The nonprofit organization Catalyst for Payment Reform is hosting a series of webcasts this month focused on “Addressing Today's Leading Challenges.” I was invited to cover behavioral health -- specifically, the changing behavioral health landscape for employers and the need to develop innovative strategies to bend the cost trend and improve care.
The issue: Just to put things in perspective, mental health is a bigger issue than most realize. One in five adults and 43.8 million people experience a mental illness each year in the US, according to the National Alliance on Mental Illness. Behavioral health issues are often not addressed and tend to exacerbate other health issues. About one quarter of patients with chronic conditions have undiagnosed depression. In addition, the US is seeing a rapid rise in opioid abuse (as discussed in an earlier post). Along with the cost of medical claims (direct and co-morbid spend), employers may also feel the effects of behavioral health issues in increases in absence and disability and worksite accidents or safety incidents.
Not easy to fix: To start with, there is a stigma associated with obtaining care. Those who need care are often hesitant or unwilling to seek help. But even if a person is ready to begin treatment, access to care can be challenging. There is a shortage of behavioral health providers such as psychiatrists, and only about 50% of providers actually participate in networks. In some cases, programs are not integrated and so it is difficult for the plan member to know which program to use and when. On top of that, poor member compliance with treatment strategies is not unusual.
Good news: There is a lot of innovation going on in this area. Greater awareness of the major barriers to accessing behavioral healthcare (such as cultural influence, access issues, and cost) have spurred the development of tools and services that address them. A myriad of apps, niche vendors, and targeted programs are available to fill gaps in care delivery and offer solutions across the continuum of behavioral health needs. ACOs and other integrated care models have emerged and continue to evolve.
What should employers do?
- Focus data-driven discovery on your existing workforce. How are current behavioral health issues affecting your organization? Are you getting the most out of the behavioral health offerings?
- Offer a variety of programs. Explore the latest innovations for options that may work better for your population and needs. Select programs that will maximize appropriate use of prevention and treatment services. Make access easy.
- Build a supportive work culture. Integrate emotional health with other pillars of well-being (e.g., physical and financial).
This last point is perhaps the most important of all. You can have great programs but if your people are not comfortable using them, not much will be accomplished. The challenge is to promote acceptance of the fact that we all have problems, that sometimes we need help, and that asking for help is the quickest, most courageous way to get better.
When employers are working on strategies to manage health benefit cost, behavioral health benefits aren’t often top of mind. After all, only about 4% of claims are related to treatment for behavioral health problems. But what’s missing from that picture are claims for comorbid conditions – other health problems that go along with the mental illness or behavioral health issues. According to one analysis, together these account for 22% of total medical spend. 
In other words, behavioral and medical health problems very often go hand in hand. One study found that patients with depression visited their primary care doctor nearly twice as often as patients without depression in given year (5.3 visits compared to 2.9 visits, respectively).  That’s why prevention, early diagnosis and effective treatment of behavioral health issues could have a big impact on total medical spending. It’s also estimated that 24% of patients with chronic medical conditions have undiagnosed depression. Diagnosing and treating the depression might result in improved medical health.
There is also the indirect cost of productivity losses to consider. One study estimates that productivity loss related to behavioral health issues amounts to $2,025 per employee per year.  The growing problem of opioid addiction is a contributor. It’s definitely a workplace problem: 70% of people using illicit drugs, including non-medical uses of opioids, are employed. And it’s not just employees, but their dependent children that factor into the equation. With 12% of 18–25 year olds reporting that they use opioids for non-medical reasons, adult dependent substance abuse is driving medical costs for employers. And substance abuse is impacting your youngest members as well; 6% of 12–17 year olds report using opioids non-medically.  Between the direct (medical) and indirect (lost productivity) cost, opioid abuse could be costing employers as much as $8 billion per year. 
The purpose of this post was to get your attention! If it worked, now check out Sandra Kuhn’s post about what you can go to support better behavioral health in your organization.
 Castlight book of business and clinical review and indirect costs = $2,025 PEPY. 20% of $10,128 PEPY, based on Edington DW, Burton WN. Health and productivity due to behavioral health based on analysis from Castlight Clinical Team.
 Luber MP, Hollenberg JP, Williams-Russo P, DiDomenico TN, Meyers BS, Alexopoulos GS, Charlson ME. Diagnosis, treatment, comorbidity, and resource utilization of depressed patients in a general medical practice. Int J Psychiatry Med. 2000;30(1):1-13.
