strategically contiguous markets in-
clude services to the exchange market if a health plan already offers to the individ-
ual market, offering to individual markets if one already offers to Medicaid, forming
an insurance subsidiary if your organization is already successful as a hospital
system and introducing one’s current suite of products in a new geographic area.
2. While exchanges should lower barriers to entry, they are only partly successful
in doing so. In any case, lowered barriers to entry are insufficient for success.
3. While product differentiation can be helpful, incumbent competitors are also
aware of this and respond in kind. If an incumbent already has a reputation of be-
ing acceptable in the market, the new entrant faces the cost to overcome it.
4. If the differentiation you establish is not sufficiently substantial, then the competitive battle will be fought
on the basis of price. Because profit margins are so thin in health insurance, price leadership likely re-
quires cost leadership over the long term.
5. Be shrewd with administrative costs. While they are small relative to health care costs, they are more
manageable. Unlike health care costs, they are susceptible to process improvements and are subject to
make-or-buy decisions by the health plan management.
Douglas B. Sherlock
CFA, Senior Health Care
Analyst Sherlock
Company
The single most effective, affordable and easy to use e-learning application for professionals in-
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any organization. Click here to review a press release with information on what's new in Version 14.
An Instructor's Kit is also available for site license users! Click here for additional information.
November 2015
Page 13 © 2015, MCOL. All rights reserved.
Thought Leaders continued
Henry Loubet
Consumer Health Care Cooperatives, established under the Affordable
Care Act as an alternative method for introducing greater competition into
the marketplace, began their existence under challenging times. These
member-operated health plans received their seed money as federal loans
(rather than as “grants” which do not have to be repaid). The loan funds
cannot be used for promotion or advertising; therefore, most consumers
knew little about these plans before they saw them as options on their state
exchanges. Limited to “grass roots” efforts, health care Co-Op members
speaking to consumer and community groups was the primary way they
were able to promote their program and services.
There is evidence that co-op plans were effective in introducing greater competition to the market
and very aggressive on pricing. During last year’s open enrollment, among the states that in-
cluded co-op plans, co-ops offered 37% of the lowest-price plans on those exchanges. According
to the best information available, average health plan premiums in states with Co-Ops were about
9% lower than states with no Co-Ops. The low premiums certainly attracted a significant amount
of the Co-Op enrollment.
Despite the financial and marketing obstacles, many of these co-ops were growing and on their
way to sustainability. Then, the Centers for Medicare and Medicaid Services (CMS) changed one
of the provisions intended to limit the risk to plans due to previously uninsured enrollees and their
pent-up health care needs. CMS announced that risk corridor payments to cooperatives would
only be 12.7% of the expected amounts. The Kentucky Health Co-Op topped enrollment over its
competitors in that state before its recent announcement it would shut down at the end of Decem-
ber. The New York Co-Op, the largest with over 200,000 members, is closing as is Nevada. Un-
fortunately, the loss of significant revenue to the plans at the critical time was a major factor to the
failure of these Co-Ops.
The implications for entrepreneurial new plans entering the Marketplace includes being suffi-
ciently capitalized, finding creative ways to communicate with potential customers and, not count-
ing on Federal funding exclusively. New not-for-profit plans often lack the reserves and cash flow
to withstand delays or cancellation of expected government reimbursements. A level playing field
is needed for Co-Ops or similar designs to inject their competitive potential into health care. That
being said, it is definitely not easy to run a health insurance operation. If they are to succeed in
this environment, it is absolutely necessary that alternative programs bring in individuals with the
requisite experience.
Henry Loubet
Chief Strategy Officer
Keenan
November 2015
Page 14 © 2015, MCOL. All rights reserved.
In getting the most out of your MCOL basic membership
The MCOL Basic Membership site has been redone to provide easier navigation and en-hanced features. Be sure to try it out by logging on at www.mcol.com.
If you haven’t joined already, you’re encouraged to join the LinkedIn Managed Care On-Line group where you can network and discuss issues with other MCOL members. You’ll find a link to the group in the paid member web site main menu.
MCOL does not share your e-mail address with third parties, as stated in the MCOL member privacy policy, available at http://www.mcareol.com/mcoprvs1.htm
If you ever would like any assistance or information regarding any aspect of your MCOL Ba-sic membership, feel free to contact MCOL anytime at [email protected] or call 209.577.4888. MCOL offices are open business days 8AM to 5PM Pacific time.
