The inability to negotiate acceptable low-price contracts with hospitals, physicians, and other providers, along with high utilization rates, is proving to be more than commercial insurers can handle.
Aetna is creating more doubt about the future of Obamacare by withdrawing late Monday from 11 of the 15 individual exchanges for 2017.
The inability to negotiate acceptable low-price contracts with hospitals, physicians, and other providers, along with high utilization rates, is proving to be more than Aetna and other commercial insurers can handle.
The Hartford, CT-based insurer's move opens the door to other carriers to rethink their own participation in the exchanges.
Aetna says it will only sell Obamacare products in Delaware, Iowa, Nebraska and Virginia, citing higher than expected utilization costs. The insurer also says it has lost $430 million in its individual policies unit since the health insurance exchanges opened in January 2014.
"More than 40 payers of various sizes have similarly chosen to stop selling plans in one or more rating areas in the individual public exchanges over the 2015 and 2016 plan years, collectively exiting hundreds of rating areas in more than 30 states," Aetna said in a press release.
In April, UnitedHealth said it would quit Obamacare in 16 states to slow its losses. This month Humana made public its plans to cut back on individual policies offered on Obamacare exchanges.
"As a strong supporter of public exchanges as a means to meet the needs of the uninsured, we regret having to make this decision."
Aetna's withdrawal is unfortunate, but not surprising, says Michael A. Morrisey, PhD, professor and head of the Department of Health Policy & Management in the School of Public Health at Texas A&M University.
Morrisey notes that in Texas, Aetna was one of seven carriers, including Blue Cross Blue Shield, that reduced the number of plans they offered in 2016 compared to 2015. Aetna reduced its Silver plan offerings by about one-third and had the highest average Silver premium in 2015 but moved aggressively in lowering those premiums in 2016 relative to BCBS.
Two Key Factors
"I think the reduction in the number of plan offerings, the lower relative premiums, and the decision to withdraw revolve around two key issues," Morrisey says.
"The first is the ability to negotiate acceptable low-price contracts with hospitals, physicians and other providers. The second is the ability to attract enough healthy low-utilizers into their plans."
Aetna acknowledged those challenges in its statement of surrender: "Providing affordable, high-quality healthcare options to consumers is not possible without a balanced risk pool. Fifty-five percent of our individual on-exchange membership is new in 2016, and in the second quarter we saw individuals in need of high-cost care represent an even larger share of our on-exchange population. This population dynamic, coupled with the current inadequate risk adjustment mechanism, results in substantial upward pressure on premiums and creates significant sustainability concerns."
Morrisey suspects that in 2016 Aetna eliminated offerings in communities where it could not obtain competitive hospital and physician prices. The lower prices, however, weren't enough to mitigate the high utilization it was experiencing among those who enrolled, Aetna they chose to withdraw, he says.
"Going forward, this experience and that of other carriers who are rethinking their exchange participation suggests we should expect continued aggressive price negotiation with providers, higher premiums, and more selected market withdrawals from the exchanges as the carriers try to deal with the disproportionately sicker populations that are enrolling in their exchange plans," Morrisey says.
Genetics research is at the cutting edge of cardiovascular care with arrhythmia syndrome screening advancements and opportunities for personalized medicine.
This article first appeared in the July/August 2016 issue of HealthLeaders magazine.
Cardiovascular care is often on the cutting edge of medicine, but hospitals are now making progress toward the next generation of cardiology with genetic testing and treatment that enable care to be far more targeted than past service lines. Contrasting the usual focus on identifying those at risk for cardiovascular issues, one of the main goals now is to identify those who are not at risk and to keep them healthy and out of the healthcare system.
The drive for more targeted care stems in part from years of criticism for the overuse of stents and other unnecessary treatment in cardiovascular care, but advances in genetics research are leading to what could be dramatic steps forward. Much of the leading edge in cardiovascular care involves the study of patients with genetic arrhythmia syndromes, in which otherwise healthy young people die suddenly or develop life-threatening heart rhythms.
At the forefront of that effort is Melvin Scheinman, MD, chief of the Comprehensive Genetic Arrhythmia Program at the University of California, San Francisco, which is devoted to discovering new genes related to heart rhythm disorders. Scheinman was one of the pioneers of cardiac electrophysiology, and he says genetics advancements could bring similarly dramatic changes in cardiovascular care.
Not all arrhythmias are genetic in nature, but many pose a serious health risk, with the Centers for Disease Control and Prevention reporting more than 600,000 sudden cardiac deaths per year. Most sudden cardiac deaths are caused by arrhythmias, as cited by Cleveland Clinic. Genetic arrhythmia syndromes include arrhythmogenic right ventricular dysplasia, Brugada syndrome, catecholamine-induced polymorphic ventricular tachycardia, long QT syndrome, and short QT syndrome.
Alterations in genes that make proteins important in regulating the heart rhythm may predispose a person to developing dangerous heart rhythms. Research on hundreds of families affected with LQTS in the 1990s (based on the study SCN5A Mutations Associated With an Inherited Cardiac Arrhythmia, Long QT Syndrome by Wang, Q., et al.) led to the discovery of several genes that are crucial to normal heart rhythms.
"We are studying patients with arrhythmia syndromes to check them and their family members for genetic abnormalities and, depending on the diagnosis, we can determine a genetic mutation up to 80% of the time," Scheinman says. "The importance of this is that if we can find a pathogenic genetic mutation, other first-degree family members have a 50% chance of having the same mutation. We can pinpoint those at risk of dying from serious heart rhythm disorders."
Success key No. 1: Rule out family members
On the other hand, family members without the mutation can stop worrying and know that they are not at risk after they have undergone genetic testing. This knowledge can significantly change the way cardiovascular care is delivered, Scheinman says, because it can eliminate the cautionary testing and treatment that might have been delivered to family members just in case they were at risk of an arrhythmia syndrome.
Genetic testing will lead to the ultimate form of personalized medicine, Scheinman says.
"If you examine the genetic background of a patient, you may be able to identify sensitivity to specific drugs, propensity for developing some very serious heart disorders, and at the same time rule out those same things for other people," Scheinman says. "That is really what personalized medicine is all about—delivering the right care to the patient because you truly understand the patient and don't have to treat him or her as just a member of a group with certain statistical risks."
Scheinman says genetic arrhythmia programs across the country have reduced what used to be the wasteful response to a sudden death or an aborted sudden death in the family. Before genetic testing, such a death typically triggered a cascade of preventive healthcare, testing, and monitoring for all family members. Without genetic testing, cardiologists were forced to take a defensive posture and order the same care for everyone, knowing that it probably was unnecessary for many of them. In many cases, genetic testing can identify new opportunities for medical resources.