 Melek S, Norris D. Chronic Conditions and Comorbid Psychological Disorders. Seattle: Milliman, 2008. The National Council on Alcohol and Drug Dependence.
This New York Times article offers an interesting “compare and contrast” analysis of public exchange plans versus employer-sponsored plans. Whether you’re satisfied with benefits on the public exchange really comes down to your perspective. If you were among the millions who were previously uninsured, you’re likely to be happy with your exchange coverage. If you came to the exchange after having had employer-sponsored coverage, the story is very different. A more limited choice of providers in the health plan network and higher out-of-pocket requirements are among the chief differences noticed by those coming off employer plans. In the end, a typical plan on the public exchange “looks more like Medicaid, only with a high deductible.” So while the public exchange is helping to fill a gap in the U.S. health care system, it’s not proving to be a source of comparable coverage for early retirees or those who would like to quit a corporate job to freelance or start a business. And each year, as these plans get skinnier, we’re seeing fewer employers that would even consider dropping the company plan to send employees to the public exchange.
The IRS has released draft instructions for 2016 Forms 1094-B and 1095-B, confirming that health insurers and self-insured employers can expect few changes when reporting minimum essential coverage (MEC) provided to individuals in 2016. The Service posted preliminary 2016 versions of these forms in June, but instructions noting what's new became available only last week. The IRS uses data from this reporting to administer assessments under the Affordable Care Act’s individual mandate provisions. Separately, the IRS earlier released draft 2016 employer shared-responsibility forms and instructions that applicable large employers will use to report coverage offered to employees and their dependents.
One way to improve engagement is to provide plan members with their own personal “health guide”. Mercer is helping plan sponsors do that a couple of different ways. Mercer also just announced an alliance with Accolade: Mercer Complete Care, powered by Accolade. Check out this interview with our leader of specialty consulting services, Jean Moore, and Rob Cavanaugh from Accolade as they provide their perspective on the alliance and why we think it has the potential to enhance engagement. Now is a good time to consider the tools you are providing your employees and family members to help them access the right health care, and how that is working to support smart consumerism and effective use of care.
Way up there on the list of things not to like about the U.S. healthcare system is the extreme variation in prices charged for the same service from one provider to the next – variation that is very often unrelated to quality of care. While employers are tackling this problem in a few different ways, there isn’t a ton of data to show how well any of these strategies work. So I jumped on the recent New York Times article reporting on one mega-employer’s attempt to achieve more standard pricing while still allowing members to choose their providers – reference-based pricing. The employer in question is the California Public Employee Retirement System, or Calpers for short, and the experiment included 450,000 of its members.
Beginning in 2011, Calpers set a limit on the amount it would contribute to the cost of a number of elective procedures, including knee and hip replacement surgery, colonoscopies, and cataract removal surgery. They made sure there were some hospitals that met certain quality criteria that would provide the service at or below their maximum contribution amount. Patients who wished to get a procedure at a hospital charging more would have to pay the difference themselves. That was a strong incentive for members to go to the less-costly hospitals, and a strong incentive for hospitals charging above the maximum to lower their prices.
As described in the article, it’s hard to see the program as anything other than a success. In two years, Calpers saw a 20% drop in prices for the services with reference-pricing, while, according to the article, “typical health care prices paid by employer-sponsored plans rose by about 5.5%.” During that time they saved $6 million on knee and hip replacements, and $7 million on colonoscopies. Even better news: Researchers found no evidence that quality suffered as prices fell.
You might think results like those achieved by Calpers would send other employers flocking to this strategy. But our most recent survey found that just 13% of all large employers currently have reference pricing in place for some services, although another 18% say they are considering it (among the largest employers, the number considering rises to 29%). As with most good things in life, there are a number of caveats that go along with reference pricing. You need enough hospitals in a given market so that patients have a choice about where to receive care and hospitals have an incentive to reduce prices. You need the resources to assess quality and choice, to set fair reference prices, and to communicate the program to employees. You need employees who will be able to use the program to their advantage.
And even if you can check all these boxes, reference pricing will only be part of the solution. It addresses elective care – “shoppable care” – which only accounts for about 40% of healthcare spending (leaving a lot of price variation to be dealt with by other means). But it could be a good starting point. And for employers that don’t have the right market conditions or the resources to pull off a program like Calpers’, think about a Center of Excellence approach – another way to build value and transparency in the U.S. healthcare system.
There was an interesting study published in JAMA this week that compares the health status of low-income individuals in two states that expanded Medicaid (Arkansas and Kentucky) with a state that did not (Texas). Respondents in Arkansas and Kentucky were 5% more likely to than their peers in Texas to say they were in excellent health at the end of 2015. This is a wider gap than was seen when the same question was asked at the end of 2014, when Medicare expansion was a year old. Because it takes time for someone to benefit from having insurance – due to the time it takes to actually get care and then for the care to have a positive impact on health – we may see continued improvement in Arkansas and Kentucky relative to Texas. While the study does not prove that Medicaid expansion caused people to be healthier, it makes sense that having insurance would have a positive impact on one’s health. This made me wonder whether the ACA has also had a positive impact on the health of those in employer-sponsored plans. Certainly the mandate for 100% coverage for preventive care comes to mind, although many employers covered preventive care prior to the ACA (and utilization is still not what we would like to see). Will the individual mandate mean more individuals seek coverage in employer-sponsored group coverage, and will that in turn result in better health in the workforce? Ultimately, it may be that because so many aspects of employer-sponsored coverage have changed since the law passed, it will be difficult to attribute any change in the health status of employed Americans (good or bad) to the ACA.
Opioid abuse. You’ve probably read lots of stories about it recently, but have you seen the stats? They’re alarming, to say the least: There has been a fourfold increase in opioid prescriptions from 1999 to 2010 and a fourfold surge in deaths due to overdose.
Opioids are medications that relieve pain, such as hydrocodone (e.g. Vicodin), oxycodone (e.g. OxyContin, Percocet), morphine (e.g. Kadian, Avinza), and codeine, as well as non-prescription drugs such as heroin. As a group they’re the third most commonly abused drugs after alcohol and marijuana, and they’re now responsible for killing more people than automobile accidents, according to the Substance Abuse and Mental Health Services Administration.
They have also been blamed for a decrease in life expectancy among certain groups of middle-aged Americans. Among self-insured employers, some estimates claim that 32% of opioid prescriptions are misused or abused, while Mercer data shows that opioid users 18 and older cost 5.5 times as much in total allowed medical and pharmacy costs compared to non-users.
The National Council on Alcohol and Drug Dependence reports that 70% of people using illicit drugs, including non-medical use of opioids, are employed -- and then there are all the employees whose work may suffer as a result of worrying about a loved one with an addiction. Among 18-25 year olds, 12% use opioids non-medically, as do 5% of those 26 and older. The CDC also reports that there is 6% utilization among those aged 12-17. Employees across the country are struggling with this disease -- diagnosed and undiagnosed, directly and indirectly.
Something needs to be done -- and all of us, including employers, can play a role in addressing this epidemic. You can help support those with addiction by training managers and supervisors to identify problems and referring employees to sources of help such as your EAP or Behavioral Health carrier. In addition, it’s important to develop communication tools for employee awareness efforts. And if your organization has a drug-testing program, check to see if the panel of substances tested for includes opioids.
Just as important is to prevent new cases. Review your medical, dental, and pharmacy benefit design to prevent the over-prescription of opioid medications. For example, the current recommendation is to limit prescriptions after procedures to seven days, which has been shown to decrease the development of new addictions. In addition, employers can ask their carriers or PBMs whether they flag members who are deemed high-risk for addiction, and if they follow up to ensure providers are consulting state Prescription Drug Monitoring Programs (PDMPs).
It’s also important to facilitate a successful return to work, by supporting the ongoing care needs of the employee as well as the families affected by addiction. And through careful monitoring of claims data, employers can look for red flags of addiction such as:
- Members obtaining large quantities of opioids
- Members prescribed narcotics by different doctors
- Members prescribed narcotics for more than 30 days
Prescription drug abuse is a serious medical issue, and should be treated as such. By taking action now, you can do right by your employees who may be suffering from addiction, while also doing your part to address a sensitive and complex issue plaguing our society.
The IRS has released draft instructions for 2016 Forms 1094-C and 1095-C, highlighting changes that employers can expect when reporting health coverage offered to full-time employees and dependents in 2016. The instructions give more detail about the minor revisions shown on the 2016 draft forms issued last month. The IRS uses data from this reporting to administer Affordable Care Act (ACA) assessments on employers and individuals, as well as eligibility for premium subsidies on the public insurance exchanges.