The MCOL website has a new look and new features. Be sure to check it out and look around at www.mcol.com.
Your clients, friends and colleagues can get a MCOLFree membership too, at no cost, simply by going to http://www.mcareol.com/freepage.htm.
If you haven’t joined already, you’re encouraged to join the LinkedIn Managed Care On-Line group where you can network and discuss issues with other MCOL members. You’ll find a link to the group in the free member web site main menu.
Looking for past MCOL e-newsletter content? The free member site includes a searchable archive of MCOL publications.
MCOL does not share your e-mail address with third parties, as stated in the MCOL member privacy policy, available at http://www.mcareol.com/mcoprvs1.htm
If you ever would like any assistance or information regarding any aspect of your MCOLFree membership, feel free to contact MCOL anytime at [email protected] or call 209.577.4888. MCOL offices are open business days 8AM to 5PM Pacific time.
If you’re looking for specific content in the member web site and aren’t sure how to find it, feel free to e-mail or call MCOL anytime and we’ll assist you with your search, free of charge.
November 2015
Page 15 © 2015, MCOL. All rights reserved.
A selected Blog entry from the month of October 2015 from MCOLBlog.com
The Health Care Cost Institute (HCCI) has just released its free 26-page 2014 Health Care Cost and Utili-
zation Report, and 92-page Appendix, which provide a definitive examination of detailed U.S. health care
cost and utilization component line items and demographics. Their study – as with other major cost studies
released this year – put a lot of focus on increases in prescription drug prices.
They found the costs increased
3.4 percent in 2014, with overall
utilization decreasing somewhat,
while prices for all categories of
services rose. Average spend-
ing per person was $4,967, up
$163, including out-of-pocket
spending of $810 that grew
2.2%.
With prescription costs standing
out, they note that “despite a
nearly 16 percent decrease in
use of brand prescriptions,
spending on these prescriptions
jumped by $45 per capita in
2014—an increase four times
larger than in 2013. Much of this
increase was due to use of high-
priced Hepatitis C drugs Olysio,
Sovaldi, and Harvoni, which be-
came available starting in late
2013.”
A Definitive Study and Reference Resource on Healthcare Cost and Utilization
By Clive Riddle, October 30, 2015
November 2015
Page 16 © 2015, MCOL. All rights reserved.
MCOL Blog: A Definitive Study and Reference Resource on Healthcare Cost and Utilization continued
They found the costs increased 3.4 percent in 2014, with overall utilization decreasing somewhat, while
prices for all categories of services rose. Average spending per person was $4,967, up $163, including out
-of-pocket spending of $810 that grew 2.2%.
With prescription costs standing out, they note that “despite a nearly 16 percent decrease in use of brand
prescriptions, spending on these prescriptions jumped by $45 per capita in 2014—an increase four times
larger than in 2013. Much of this increase was due to use of high-priced Hepatitis C drugs Olysio, Sovaldi,
and Harvoni, which became available starting in late 2013.”
Here’s some other key findings:
“In 2014, the largest decline in use (-2.7%) was for acute admissions, which fell by 1 admission per
1,000 individuals. The smallest decline in use (-0.9%) was for outpatient visits, which fell by 3 visits
per 1,000 individuals.”
“The smallest average price increase was for professional services (3.1%), an increase of $3 per
service. The largest average price increase was for acute inpatient admissions (4.6%), an increase
of $831 per admission.”
“Spending out of pocket on acute inpatient admissions (–$1) and on brand (–$9) and generic (–$4)
prescriptions decreased by $14 per capita in 2014 compared to the previous year, while spending
out of pocket on outpatient ($16) and professional ($15) services increased by a total of $31 per
capita in 2014.”
“Every year between 2010 and 2014, out-of-pocket spending was higher by women than by men.
This difference grew every year, reaching $237 in 2014.”
“The difference in spending between the oldest and youngest age groups studied increased every year
studied: from $6,281 in 2010 to $6,806 in 2014. In 2014, spending was $2,660 for children ages 0-18 and
$9,466 for pre-Medicare adults, ages 55-64.”
