How employers can manage the skyrocketing cost of specialty drugs

Since the 90's, the number of specialty medications, not to mention their costs, has grown exponentially. Continue reading to learn what employers can do to manage these costs.


In the past two decades, the number of specialty medications — which treat rare and complex diseases such as multiple sclerosis, pulmonary arterial hypertension, hepatitis C, HIV, cystic fibrosis, some types of cancer and hemophilia — has grown exponentially. In 1990, there were only 10 specialty drugs on the market. By 2015, that number had increased to 300 medications, and by the end of 2016 there were approximately 700 more specialty drugs in development.

These medications are usually very high cost, with some new biologic medications costing more than $750,000 a year. Why are the costs so high? There are a number of factors, including the facts that distribution networks are limited, these medications are complicated to develop and distribute, and there are few, if any, generic alternatives for these drugs.

See also: A Look at Drug Spending in the U.S.

The Pew Charitable Trusts found that although only 1% to 2% of Americans use specialty medications, they account for approximately 38% of total drug spending in the U.S.

So, how can employers better gain control over the cost of specialty medications? Because there are hundreds of specialty medications, there’s no single strategy for cost management that can be applied universally. To build an effective cost management strategy, employers need to first analyze employee use of specialty medications. The best strategy will approach specialty medication management by disease class and drug by drug.

However, there are key building blocks of a strategy that will both manage costs and ensure that employees have access to the medications they need. Here are six things employers can do.

Assess benefit plan design structure. Employers should consider how they are incenting employees to spend their benefit dollars appropriately and wisely. A multi-tiered medication formulary where employees pay less out of pocket for generic drugs and lower cost medications and more for costly medications is one approach that’s proven effective. To help employees afford these higher out-of-pocket costs, employers can promote manufacturer copay savings programs, which many drug makers offer.

Think about utilization management. This can include requiring prior authorization for high-cost specialty medications and step therapies (employees must start with lower cost therapies and can move up to more costly ones if those are not effective).

Consider a custom pharmacy network design. By narrowing the network of pharmacies that fill specialty medication prescriptions, employers can negotiate a better unit price. A freestanding specialty pharmacy or a pharmacy benefits manager can provide savings by optimizing discounts for both employers and employees.

Offer second opinion and other support services for rare and complex diseases. A newly diagnosed rare or complex disease patient will see, on average, seven different specialists over the course of eight years before getting a true diagnosis and appropriate treatment path. These programs aim to reduce that burden and ensure success with that treatment once it’s identified. A second opinion from a top specialist in the field provides an expert assessment of the diagnosis and recommendations on the most effective treatment protocol. This not only helps manage costs, it lowers the risk of misdiagnosis and inappropriate treatment. Additional case management services can include one-to-one counseling and, when the drug regimen requires, in-home nursing services to help patients better manage their disease and improve outcomes.

See also: Specialty Drugs and Health Care Costs

Offer site of care choices. Where specialty drugs are administered can have a significant impact on what they cost. Medications administered in an outpatient clinic at a hospital can cost five times as much as those that are injected or infused in a physician’s office or at the patient’s home. Offering services such as home infusion or injection delivered by nurses or incenting patients with lower copays when they receive their medications at their physician’s office can lower overall specialty drug costs.

Educate employees. When an employee or covered family member is diagnosed with a rare or complex condition that will require a higher level of care and the use of specialty medications, employers can connect employees with case managers or similar services that provide education about the condition and the medication, such as how to manage side effects or what alternative medications are available, which can increase employee adherence with the medication regimen.

SOURCE: Varn, M (8 August 2018) "How employers can manage the skyrocketing cost of specialty drugs" (Web Blog Post). Retrieved from https://www.benefitnews.com/opinion/specialty-pharmaceuticals-and-how-employers-can-manage-cost


Reference-based pricing is gaining momentum — here’s why

Reference-based pricing has made its comeback. Continue reading to learn what reference-based pricing is and why it is slowly gaining momentum.


In my 25 years in the insurance business I’ve seen many changes. But there’s always been one constant: Healthcare and pharmacy costs continue to accelerate and no regulatory action has been able to slow this runaway train. The problem is that we have focused on the wrong end of the spectrum. We don’t have a healthcare issue; we have a billing issue.

At the root of this national crisis is a lack of cost transparency, which is driven by people who are motivated to keep benefit plan sponsors and healthcare consumers in the dark. Part of the problem is that most cost-reduction strategies are developed by independent players in the healthcare food chain. This siloed approach fails to address the entire ecosystem, and that’s why we continue to lament that nothing seems to be working.

But that could change with reference-based pricing, a method that’s slowly gaining momentum.

Here’s how it works.

Reference-based pricing attacks the problem from all angles and targets billing — which is at the heart of the crisis.

Typically, a preferred provider organization network achieves a 50-60% discount on billable charges. However, after this 50-60% discount, the cost of care is still double or triple what Medicare pays for the same service. For example, the same cholesterol blood test can range from $10 to $400 at the same lab. The same hospitalization for chest pain can range anywhere from $3,000 to $25,000.

Reference-based pricing allows employers to pay for medical services based on a percentage of CMS reimbursements (i.e. Medicare + 30%), rather than a percentage discount of billable charges. This model ensures that the above-mentioned hospitalization cost an employer $3,000 rather than $25,000.

“Negotiating” like Medicare

Reference-based pricing is becoming increasingly popular as more organizations consider the move to correct cost transparency issues as they transition from fully-insured to self-funded insurance plans.

One well-known and considerable example is Montana’s state employee health plan. The state employee health plan administrator received a notice from legislators in 2014 urging the state to gain control of healthcare costs. Instead of beginning with hospitals’ prices and negotiating down, they turned to reference-based pricing based on Medicare. Instead of negotiating with hospitals, Medicare sets prices for every procedure, which has allowed it to control costs. Typically, Medicare increases its payments to hospitals by just 1-3% each year.

The state of Montana set a reference price that was a generous 243% of Medicare — which allowed hospitals to provide high-quality healthcare and profit, while providing price transparency and consistency across hospitals. So far, hospitals have agreed to pay the reference price.

Of course, there is still the risk that a healthcare provider working with the state of Montana health plan, or any other health plan using reference-based pricing, could “balance bill” the member. But a fair payment and plenty of employee education about what to do if that happens could help you curb costs.

If balance billing does occur, many solutions include a law and auditing firm to resolve the dispute. In one recent example, a patient was balance billed almost $230,000 for a back procedure after her health plan had paid just under $75,000. An auditing firm found that the total charges should have been around $70,000, and a jury agreed. The hospital was awarded an additional $766.

Reference-based pricing is a forward-thinking way to manage costs while providing high-quality benefits to your employees. It’s one way to improve cost transparency, which may eventually transform the way that we buy healthcare.

Kern, J. (18 July 2018) "Reference-based pricing is gaining momentum — here’s why" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/reference-based-pricing-health-insurance-gaining-momentum?utm_campaign=intraday-c-Jul%2018%202018&utm_medium=email&utm_source=newsletter&eid=1e52d1873f9d2e8d6bd477da3e7f49a3


A Look at Drug Spending in the U.S.

Spending on prescription drugs in the U.S. is projected to overtake other sectors of healthcare in 2018. Continue reading this blog post to learn more.


This fact sheet was updated on April 26, 2018, to reflect newly published data.

Overview

Spending on prescription drugs in the United States is on the rise and is projected to outpace growth in other parts of the healthcare sector in 2018.1 Limited public data on how much various payers and supply chain intermediaries pay for prescription drugs, as well as a lack of consensus on a single metric for drug expenditures, presents methodological challenges in measuring drug spending.

See also: Specialty Drugs and Health Care Costs

Nevertheless, a number of public and private organizations have published drug spending estimates over the past several years, including the share of health spending attributed to drugs. Historical estimates and spending projections from the Department of Health and Human Services’ Assistant Secretary for Planning and Evaluation (ASPE), the Centers for Medicare & Medicaid Services’ (CMS’) National Health Expenditure Accounts (NHEA), the Altarum Institute, and IQVIA are explored in Figures 1 and 2.

Figure 1 illustrates estimates and projections of U.S. drug spending by source from 2010 to 2018. Each incorporates rebates and spending on drugs, excluding over-the-counter (OTC) products.

  • ASPE estimates total prescription drug spending, including retail and nonretail, using CMS NHEA, IQVIA, and Altarum Institute data.2
  • CMS’ NHEA data provide estimates of retail prescription drug spending, excluding nonretail.3
  • IQVIA estimates total manufacturer revenue (“net price spending”), accounting for rebates and other price concessions.IQVIA also breaks down manufacturer revenue for drugs sold in both retail and nonretail settings.

Figure 2 illustrates drug spending as a percentage of health expenditure. Each of these estimates incorporates rebates and spending in retail and nonretail settings excluding OTC products, unless noted below.

  • ASPE estimates total drug spending (retail and nonretail) as a percentage of personal health expenditures, a subset of national health expenditures.5
  • The Altarum Institute estimates total prescription drug spending (retail and nonretail) as a percentage of total national health expenditures.6
  • CMS NHEA estimates drug spending (excluding nonretail) as a percentage of total national health expenditures.7
  • IQVIA estimates net drug spending (retail and nonretail) as a percentage of health care spending, including OTC products that do not require a prescription.8

See also: How employers can manage the skyrocketing cost of specialty drugs

Organizations use different denominators to describe health care expenditures

  • National health expenditures: Total health expenditures, including medical spending and public health activities, administrative costs, and research investments (Altarum Institute and CMS).
  • Personal health expenditures: Spending exclusively on direct patient care (ASPE).
  • Healthcare spending: An estimate of health care spending from the World Health Organization (IQVIA).

What drug spending estimates include

  • Rebates: Drug price reductions intended to increase sales through formulary placement. While the method used to calculate the rebate is specified at the time of purchase, the actual rebate is received in the future, as it is based on product sales. Most rebates are paid to pharmacy benefit managers and health plans. Rebates are accounted for in all five estimates, but none of the organizations has access to the specifics of manufacturer agreements.9 IQVIA approximates rebates and other price concessions using publicly available wholesaler and pharmaceutical sales data, public financial filings, the Medicare trustees’ report, and proprietary audits. CMS NHEA adjusts estimated drug expenditures to account for rebates in retail and mail-order settings.10 Altarum Institute and ASPE apply CMS’ rebate adjustments to their drug expenditure estimates.
  • Payers: Entities other than patients responsible for paying health care costs. In the United States, payers generally include insurance companies, health plan sponsors—such as employers or unions—and pharmacy benefit managers. Medicare is the nation’s largest payer. CMS NHEA data include estimates of pharmaceutical expenditures by private health insurers and public health insurers such as Medicare and Medicaid. CMS NHEA data also incorporate the amount that premiums contribute to the cost of pharmaceuticals, though the data do not include the share of premiums that go toward pharmaceuticals. IQVIA does not directly incorporate patient premiums in its drug spending estimates. CMS NHEA data include nonretail prescription drug spending in overall health expenditures but do not separately report spending on nonretail drugs. Spending on drugs in these sites of care is included in overall health cost estimates for each respective setting (for example, drugs purchased by hospitals are reported as hospital spending). The Altarum Institute uses IQVIA data to estimate spending on nonretail prescription drugs. ASPE also publishes an estimate of pharmaceutical spending for both retail and nonretail outlets.
  • Over the counter: Drugs that do not require a prescription. Only the IQVIA estimate for net drug spending as a percentage of health care spending incorporates spending on OTC products.
  • Retail prescription drugs: Drugs sold in a retail setting, such as a pharmacy, drugstore, mail-order, or other mass-merchandising establishment.
  • Nonretail prescription drugs: Drugs dispensed in clinics and institutional settings such as hospitals, long-term care facilities, and nursing homes.