Genetic testing can be used with standard cardiac testing such as electrocardiograms and treadmill tests to determine whether a person has an arrhythmia condition. It can be useful when there is uncertainty about the exact diagnosis, Scheinman says. A patient who does not quite meet the diagnostic criteria for LQTS based on the family history and cardiac tests, for example, could be tested for the five to 13 genes that are known to cause LQTS. Finding the gene alteration known to cause LQTS would make the diagnosis more certain. Not finding it would make it less likely that the patient has LQTS, but not impossible.
Success key No. 2: Use genetics to improve screening
Genetics research is slowly starting to affect many aspects of cardiovascular care, says Thomas P. Cappola, MD, ScM, chief of the division of cardiovascular medicine at the Perelman School of Medicine at the University of Pennsylvania in Philadelphia.
"I believe we are right on the cusp of genetic testing for cardiac conditions being very mainstream and low cost. We already have some genetic tests in the cardiac space that have an out-of-pocket, self-pay rate of less than $500."
Cappola's application of genomic methodologies to identify the molecular and genetic basis of heart failure was recognized in 2009 with a Presidential Early Career Award for Scientists and Engineers, which he received from President Barack Obama. Cappola says cardiovascular care is a field in which physicians are constantly seeking improved treatment options, including drugs and devices in the short term. Long-term efforts are underway to explore cell-based therapies and gene therapies. "There is tremendous demand for those clinical services, so our research is always pushing boundaries to see what we can offer that is new for our patients," he says.
Scheinman says, "The effect from genetic arrhythmia testing has been tremendous, particularly because it is so tragic when young people drop dead suddenly. The main thrust now is to find the genes responsible for coronary artery disease, atrial fibrillation, and other cardiovascular conditions. This is the next big thing."
Quantifying the effect of arrhythmia testing relies on modeling derived from the prevalence of these conditions, so it is difficult to say how many lives have been saved, says Julianne Wojciak, MS, licensed genetic counselor who works closely with Cappola at the Perelman School of Medicine.
The most certain benefit is the ability in many cases to screen family members and identify the 50% who are not at risk, reassuring them and avoiding the unnecessary expense of further testing and precautionary care, she says. A challenge with genetic testing for arrhythmias is interpreting the genetic variations in a patient accurately, distinguishing between the variations that are disease-causing mutations and others that are without medical consequences, Wojciak says.
"It's an order of magnitude of increased complexity when it comes to the more common cardiovascular abnormalities, such as aortic valve stenosis or atrial septal defect," Scheinman says. "The genetic origins of cardiac arrhythmia were relatively straightforward when compared to what we're seeing with these other conditions, and as a result the practical application has been slower. But I'm optimistic that we'll get there just as we did with arrhythmia."
Success key No. 3: Overcome the financial challenge
Cappola says that the influence of genetics in cardiovascular care is slowed by the fact that genetic testing and acting properly on the results requires considerable expertise. It is not something that a hospital can simply add to its cardiovascular line of care and expect results, he says.
"It's not the kind of thing that is easily deployed. What genetic testing can do and what you can do with the information, that's a constantly moving target," Cappola says. "We know some inherited gene variances that are convincingly disease-causing, and we know many more that might be associated with disease but not in a very convincing way. That bar between what's convincing and what is murky is moving, so what is not actionable now might be actionable in the future."
Genetic testing also has been expensive, which posed a challenge for insurance reimbursement, Cappola says. Wojciak says that situation is improving, however. Genetic testing used to cost between $3,000 and $10,000 per patient, but new technology is making it possible to test large amounts of DNA at a low cost, she says.
"Nailing down the cost of testing is a moving-target situation because you have some older laboratories that are still charging high prices and newer laboratories using the new technology to push tests through in a very affordable way," she says. "I believe we are right on the cusp of genetic testing for cardiac conditions being very mainstream and low cost. We already have some genetic tests in the cardiac space that have an out-of-pocket, self-pay rate of less than $500."
Reimbursement is uncertain at the moment, Wojciak says. Most insurance companies do not yet have uniform guidelines for genetic testing for arrhythmias, but there is movement forward in that area, she says.
Success key No. 4: Pursue additional cardiovascular advances
Cappola says that the next generation of cardiovascular care will be influenced by such nonclinical factors as the increased use of mobile devices and apps, which he says will change the way clinicians interact with patients and monitor their cardiac health. Drug advancements also will play a role, he says.
An example is the CardioMEMS device, an implantable pressure monitor that enables doctors to follow pressures inside the heart remotely. The technology behind CardioMEMS was invented by Professor Mark G. Allen in the University of Pennsylvania's School of Engineering and scientific director of the school's Singh Center for Nanotechnology. Cappola says he expects similar advancements as engineers and physician-scientists continue working together.
"The future in cardiovascular care is very promising. We've never been able to do more, and there is more on the horizon," he says. "Devices and drugs will continue to improve what we can do for our patients. The decline in mortality of heart disease over the past two decades really speaks to the success in cardiology we've had so far—with genetics as a part of it, and I expect more in the future."
It's real enough to drive changes in how the healthcare industry communicates costs and quality, but still a long way from true consumer shopping.
This article first appeared in the April 2016 issue of HealthLeaders magazine.
Consumerism has been making inroads into the healthcare industry for at least a decade, with patients increasingly acting like consumers who have a choice in their healthcare options, trying to make the best decisions for quality and cost just as they do with any other commodity. The trend has been accelerated by the Patient Protection and Affordable Care Act, which left many consumers with large deductibles that put more pressure on them to find the most cost-effective care for the dollars coming out of their own pockets.
Just a few years ago, patients seeking information about a doctor or hospital were able to find only the most basic data, leaving them to base their treatment decisions on the few factors they could mostly understand—their insurance coverage and the availability of the care they needed. Now many of those patients are able to access much more detailed information about important factors such as a physician's experience with a particular procedure or a hospital's complication and readmission rates.
Patients are finding, however, that there are limits to how much they can play the savvy consumer. Despite growing access to quality metrics and hospital rankings, there still are holes in that data that can make it difficult to discern meaningful differences among providers; and even if patients have adequate information, they may be unable to choose freely because of health plan restrictions and other limitations.
However, the trend toward consumerism has advanced far beyond where it was just a few years ago, and the healthcare industry is responding with outreach and initiatives intended to help patients in their quest for value.
At the same time, consumers and healthcare leaders are both realizing that making healthcare choices is not the same as finding the best deal on a television set—and it never will be. Other concerns and motivations are in play when it comes to healthcare, starting with the fact that the patient often is making the decision in a time of stress and urgent need. Also, choosing one physician or hospital usually is not enough; the patient has to make choices based in part on which physicians, specialists, and hospitals work together and how they will work with the patient's insurance coverage. And unlike most consumer choices, the human connection between the patient and the provider can hold great sway over a patient's decision.
The search for cost and quality information
Research by Healthgrades, a Denver-based online resource for consumers seeking information about physicians and hospitals, indicates significant overlap between what consumers say is most valuable when selecting a physician and what physicians want to know when referring a patient to a specialist. Both consumers and physicians say experience-related information is most important, especially for complex conditions and unique cases.
When choosing a hospital, quality measures such as complications and mortality rates are most important in complex cases. Consumers take note of the "patient satisfaction" ratings of a physician or hospital more in basic, everyday situations such as selecting a primary care provider than they do in more complex scenarios such as finding the best surgeon for the procedure they need.
Consumers are twice as likely to select a specialist, such as an OB-GYN or an orthopedic surgeon, when they have access to three objective metrics about that specialist—experience, hospital quality, and patient satisfaction, according to the Healthgrades research. In primary care, however, consumers are just 1.26 times more likely to choose a doctor when they can access that data. Additionally, when presented with information about physician experience and related hospital quality, 85% would select a different doctor than the one they chose before getting that information.
That may be because consumers see so little transparency that when they do, the very fact that they have access to information works to the benefit of that healthcare provider. Patients at times struggle to understand their healthcare choices because the healthcare industry is still mostly opaque, says Roger C. Holstein, who spoke to HealthLeaders for this article as CEO of Healthgrades. He has since become vice chairman of Healthgrades' board of directors and has returned to Vestar Capital Partners as managing director.
Some large health systems are responding rapidly to the need for more transparency and recognizing that embracing transparency as a core principle can differentiate them from competitors, he says. "The health systems rapidly adopting transparency are reaping the benefits because consumers are more likely to trust those who expose more content than those who don't."
Trust is the touchstone of consumerism and the way healthcare organizations respond to it, says Mark P. Herzog, FACHE, president and CEO of Holy Family Memorial in Manitowoc, Wisconsin. With high deductibles putting more of their own money on the line, patients are looking for data and healthcare professionals they can trust to provide the most cost-effective care. The 62-staffed-bed general medical and surgical hospital, along with its network of clinics, pharmacies, and other facilities, has more experience than most in dealing with high deductibles, Herzog says, in part because the Manitowoc community has many family-owned businesses and they have been more innovative in designing their health plans than larger employers.
"We've been in a high-deductible market since 2008, so we are much further along in learning what that means for us and for patients," he says. "Ninety percent or more of our insured population has a high-deductible plan. The typical family deductible in our market is about $8,000, and we have more than a handful of $14,000 deductibles in our community."
Those figures prompted Holy Family Memorial to address consumerism earlier than most hospitals. One of the first signs of the high-deductible impact was suppressed utilization of healthcare—some appropriate, but much of it may be inappropriate, Herzog says.
Not only were patients avoiding high-cost care, but they were also avoiding inexpensive or fully reimbursed care because they didn't want to risk having to pay for follow-up treatment. For instance, a false positive mammogram, which happens about 15% of the time, would necessitate an office visit that the patient would pay for, so some women elected to forgo the mammogram, he says.
High deductibles force more dialogue with patients, and cost is almost always part of dialogue. That discussion changes the course of treatment about a quarter of the time, he notes.
"Providers have had to become more aware of what the cost of services are," Herzog says. "For the services that they commonly order, our providers are pretty aware of the costs and can discuss treatment options with the patient. Patients will ask directly about the cost and whether this test or therapy is really necessary, so our providers have to be able to discuss that instead of passing them on to someone else."
The right setting for a patient's care
Responding to that consumer move by the patient, Holy Family Memorial adopted a corporate philosophy called Right Care, striving to provide each patient the right care in the right setting, with the right outcome. The right setting is the one that presents the patient with the lowest financial risk and the lowest physical risk, Herzog explains.
The hospital also has worked to provide more cost information directly to the consumer. For 10 years, the hospital has offered price estimates that outline the patient's out-of-pocket expense for almost all procedures. When Herzog recently underwent knee surgery, he didn't specifically ask for the cost estimate but found one in his mailbox a week before the procedure, detailing all the costs and the out-of-pocket expense from his health plan.
"A strict focus on cutting costs and suppressing utilization purely driven by insurers can be seen as bad, mostly because of the way it is being forced on consumers and providers, but I think it can start a healthy dialogue," Herzog says. "We've been trying to help those we serve by intentionally lowering utilization of expensive hospital services for over a decade now, and it's been not good for hospital finances. But because our mission statement is to serve communities and not our own corporation, we decided to do this because it's the right thing for the community."
The efforts to lower utilization costs at Holy Family Memorial has resulted in lowering inpatient admissions by 45% in the past decade.
"We saw a 20% increase in clinic visits during the same time frame, which, when correlated with the decrease in admissions, provides some indication that our efforts to shift patients from hospital to clinic is working," Herzog says.
"There is one other competing hospital which has not embraced a community-focused value philosophy like Holy Family Memorial has. In fact, if Holy Family Memorial had been the only provider in the county, the increase in hospital bills individuals, government, businesses, and insurers received would have increased only 22%," Herzog says. "If all hospital services in our county used our Right Care approach, it would have avoided more than $90 million in hospital charges over the past decade."
Herzog notes that the hospital's Right Care value focus directly caused group health insurance premiums in his county over the same time period to increase 38% less than neighboring Green Bay, reflecting how hospitals and doctors can improve the economic environment.
Also, Holy Family Memorial's bad debt (as a percent of gross revenue for the hospital—not consolidated), decreased from 1.47% in 2004 to 1.13% in 2014.
Herzog notes that the commitment to serving the community has forced Holy Family Memorial to transform its delivery system and cost structure considerably faster than if it had stayed in the traditional volume-driven mindset.
Herzog's hospital also formed the Consumer Transparency Theme Team in January 2015, responsible for making Holy Family Memorial as transparent as possible so that the patient knows what to expect from the entire experience. That means providing information on not just the cost, but also issues such as how the patient can expect to feel during and after a procedure or test, and who will be calling to follow up after discharge. The transparency team also works to provide quality information to patients in a form they can understand.
"Very few people can make use of the quality data that is out there because it is written from a provider or regulator point of view. It just doesn't resonate with the average citizen," Herzog says. "This team works to translate all the healthcare gobbledygook about healthcare costs, quality, and outcomes into the way two women at the hairdresser would talk about it, or two guys over a beer and a football game."
Holy Family Memorial also empowers the consumer by providing direct access to scheduling lab tests, therapy, and other care. The hospital's direct-access lab testing, for instance, allows the patient to schedule a lab test online without a physician referral, with results mailed the next day. The website lists the cost of 73 available lab tests.
The hospital also is working to accommodate patients' schedules, rather than the traditional approach that puts the convenience of the hospital first. Clinic hours were extended, e-visits were made available online, and Holy Family Memorial also implemented same-day appointments at its clinics.