Overview: Executing on the Individual Mandate: Opportunities and Challenges for Healthcare Payers Healthcare payers in the U.S. are facing the most disruptive change since the introduction of Medicare. In this paper, we have brought together influential voices from across the health insurance landscape, gathering their thoughts and advice on some of the best ways to move forward. Hear from “first-mover” insurance companies in states where reforms are already underway. Read advice from industry associations, academics, consultants and vendors on how to execute on the individual mandate and integrate with health insurance exchanges. Learn how to select product and service offerings to retain profitability and growth, along with the technology required to thrive in this new environment.
November 2015
Page 17 © 2015, MCOL. All rights reserved.
A selected Blog entry from the month of October 2015 from MCOLBlog.com
Some new research on the effect of physician practice arrangement has on spending offer some disap-
pointing -- but not entirely surprising -- results.
Take physician groups. The death of the independent physician practice, working solo or in a small prac-
tice, has long been predicted. Honestly: would you rather be treated by a doctor practicing alone, or by one
at the Mayo Clinic? Physician groups allow for things like development of best practices, administrative
efficiencies, and, in this era of Big Data, larger data sets that can be used to improve patient care. When it
comes to physician groups, bigger would seem to be better.
If physician groups are good, the theory goes, then integrating them clinically and financially with hospitals,
such as through partnerships or common ownership, should even better.
The AMA says solo practice physicians now are only 17% of all physicians, down from 40% in 1983, and
that physician ownership of their practice has declined from 76% in 1983 to just over 50% now. Our health
care system, it would seem, is destined to be made up of large physician groups, many of which will be
owned by hospitals.
Too bad both larger groups and hospital ownership apparently end up costing us more.
A new study in Health Affairs found that as physicians concentrate in larger groups, prices tend to go up, at
least for the 15 high volume, high cost procedures the authors looked at. It might seem that whatever sav-
ings might be gained by becoming part of a group are not being passed on to consumers (or their health
plans), and/or larger size allows groups to bargain for better reimbursement rates from payors.
An earlier survey, by one of the lead authors of the new study, found that more competition among physi-
cians did, in fact, result in lower prices, at least for office visits. The moral appears to be, if you don't want
to compete with them, join them!
Then there is the hospital ownership effect. A study in JAMA Internal Medicine found that increased hospi-
tal/physician financial integration led to greater spending, primarily in outpatient care and almost entirely
due to higher prices, not higher utilization. The AHA protests that the study "is not reflective of the changes
happening in today’s health-care market," citing newer value-based payment arrangements and hospital
price increases that are at historically low levels.
Maybe the AHA is right. Maybe once we move more fully into the wonderland of value-based payment ar-
rangements everything will work out: better quality for same or lower costs.
I'm Shocked, Shocked
By Kim Bellard, October 22, 2015
November 2015
Page 18 © 2015, MCOL. All rights reserved.
MCOL Blog: I’m Shocked, Shocked continued
I've lived through DRGs, RBRVS, capitation, global capitation, staff model HMOs, IPAs, and an array of
cost/quality incentive programs -- each of which was supposed to be the next magic bullet -- so I'm not
holding my breath that payors will finally be able to outsmart providers when it comes to controlling reve-
nue.
Don't get me wrong: I've long been a believer both in large physician groups and in clinical integration. But
I worry that those strategies to improve health care delivery are now being used more as tactics to main-
tain and even improve revenue.
As I've written before, when you have to create a new model that is supposed to be patient-centered, and
providers demand to get paid more just for participating it in, it's a pretty clear indication that our health
care system isn't about patients but rather is about the providers.
The problem isn't the structures themselves but rather their focus.
This post is an abridged version of the posting in Kim Bellard’s blogsite. Click here to read the full posting
A learning resource kit on Accountable Care Organizations (ACOs)
Using this learning kit, you can view a number of insightful recent recorded webinar presentations
from national experts covering a variety of issues concerning ACOs, browse a directory of executive
profiles with contact information on ACO leaders, review and reference key ACO articles, overview
and regulatory documents, and even take an interactive quiz on basic ACO knowledge.
HealthExecStore
1101 Standiford Ave. Suite C-3
Modesto, CA 95350
209.577.4888 (phone)
209.577.3557 (fax)
[email protected] (email)
November 2015
Page 19 © 2015, MCOL. All rights reserved.
A selected Blog entry from the month of October 2015 from MCOLBlog.com
Moving away from traditional reimbursement models based on volume to those aligned more closely with
outcomes, cost and quality is easier said than done, but has over-whelming industry support. Earlier this
year, Modern Healthcare spoke with committee members of a new Health Care Transformation Task
Force (made up of providers, insurers and employers) who pledged collectively to shift 75% of its mem-
bers' business into contracts with incentives for health outcomes, quality and cost management by January
2020.