Endnotes

  1. Gigi A. Cuckler et al., “National Health Expenditure Projections, 2017–26: Despite Uncertainty, Fundamentals Primarily Drive Spending Growth,” Health Affairs 37, no. 3 (2018): 553–63, https://doi.org/10.1377/hlthaff.2016.1627; Centers for Medicare & Medicaid Services, “National Healthcare Expenditure Data,” accessed February 14, 2018, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData.
  2. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, “Observations on Trends in Prescription Drug Spending” (2016), https://aspe.hhs.gov/pdf-report/observations-trends-prescription-drug-spending. ASPE figures rely on data from the NHEA and the Altarum Institute. ASPE expenditures are available from 2009 to 2013 and projections from 2014 to 2018. This was a one-time publication.
  3. Centers for Medicare & Medicaid Services, “National Healthcare Expenditure Data.” CMS data are sourced from Census Bureau retail data, Medicare and Medicaid claims, and IQVIA data. CMS expenditures are available from 1970 to 2016 and projections from 2017 to 2026. CMS publishes these data annually.
  4. IQVIA, “Medicines Use and Spending in the U.S.: A Review of 2017 and Outlook to 2022” (2018), https://www.iqvia.com/institute/reports/medicine-use-and-spending-in-the-us-review-of-2017-outlook-to-2022. IQVIA data are sourced from wholesaler and pharmaceutical company sales information. IQVIA publishes expenditures from 2013 to 2017 and projections from 2018 to 2022. It updates this publication annually.
  5. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, “Observations on Trends in Prescription Drug Spending” (2016).
  6. Charles Roehrig, “A Ten Year Projection of the Prescription Drug Share of National Health Expenditures Including Non-Retail,” Altarum Institute (2017), https://altarum.org/sites/default/files/uploaded-publication-files/Non-Retail%20Rx%20Forecast%20Data%20Brief%20with%20Addendum%20May%202017.pdf.
  7. Centers for Medicare & Medicaid Services, “National Healthcare Expenditure Data,” accessed February 14, 2018, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData.
  8. IQVIA, “Understanding the Dynamics of Drug Expenditure: Shares, Levels, Compositions and Drivers” (2017) https://www.iqvia.com/institute/reports/understanding-the-dynamics-of-drug-expenditure-shares-levels-compositions-and-drivers. IQVIA data are sourced from wholesaler and pharmaceutical company sales information and the World Health Organization’s Global Health Expenditure Database from December 2016. This one-time publication includes expenditures from 1995 to 2015.
  9. IQVIA accounts for but does not report drug supply and payment chain entity profit retentions (e.g., discounts, rebates, chargebacks and other financial transactions among manufacturers, pharmacy benefit managers, pharmacies, and wholesalers).
  10. Centers for Medicare & Medicaid Services, “National Health Expenditure Accounts: Methodology Paper, 2015,” https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/DSM-15.pdf.

SOURCE: PEW (27 February 2018) "A look at drug spending in the U.S." (Web Blog Post). Retrieved from http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2018/02/a-look-at-drug-spending-in-the-us


12 Ways to Save on Health Care

Managing your money is tough, saving for your health care is pretty rough too. These tips and tricks will assist you in managing your medical finances for the future.


We all know paying for health care is a challenge, with or without insurance, amid rising copays, deductibles, and premiums. But there are ways to hold down the costs that can come in handy now, but also as the Affordable Care Act undergoes whatever transformation (or replacement) the Trump administration comes up with.

The Huffington Post reports that, despite the numerous obstacles to cutting costs on health care for individuals —insured or not — there are also numerous ways to do just that, whether it takes due diligence on the patient’s part or having conversations with doctors, hospitals and insurers — even drug companies — about price.

While such tactics may not exactly amount to haggling, negotiating skills can’t hurt, and determination and perseverance are definite assets when it comes to finding the best prices or convincing medical entities to give you a better deal.

Plenty of other sources have good suggestions for slicing medical expenses, whether for prescription drugs, doctor and dentist visits, or hospital care. In fact,

Here’s a look at 12 strategies and suggestions that can end up saving you beaucoup bucks for care and treatment.

12. Check the internet

You would be amazed at how many tips there are online to help you cut the cost of getting — or staying — healthy.

One of the first things you should do is to check out the internet, where you’ll find not just help from the Huffington Post but also from such prominent sources as Kiplinger, Investopedia, Money, CBS and other news stations — and checking them out can have the advantage of providing you with any new suggestions arising out of changes in the law or in the medical field itself. And definitely compare prices on the Internet for procedures and prescriptions before you do anything else.

11. Skip insurance on your prescriptions

Not all the time, and not everywhere, but you could end up getting your prescriptions filled for less money if you don’t go through your medical insurance.

Costco, Walmart, and other retailers with pharmacies often offer cut-to-the-bone prices on generics, some prescription drugs and large orders (say, a 90-day supply of something you take over an extended period). Costco will even provide home delivery, and fill your pets’ prescriptions, too.

Then there are coupons. GoodRx will compare prices for you, provide free coupons you can print out and take to the pharmacy and save, as the website says, up to 80 percent — without charging a membership fee or requiring a sign-up.

10. Talk to your doctor

And ask for samples and coupons. Especially if you’ve never taken a particular drug before, let your doctor know you want to try out a sample lest you have an adverse reaction to the medication and get stuck with 99 percent of your prescription unusable.

Pharmaceutical reps, of course, provide doctors with samples, but they often give them coupons, too, lest you suffer sticker shock in the pharmacy and walk away without filling the prescription. So ask for those too. Doctors can be more proactive about samples than coupons, but remember to ask for both. After all, it’s your money.

9. Talk directly to the drug companies

So you’ve tried to get a brand-name drug cheaper, but coupons don’t help enough and there’s no generic available (or you react badly to it). Don’t stop there; go directly to the source and ask about assistance programs the pharmaceutical company may offer.

Such programs can be need-based, but not always — sometimes it’s a matter of filling out a little paperwork to get a better deal. The Huffington Post points out dialysis drug Renvela can go for several hundred dollars, but drops to $5 a month if the patient completes a simple form.

8. Haggle

Before you go in for a procedure (assuming it’s voluntary), or when the bills start to come in, talk to both the doctors (is there ever only one?) and the hospital and ask for a discount — or a reduction in your bill for paying in cash or for paying the whole amount. Be polite, but stand your ground and negotiate for all you’re worth.

A CBS report cites Consumer Reports as having found that only 31 percent of Americans haggle with doctors over medical bills but that 93 percent of those who did were successful — with more than a third of those saving more than $100. Just make sure you’re talking with the right person in the office — the one who actually has the authority to issue those discounts. And get it in writing.

7. What about an HMO?

If you’re not devoted to your doctor, opting for an HMO can save you money — although it will limit your choices of doctors and hospitals. Still, coverage should be cheaper.

