Health care costs

Papa Bear and the Goldilocks Health Plan

Papa Bear and the Goldilocks Health Plan

Before a knee injury, one of my annual traditions was running with my fellow Holmies in the annual Dallas Marathon corporate relay....

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Health Plan Analytics Stuck in the Wild West?

Health Plan Analytics Stuck in the Wild West?

Our family loves traveling to Colorado each summer. This year, we passed through Leadville and Minturn, two old mining towns that remind...

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Speaking Out On Transgender Benefits

Speaking Out On Transgender Benefits

I recently came across this article, published by Business Insurance with the following headline "Few employers offer transgender benefits".  This article, along with the growing news coverage around bathroom use for transgender, prompted me to investigate exactly what percentage of the population here is impacted.   According to two of  the largest surveys ever conducted on the topic, approximately .3 percent or 700,000 people in the United States identify as transgender.   

Getting "Fed Up" / Trends Not Sweet

What the World Eats Almost 60% of the U.S. diet is made up of sugar and carbohydrate.   Since 1977, Americans have doubled their daily intake of sugar, lurking in processed foods like cereal and catsup.   Our sugar intake has lead to a corresponding rise in obesity, metabolic syndrome and chronic conditions that are the result of  a pancreas that eventually exhausts itself from producing the hormone insulin.

How could it be that from 1980 to 2000, fitness memberships doubled along with a corresponding doubling of the obesity rate?   If our willpower is to blame why do we have obesity in 6 year olds?   And of all the nutrients listed on a food label, how is it that sugar, a substance more addictive than cocaine, is the only nutrient that a food manufacturer does not have to disclose under the food label's  percentage daily recommended allowance guidelines?   Could it be that Americans were misled into believing that a "low-fat" diet was best for us based on junk science?   Could federal guidelines have been influenced by powerful food lobbies and corporate profits placed ahead of our  public health interests?

Realizing we now have an epidemic that we are not going to be able to exercise our way out of, the U.S. Preventive Task Force (USPTF) has recommended coverage for progams that have demonstrated clinical success in reversing symptoms of Metabolic Syndrome be covered under the Affordable Care Act (ACA) at 100% with no cost sharing.   In a future post, I'll share more about how and when employers must cover behavioral weight management as a benefit and what our  ACAP Health  subsidiary is doing to help companies reverse these metabolic trends  caused by sugar.

Our company will continue to endorse only programs that adhere to  evidence based guidelines from trusted voices like Dr. David Katz, Dr. Mark Hyman, Dr. Robert Lustig, Tim Church, M.D., M.P.H., Ph.D and Dr. David Kessler.  Please commit to watching "Fed Up", produced by Katie Couric and Laurie David.

Infographic Source: National Geographic: What the World Eats (Interactive Calories Over Time / Country Comparisons)

Accountable Care - Transforming Healthcare Delivery

At no other time in the history of our country has the healthcare delivery system so rapidly transformed as it has since the passage of the Affordable Care Act (ACA).   With healthcare consuming nearly 20% of our country's GDP, traditional fee for service medicine simply was not sustainable.   Accountable Care Organizations ("ACO's") hope to change that with the aim of improving population health, improving the care experience and reducing the per-capita cost. The Centers for Medicare and Medicaid Services (CMS) have very clear rules and definitions as to what might comprise an ACO for the Medicare market, but when it comes to what it means for the private sector, definitions vary. An ACO is a health care delivery system that has partnered with a payer or purchaser of health care to develop arrangements that align financial interests with the delivery of effective and quality care for a specific population.   However, if you have seen one ACO ... you have seen one ACO since success is contingent upon IT integration, physician-led affiliation, care coordination, access, prevention and convenience, and payment reform that aligns stakeholder interests.

Many plan sponsors might first think an ACO of today is simply warmed over "HMO soup", reheated from the 1990's.   What's different is that we have advances in technology, larger systems of care with greater physician/hospital collaboration, bigger federal incentives and a decade of best practices to guide us.   Many systems will be smart to avoid the  mistakes made  during the HMO era when the market greatly underpriced  premiums, withheld care and failed to model risk accurately.   We're only in the first inning of the ACO era that will continue to  lead to pay for performance, bundled payments, episodic risk sharing and more fully capitated transfer of risk for health sytems.

According to Leavitt Partners latest study, there are over 600  ACOs now across the United States:

ACO's Across the Country

There are three considerations that should prompt employers of all sizes to  consider ACO's in their employee benefits portfolio:

1) Available Now  - Traditional health insurers, physician groups and health systems have been hard at work building partnerships that incorporate shared risk arrangements.   Last year, ACOs began rolling their products out to our  benefit consulting teams for us to share with our clients.   We were pleased to learn  the health systems and carriers are "eating at their own restaurant" by  enrolling their employees into their own ACO over the last couple of years.   For the early adopter seeking alternatives that promise greater value   with a narrower network or steerage mechanisms, ACO options are available now throughout the country.   Our firm has examples of clients who have deployed narrow network strategies in partnership with hospital based systems anchored in DFW.   One of the largests now boasts a network of approximately 50 hospitals, 500 patient access points and 6,000 affiliated physicians.

2) Geographic Density -  Since ACOs are about the delivery of healthcare at the local level, employers with great density (concentrations of a large number of employees) will fare better with this strategy.   In California for instance, CALPERS, one of the state's largest plan sponsors, had enough clout to form a direct contract with a upside  premium credit of nearly $16MM  with a physicians group, Blues plan and hospital system.   This alliance was formed to compete against the dominate player in the area, Kaiser of California.   If you are the major employer in an area, you and other employers have more clout than you might think in this new era of ACO alignment.

3) Show Me the Money -  The most fundamental change that ACOs may bring to the market is a substantial increase in the levels of collaboration among payors and providers.   So how will more integrated models prove to the private sector they can truly remove waste, impact steerage, align incentives with greater patient satisfaction?   These integrated systems realize they must offer up savings in the form of guarantees, ,risk-adjusted PMPMs and total cost guarantees for us to consider their offering.   Initial actuarial projections are targeting PMPM savings ranging from 5-10% off of current spending levels, as contracts mature.

But accountability is up to every organization and every body with a body. The ACO cannot foster health alone ... and that's why the early adopters must be prepared to lead with  executive sponsorship, design and contribution alignment to drive steerage, coordination and communications  that lend support to these exciting options. I am a voracious reader of  Benefits Quarterly,  a publication for peers in my industry.   This excerpt, written by Isabelle Wang and Michael Maniccia of Deloitte, provides a good primer for employers to consider on the topic of ACOs and is available on their website or download here: