Urban Institute: ACA Will Not Cause Employer Flight from HI Coverage

Many have predicted that the ACA will provide incentives for employers, especially small ones, to drop their health insurance benefits. Not so fast says the UI:

http://healthreformgps.org/wp-content/uploads/RWJ-URBAN.pdf

Good FAQ on Selling Insurance Across State Lines

Selling insurance across state lines is a major Republican solution for those seeking affordable individual coverage. But w/o suggesting a minimum benefits package, this solution could ber just a race to the bottom.

http://www.kaiserhealthnews.org/Stories/2010/September/30/selling-insurance-across-state-lines.aspx

BCBS of MA Pushing Global Payments

This really is the major way to contain health care costs:

http://www.boston.com/business/healthcare/articles/2011/01/23/blue_cross_ceo_says_providers_must_control_health_care_costs_or_else/?p1=Well_MostPop_Emailed4

Vermont to Examine Moving Towards Single Payor

This really should be interesting:

http://www.bloomberg.com/news/2011-01-19/consultant-vt-could-do-single-payer-health-care.html

The system covering all Vermonters would provide what Hsiao called an "essential benefit package," paying at least 87 percent of each Vermonter's medical and mental health expenses and 77 percent of his or her drug expenses. He said those targets were derived from the averages now covered by private plans.

He said the system would expand coverage for dental and vision over levels offered now, emphasize prevention and primary care, and provide "financial risk protection" against catastrophic health expenditures that otherwise can cause impoverishment.

If it could clear all the hurdles listed by Hsiao and run the gauntlet of concerns sure to be raised by insurers, hospitals and others, Vermont would be the first state to adopt the sort of single-payer health care system long seen as a key goal of the American left.

First-term Gov. Peter Shumlin, who made the creation of such a system a cornerstone of his campaign, said Wednesday that he wanted a system that would "provide universal access, contain costs and treat health care as a right and not a privilege."

Shumlin was president pro-tem of the Senate when the Legislature hired Hsiao last year. In their first phone conversation, Hsiao told him he had "given up on America," Shumlin recalled.

"I told him we are Vermonters," the governor said. "We think independently. We take care of each other, and we do things that others dare not do."

Hsiao said the system he envisioned would include at least two key components:

— An independent board, set up to minimize the influence of politics and lobbying over its process, that would set reimbursement rates each year for doctors, hospitals and other health providers. The board would be made up of provider and consumer representatives who would negotiate with each other and make recommendations to the Legislature.

— A single entity to process insurance claims and adjudicate disputes. Hsiao said the state could hire a private company to handle this task or create a quasi-public agency to bid against the private ones and help keep costs low.

The Cost of Obesity in the United States

According to McKinnsey, it is $450B:

http://www.mckinseyquarterly.com/newsletters/chartfocus/2011_01.htm

Concerns About HHS' Role in Rate Review

As I noted in a previous post, HHS has determined any increase in the small or individual market 10% or more as unreasonable and therefore subject to review. Will this cause issues for health insurers? This article discussews the possibilities:

http://www.kaiserhealthnews.org/Stories/2011/January/20/insurance-mandate-health-law-repeal-expert-QA.aspx

Alternatives to the Individual Mandate

Of all the provisions of the ACA, the one that attracts the most attention and opposition is the individual mandate. Is there a better alternative? This article provides some ideas:

http://www.kaiserhealthnews.org/Stories/2011/January/20/insurance-mandate-health-law-repeal-expert-QA.aspx

My biggest concern w/the individual mandate is that many people will ignore it and just pay the minimal penalties for doing so.

What Are Essential Benefits? AHIP Weighs In

The IOM held a three day meeting to define essential benefits for a health insurance policy. AHIP provided its own perspective of what the definition should look like.

The health insurance lobby urged federal advisers against recommending specific "essential" items or services that must be included in health plans offered on new insurance exchanges starting up in 2014.

The 10 general categories of benefits outlined in the reform law already specify an "appropriate set" of items or services that should be included in the essential health benefits package, America's Health Insurance Plans said in Thursday written testimony to the Institute of Medicine (IOM).

"Other programs, such as the Federal Employee Health Benefits Program and the Massachusetts Exchange, generally use a consistent model in which the benefit package only specifies general categories of items or services and does not indicate number and frequency of services that should be covered," wrote Carmella Bocchino, executive vice president of clinical affairs and strategic planning for AHIP.

AHIP's comments were considered in the middle of a three-day IOM meeting as the body prepares recommendations to the Department of Health and Human Services on essential health benefits.

The health insurer advocate also said the essential benefits package should not have the effect of forcing individuals and small employers to purchase a richer scope of benefits than what is currently available today.

"Broadening the scope of the essential health benefit package could have the unintended consequence of making products unaffordable and thereby limit access and consumer choice," Bocchino wrote.

The group also strongly urged against requiring plans on the exchanges to comply with state mandates. AHIP said more than 2,000 state mandates currently exist.

Can CO-OPs Be Viable?

The ACA has allocated $6B for the formation of not for profit CO-OPs to compete with health insurance companies. What are the requirements for these entities?

• Organizations qualified to participate in the CO-OP program are those that are organized under state law as nonprofit, member corporations.