The U.S. Department of Health
and Human services has jumped
on board the value reimburse-
ment trend as well, setting a goal
of tying 30% of traditional fee-for-
service Medicare payments to
quality or value through alterna-
tive payment models, such as
Accountable Care Organizations
(ACOs) or bundled payment ar-
rangements by the end of 2016,
and tying 50% of payments to
these models by the end of
2018. A Deloitte study found that
72% of surveyed health execu-
tives said that the industry will
switch from volume to value. The
Case for Value-Based Care was
the focus of a recent MCOL in-
fographoid, highlighted below:
MCOL’s weekly infoGraphoid is a
benefit for MCOL Basic members
and released each Wednesday
as part of the MCOL Daily Fac-
toid e-newsletter distribution ser-
vice – find out more here.
Transitioning Payer Reimbursement from Volume to Value
By Claire Thayer, October 20, 2015
November 2015
Page 20 © 2015, MCOL. All rights reserved.
A selected Blog entry from the month of October 2015 from MCOLBlog.com
To what degree will the mega-merged health plans dominate the landscape in the balance of this decade? We’ve recently discussed the topic: will health plan start ups and provider sponsored plans fill the competi-tion gap? We noted then, that the airline industry demonstrated opportunities that might apply in the cur-rent health plan environment, “where the post-merger environment after established airline joined forces didn’t prevent the emergence or growth of carriers like Southwest, Jet Blue, Virgin America and many oth-ers.
It’s looking more and more like the gap won’t be significantly filled by co-ops, with theKentucky Health Co-operative being the latest co-op to bite the dust. Much attention, and Wall Street dollars, is being given to the venture-capital backed startups. But it remains to be seen if they will take over the world or suffer the fate of a number of the co-ops.
In the meantime, regional independent plans, a large portion being provider sponsored, have much more of a track record and maturity to fall back on. A Reuters article this week, As U.S. insurers aim to get big-ger, hospitals eye health plan entry, discusses established integrated delivery systems such as Kaiser and Geisinger, as well as the re-entry into this business by hospital companies such as Tenet, who now owns six health plans with about 100,000 members. Companies like evolent health are also cov-ered, who are doing big business working with hospitals on developing new plans and risk-bearing net-works.
During the course of 2015, a term emerging into the lexicon around the country has been “Payvider”, which hopefully is self-explanatory. Let’s listen in a discussion about Payviders from Cathy Eddy, President of Health Plan Alliance:
“….we met with the research firm KLAS. They are conducting a survey with “Payviders,” or health systems that have their own health plan. This is a new term for a concept that has been around for more than 30 years, but seems to be gaining traction again as more providers move into value-based reimbursement (don’t call it capitation – that is so 90s), and more are leveraging their existing health plan, partnering with one, or even starting a health plan. I’ve been working in the space between payers and providers since 1982 and running the Health Plan Alliance for nearly 20 years. What seems different now is the level of strategic alignment between the plans and their provider sponsors. The expertise that exists in a health plan is a great (essential? necessary? logical?) resource for a health system that is moving into Population Health, establishing ACOs and negotiating contracts for value-based payments and incentives. Many of the competencies it takes to run a health plan are critical elements for health systems that are taking on risk.”
The Health Plan Alliance represents almost fifty provider-sponsored and independent health plans, that range in size, from less than 50,000 members to more than I million members, and operate in all lines of business, including commercial, Medicaid, and Medicare. Perhaps they are the nexus of the source of competition in the health plan industry for the rest of this decade.
The Nexus of Payviders
By Clive Riddle, October 16, 2015
November 2015
Page 21 © 2015, MCOL. All rights reserved.