The overall impact of consumerism is a positive one for the healthcare industry, Herzog says. "My greatest concern is that while the healthcare system is changing, albeit at a glacial pace, employers are struggling to make sense of this shift to consumerism," he says. "Employers rushing to high deductibles often give little or no help to the employee about how to appropriately access healthcare in this new environment."
More impact on outpatient services than inpatient
Consumerism appears to have more impact on outpatient services than inpatient care, says Mark Bogen, senior vice president of finance and chief financial officer at South Nassau Communities Hospital, a 400-staffed-bed acute care facility in Oceanside, New York. Patients still rely on their physicians to refer them to the appropriate hospital and generally don't question that choice unless the facility is out of network. It's only at that point that most patients will speak up and ask about an in-network alternative, he says.
"People are becoming much more savvy about the ultimate financial responsibility and the high deductibles, and it's the outpatient choices where they put that information to use," Bogen says. "We are certainly seeing the impact of that here on Long Island, with patients moving away from hospital-based outpatient ambulatory services to our freestanding counterparts."
South Nassau's efforts to follow patient trends in the past few years actually have backfired because of the move to consumerism, he says. With all the experts predicting that hospital admissions would decrease as patients gravitated more toward ambulatory care, South Nassau negotiated managed care contracts that would take advantage of that move with high-margin ambulatory care fees.
"What has happened is that we have substantially outpriced ourselves in the market, in relation to freestanding, primarily physician-owned and -operated providers of ambulatory care," Bogen explains. "And now insurance carriers have put in benefit designs that penalize recipients who prefer to use hospital-based ambulatory services. So the quandary we have in terms of redoing our managed care rate structure is that we could bring down our rates, but if the benefit design remains to penalize those using our facilities, we aren't accomplishing anything."
The insurers have to give a little if the hospital lowers its rates, so South Nassau is working with insurance companies to develop shared savings relationships that would soften the impact of patients continuing to move to freestanding ambulatory care. The hospital would share in the savings generated by the managed care plan patients choosing more cost-effective care in freestanding facilities, helping to compensate for the hospital's loss in revenue. Talks also are underway to establish a "skinny network" in which the insurer agrees to exempt South Nassau from the high deductibles that patients otherwise would pay when choosing the hospital over a freestanding facility.
Threats from urgent care, drugstore clinics
The damage from lost patients may be mitigated by the glut of urgent care centers on Long Island, which was spurred by the constant search for more cost-effective care outside the hospital. With a new one popping up in seemingly any vacant space, South Nassau leaders initially saw them as formidable competition that promised to save managed care providers money over patients going to a hospital emergency department, so the insurers were willing to pay physicians more than the standard private practice fee schedule. That led many local physicians to sign on with the urgent care centers, which left the community with fewer primary care physicians.
"So when they couldn't find a primary care doctor, people ended up using the urgent care as their primary care," Bogen explains. "The insurers end up paying more for the patient to see the doctor in an urgent care setting than if that doctor was available for a regular primary care visit. Now we're seeing the insurers go back to paying the primary care practice rate, and many of the urgent care operations can't sustain themselves on that."
As that threat recedes, another serious challenge for South Nassau is the CVS pharmacy directly across the street. CVS Health—which reported 2014 net revenues of $139 billion, and net operating profit of $8.8 billion—can undercut the hospital on prices for basic services at the chain's Minute Clinics because it is willing to lose money on a flu shot if it means getting a customer in the door to buy retail goods and use the pharmacy, Bogen says. The idea of setting up a similar clinic has crossed his mind, but Bogen notes that larger healthcare systems have tried that and ended up closing or subleasing the clinics because they were not profitable.
South Nassau also has gone to social media to slow the loss of patients seeking a better price. Realizing that, although it had a good Web presence, it wasn't very active on social media, hospital leaders brought in a new hire at the senior vice president level to focus on improving the hospital's exposure on Facebook, Twitter, and other social media.
During 2015, the hospital made a relatively small investment in a Facebook advertising campaign that paid big dividends in its ability to reach a significantly greater core audience. By the end of 2014, the hospital had collected about 970 "likes" for its page, and through 2015, that number swelled to 10,000 likes. This dramatically increased its engagement and reach, Bogen says, with weekly total reach skyrocketing from 26,000 to more than 70,000. The campaign was instrumental in developing awareness as the hospital launched a new branding campaign in 2015 with newspaper, cable, and spot TV. Of particular focus was generating original and organic content on an almost-daily basis, which has been key to effectively engaging the audience.
"We increased the number of social media administrators from within the hospital who could post content directly to our social media sites to aid in content generation and also be additional sets of eyes and ears," Bogen explains.
Using similar means, the hospital also grew a specialty Facebook site for its urgent care and freestanding emergency department, located in Long Beach, New York, about 5 miles from the hospital's home campus. Participation grew from just under 500 likes to more than 6,500 in that same year. When the hospital changed the service platform at that location from urgent care to emergency care, that growth gave the hospital an easy and inexpensive way to reach and notify interested parties in the market.
Using an integrated campaign of social media, website promotion, newspaper, radio, postcard mailing, beach flyover banners, and press conferences, the center doubled its patient volume in the first month and has continued to grow steadily.
South Nassau also increased its marketing budget, almost doubling in two years how much it spends on quality- and outcomes-based advertising. The hospital also is revamping its website to include more patient interactivity and to make more quality and cost information available. Previously the website was managed by a single administrator who could not keep up with constant updates, so now department managers have access to the site and are responsible for updating their information.
Different levels of consumerism across country
Regional differences can affect how much patients are moving toward consumerism, and how healthcare entities are responding. In areas where people have not been hit as hard with high deductibles and restrictive health plans, costs probably won't be the paramount issue for most patients, says Kimberly Boynton, president and CEO of Crouse Hospital, a 400-staffed-bed general medical and surgical hospital in Syracuse, New York.
Patients are asking more questions and seeing more information online about providers and suggested treatment, but their actual decisions usually are not based on price, she says. That may be due in part to the fact that the Syracuse market is behind the curve regarding health plans and high deductibles, with many employers maintaining their traditional plans. But even the most motivated consumer will find it difficult to obtain the information needed to truly price shop among healthcare options.
"With all that New York State regulates, I can't believe they haven't made us post our prices yet," she says. "I think the state would like to, but some hospitals are driving the conversation by saying 'No way.' It's because they are higher-priced and they know it, so they're going to oppose making it easier for patients to compare."
Crouse Hospital posts prices online, but Boynton says making costs and quality metrics transparent is more difficult than it might seem. The information that can be made available publicly is limited by the hospital's ability to calculate the many variables that go into determining a patient's actual costs, she explains.