If you’re generally in good health, choosing a plan — HMO or not — that restricts your choices of doctors and hospitals can save you money. And having the flexibility to go see the top specialist in his field won’t necessarily be your top priority unless you have specific health conditions for which you really need specialized care. In that case, you might prefer to hang on to your right of choice, despite the expense.

6. Ask for estimates

Yes, just the way you would from your mechanic or plumber. Ask the doctor/hospital/etc. what the charge is for whatever it is you’re having done, whether it’s a hip replacement or a deviated septum. You will already have checked out the costs for these things on the Internet, of course, so that you have an idea of standard pricing — and if your doctor, etc. comes in substantially higher, look elsewhere.

And while you’re at it, ask whether the doctor uses balance billing. If so, run, do not walk, in the opposite direction and find a doctor who doesn’t. Otherwise, particularly if the doctor’s fees are high, you’ll find yourself paying the balance of his whole bill once the insurance company kicks in its share.

Normally the doctor and insurer reach an agreement that eliminates whatever is left over after you pay your share and the insurer pays its share. But with balance billing, whatever is left over becomes your responsibility — and you’ll be sorry, maybe even bankrupt. By the way, balance billing is actually illegal in some states under some circumstances, so check before you pay.

5. Network, network, network

Always, always ask if the doctor is in network, and if the lab where your blood work goes and the specialist he recommends and the emergency room doctor and surgeon are also in network. Of course you can’t do this if it’s a true emergency, but if you learn after the fact that you were treated by out-of-network doctors at an in-network hospital, see whether your state has any laws against, or limits on, how much those out-of-network practitioners can charge you.

According to a Kaiser Family Foundation study, close to 70 percent of with unaffordable out-of-network medical bills were not aware that the practitioner treating them was not in their plan’s network at the time they received care.

4. Check your bill with a fine-toothed comb

Not only should you check to see whether your bill is accurate, you should also read up on medical terminology so you know whether you’re being billed for medications and procedures you actually received.

Not only do billing offices often mess up — a NerdWallet study found that 49 percent of Medicare medical claims contain medical billing errors, which results in a 26.4 percent overpayment for the care provided, but they can also get a little creative, such as billing for individual parts of a course of treatment that ought to be billed as a single charge. It adds up. And then there are coding errors, which can misclassify one treatment as another and up the charge by thousands of dollars.

3. Get a health care advocate

If you just can’t face fighting insurers or doctors’ offices, or aren’t well enough to fight your own battles, consider calling in a local professional health care advocate. They’ll know what’s correct, be able to spot errors, and can negotiate on your behalf to contest charges or lower bills.

For that matter, if you call them in ahead of time for a planned procedure or course of treatment, they can advise you about care options in your area and maybe forestall a lot of problems.

2. Go for free, not broke

Lots of places offer free flu shots and screenings for things like blood pressure and cholesterol levels — everyplace from drugstores to shopping centers, and maybe even your place of work.

Senior centers do too, but if you can’t find anything locally check out places like Costco and Sam’s Club, which do screenings for $15; that might even be cheaper than your copay at the doctor’s office.

1. Deals can make you smile

Whether you have dental insurance or not, it doesn’t cover much. So go back to #8 (Haggle) to negotiate cash prices with your dentist for major procedures, and take advantage of Living Social or Groupon vouchers to get your routine cleanings and exams with X-rays. The prices, says HuffPost, “range from $19 to $50 and are generally offered by dentists hoping to grow their practices.”

SOURCE:
Satter, M (2 June 2018) "12 ways to save on health care" [Web Blog Post]. Retrieved from https://www.benefitspro.com/2017/02/07/12-ways-to-save-on-health-care?t=Consumer-Driven&page=6


Quality trumps convenience among employees

Convenience, or quality? Take a look into why researchers are saying quality of a doctors visit outshines convenience when scheduling the next appointment.


Faced with the choice between going to a conveniently located doctor’s office or a more qualified physician, group health plan members are four times more likely to embrace the better-perceived medical professional.

“Traditional metrics like patient ratings, prescribing rates and volume of patients seen were not nearly as compelling to respondents as more qualitative, contextualized statements about a doctor’s clinical expertise,” according to Nate Freese, senior director of data strategy at Grand Rounds, a healthcare service provider for employees in need of local and remote specialty care.

The data is based on a study of 1,100 members covered by Grand Rounds, which is headquartered in San Francisco.

While surprising, Freese says that result depends on the information and messaging that’s provided to employees. Just 14% of respondents based their choice on clinical expertise if they saw traditional physician profiles, whereas it was 69% if they saw contextualized profiles. Contextualized profiles offered more information in complete sentences compared to traditional profiles. These profiles also compared data against other doctors and specialists, such as appointment wait times, expertise and patient satisfaction.

Freese is encouraged by these findings, which were recently presented at the National Healthcare Ratings Summit. “Don’t sell employees short in terms of their ability to appreciate quality and willingness to sacrifice convenience,” he says.

Offering more subjective interpretation of hard quality metrics would be helpful, Freese explains, as long as employers and their advisers are careful not to “overstep what can be reasonably inferred based on available data.”

Another caveat to consider is that finding high quality providers may not be inherently more difficult in narrow networks. Rather, he says, the issue is when health plan members “lack the ability to identify them. And so, it’s more about presenting information in the right way.”

Providing compelling quality information can achieve the same results of a narrow network, he notes. But he hastens to add that even narrow networks must be sufficiently broad enough for members to have a reasonable amount of choice. Geography also plays a role. “You could be in the broadest network, but by virtue of where you live, have reduced choice,” he says.

Michael Hough, executive vice president and U.S. founder of Advance Medical, believes the quality metrics that are currently available are insufficient for several reasons. “We’re looking at things like frequency and whether the outcomes are horrible,” he says. “But just because the outcomes weren’t horrible doesn’t mean they were good, either.” Desired outcomes depend on what’s going on with patients and whether their objectives are being achieved.

The context of care is “extremely important,” Hough explains, noting the importance of relationships between the patient and a trained physician based on human interaction, as well as the delivery of services. Also, while he believes the rise of telemedicine and self-service “is good for many parts of our lives,” Hough cautions that it’s not necessarily true for healthcare because meaningful relationships trump convenience.