A selected Blog entry from the month of October 2015 from MCOLBlog.com
The Deloitte Center for Health Solutions has just released a survey report, Health Care Consumer En-gagement: No One-Size-Fits-All Approach, which they say shows 'that Americans are increasing their use of technology to improve their health, navigate the health system and flex their shopping muscles in acting like consumers instead of passive patients." Overall, how "techy" are American healthcare consumers? They found "22% used technology to access, store and transmit health records in the last year, up from 13% in 2013. Use was higher for those with ma-jor chronic conditions: 32% compared to 19% in 2013." Deloitte’s findings are that consumer engagement is increasing three ways:
1. "More consumers today prefer to partner with doctors instead of relying passively on them to make
treatment decisions"
2. "Consumers’ trust in the reliability of information sources is rising"
3. Consumers are increasingly relying on technology
Here's some of the numbers behind their report, regarding the percentage of survey consumer respon-dents:
28% have used technology to measure fitness and health goals, up from 17% in 2013 (45% of Mil-
lennials this year)
23% have used technology to monitor a health issue, versus 15% in 2013
40% of the surveyed technology users have shared their fitness or monitoring information with their
doctor
39% with major chronic conditions use tech-based monitoring (22% in 2013)
63% of the surveyed technology users say their use of fitness or monitoring technologies has led to
a significant behavior change
13% who take prescription drugs receive electronic alerts or reminders
48% prefer to partner with doctors rather than have them make decisions for them, up from 40% in
2008
34% strongly believe doctors should encourage patients to raise questions
58% feel that doctors should explain treatment costs to them before decisions are made
16% who received care report asking their doctor to consider treatment options other than the one
initially recommended.
52% report searching online for health or care-related information;
16% who needed care went online for cost information, up from 11% in 2013 (27% of Millennials
this year)
Consumers and Physicians and Technology in 2015
By Clive Riddle, October 9, 2015
November 2015
Page 22 © 2015, MCOL. All rights reserved.
A selected Blog entry from the month of October 2015 from MCOLBlog.com 71% of all those surveyed said they have not gone online for cost information but are "very" or
"somewhat" likely to use a pricing tool in the future
25% used a scorecard to compare the performance of doctors, hospitals and/or health plans, up
from 19% in 2013 (49% of millennials this year)
What do these numbers mean? Harry Greenspun, M.D.Director of the Deloitte Center for Health Solutions, tells us "not all consumers are alike in how they engage the system, and a large segment still remains dis-engaged. Companies likely won't take a one-size-fits-all approach in their marketing and operations, but a tailored strategy that considers the unique characteristics of the segments they are most interested in." Greg Scott, Principal, Vice Chairman and national sector leader for Deloitte's health plans practice, adds "the specter of a more customer-driven industry is causing many health companies to transform into retail-focused organizations, impacting everything from strategy and scale to operations and human capital. For the enterprise, this is about more than a cool app – this is about making the end-to-end changes needed to better identify and engage a more empowered purchaser." So at the other end of the stethescope, how do doctors feel about using technology in their practices? Ge-neia just released survey results on this topic - not addressing physician interaction with consumers as dis-cussed above, but rather how physicians relate to EMR, data and analytics. Heather Lavoie, Geneia's President & Chief Operating Officer, tells us that "seemingly, there is an inverse relationship between health IT spending and physician job satisfaction,..physician sentiment towards tech-nology is surprisingly nuanced. Doctors are indicating that data and analytics tools have the potential to reduce time spent on recordkeeping, one of their primary frustrations, while also contributing to it." 24% of physicians said that EMR impact on practices was positive, 19% negative, 53% a little of both, and 5% said they do not use EMRs. 69% of physicians felt data and analytics tools positively impacted their ability to efficiently assess patient history and needs, 63% said they help them get value and improved out-comes from chart documentation, and nearly 60% felt they helped identify and triage the highest need pa-tients and created greater efficiencies in office workflow. But Geneia shares that "on the other hand, more than 60% of physicians say that data and analytics tools have negatively impacted recordkeeping time. In fact, when asked to identify the number one way data and analytics could improve their job, the most popular answer was to reduce the time spent on record-keeping (41%) followed by more time with every patient (22%), better access to patients' complete medical profile and history (20%), and more time with the patients who require enhanced care (14%)."
MCOL Blog: Consumers and Physicians and Technology in 2015 continued
The Accountable Care Directory 2015 version 2 book or pdf with optional database
The ideal resource for collaborating, networking, recruiting, marketing or monitoring of Accountable Care Organizations.
November 2015
Page 23 © 2015, MCOL. All rights reserved.
A selected Blog entry from the month of October 2015 from MCOLBlog.com
Press Ganey has just published a seven page white paper Pa-tient Experience in the Very Elderly: An Emerging Strategic Fo-cus, that in their words, “examines the clinical and strategic bene-fits for health care organizations creating targeted care strategies for the ‘Very Elderly’ population” which they define as patients 80 years of age and older.