For most procedures and treatment options, the Crouse Hospital website provides data such as the number of surgeries performed at the hospital, the typical age, approximate payer mix, the average price to the hospital, and the average amount reimbursed by the payer. The commercial health plans have to be combined for the average price and reimbursement figures because their contracts do not allow the hospital to disclose detailed information on their agreements.
Boynton pushed for making cost information available to the public two years ago when she was chief financial officer, contending that other hospitals across the country (although none in the hospital's market) were leading the way and that posting prices just made sense. No other industry could get away with not disclosing prices, she says.
"If your car dealer calls and says the car needs more work, he tells you how much it's going to cost," Boynton says. "But you go to the doctor and they order a long list of tests and office visits, and nobody even talks about how much this is going to cost you."
The price listing received a lot of favorable attention when Crouse Hospital launched it July of 2014, and Boynton expected other hospitals in the area to follow suit. That hasn't happened yet, and she says the reason is that the level of consumerism in upstate New York is not high enough to make hospitals feel obligated to make the move.
While Crouse has not seen changes directly attributable to its price transparency initiative, the feedback from patients and families who have accessed the information has been very positive, Boynton says, adding that the online page receives between 40 and 60 hits a week.
A similar situation is found in North Carolina, where the healthcare industry is seeing a "rising but moderate amount of consumerism," says Doug Luckett, president and CEO at CaroMont Health, a 435-licensed-bed nonprofit hospital in Gastonia. Consumerism is still in the early stages, where people are learning more about their healthcare options and the related costs but not necessarily acting in a proactive manner. It's only been in the past two or three years that CaroMont has seen a rise in consumer behavior, first noted when CaroMont's financial counselors spent more time on the phone helping patients understand their options and their out-of-pocket expenses.
CaroMont is responding by increasing the educational opportunities for patients.
"We try to set expectations so that there are no surprises in the end, and that seems to be what they want most at this point. They don't expect a firm dollar figure, but they want to understand what range they can expect," Luckett says.
Luckett says the hospital encourages patients to call a financial counselor to talk through the financial questions. With so many managed care plans and the offshoots of those plans, it can be difficult for a patient to do his or her own calculations. Speaking to a financial counselor is still the best way to go because the counselor can ask the right questions to find out that, for instance, a patient has a certain managed health plan and not the plan's general coverage.
"This approach, combined with an increase in our commercial payer mix, which could be attributable to a number of things like ACA and an improving economy, has led to a decrease in bad debt for our system," Luckett says.
Hospitals respond to cost anxiety
Offering cost estimates to patients can be a tricky business, because a wrong estimate can either drive patients away if it is too high or upset patients if the estimate was too low.
OhioHealth in Columbus, with 11 nonprofit, faith-based hospitals, has tried offering out-of-pocket estimates in the past but found that the accuracy was reduced by insurers' reluctance to release the necessary details about their contracts. The insurers have loosened their grip on that data in the past two or three years, however, and now OhioHealth offers a price estimator hotline. The hospital is not quite able to do real-time adjudication the way pharmacies can do with prescription drug coverage, but it is getting closer, says Jane Berkebile, system vice president of revenue cycle.
"We also are promoting consistency and standardization in our messaging to patients, so they're not told in one department that an estimate is not available and then going to another department and getting an estimate for their cost," she says. "At the same time, we are changing the culture and what the patient expects. We explain that almost everyone will pay something out of pocket, and once we have that estimate, we do ask for a payment against that estimation."
Marketing to the financial concerns of patients can be a competitive differentiator, says Sarah E. Ginnetti, director of revenue cycle at Day Kimball Healthcare, a nonprofit, integrated medical services provider that includes Day Kimball Hospital in Putnam, Connecticut; Day Kimball Medical Group; and four medical centers. Successfully engaging patients as consumers can create an ongoing relationship, especially if you help remove financial barriers by offering financing options and payment plans, she says.
Offering payment plans with its patient financial engagement partner CarePayment, has reduced Day Kimball's bad debt expense, she says. Patients are now paying their bill sooner rather than later, which Ginnetti says has allowed the health system to keep resources focused on helping the patient rather than trying to collect.
Ten percent of all patient payments received are a result of patients enrolling in the CarePayment program, Ginnetti notes. Patient payments increased by 27% overall after Day Kimball implemented the CarePayment program four years ago, and bad debt numbers have held flat since then despite patient balances growing with the advent of high-deductible healthcare plans.
"Most things in American culture require financing now, for better or worse, and having that same option in healthcare is a huge advantage because it allows people to have a budgeted amount every month and stick to their overall budget as a family or individual," she says. "It's predictable and that makes a huge difference even if the total amount you're paying is substantial. We're trying to offer that predictability with up-front education and these financial tools."
Day Kimball Healthcare recently launched a new tool intended to provide patients with a much more robust estimate of expenses so they can make informed choices. The group also developed an infographic titled "Health Insurance Math Simplified (kinda)" to walk patients through key steps in the process, from how insurers set rates and providers get paid to how patients pay for insurance and other medical costs.
Mixed reviews on consumerism
South Nassau's Bogen expects to see the consumerism movement grow in the outpatient sector but says he hopes it doesn't achieve any more presence in inpatient care than it already has.
"I still believe it's crass to call them consumers," he says. "On the outpatient side, it's more fitting that people will shop for price, and you could argue that much of the outpatient services are commodities, but I don't believe that to be true from an inpatient perspective, and I would hate to have people make what ultimately could be a life-and-death decision on the basis of cost."
Still, Herzog says he sees consumerism as a tide that won't be turned back, so he advises healthcare organizations to accept the change and respond accordingly.
"We have to look at this as a great opportunity to serve people better, and that's going to mean we have to be different," Herzog says. "Instead of fighting to maintain the status quo and get more market share, which is what most of us are doing, we need to sustain and preserve the best parts but make the changes that consumers need from us. While only a few organizations are pioneering this approach, the intellectual acceptance of the need for this transformation is an important first step."
The great appeal of telemedicine is that it comes at a lower cost than other care access points, and payers have exhausted other cost efficiencies on the front end.
Having squeezed all they can out of health plan design, employers are now pinning their hopes on telemedicine as the way to bring down their health insurance costs.
Telemedicine is growing rapidly and within a few years will be a routine part of healthcare plans offered by employers, according to the president and CEO of the National Business Group on Health (NBGH), a non-profit association of 425 large employers.
Brian Marcotte says employers have moved away from issues of plan design, pretty much accepting that there is little chance of improvement there, and are now focusing on how healthcare is accessed and delivered.
Ninety percent of employers will make telemedicine services available to employees in states where it is allowed next year, a sharp increase from 70% this year, according to an annual survey by NBGH.
That figure will rise to virtually 100% by 2020, Marcotte says. He presented the survey findings at the National Press Club in Washington, DC.