• Priority will be given to plans that operate on a statewide basis, utilize integrated care models, and have significant private support.
• The governance of the organizations must be subject to a majority vote of its members and the organizations are required to operate with a strong consumer focus, but they are not consumer-owned.
• Profits must be used to lower premiums, improve benefits, or to finance programs aimed at improving the quality of care to its members.
• Any health insurance issuer that existed prior to July 16, 2009 may not qualify for the CO-OP program.
• Grant or loan recipients under the CO-OP program are restricted from using the funds for marketing activities.
• Representatives of federal, state, or local governments as well as representatives of insurance issuers that were in existence on July 16, 2009 cannot serve on cooperative boards.
• Cooperatives may establish private purchasing councils that may enter into collective purchasing arrangements for items and services. But the councils are precluded from setting payment rates for health care facilities or providers that are participating in health insurance coverage provided by the plans.
• The secretary of HHS is precluded from participating in any negotiation between cooperatives, or a purchasing council, and any health care facilities or providers including drug manufacturers, pharmacies, or hospitals. The secretary may not establish pricing structures for reimbursement of health benefits provided by the qualified health plans.

Group Health Cooperative in Seattle is a good example of a present not-for -profit cooperative. It presently serves 500,000 people.

What Will the Blues Do w/Their Excess Capital?

Lower prices? Invest in IT?

http://www.aishealth.com/Bnow/hbd011011.html

The Battle Over ACOs

Here is a good article that describes how the different parties in health care are lining up over ACO regulations:

http://www.kaiserhealthnews.org/Stories/2011/January/10/doctors-hospitals-accountable-care-organizations-rules.aspx

Insurers concerns?

Insurers are helping to drive the fight over financial incentives as they push CMS to place a tighter rein on ACOs. They are fearful that ACOs will try to make up lost revenue from Medicare by charging privately insured people more or coaxing them to get more treatments. Insurers also worry that ACOs will give doctors and hospitals more power to set health care prices in the private market, and are resisting providers' requests for the government to loosen anti-trust rules.

The Need to Require Docs to Follow Evidence Based Medicine Practices

From Reuters:

Even when following medical guidelines to the letter, doctors often use treatments that have little or no scientific support, U.S. researchers said Monday. They found only one in seven treatment recommendations from the Infectious Diseases Society of America (IDSA) -- a society representing healthcare providers and researchers across the country -- were based on high-quality data from clinical trials.

Moody's: 2011 Outlook Bleak for Health Insurers

It will be harder for HIs to be profitable:

http://www.modernhealthcare.com/article/20110104/NEWS/301049965/0#

ACA Changes Forthcoming in 2011

Here is a list of what to expect:

• Reports to Congress: the National Quality Strategy, National Prevention Strategies from the U.S. Department of Health and Human Services (HHS)
• Establishment of the CMS Center for Innovation
• Implementation of insurance plan requirements: medical loss ratio (MLR), premium increase oversight, and others
• Start of Medicare bonuses to primary care providers and general surgeons who treat under-served populations; equivalent pay to certified nurse practitioners for primary care services
• Prohibitions against preventive services cost sharing start for Medicare enrollees
• New employer W-2 reporting (1099 provision)
• Enhanced Medicaid home and community-based services funding for states
• Start of the annual pharmaceutical manufacturer excise tax ($2.5 billion per year)
• Discounts for branded prescription drugs in Part D coverage begin for Medicare enrollees
• New disclosure requirements for ownership of skilled nursing and nursing homes
• Initiation of nutrition labeling on menus and vending machines
• Enhancement of government websites: Healthcare.gov (for insurance), Physician Compare, and others
• First working sessions for the Patient Centered Outcome Research Institute (PCORI) (members already named and recruitment for an Executive Director is underway)

Growth in Medicaid Managed Care Will Be in the South

Here is a good-follow-up to my most recent post about opportunities for Medicaid managed care growth:

http://www.aishealth.com/Bnow/hbd010511.html

Good Summary on Changes to Medicaid

Due to the ACA, Medicaid enrollment is really going to jump. This is why I think any managed care organization should look into offering a managed care program for this population though the low profit margin could make it unattractive for small organizations.

http://www.bcbsm.com/healthreform/reform-alerts/ra_01_04_2011.shtml

Study in Texas Shows Health Insurance Hoops Save Money

A study from Health Affairs comparing Medicare costs in two Texas towns to those of private pay patients showed that health insurers actually save money. Why?

Among the tactics used by BCBS that might not be employed by Medicare, according to Franzini, are preauthorizations, provider utilization monitoring, case management efforts and stepped up prevention and wellness programs and incentives. In other words, meddling in provider (and patient) decision-making is effective … at least in some cases.

Chalk one up for health plans and their contentious rules which require physicians to clear procedures and medications before they are delivered.

http://www.healthleadersmedia.com/page-2/HEP-260971/Health-Plans-Data-Proves-that-Meddling-Works

Regulations Due for ACOs at the End of January

This is an excellent article on the issues in starting up an ACO, particularly the upfront costs which can be high given reporting and IT requirements:

http://www.healthleadersmedia.com/page-1/LED-260798/How-to-Finance-and-Build-Your-ACO