Thomas H. Lee, MD, Press Ganey’s Chief Medical Officer and a co-author of the paper tells us “most patients in this Very Elderly population claim a ‘poor’ or ‘fair’ health status and tend to have greater and more complex needs. The data suggest their needs are not being met reliably. Organizations that embrace a more focused, compassionate, connected care model have the poten-tial to reduce suffering for this very vulnerable population and mitigate the impact of age and health status on patient experi-ence ratings.”
Press Ganey points out that while only 3.5% of the U.S. popula-tion is over 80 years of age - this demographic is a dominant presence in hospitals, emergency departments and outpatient practices, representing “27% of medical service and 12% of sur-
gical service admissions, and their lengths of stays are longer.” Press Ganey’s analysis examined HCAHPS data by service line and age group for 1.5 million patients.
Press Ganey uses HCAHPS patient service ratings as an argument that the medical needs of the Very Elderly are not being adequately met. They note that “the percentage of patients giving top ratings [to pro-viders] steadily increases as patients get older—but then declines for patients above 80 years old. When data “change directions,” the reason is usually two different forces are at work. The most likely explanation for the data in Figure 1 is that the elderly patients have greater needs, and that, in the Very Elderly, failure to meet these needs overcomes the tendency of older patients to give higher ratings to their providers.”
Service ratings of providers that were a 9 or 10 (out of ten) increased by each age group (medical services from 58.6% for age 18-34to 71,2% for ages 65-79; and surgical services from 65.2% for ages 18-34 to 78.2% for ages 65-79; which fell to 69.2% for age 80+ medical services and 75.9% for age 80+ surgical services.)
Press Ganey also points out that “patients in poorer health give lower ratings to their hospitals than do those in better health, regardless of age,” and the HCAHPS data clearly shows a deterioration in reported health status by age. 83% of patients reporting excellent health rating medical service providers 9+ out of ten, compared to 61% reporting poor health. 86% of patients reporting excellent health rating surgical ser-vice providers 9+ out of ten, compared to 65% reporting poor health. Press Ganey provides graphs dem-onstrating that “older patients are more likely to describe their health as fair or poor, and few Very Elderly patients report being in very good or excellent health.”
The Patient Experience of the Very Elderly
By Clive Riddle, October 2, 2015
November 2015
Page 24 © 2015, MCOL. All rights reserved.
Press Ganey emphasizes to providers that “taken together, these data demonstrate both an opportunity and a threat. The threat is the risk of losing the patient segments that account for a large proportion of the care delivered by most organizations—the sick elderly. Furthermore, hospital payments might be compro-mised by lower patient experience scores that result from having more sick Very Elderly patients.” Press Ganey concludes that “this group wants more thorough, communicative care that meets their needs for information, coordination, responsiveness and general hygiene;” and that “providers have the potential to reduce suffering for this very vulnerable population, improve patient experience and market share through focused efforts and team-based care.”
Royal Philips has also just published new study results relating to the elderly’s healthcare experience, with their analysis “demonstrating an insightful correlation between chronic conditions and falls risk. Their re-searchers” retrospectively analyzed the records of 145,000 seniors equipped with a standard Philips Life-line medical alert service or a medical alert service with AutoAlert (automatic fall detection) between Janu-ary 2012 and June 2014.”
Their findings, and national data they highlight in their report include:
Seniors with chronic conditions fell and required emergency transport up to 54 percent more often, compared to their peers with no chronic conditions. (they note that one in three seniors fall each year and that 80 percent of the senior population has at least one chronic condition and 68 percent has two or more.)
Seniors with physical conditions not typically tied to frailty, including COPD and diabetes, also were shown to fall more often.
Among Philips users, seniors who self-reported suffering from three chronic conditions had 15 per-cent more falls that required hospital transport, and those with five or more conditions had 40 per-cent more falls than those with no chronic conditions.
Within the study population, 72 percent reported having one or more chronic conditions, with 20 per-cent reporting five or more.
The data shows that seniors fell more often and needed hospital transport when reporting the fol-lowing: Cognitive impairment by 54 percent; COPD by 42 percent; Diabetes by 30 percent; and Heart condition by 29 percent.
MCOL Blog: The Patient Experience of the Very Elderly continued
November 2015
Page 25 © 2015, MCOL. All rights reserved.