The great appeal of telemedicine is that it comes at a lower cost than other care access points, Marcotte says. An emergency visit costs an average $700 per visit, urgent care $150, and a physician office visit $100. A telemedicine session? About $40.
Employers are leveraging the fact that most people have a smartphone with which to access healthcare. That bypasses a pain point both patients and employers loudly complain about, the way a 15-minute talk with a doctor can require nearly a full day off work to travel to the office and wait.
No Other Way Left to Save
The focus on delivery comes because efficiencies on the front end have been pretty much exhausted. Employers have realized that once you go to a high deductible health plan, there's not much more you can do to save money on the plan design, Marcotte says.
A few tweaks here and there maybe, but nothing that really makes a difference.
"You really have to train your sights on the delivery system if you want to drive efficiencies and control healthcare costs," he says.
In addition to telehealth, employers are focusing on other factors at the point of delivery, Marcotte says. There is more interest in accountable care organizations, high performance networks, and the expansion of centers of excellence beyond transplants and into areas such as bariatric surgery, orthopedics, cancer, and fertility.
The Large Employers' 2017 Health Plan Design Survey is the industry's first look at health benefit costs and plan design changes for 2017. The survey is based on responses from 133 large U.S. employers offering coverage to more than 15 million Americans.
This year's survey finds employers projecting a 6% increase in medical costs for 2017, the same as they would have experienced in the past two years had they not made changes to their plan design. Some employers say they might hold increases to 5% by making some changes to their plans.
Medical costs continue to increase at about three times the rate of the Consumer Price Index and twice the rate of general wages, Marcotte says.
"The ongoing, continued, year-over-year trend running around 6% is really unsustainable from a cost perspective and is still the number one issue employers are focused on," Marcotte says. "It really threatens the overall affordability and long term affordability of healthcare."
Marcotte notes, however, that health insurance premiums for the average public exchange plan are increasing by at least 10% for 2017, which he says is a clear indication that the employer-based health care model continues to be the most effective way to provide health insurance coverage.
Interestingly, specialty pharmacy costs have emerged as major factor in those increased medical costs. Just three years ago, employers didn't even cite pharmacy costs in the top five factors affecting their healthcare expenses, but specialty pharmacy costs are now the number one driver.
Nearly a third of respondents (31%) indicated specialty pharmacy was the highest driver of health costs, compared with only 6% who cited specialty pharmacy as the number one driver in 2014. Overall, 80% of employers placed specialty pharmacy as one of the top three highest cost drivers, followed by high cost claimants (73%) and specific diseases and conditions (61%).
Two of the top priorities for health insurers are finding a way to simplify the process and removing what young people see as barriers to enrollment.
In the ever-important quest for young enrollees, the primary strategy for health plans used to be awareness campaigns that simply educated them that insurance is available and why they should get it.
Now that some progress has been made there, insurers should address the other issues that keep young people from signing up, including some that aren't so obvious.
One of the first priorities should be simplifying the process and removing what young people see as barriers to enrollment, says Shelby Gonzalez, a senior health policy analyst with the Center on Budget and Policy Priorities, a Washington, DC, think tank.
"We need to present the fewest barriers possible after we've made them aware and convinced them that it is in their best interest to enroll," she says.
"You don't want them to have to get a lot of paperwork or anything that they will find tedious or complicated. The ideal is to make it a seamless enrollment process, as simple as possible for them."
One way to improve the application process is to make sure that any required documentation is obtained electronically on the back end, rather than requiring the enrollee to submit it, she says.
The transition from children's healthcare coverage to an adult plan also can be unnecessarily difficult, Gonzalez says. Few states handle that transition well, she says, leaving young people who are not savvy about insurance to figure it out for themselves.
Teach Them How to Buy a Health Plan
In some states, for instance, a 19-year-old may receive a notice that Medicaid coverage is terminating but without any accompanying information on how to obtain coverage as an adult. Many of those young people never pursue a health plan because they don't know where to start or what to do, Gonzalez says.
Twenty-eight percent of enrollees were 18-24 in the latest figures released by HHS in March 2016, which is better than the initial numbers but still not what health plans hoped for, Gonzalez says. The potential market for the individual marketplace is about 40%, she says, so that is still a significant shortfall.
Those national figures are derived from state-based risk pools, and some states are doing better than others, Gonzalez notes. California is at 38% enrollment for 18-24. That result came from an intensive outreach effort, says Sarah Lueck, also a senior policy analyst at the think tank.
Fine-tuning the Health Insurance Enrollment Message
California and other states primarily addressed young people's assumption that they don't need insurance because they're young and healthy, and they emphasized how different ACA coverage is from what they may have known in the past.
That leads into some of the finer points of enrolling, Lueck says. Successful outreach campaigns also educate young people about how expensive healthcare can be, particularly emergency care for injuries, she says. Young people may dismiss the idea of an illness hitting them, but they're more open to thinking they could be injured in an accident.
Subsidies also help get more young people in health plans, as well as making them more aware of the potential penalties for not enrolling, Lueck says.
Young people, and the uninsured population in general, are less likely to consider the potential tax implications because they may have little experience in filing income tax returns, she says. HHS is planning to emphasize this point more in its education efforts, Lueck notes.
"Just as it's hard for them to imagine getting sick and needing insurance, some people have a hard time making that calculus, looking forward to when they will file a tax return and the ramifications because they didn't have insurance," Lueck says.
"Tax liability is not on the minds of young people as much the rest of the population."
Supporters of the public option would still face major political opposition, says one expert, who says he is not optimistic that the PPACA will be amended.
With only seven nonprofit, member-run health plans left to participate in this year's open enrollment, critics of the Patient Protection and Affordable Care Act are pointing to the disappearance of the co-ops as further evidence that the law is founded on unrealistic goals and doomed to fail.
But that's not necessarily so, and the loss of so many co-ops could revive a proposal that did not make it into the PPACA.
The loss of the co-ops does hamper some of the most ambitious goals of the PPACA because they provided some of the most cost effective care. There were 23 co-ops in 2014 and only 10 are still around.
Three of those, in Connecticut, Ohio, and Oregon, are bankrupt and will be gone before the next enrollment period. Those plans covered more than a million people in 2015, but that number is now down to about 400,000.
Some consumers see the co-ops as good alternatives to commercial health plans, primarily because they tend to have lower premiums. Individual consumers may be unhappy at losing the co-op choice, but the impact on the PPACA and the healthcare system should be minimal, says Timothy Jost, JD, a law professor at Washington and Lee University in Virginia who is known for his expertise in healthcare law.
He notes that the co-ops were added to the PPACA at the last minute to throw a bone to those who wanted a public option, which didn't have enough political support.