SOURCE:
Shutan, B (22 June 2018) "Quality trumps convenience among employees" [Web Blog Post]. Retrieved from https://www.employeebenefitadviser.com/news/quality-trumps-convenience-among-employees?tag=00000151-16d0-def7-a1db-97f0240f0000


Top 10 health conditions costing employers the most

Conditions that impact plan costs can be problematic. Here is a look into the top 10 health conditions hitting the hardest on employers wallets.


As healthcare costs continue to rise, more employers are looking at ways to target those costs. One step they are taking is looking at what health conditions are hitting their pocketbooks the hardest.

“About half of employers use disease management programs to help manage the costs of these very expensive chronic conditions,” says Julie Stich, associate vice president of content at the International Foundation of Employee Benefits Plans. “In addition, about three in five employers use health screenings and health risk assessments to help employees identify and monitor these conditions so that they can be managed more effectively. Early identification helps the employer and the employee.”

What conditions are costly for employers to cover? In IFEPB’s Workplace Wellness Trends 2017 Survey, more than 500 employers were asked to select the top three conditions impacting plan costs. The following 10 topped the list.

10. High-risk pregnancy

Although high-risk pregnancies have seen a dip of 1% since 2015, they still bottom out the list in 2017; 5.6% of employers report these costs are a leading cost concern for health plans.

9. Smoking

Smoking has remained a consistent concern of employers over the last several years; 8.6% of employers report smoking has significant impact on health plans.

8. High cholesterol

While high cholesterol still has a major impact on health costs- 11.6% say it's a top cause of raising healthcare costs- that number is significantly lower from where it was in 2015 (19.3%).

7. Depression/ mental illness

For 13.9% of employers, mental health has a big influence on healthcare costs. This is down from 22.8% in 2015.

6. Hypertension/ high blood pressure

This is the first condition in IFEBP's report to have dropped a ranking in the last two years. In 2015, hypertension/ high blood pressure ranked 5th with 28.9% of employers reporting it is a high cost condition. In 2017, the condition dropped to 6th with 27.6% of employers noting high costs associated with the disease.

5. Heart disease

This year's study found that 28.4% of employers reported high costs associated with heart disease. In 2015, heart disease was the second highest cost driver with 37.1% of employers citing high costs from the disease.

4. Arthritis/back/musculoskeletal

Nearly three in 10 employers (28.9%) say these conditions are drivers of their health plan costs, compared to 34.5% in 2015.

3. Obesity

Obesity is still a top concern for employers, but slightly less so than it was two years ago. In 2017, 29% of employers found obesity to be a burden on health plans. In 2015, 32.45 cited obesity as a major cost driver.

2. Cancer (all kinds)

Cancer has become more expensive for employers. Now, 35.4% of employers report cancer increasing the costs of health plans, compared to 32% in 2015.

1. Diabetes

The king of raising health costs, diabetes has topped the list both in 2015 and 2017. In the most recent report, 44.3% of employers say diabetes is among the conditions impacting plan costs.

SOURCE:
Otto. N (18 June 2018) "Top 10 health conditions costing employers the most" [Web Blog Post]. Retrieved from https://www.employeebenefitadviser.com/slideshow/top-10-health-conditions-costing-employers-the-most


Lack Of Insurance Exposes Blind Spots In Vision Care

Vision problems are typically not life threatening but can impact the success of your everyday life. Vision care is a significant benefit that could change the lives of many families.


Every day, a school bus drops off as many as 45 children at a community eye clinic on Chicago’s South Side. Many of them are referred to the clinic after failing vision screenings at their public schools.

Clinicians and students from the Illinois College of Optometry give the children comprehensive eye exams, which feature refraction tests to determine a correct prescription for eyeglasses and dilation of their pupils to examine their eyes, including the optic nerve and retina.

No family pays out-of-pocket for the exam. The program bills insurance if the children have coverage, but about a third are uninsured. Operated in partnership with Chicago public schools, the program annually serves up to 7,000 children from birth through high school.

“Many of the kids we’re serving fall through the cracks,” said Dr. Sandra Block, a professor of optometry at the Illinois College of Optometry and medical director of the school-based vision clinics program. Many are low-income Hispanic and African-American children whose parents may not speak English or are immigrants who are not in the country legally.

Falling through the cracks is not an uncommon problem when it comes to vision care. According to a 2016 report from the National Academies of Sciences, Engineering and Medicine, as many as 16 million people in the United States have undiagnosed or uncorrected “refractive” errors that could be fixed with eyeglasses, contact lenses or surgery. And while insurance coverage for eye exams and corrective lenses clearly has improved, significant gaps remain.

The national academies’ report noted that impaired vision affects how people experience their world, including normal communication and social activities, independence and mobility. Not seeing clearly can hamper children’s academic achievement, social development and long-term health.

But when people must choose, vision care may lose out to more pressing medical concerns, said Block, who was on the committee that developed the report.

“Vision issues are not life-threatening,” she said. “People get through their day knowing they can’t see as well as they’d like.”

Insurance can make regular eye exams, glasses and treatment for medical problems such as cataracts more accessible and affordable. But comprehensive vision coverage is often achieved only through a patchwork of plans.

The Medicare program that provides coverage for millions of Americans age 65 and older doesn’t include routine eye exams, refraction testing or eyeglasses. Some tests are covered if you’re at high risk for a condition such as glaucoma, for example. And if you develop a vision-related medical condition such as cataracts, the program will cover your medical care.

But if you’re just a normal 70-year-old and you want to get your eyes examined, the program won’t cover it, said Dr. David Glasser, an ophthalmologist in Columbia, Md., who is a clinical spokesman for the American Academy of Ophthalmology. If you make an appointment because you’re experiencing troubling symptoms and get measured for eyeglasses while there, you’ll likely be charged anywhere from about $30 to $75, Glasser said.

There are a few exceptions. Medicare will pay for one pair of glasses or contact lenses following cataract surgery, for example. Some Medicare Advantage plans offer vision care.

Many commercial health insurance plans also exclude routine vision care from their coverage. Employers may offer workers a separate vision plan to fill in the gaps.

VSP Vision Care provides vision care plans to 60,000 employers and other clients, said Kate Renwick-Espinosa, the organization’s president. A typical plan provides coverage for a comprehensive eye exam once a year and an allowance toward standard eyeglasses or contact lenses, sometimes with a copayment. Also, individuals seeking plans make up a growing part of their business, she said.

