Wednesday, April 17, 2019

The Cost of Hospital Care is Much Higher for those with Employer-Provided Coverage

When you go to the hospital, what you pay is based on what your insurance covers. This raises the question, how do insurers determine what a hospital is paid? On one end there is the chargemaster amount, the list price for services that hospitals are now required to post. On the other end, there is what Medicare pays. Traditionally insurers have negotiated discounts from the chargemaster prices, but that's starting to change. Employers are banding together to force insurers to negotiate up from Medicare instead of down from the chargemaster.

A group of self-insured employers in Indiana commissioned Rand to conduct a study that would provide useful information about the prices they are paying for health care services. The study showed that what employers paid varied wildly--200 to 600 percent over what Medicare reimburses. This is not a question of good hospitals charging more. It's poor hospitals charging too much. The amount considered appropriate as a percentage of Medicare varies. I've heard anywhere from 120 percent to 200 percent of what Medicare reimburses deemed acceptable. The Rand study was so informative that it has been expanded to include 22 states, and the results are due to be announced next month.

Ideally, this pricing information would be used in conjunction with quality data. This raises another issue where employers need to press insurance companies. I've encouraged people to use Leapfrog ratings to obtain care from the safest hospitals. I want to take the next step and build a financial incentive into the plan design for doing this, but the network contracts insurers have with hospitals prevent this. Here is the response I received from UHC.

Saturday, February 23, 2019

Are Hidden Fees Driving Up the Cost of Your Healthcare Coverage?

Every once in a while, you come across an article you wish you would have read a decade or two earlier. Propublica's Behind the Scenes, Health Insurers Use Cash and Gifts to Sway Which Benefits Employers Choose by Marshall Allen is one of those articles. For years, I compared the commission our broker was paid to what others were paying. The fees usually ranged between three and six percent. What I didn't see was the additional bonuses insurers paid our broker. I finally looked at the 5500 filings of other associations and was able to see the picture more completely. I created this scatter plot to see how what we were paying really compared. A quick look at this chart will show you how dramatically per employee per year broker fees varied among associations in the DC area in 2015. This caused us to make a change. We now work with Zack Pace at CBIZ. We pay Zack a monthly fee for his help and everything is transparent and above board. 

I've run into Dave Chase and David Contorno who were interviewed in this article at various meetings in the past year. It seems like the Health Rosetta movement is gaining steam which is good for all of us who have employer-provided health care coverage. Ask your HR team how your employer's advisors are paid.

Monday, February 4, 2019

Engaging Employees in Health Care Benefit Design

Traditionally, benefit managers get together with an advisor or broker and a representative from a health insurance company to decide what to include in their employer-provided health care coverage. No employer can afford to pay for everything, so this small team debates the tradeoffs and decides what's best for the organization. 

I asked myself what it would look like if employees had input into these decisions, and I set out to design a process to facilitate employee input. I invited ASHA employees to participate in this process, and together, we redesigned one of the health insurance plans we offer to staff and dubbed it the ASHA signature plan. 

You can read about this journey in Health Affairs. If you're interested in learning more, I wrote a white paper with Len Nichols, professor of Health Economics at George Mason University (GMU), Lisabeth Buelt, and her colleagues at NPC. NPC provided funding for me to contract with GMU to analyze what insights we could draw from all the data we collected. I hope our work inspires other employers to involve their employees in decisions about their benefits. 

Wednesday, August 15, 2018

You Must See The Bleeding Edge

Americans value innovation, and we built a health care system that rewards it, but at what cost? Few people understand that medical devices are not regulated as well as pharmaceuticals and patients can have untested objects implanted in their bodies. 

Prescription drugs must be tested in humans, and the FDA reviews the data before they're approved to go to market. The process has its shortcomings, but nothing like what goes on with medical devices. Through a what is essentially a loophole, the 510(k) pathway, medical devices can be approved if the manufacturer demonstrates that their device is "substantially equivalent" to a device that's already on the market. Manufacturers can get approval even if the device they're using for the comparison has been recalled because it caused problems. The new device might be made from entirely different material like using cobalt in a hip replacement or used in a completely different way like mesh that was used for hernia repairs being used for gynecological repairs. Under the current administration, what little control the FDA had is eroding. 

Wednesday, August 1, 2018

Nine Actions to Mitigate Specialty Drug Costs

I was asked to give a presentation at the Employee Health, Benefits, & Well-Being Congress in Boston about what employers can do to manage specialty drug costs. The timing was good, ASHA's PBM contract is out to bid and I've spent the last four months learning what I need to know to evaluate our options. I was happy to share what I've learned and will summarize what I shared here as well with links to some of the things I mentioned. 

Monday, May 28, 2018

Mental Health Care -- Far from Equal (Part 2)

4 Helpful Actions Employers Can Take

It's been 10 years since the Mental Health Parity and Addiction Equity Act was passed, so it seems like a good time to pause and ask ourselves if access to care is now equal. M
ost insurers have dropped visit limits and separate deductibles and co-insurance for mental health care yet patients are still struggling to get access to treatment. A report from Milliman concluded:
The difference between medical/surgical and
behavioral health use out-of-network by state.
 Source: Milliman - 2017
  • In 2015, behavioral care was four to six times more likely to be provided out-of-network than medical or surgical care.
  • Insurers pay primary care providers 20 percent more for the same types of care as they pay addiction and mental health care specialists, including psychiatrists.
  • State statistics vary widely. In New Jersey, 45 percent of office visits for behavioral health care were out-of-network. In Washington D.C., the figure was 63 percent.6
In part, because reimbursement rates are low, mental health practitioners choose not to participate with insurance networks. Participation also means dealing with all the paperwork and bureaucracy involved in filing insurance claims. Many mental health care providers are solo practitioners and they don't have the administrative support they need to deal with insurance coverage.

Wednesday, April 18, 2018

Sewage Leaks in DC Hospital Operating Rooms

The next time you are tempted to think, "all hospitals are equally safe," stop and think of this story about sewage leaks in the operating rooms at MedStar Washington Hospital Center. These leaks are cited as a cause of patients acquiring infections while in the hospital and the cause of the death of a woman from Northern Virginia. 

Leapfrog Hospital Safety Grade assigned Washington Hospital Center a safety grade of a D the last four times safety was evaluated.  The results clearly show they scored below average in infections. Sibley Memorial Hospital is just six miles away and it earned a B. Knowing this, where would you choose to seek care? 

I understand people put a lot of trust in their doctors and generally go wherever their doctors recommend, but it's up to you to choose where to seek care. I'm not exaggerating when I say this can be a life and death decision. 

The good news is that the information you need to make a well-informed decision is easy to obtain. Just go to Leapfrog Hospital Safety Grade and search by state, city, zip code or hospital name. Leapfrog even has an app you can load onto your phone, so this information is always at your fingertips.