No Surprise Co-ops are Disappearing
The co-ops were at a disadvantage from the start, Jost says, because the law imposed limits on how funding could be used and required startup loans to be paid back in five years. Then Congress sharply reduced funding for the program.
Co-ops also were less experienced than commercial plans and made missteps with setting premiums too high or too low. So it's no surprise that the co-ops are disappearing. With the hurdles they faced from the beginning, Jost says he is surprised that there are any co-ops left.
"It shows that this was never an adequate substitute for the public option," Jost says. "The loss of the co-ops will have little effect on the ACA because they were not necessary for the ACA's success, but in the markets where they are closing, we are going to see some areas with very little competition."
Jost says the loss may breathe new life into the idea of a public option, especially since Medicare Part D already has some elements of one. Publicly, at least, centrist Democrats are wary, however.
"The Medicare Part D drug program has bipartisan support and it has exactly the same premium stabilization program as the ACA except that they're more generous. Medicare Part D also has fallback plans where, if there aren't enough insurers in a particular market to create competition, the government will contract with an entity and take on all the risk, paying the claims and administrative expenses," Jost says.
"It's not exactly a public option, but it is at least a potentially better, stable kind of arrangement than the co-ops."
Public Option 'A Tough Sell'
The government has not needed to use the fallback program, but its inclusion in the popular Medicare Part D gives it a legitimacy that public option proponents can draw on, Jost says.
Supporters of the public option would still face major political opposition, so Jost says he is not optimistic that the PPACA will be amended. A public option would be a tough sell to a Trump administration and only somewhat easier to a Clinton administration, he says.
"We would have been much better off if we had set up a health plan option like the fallback in Medicare Part D, rather than trying to launch new insurance companies," he says. "That was the right idea back then and the failure of the co-ops just underscores that."
If it blocks the merger of two giant health insurers, it will face litigation and criticism from the business community. If it lets the merger proceed, it will be accused of failing to protect consumers.
Coming off weeks of controversy about the FBI's recommendation not to prosecute Hillary Clinton for mishandling classified information, the United States Department of Justice is now facing a decision that could have equal impact on the healthcare industry.
Leaders from Aetna and Humana met with DOJ officials last week to convince them that the proposed $34 billion merger will not harm competition. But all signs indicate the anti-trust enforcers are highly skeptical of those claims.
There is no timetable for DOJ to make its decision, but some analysts who have followed the proposed merger say they expect an announcement within a month.
DOJ is facing a hard decision: If it blocks the huge corporate merger, it will face litigation and criticism from the business community. If it lets the merger proceed, it will be accused of failing to protect consumers.
The most likely outcome is that DOJ will approve the transaction, but with requirements that both parties make significant divestitures, says Robert Fuller, JD.
He served as executive vice president and chief operating officer of Downey Regional Medical Center in Los Angeles from 2001 to 2013, then joined the law firm of Nelson Hardiman in Los Angeles as a healthcare analyst and attorney.
Effect of Potential Divestitures
The impact of the divestitures is uncertain, however. Divestitures are currently under debate at DOJ, he says, with some regulators saying they have little impact when the companies are divesting themselves of a book of business rather than hard assets.
"The post-merger company can go right out and market to that business if there are no additional restrictions," Fuller says. "The divestitures would have to be coupled with restrictions on their marketing activity in the states where the current businesses overlap."
The primary concern in that regard is the Medicare Advantage market, Fuller says.
Humana's business focuses almost entirely on Medicare Advantage, and Aetna had been almost entirely commercial until it took in more Medicare Advantage business in the last few years, he notes.
Aetna's forays into Medicare Advantage created overlaps primarily in eight states, and that is where DOJ is likely to limit Aetna's ability to market, he says.
Implementing those restrictions could prompt Aetna and Humana to litigation, and Fuller says the government could take a big hit if that happens. The DOJ historically has considered the Medicare Advantage market to be those already in the system, and Fuller believes the merging companies could successfully challenge that theory.
"That theory would be terribly at risk in front of a U.S. District Court," Fuller says. "I think it would be entirely reasonable for the court to consider the number of subscribers in a particular market not to be those who have already signed up for Medicare Advantage, but in fact, to be the entire Medicare population. If that is the case, the percentage of market share numbers in these overlapping states just go out the window."
Deal Likely
Nevertheless, Fuller believes DOJ will find a way to let the deal go through, even if the divestitures must be accompanied by strict limitations on marketing.
"My supposition is that there has been a fairly negative staff report, not necessarily saying no to the merger, but saying the divestitures should cover 22 states, not just eight, or something like that," Fuller says.
"Aetna has already pre-sold some of the business to key players in the affected markets, and I'm sure they meant that as sort of an opening offer. I would expect the Justice Department management to double up on that kind of offer and add the restrictions."
It is possible that DOJ will say no and pursue the litigation necessary to stop the merger, Fuller says. Given the size of the merger and the potential impact on the market Fuller says he would not be terribly surprised if DOJ decided that even draconian restrictions would not be enough to protect consumers.
"It's a close one," he says.
Perhaps DOJ will conclude that there was "no intent" for the merger to harm consumers.
Members of the independently operated UnitedHealthcare affiliate, which emphasizes primary care, will have a care team and be allowed unfettered access to care with no copays in centers.
Taking aim at one of the most common complaints from healthcare consumers, Harken Health Insurance is eliminating many out-of-pocket costs for care under a plan offered, for now, in Atlanta, Chicago, and two South Florida counties.
Florida is the third test market for an approach based on research indicating that increased access to primary care leads to healthier outcomes at a lower cost.
Members will get no-cost access to 12 primary care centers in the two counties, centers that are deliberately small and designed to cater to a limited number of members, the company announced.
Harken Health is an independently operated affiliate of UnitedHealthcare, which is its sole investor.
The plans offered by Harken require no copays.
Members will be allowed unfettered access to care at the centers with no copays. And members will have a care team, which will include a primary care physician and behavioral health specialists, along with a health coach assigned to help develop overall health and well-being plans.
Health coaches will also accompany members to visits with their primary care physicians, the company says. Members may also take advantage of other health-oriented services at the centers, such as yoga, fitness, and nutrition classes.
The Florida plans follow similar initiatives launched this year in Atlanta and Chicago. Harken Health says it intends to expand those programs with more clinics in each city.
Lower Costs Eyed
The benefit to consumers is clear, but co-founder and CEO Tom Vanderheyden says it also makes sense from Harken Health's perspective.
"Our ROI will ultimately be lowered healthcare costs for our members and the system overall," Vanderheyden says.
"While we do need a sustainable business model in order for Harken to continue serving more members, right now we are focused on getting the relationship-based care model right, and we believe the improved health outcomes that will result will prove the business model."
The Atlanta and Chicago plans are exceeding expectations, Vanderheyden says, with a current total of 35,000 combined members.