Employee Benefits News posted a slideshow illustrating the differences between Clinton and Trump on the current state of healthcare in the US. Spoiler alert: there are not that many differences! The areas where they are aligned include:
- Cadillac tax – both want it repealed
- Cost – both think it needs to go down
- Prescription drug costs – both want Medicare to set drug prices
- Insurer consolidation – both oppose
- Transparency – both support
The two major differences are the ACA – Clinton supports with tweaks; Trump wants it repealed, mostly. The other is Medicare-for-all/single payer – Clinton favors the ACA; Trump wants to repeal the ACA and is “open” to some kind of free healthcare option or single payer system.
Trump has been vocal on two additional health benefit issues – purchasing insurance across state lines (check out my prior blog post) and support/expansion of consumer directed health plans and health savings accounts. Clinton has not publicly addressed these two topics so we are not sure if she is aligned on these, or not.
Likely not the last we will be hearing on this topic as the campaigns move full steam ahead.
This interesting piece in Kaiser Health News sheds some light on a real gap in healthcare: Physicians are barely trained in medical school on how to identify and treat addiction. In fact, only a few hours in the course of four years of medical school are devoted to teaching addiction medicine. Schools have been so slow to change that medical students at Harvard University, for example, have started conducting their own training on how to buy and administer drugs that reverse the effects of an overdose. And Stanford’s medical school adjusted its curriculum so that lectures on addiction will no longer be folded into the psychiatry series as a side note, but instead will be presented as a separate unit, relevant to future doctors in any subspecialty – and that training will continue when the students leave the classrooms for clinical rotations. As the story notes, medical schools have traditionally avoided teaching about addiction, partly because so many doctors have viewed it not as a disease but as a vice resistant to treatment in a medical context. But as this outmoded view fades, pressure is being put on medical schools to expand their curriculum in this area. While this is good news for employer sponsored plans, it will obviously take time for providers to be better trained on addiction treatment.
Mental health parity is nowhere close to the top of most lists of benefit concerns. After all, the Mental Health Parity and Addiction Equity Act (MHPAEA) is eight years old and has never received the attention paid to other laws. Its rules are complex, requiring comparison of mental health/substance use disorder benefits with medical/surgical benefits in six separate classifications.
It is a mistake to ignore the MHPAEA, though, for at least three reasons.
First, mental health issues are abuzz in Washington. Witness increased public awareness of gun violence and opioid abuse. Several bills are pending, including HR 2646, a bi-partisan effort that would strengthen the MHPAEA. Also, earlier this year the President created a Mental Health and Substance Use Disorder Taskforce that will issue a report later this year that will identify gaps in parity implementation and discuss best practices.
Second, the regulatory agencies view mental health parity as a high priority. In May, DOL, Treasury, and HHS clarified in FAQ Part 31 that insurance companies or TPAs performing mental health parity testing cannot base the testing on their book of business. Instead, they must use plan-specific data when available. Also, in early June DOL and HHS provided a list of 15 red flags that indicate an issue with MHPAEA, including differing preauthorization requirements, likelihood of improvement provisions and written treatment plan constraints. DOL reviews mental health parity in its plan audits.
Finally, May’s final §1557 regulations have brought one mental health condition to the forefront: gender dysphoria. Health programs and activities receiving HHS funds cannot discriminate based on gender, among other protected categories. Blanket exclusions based on gender are prohibited -- this includes a broad exclusion of all items and services related to gender transition/re-assignment. Employers covered by final 1557 regulations will potentially have to cover gender reassignment benefits when deemed medically necessary. Mental health parity rules could limit design options as it prohibits stricter cost-sharing (e.g., a lifetime or annual limits) for mental health benefits than applies to medical/surgical benefits in the same classification.
Additional issues arise in varied situations, like carved-out behavioral health and autism spectrum disorder coverage. The challenge is that MHPAEA includes financial requirements, quantitative treatment limitations, and non-quantitative treatment limitations.
What should employers do? At least three things come to mind:
- Review current and future medical plan designs with legal counsel to determine if there are any mental health parity “red flags.”
- Address testing concerns with their insurance company or TPA to assess compliance with the recently issued FAQ.
- Work with a trusted advisor to determine if any other mental health parity issues are lurking “under the hood.”