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Mercer

Our sister company, Oliver Wyman, recently released a white paper on the “New Front Door to Health Care” -- namely, telemedicine and retail clinics. We shared their latest survey data on consumer perceptions and use of these newer access points for health care. While employers have incorporated telemedicine and retail clinics into their health benefit offerings and plan designs, it is important to think about how these access points will evolve as the health care delivery system continues to transform itself.

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Employers are moving quickly to add telemedicine services to provide employees with an alternative to the traditional care delivery model. Our recent survey found that 30% of large employers now offer telemedicine, up from just 18% last year. Telemedicine is most commonly used for medical care, but it can also be utilized for behavioral health care. One example highlighted in a recent Washington Post article describes a situation in which the behavioral health televisit actually takes place during a patient’s primary care visit, allowing the primary care provider, the behavioral health provider, and in this case even a separate psychiatrist, to coordinate care for the individual. The convenience afforded by telemedicine is perhaps even a bigger boon with behavioral health care, considering that there are fewer behavioral health providers available than primary care providers; patients may have to wait longer for appointments and travel further to find the appropriate provider. In addition, given that behavioral health visits tend to be ongoing, the opportunity for cost savings is amplified. If your telemedicine program also covers behavioral health, it’s also important to let employees know how they can benefit from using it for these services as well as for medical care.

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July 30 marks the 50th anniversary of the law that created Medicare and Medicaid. Let’s take a look at how much has changed since the programs were first conceived — and also at the role they play in employer-sponsored health care.

 

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A recent article in The New Yorker entitled “OverKill” by Atul Gawande describes the harmful effects of unnecessary medical care, with a focus on the resulting adverse medical consequences. It framed the issue of medical waste using a different lens than I typically apply, and I find myself thinking about the implications frequently.

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Between 1990 and 2012, the number of US adults reporting a diagnosis of diabetes tripled. There are now more than 29 million diabetics in the US, and another 86 million are considered pre-diabetic. Given the overwhelming numbers, it was welcome news indeed to read the recent article by Greggs, et al., in The New England Journal of Medicine highlighting the success in decreasing diabetes-related complications in the US over the last 20 years.

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Pretty much everyone agrees that electronic health records (EHR) are a good thing. The benefits include better-coordinated, safer care; fewer duplicative tests and procedures; and a new data source for measuring and improving health care quality. President Bush and President Obama both called for widespread EHR adoption by...oops, 2014. We're not there yet, but a new report from the Robert Wood Johnson Foundation on the state of EHR today shows both encouraging progress and how far we still have to go. While just 10% of hospitals had a basic EHR system in 2008, 59% do today. Still, it's one thing to have the system and another to use it effectively. For example, only about one in 10 hospitals can share a patient's electronic health record with the patient. That should improve, though. Much of the growth in EHR adoption was prompted by Medicare and Medicaid payment programs beginning in 2009, and to continue to receive payments, providers must meet increasingly strict standards for how records are used and shared.

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Employers, keep pushing on health care pay-for-performance! That was one theory to account for the recent slowdown in health care spending growth aired at a forum held by the Altarum Institute in Washington, D.C. last week. This article in Bloomberg BusinessWeek focused on a presentation by Peter Orszag, former director of the White House Office of Management and Budget (now with Citibank) that medical providers, and hospitals in particular, are changing their ways in preparation for the end of fee-for-service reimbursement. He cited the drop in hospital readmission rates as evidence that the industry is responding to what they see as the future – reimbursement that rewards quality, not quantity – even though the incentives to provide more care are still currently in place. It’s an interesting -- and encouraging -- point of view (I’m typing with one hand as I knock on wood), even if another expert at the forum, Uwe Reinhardt, said no one really has a full explanation of the current slowdown in cost growth. FYI, the article includes links to all the presentations.

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Castlight Health, a pioneer in the area of health care cost transparency, has created an interactive map showing variations in the average cost of four common health care services in cities across the country. While we all know this variation exists, it’s still enlightening to see the difference in the average price of a lipid panel in neighboring cities like Cincinnati ($21) and Dayton ($65). Providing employees with an effective transparency tool is a necessary precursor to implementing reference-based pricing, a tactic that directly addresses extreme variation in pricing (for more on that topic, see my post Reference Pricing Under the ACA). But transparency is also the key to enabling employees to become better health care consumers. In our last survey, nearly two-thirds of large employers said they would have a consumer-directed health plan in plan by 2016. To be more than just a high-deductible health plan, a CDHP needs an effective transparency tool.

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Did you know that, on average, the sickest 4% of the population represents 41% of the total allowed medical and pharmacy spend? It’s hard to believe -- and even harder to manage. That’s why we created Mercer Health AdvantageSM (MHA), a proprietary, high-intensity care management program designed to manage care for employees with serious/chronic conditions -- and we’ve seen some great results. In fact, according to a study released this week, employers who offered MHA realized a combined average return on investment* of $2.70 in health care savings for every $1 spent.

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The HMO is making a “comeback,” claims a recent article in The New York Times. HMOs, once “emblematic of everything wrong with health insurance” due to lack of provider and hospital choice, are now looking to re-brand themselves as high-performance care delivery vehicles for lower cost and better managed care.  In an effort to escape the negative connotations, some insurers are going to great lengths to avoid the term “HMO” altogether: Health Care Service Corporation considered lobbying state lawmakers to change the acronym to H.I.O. for Health Improvement Organization.  Although these emerging HMOs generally share the same philosophy of managed care as their predecessors, they are less likely to include the unpopular gatekeeper feature, in which access to specialist care is controlled by a primary care provider.

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This week the Centers for Medicare and Medicaid Services (CMS) and America’s Health Insurance Plans (AHIP) announced a set of seven standard areas in which the quality of physicians should be measured, ranging from primary care to treatment of patients with cancer or AIDS. This is the first time the two organizations have collaborated on such an initiative, which will not only standardize quality measures and contribute to compensation and pay-related decisions, but will also reduce the administrative burden that many doctors currently face in terms of reporting their outcomes and other metrics of success to insurers and Medicare; in the current system, doctors often have to fill out many different, sometimes duplicative, requests for quality data from the various insurers with which they have contracts. We see this move as a great step forward for the shift to value-based care, but keep in mind, CMS said the measures will be implemented in several stages. For instance, commercial health plans will implement the core measures when contracts come up for renewal or if existing contracts allow modification of the performance measure set. CMS and partner organizations intend to add more measure sets and update the current sets over time. We encourage employers to discuss timing and possible impact with your health plan partners and transparency tool providers.

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