"We measure our success based on member experiences and ask ourselves 'are we changing what members, the industry and our investors believe is possible in healthcare? Are we moving the needle on bringing care and patient experience back to the forefront?'" Vanderheyden says.
"We can proudly say we are doing that—and we see further evidence of that daily."
The challenge for Harken lies in resetting the way Americans consume healthcare and replacing the "emergency room or urgent care" mindset, Vanderheyden says.
That mindset stems from having limited access to relationship-based primary care teams, he says.
Harken is trying to change that mindset by encouraging a stronger relationship with primary care providers, who Vanderheyden says can be "the quarterbacks in a leaderless healthcare environment."
"Though so many Americans visit urgent care centers when they're sick, urgent care isn't structured to emphasize care. Care builds trust and relationships. It's well-documented that people who have a relationship with a primary care provider visit their provider more, listen, and follow directions better, and overall have better health," Vanderheyden says.
"PCPs in the right environment can do much more than the annual exam. They can attend to the whole person, their lifestyle, track progress, and more broadly coordinate care across multiple specialists and conditions."
Hallmarks of an unbroken system are total connectedness across the continuum of care, humanity, and alignment with incentives to drive the right outcomes, a senior AthenaHealth executive says.
AthenaHealth is launching a campaign to "unbreak" healthcare in the United States, inviting players from all corners of the industry to address software roadblocks and other systemic problems.
"If we're honest, most people would say healthcare is broken today," says the company's chief marketing officer, Tim O'Brien.
He calls the campaign "a rallying cry for the industry." AthenaHealth is a provider of network-enabled services for electronic health records, revenue cycle management and medical billing.
O'Brien describes an unbroken healthcare system as marked by a total connectedness across the continuum of care, humanity brought back to the moment of care, and aligned with incentives to drive the right outcomes.
"We're spending three billion dollars and people aren't living any longer. Most physicians would not recommend the practice of medicine to their children, we're losing primary care doctors, and doctors are selling out to health systems because they don't believe they can navigate all the regulatory complexities and hurdles that we've put in front of them," he says.
Software issues are involved with many today's problems in healthcare, O'Brien says.
Providers are angry and frustrated with electronic health records. Information-sharing across healthcare settings remains elusive; and associated financial losses are forcing some health systems to the brink of collapse.
Beyond addressing software challenges, the Unbreak campaign will take on what AthenaHealth calls the government's "series of false starts, sluggishness, and waste" regarding healthcare improvements.
A key goal is to improve the continuity of care so that a physician will actually know what happens after discharge, such as whether the patient went to the recommended specialist or complied with medication instructions.
O'Brien says AthenaHealth will use the data in its network to look for solutions, and one of the first data research projects will focus on opioid addiction.
Another goal for the campaign is to reduce the time physicians spend interacting with the electronic record, so they can interact more with the patient, O'Brien says.
By analyzing real-time data from the AthenaHealth network, it recently became apparent that doctors spent too much time documenting the patient encounter, he says.
In response, the AthenaHealth network automated more of the functions previously performed by the physician and moved some tasks to the front desk. The effort reduced the time spent documenting the patient encounter by 23%, he says.
Truth-telling and Humor
O'Brien calls on health plans and providers to seek similar ways to bring the doctor and patient back together.
"We're not doing this to point fingers or pin the blame. Healthcare's current state is the work of a vast array of good intentions by well-meaning people on both sides of the political aisle," he says.
"But fixing health care is a bipartisan mission. Our hope is that with a little truth-telling and humor we can reignite the fire in the bellies of the masses to drive directed and meaningful change."
AthenaHealth will work toward unbreaking healthcare through a variety of initiatives, including a series of satirical short films that point out critical breakdowns in healthcare, conversations on social media to illustrate what unbroken healthcare moments look like, and a new web publication called athenaInsight which will use the company's network data to share inspiring examples and actionable insights.
"Everyone knows healthcare is broken," O'Brien says.
"With the Unbreak campaign, we're just shining a bright, harsh light on it, and laughing at the absurdity of the system. But though we embrace humor, we couldn't be more serious about our desire to address and fix what's broken."
Standardized health insurance plans, also known as "simple choice" plans, can benefit consumers and have little or no impact on premiums, a Families USA report says.
High insurance deductibles and out-of-pocket expenses can be infuriating to consumers. Even worse, some will avoid seeking medical attention because they feel they can't afford it.
The magic number where an insurer will actually pay for something is frustratingly out of reach for many.
But a new kind of health plan aims to knock down that cost barrier and encourage access to primary care services. The new type of plan promises to achieve these goals without affecting the insurer's bottom line.
The standardized health insurance plans, also known as "simple choice" plans, were designed by the federal government for the healthcare marketplace. They were included in CMS's final rule on Benefit and Payment Parameters for 2017.
Simple Choice plans can benefit consumers with little or no impact on premiums, according to the Families USA report. The Washington, DC-based nonprofit and nonpartisan group advocates for high-quality, affordable healthcare.
The report debunks the idea that insurers are already offering the best possible coverage that they can without going broke, says Senior Policy Analyst Lydia Mitts, author of the report.
Competitive Premiums
"The findings of this report show that insurers can design plans in smarter ways and more patient-centered ways, so that they provide immediate help. People will be able to go to the doctor and fill a prescription without worrying about paying out of pocket," Mitts says.
"They can do that and still have competitive premiums to other silver plans in the marketplace."
Standardized plans are plan offerings designed by the governing body of a marketplace that insurers are encouraged, but not required to sell. The federal standardized silver plan has a patient-centered design that covers numerous outpatient services before the deductible kicks in, making it easier for consumers to access that care.
Families USA contracted with the independent actuarial consulting firm Milliman to compare the federal standardized silver plans for the 2017 exchanges to existing non-standardized silver plans in North Carolina, Pennsylvania, and Virginia. All three of the silver plans that were studied cover at least some of the office visits and drugs only after the deductible.
The analysis showed that it is possible to design plans that cover basic outpatient care before the deductible and that still have competitive premiums.
After considering all benefit differences, the average premiums for the federal standardized silver plans would be within plus or minus 5% of the three non-standardized silver plans that were the focus of the study. The simulation used for the study held utilization constant to examine direct changes in costs.
So if more accessible coverage can be provided to consumers without significantly raising premiums, why aren't more insurers doing that?
"There are some good actors in marketplaces and there are some regions of the country where insurers are actually staking steps to develop plans that are more patient-centered," Mitts says.
"But we see a patchwork of some insurers doing it; it's something that all insurers in a region are doing, or none of them are doing it. This standardized plan creates an opportunity to expand this type of plan option across all federally facilitated marketplaces, so your address doesn't dictate whether you have access to this type of plan."