Selected Factoids from the MCOL Daily Factoids e-newsletter
Towers Watson and the National Business Group on Health recently released an annual survey on best practices in health care employer, and some of the key findings include:
Health care costs for 2015 are expected to average $12,041 per employee
On average, employees will pay 22.2% of total premium costs in 2015
Employers expect a 4.1% rate of increase in the cost of employer-sponsored health care
benefits
Employer confidence in offering health care coverage 10 years from now has nearly dou-
bled to 44% today, from 25% in 2014.
Source: Towers Watson
Employers Expect Lower Rate of Increase in Healthcare Costs in 2015 vs 2014
The Number of Medicare Advantage Plans Will Increase by 3% in 2016
Kaiser Family Foundation recently conducted an analysis on changes to Medicare Advantage of-ferings for 2016. Here are some key findings from the report:
The number of Medicare Advantage plans will increase from 1,945 plans in 2015 to 2,001
plans in 2016.
203 Medicare Advantage plans will exit markets at the end of 2015 while 259 new plans will
enter in 2016.
87% of plans that will be offered in 2016 were also available in 2015.
Medicare beneficiaries will be able to choose among 19 plans, on average, in 2016.
16 of the 19 average plans will offer Part D prescription drug coverage.
3% of Medicare Advantage enrollees are in plans that are exiting the market at the end of
2015.
Source: Kaiser Family Foundation, October 13, 2015
November 2015
Page 26 © 2015, MCOL. All rights reserved.
Selected healthsprocket lists from the healthsprocket.com
1. W5921XA Bitten by turtle, initial encounter
2. W5921XD Bitten by turtle, subsequent encounter
3. W5921XS Bitten by turtle, sequela
4. W5922XA Struck by turtle, initial encounter
5. W5922XD Struck by turtle, subsequent encounter
6. W5922XS Struck by turtle, sequela
7. W5929XA Other contact with turtle, initial encounter
8. W5929XD Other contact with turtle, subsequent encounter
9. W5929XS Other contact with turtle, sequela
Source: Wall Street Journal, A Code for What Ails You
Actual ICD10 Codes for Turtle Encounters
Fact Based List:
LexisNexis: Top Providers Of Home Health Care 1. Kindred Healthcare – Atlanta, GA
2. Amedisys, Inc. – Baton Rouge, LA
3. LHC Group – Lafayette, LA
4. Almost Family, Inc. – Louisville, KY
5. Encompass Home Health – Dallas, TX
6. Brookdale Senior Living - Brentwood, TN
7. Visiting Nurse Service of New York – New York, NY
8. Trinity Health – Livonia, MI
9. Interim HealthCare – Sunrise, FL
10. BAYADA Home Health Care – Moorestown, NJ
Source: LexisNexis
Fact Based List:
November 2015
Page 27 © 2015, MCOL. All rights reserved.
From MCOL’s Quotes of the Week during October 2015
“S“Studies have shown that bad provider information costs 23 to 26 billion dollars year to
the industry, so its a very big number.”
Josh Schoeller, Vice President Client Engagement, LexisNexis Risk Solutions
“W“While we have experienced several years of slower growth in health care trend, health
care cost increases are still multiples of CPI. Employers are trying to balance offering valu-able benefits that meet employees' needs with the looming excise tax, which makes it im-
perative that they focus on areas where there are opportunities to make changes while pre-serving quality and effectiveness.”
Brian Marcotte, President and CEO, National Business Group on Health
“W“Whether it is the first time or the twentieth time, it is always important to read and follow
the label for all medicines, prescription and OTC. The OTC medicine label contains informa-tion consumers need to use a medicine safely and responsibly, in addition to working closely
with their healthcare professionals for guidance.”
Dr. Rajesh Mishra, Vice President of Medical and Clinical Affairs, McNeil Consumer Healthcare
“M“Most of the co-ops have not been collecting enough money to cover their financial obli-
gations. The low premiums and skyrocketing member bases of co-ops like Colorado Healt-hOP further dampened that financial picture. The worst thing that can happen to any insur-
ance company is to grow very rapidly at inadequate premiums.”
Scott Harrington, Professor and Health Care Management Department Chair , Wharton School of the University of Pennsylvania
“I“It’s a mixed picture on drug ads and we don't have enough information to say if we would
be better off with or without them. But in the end, the public would like greater assurance that drug ads are accurate."
Drew Altman, President and Chief Executive Officer, Kaiser Family Foundation