Vision coverage for kids improved under the Affordable Care Act. The law requires most plans sold on the individual and small-group market to offer vision benefits for children younger than 19. That generally means that those plans cover a comprehensive eye exam, including refraction, every year, as well as a pair of glasses or contact lenses.

But since pediatric eye exams aren’t considered preventive care that must be covered without charging people anything out-of-pocket under the ACA, they’re subject to copays and the deductible.

Medicaid programs for low-income people also typically cover vision benefits for children and sometimes for adults as well, said Dr. Christopher Quinn, president of the American Optometric Association, a professional group.

But coverage alone isn’t enough. To bring down the number of people with undiagnosed or uncorrected vision, education is key to helping people understand the importance of eye health in maintaining good vision. Just as important, it can also reduce the impact of chronic conditions such as diabetes, the national academies’ report found.

“All health care providers need to at least ask vision questions when providing primary care,” said Block.

SOURCE:
Andrews M (13 JUNE 2018). "Lack Of Insurance Exposes Blind Spots In Vision Care" [Web Blog Post]. Retrieved from https://khn.org/news/lack-of-insurance-exposes-blind-spots-in-vision-care/


Are You And Your Primary Care Doc Ready To Talk About Your DNA?

Knowing your genes could save your life, especially if a genetic mutation is hereditary. See why incorporating DNA testing is a crucial part of your primary care.


If you have a genetic mutation that increases your risk for a treatable medical condition, would you want to know? For many people the answer is yes. But such information is not commonly part of routine primary care.

For patients at Geisinger Health System, that could soon change. Starting in the next month or so, the Pennsylvania-based system will offer DNA sequencing to 1,000 patients, with the goal to eventually extend the offer to all 3 million Geisinger patients.

The test will look for mutations in at least 77 genes that are associated with dozens of medical conditions ranging from heart disease to cancer, as well as variability in how people respond to pharmaceuticals based on heredity.

“We’re giving more precision to the very important decisions that people need to make,” said Dr. David Feinberg, Geisinger’s president and CEO. In the same way that primary care providers currently suggest checking someone’s cholesterol, “we would have that discussion with patients,” he said. “‘It looks like we haven’t done your genome. Why don’t we do that?’”

Some physicians and health policy analysts question whether such genetic information is necessary to provide good primary care — or feasible for many primary care physicians.

The new clinical program builds on a research biobank and genome-sequencing initiative called MyCode that Geisinger started in 2007 to collect and analyze its patients’ DNA. That effort has enrolled more than 200,000 people.

Like MyCode, the new clinical program is based on whole “exome” sequencing, analyzing the roughly 1 percent of the genome that provides instructions for making proteins, where most known disease-causing mutations occur.

Using this analysis, clinicians might be able to tell Geisinger patients that they have a genetic variant associated with Lynch syndrome, for example, which leads to increased risk of colon and other cancers, or familial hypercholesterolemia, which can result in high cholesterol levels and heart disease at a young age. Some people might learn they have increased susceptibility to  malignant hyperthermia, a hereditary mutation that can be fatal since it causes a severe reaction to certain medications used during anesthesia.

Samples of a patient’s blood or spit are used to provide a DNA sample. After analysis, the results are sent to the patient’s primary care doctor.

Before speaking with the patient, the doctor takes a 30-minute online continuing education tutorial to review details about genetic testing and the disorder. Then the patient is informed and invited to meet with the primary care provider, along with a genetic counselor if desired. At that point, doctor and patient can discuss treatment and prevention options, including lifestyle changes like diet and exercise that can reduce the risk of disease.

About 3.5 percent of the people who’ve been tested through Geisinger’s research program had a genetic variant that could result in a medical problem for which clinicians can recommend steps to influence their health, Feinberg said. Only actionable mutations are communicated to patients. Geisinger won’t inform them if they have a variant of the APOE gene that increases their risk for Alzheimer’s disease, for example, because there’s no clinical treatment. (Geisinger is working toward developing a policy for how to handle these results if patients ask for them.)

Wendy Wilson, a Geisinger spokeswoman, said that what they’re doing is very different from direct-to-consumer services like 23andMe, which tests customers’ saliva to determine their genetic risk for several diseases and traits and makes the results available in an online report.

“Geisinger is prescribing DNA sequencing to patients and putting DNA results in electronic health records and actually creating an action plan to prevent that predisposition from occurring. We are preventing disease from happening,” she said.

Geisinger will absorb the estimated $300 to $500 cost of the sequencing test. Insurance companies typically don’t cover DNA sequencing and limit coverage for adult genetic tests for specific mutations, such as those related to the breast cancer susceptibility genes BRCA1 or BRCA2, unless the patient has a family history of the condition or other indications they’re at high risk.

“Most of the medical spending in America is done after people have gotten sick,” said Feinberg. “We think this will decrease spending on a lot of care.”

Some clinicians aren’t so sure. Dr. H. Gilbert Welch is a professor at the Dartmouth Institute for Health Policy and Clinical Practice who has authored books about overdiagnosis and overscreening, including “Less Medicine, More Health.”

He credited Geisinger with carefully targeting the genes in which it looks for actionable mutations instead of taking an all-encompassing approach. He acknowledged that for some conditions, like Lynch syndrome, people with genetic mutations would benefit from being followed closely. But he questioned the value of DNA sequencing to identify other conditions, such as some related to heart disease.

“What are we really going to do differently for those patients?” he asked. “We should all be concerned about heart disease. We should all exercise, we should eat real food.”

Welch said he was also concerned about the cascading effect of expensive and potentially harmful medical treatment when a genetic risk is identified.

“Doctors will feel the pressure to do something: start a medication, order a test, make a referral. You have to be careful. Bad things happen,” he said.

Other clinicians question primary care physicians’ comfort with and time for incorporating DNA sequencing into their practices.

A survey of nearly 500 primary care providers in the New York City area published in Health Affairs this month found that only a third of them had ordered a genetic test, given patients a genetic test result or referred one for genetic counseling in the past year.

Only a quarter of survey respondents said they felt prepared to work with patients who had genetic testing for common diseases or were at high risk for genetic conditions. Just 14 percent reported they were confident they could interpret genetic test results.

“Even though they had training, they felt unprepared to incorporate genomics into their practice,” said Dr. Carol Horowitz, a professor at the Icahn School of Medicine at Mount Sinai in New York, who co-authored the study.

Speaking as a busy primary care practitioner, she questioned the feasibility of adding genomic medicine to regular visits.

“Geisinger is a very well-resourced health system and they’ve made a decision to incorporate that into their practices,” she said. In Harlem, where Horowitz works as an internist, it could be a daunting challenge. “Our plates are already overflowing, and now you’re going to dump a lot more on our plate.”

SOURCE:
Andrews, M (12 June 2018). "Are You And Your Primary Care Doc Ready To Talk About Your DNA?" [Web Blog Post]. Retrieved from https://khn.org/news/are-you-and-your-primary-care-doc-ready-to-talk-about-your-dna/


Taking Action to Prevent the Harmful Impact of Short-Term Plans

This article explores the recently established rule on short-term limited duration plans - as proposed by HHS - which would not comply with consumer protections afforded under ACA.

The U.S. Department of Health and Human Services (HHS) has proposed a new rule, open for comment until April 23, 2018, that is dangerous to consumers and to health care marketplaces. This rule would expand the sale of “short-term limited duration plans” that do not have to comply with the consumer protections afforded under the Affordable Care Act (ACA) and often leave consumers uncovered for major medical expenses.

The short-term plan rule will harm consumers and health care markets

The proposed rule would alter the definition of short-term plans as a backdoor way of creating a new class of plans that do not have to comply with the ACA, extending the duration of short-term plans from policies that last for 3 months to policies that can last just short of one year. Under this rule, insurers may also be allowed to renew a short-term plan for an enrollee after that period is up.

Companies selling these plans can make large profits at consumers’ expense, and the plans do not have to cover pre-existing conditions, provide essential health benefits, include adequate provider networks, or comply with a host of other key protections, as we describe in Seven Reasons the Trump Administration's Short-Term Health Plans Are Harmful to Families. Moreover, if many young and healthy people are drawn into these plans, the plans will undermine the market for real coverage, driving up prices in the ACA-compliant marketplace.

Now is the time to take action to prevent short-term plans from harming consumers and insurance markets throughout the country. Here we outline how advocates, consumers, and states can take action to address this harmful rule.

Stakeholders can urge HHS to stop the spread of harmful short-term plans

It’s important that HHS hears from stakeholders all over the country about how short-term plans will leave those who enroll in them without adequate protection from the costs of care, and how those who seek to stay in the market for comprehensive coverage will experience spikes in premiums and jeopardized access to coverage if short-term plans are allowed to expand.

The short-term plan rule will also burden states and insurance companies that are interested in making comprehensive coverage affordable. Particularly if the rule allows the proliferation of short-term plans that last for up to 12 months to take effect after insurers have already planned their premium pricing for 2019, these plans will cause chaos for comprehensive insurance providers and states alike in maintaining a stable insurance market. These expanded short-term plans should not be put on the market at all, but at the very least HHS should delay implementation of the final rule to give states and insurers more time to plan for it to take effect.

Advocates, consumers, state officials, health care providers, and other stakeholders can all make a difference by commenting to HHS about these problems. Stakeholders can also make a difference by urging state policymakers and officials to comment on the rule as well. Comments should urge HHS to stop or at the very least delay implementation of the rule on short-term plans. Comments should be submitted here by 5 PM on Monday, April 23rd.

States can take direct action to protect against short-term plans

States can take direct action to protect consumers and insurance markets from the harm of short-term limited duration plans. States have broad authority to regulate short-term plans and can adopt new laws or issue new regulations or guidance that exceeds the standards in the proposed rule. Given other upcoming changes in 2019 that will also pose risks for the market, including the repeal of the individual mandate penalty, taking swift action is particularly important.

These strategies can provide protections for consumers and help limit market instability caused by the expansion of short-term plans.

States can prohibit short-term plans altogether. Massachusetts, New Jersey, and New York currently prohibit short-term plans, and California is pursuing a prohibition via SB910 (Hernandez).

States can require that short-term plans comply with all protections that health plans sold on the comprehensive individual market meet. For example, a few states prohibit short-term plans from refusing to sell to a consumer based on their health status— those plans cannot “underwrite,” or take people’s health status into consideration when people seek to buy them. States could protect consumers from the harm of short-term plans by applying the same requirements to them as apply to comprehensive insurance. These include requirements for external review, essential health benefits and state benefit mandates, network adequacy, medical loss ratios, and pre-existing condition protections, including a requirement that plans do not charge people rates based on their health status. States can also ensure companies that offer short-term plans have to pay any existing state-based assessments, such as insurer taxes. States could also consider assessing short-term plan insurers and using those funds for a reinsurance program for plans that meet ACA standards.

  • States can restrict the duration of short-term plans. For example, states can pass laws prohibiting short-term plans from lasting for longer than 3 months. This will ensure that these plans are used as they were intended- to fill short gaps in coverage- and not as a long-term solution to substitute for real coverage. Some states already limit the period for which a short-term plan can be sold to less than the nearly 12 months allowed in the proposed federal rule. For a good index of such state laws, see State Regulation of Coverage Options Outside of the Affordable Care Act: Limiting Risk to the Individual Market from the Georgetown Center on Health Insurance Reform.
  • States can prohibit short-term plans from renewing consumers’ policies beyond their allowed duration: To ensure that short-term plans are not treated as a replacement for comprehensive insurance, states can prohibit plans from renewing their contract with a consumer once the duration of the short-term plan is over. For example, a state could prohibit insurers from selling a short-term policy to anyone who has enrolled in one during the last 12 months.
  • States can require strong disclosure and marketing rules to ensure short-term plans are transparent about their shortfalls. States can require short-term plans to include prominent disclosures in marketing materials (including websites), application forms, and other forms to warn people about what the plans do not cover and how they may expose consumers to high out-of-pocket costs. For example, Colorado requires short-term plans to provide such a disclosure to warn people about the lack of coverage for pre-existing conditions in short-term plans. Additionally, states can require short-term plans to supply simple, clear, and comparable information about what benefits they do and do not cover, and corresponding cost-sharing requirements. Comprehensive plans must comply with requirements to produce a summary of benefits and coverage, and states could apply such requirements to short-term plans as well.

There are additional protections that states may want to consider to protect people from the harms of short-term plans. For additional discussion of how states can take action, see State Options to Protect Consumers and Stabilize the Market: Responding to President Trump’s Executive Order on Short-Term Health Plans by the Georgetown Center on Health Insurance reform.

State legislators and insurance departments can lead the efforts to enact these important protections. And, they along with any health care ombudsman programs or other organizations that assist health insurance consumers in the state may know of complaints and problems regarding short-term plans that can inform what protections the state should enact. State attorneys general, Better Business Bureaus, or other consumer protection agencies may also be aware of problems and can be helpful allies in efforts to prevent short-term plans from harming consumers and insurance markets alike.

Additionally, the National Association of Insurance Commissioners (NAIC) is currently updating its model law for states on Accident and Sickness Insurance Minimum Standards (Model #170) and its companion regulation, the Model Regulation to Implement the Accident and Sickness Insurance Minimum Standards Model Act (Model #171). NAIC consumer representatives including Families USA are advocating to make these models as robust possible in their protection of consumers and the market from the damage of short-term plans. (See the March 2018 report by the NAIC consumer representatives and former Montana regulator Christina Goe, Non-ACA-Compliant Plans and the Risk of Market Segmentation.)

This article was brought to you by Families USA by Claire McAndrew on April 2018.


Resisting Popular Healthcare Trends and Getting Creative

In this article, experts explore the idea that companies need to use the many tools at their disposal, as opposed to relying specifically on one popular trend.

A recent study found that substantial wellness incentives and high-deductible health plans are not the quick fix to improving health care costs they were originally thought to be.

Employers pinned their hopes on high-deductible health plans, but HDHPs only represent 30 percent of medical plans offered by employers, according to the “2018 Medical Trends and Observations Report” released in early March by DirectPath and research and advisory company Gartner.

“Increasingly, employers are realizing that true, long-term cost management will come from a combination of tools and that they need to enlist employees in the effort in a meaningful way,” said Kim Buckey, vice president of client services at employee engagement firm DirectPath.

Employers have explored different options starting with managed care plans and health maintenance organizations the past several decades, moving toward consumer directed health plans years later and considering wellness programs and private exchanges after that, according to Buckey. These solutions could provide short-term relief but not singlehandedly solve the problem, she said.

The logic behind HDHPs was that if employees had skin in the game, they’d be more conscientious about looking for lower-cost options in medical care and become smarter health care consumers, Buckey said. But what this idea did not address the larger issue: employees’ lack of health literacy and little understanding of health insurance comprehension.

“Employees historically just hadn’t had the knowledge or the tools to truly become educated consumers,” she said.

The report, based on an analysis of 900 employee benefit health plans, also found that fewer companies are offering wellness incentives. Some 31 percent of employers offer them today, according to the 2018 report. This number is considerably lower than the 2017 report, which found that 58 percent of employers offered incentives, and the 2016 report, which found that 50 percent did.

“That was surprising because using incentives to drive employee behavior was a big component of most companies’ strategies across the past couple years,” said Brian Kropp, HR practice leader at Gartner. “What companies are finding in a lot of cases is that the incentives were most likely used by healthiest people whose health care costs were already quite low.”

For many companies, incentives have been cutting health care costs for employees who were already spending less rather than making prices more reasonable for people with higher expenses, he said.

This is not the ideal result since the idea behind incentives was, for example, to convince unhealthy people to get an annual physical. This would supposedly help them find health problems before they became serious and more expensive to treat.

“The idea that incentives as currently structured at most companies are becoming of less interest because they’re not as effective as we thought,” Kropp said.

The decline in incentive use may also have to do with concerns about the future legality of these plans, according to the report. A federal judge ruled in December 2017 that the EEOC’s incentive rules — which deem a wellness program voluntary if the incentive or penalty was no more than 30 percent of the cost of the health plan — will only continue until the end of 2018.

Other reports have found different data on wellness incentives. Jessica Grossmeier, vice president of research for the think tank Health Enhancement Research Organization, shared that a Mercer report in 2016 found that two-thirds of employers were using incentives to encourage employee to participate in wellness programs and that 29 percent provided incentives for achieving, maintaining or showing progress toward specific health status targets.

Whether employers will maintain their commitment to using financial wellness incentives will depend on the individual employer and what happens with the EEOC incentive rule. For the time being, employers can take the conservative approach and offer no incentives, take the middle-ground approach and offer modest incentives, or take the aggressive approach and offer up to 30 percent incentives as usual, according to law firm K&L Gates.

Privacy is another concern with wellness programs, Buckey said. Despite generous incentives, some employees may hesitate to participate in these programs because of privacy concerns. Some wellness programs provide employers with aggregate data about the current health status and health risks of their employee population. “With financial and health data breaches increasingly in the news, I think we will see a leveling off or even a lack of interest in participating in programs whether data — even in aggregate — is collected about an employee’s health,” Buckey said.

While strategies such as relying on wellness programs to lower health care costs or using HDHPs to make employees smarter health care consumers have not become the ultimate fix, there are some ways employers can get more creative with their strategy, according to Buckey. She suggested several ways for employers to take a multi-pronged approach to health care cost management.

Employers can offer transparency services, which allow employees to compare pricing for the same service near their home, when they are planning an elective high-cost service like diagnostic tests or surgeries. Employers can also provide better enrollment support in open enrollment so that employees choose the right plan and more carefully manage pharmacy costs by adding measures like mandatary generics or step therapy.

Buckey also mentioned that some of her company’s clients provide patient-advocacy services.

“[It] helps employees identify billing errors and resolve disputes with providers and insurance companies,” she said. “This frees up the employees to focus on their work, rather than financial and medical concerns.”

It’s important for companies to get creative with their health care benefits more than ever before, Kropp said. In the past, employees knew that the health insurance they received at one company was comparable to what they’d receive at many other companies. What the insurance was exactly didn’t matter because most employees felt the plans were more or less the same, he said.

Now companies are starting to realize that better health care plans are a significant differentiator for attracting talent in a competitive labor market, he added. As information for employees and candidates became more transparent and accessible, it became easier as a candidate to understand what health plan offerings looked like at other companies.

“It is a relatively new phenomenon of companies becoming much more vocal about their benefits offerings as a way to compete in a tight labor market,” Kropp said.

This article is from Workforce written by Andie Burjek on April 10, 2018.