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.
According to OW’s Sam Glick, “This year will usher in a new era of retail health. Retail clinics 2.0 will be different; they will be the hub of the provider network of the future. These clinics will still provide inexpensive urgent care at convenient hours and locations, but they’ll also provide insurance enrollment (like Walmart is doing); care coaching (a la Rite Aid); full primary care (as Walgreens is piloting); a community-health focus (like Target); and whole-health services (like CVS). The retail healthcare experience will be like the best of any other retail experience -- that is, tailored, affordable, and easy. In the coming year we will also see traditional health systems embrace retail care as an extension of their impact, not as a competitor.”
The advantage to employer-sponsored plans and consumers? These access points are more convenient and less costly. They also have the potential to provide coaching and educational support to drive healthy habits.
So what should employers be thinking about to maximize the benefits to themselves and their employees?
- Communicate with employees about any retail clinics and telemedicine services available to them to make sure they understand what each offers and how the costs vary. Otherwise, they may not realize how significant these differences are. For example, the cost spectrum could range from as little as $40 for a telemedicine visit, to $70 for a retail clinic visit, to $150 for a primary care office visit. It’s also important to reinforce that an urgent care facility is an alternative to the emergency room, not for a primary care visit.
- Keep a pulse on what the hospital systems in your locations are doing. We know from the OW survey that people value retail offerings that are associated with a health care name they trust. Promoting these new options could also be beneficial.
- Talk with your vendor partners about their approach to including these new options in the provider network and communications with plan members.
- Look for opportunities to link convenient retail resources to chronic condition management programs and communications. For some plan members, the personal interaction could have a significant impact on their success in managing their condition.
More access points means more opportunity to have a positive impact on plan members’ health and health improvement efforts. In the busy world we live in, that’s a good thing!
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.
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.
Medicare — When Medicare was established in 1965, as Federal health insurance for the elderly or disabled, there were fewer than 20 million Americans over the age of 65. Nearly half of them were uninsured, and the elderly population was viewed as politically disconnected. Today, Medicare covers 55 million people — one in six Americans. Each day 10,000 more people become eligible, while the number of workers paying the tax to fund the program decreases. And these seniors are “uber-citizens” who can’t be ignored. They are a political force to be reckoned with, and their health coverage is of great importance to them. Half of the covered individuals have four or more chronic conditions. When the George W. Bush administration expanded Medicare coverage to include prescription drugs, many employers decided to discontinue sponsoring plans for retirees over age 65.
Medicaid — Medicaid was originally intended only to provide coverage to children, pregnant women, and disabled persons. After the ACA expanded the scope of Medicaid to include residents with incomes as high as 133% of the Federal poverty level, the Supreme Court decided states could have the option to expand coverage or not, and 20 have chosen not to expand. Even so, a whopping 70 million people are enrolled — that’s one in four Americans. The annual cost of $500 billion is shared between the Federal government and states, where it tends to be one of the largest budget items. States manage cost by cutting payment rates to providers or reducing benefits, creating access challenges for members. As a potential coverage option for low-paid and part-time employees, Medicaid takes some of the pressure off employer-sponsored plans to provide affordable coverage to all.
What lies ahead for these landmark programs, and how can employers prepare? Consider that Medicaid is the only safety net for millions of middle-class people who need long-term care at home or in nursing homes — in fact, more than 60% of nursing home residents rely on Medicaid for assistance. Not surprisingly, Medicaid programs are working to shift people from costly nursing homes to less costly services at home or in community settings. Your employees should consider what they would want for their parents, or themselves, should they need this type of assistance. Advance planning for long-term care is a good thing to include in financial wellness coaching.
Medicare and employer programs have a symbiotic relationship. According to the Urban Institute, reducing the rate of chronic disease by just 5% would save Medicare and Medicaid $5 billion per year by 2030; 25% reduction would save $26.2 billion per year. Employer investments to help workers avoid and/or manage chronic conditions have the potential to contribute to significant savings. At the same time, the vast purchasing power of Medicare has the potential to move the market in productive ways. In 2014, 20% of Medicare spending ($72 billion) went to providers under contracts that gave them incentives to coordinate care to drive better quality and lower costs. This effort is parallel to employer efforts to utilize Accountable Care Organizations and patient-centered medical homes to achieve the same goals. The more pressure on providers to provide care this way, the faster we will be able to make progress.
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.
As Mercer’s Chief Actuary for Health and Benefits, I have spent nearly a year leading an internal initiative aimed at understanding how value-based care is changing the health care landscape. Value-based care is a term used to describe a number of strategies for reducing unnecessary care and encouraging the practice of evidence-based medicine by changing incentives for providers and patients. In particular, I’m looking at the implications for the employers with whom we consult. My focus, first and foremost, is on all things financial. Studies point to the large degree of waste in the medical system, and as employers look at ways to flatten the medical trend curve, eliminating waste seems a logical place to start.
I am also a spouse and a parent, though, and will admit to the tiny voice in my head that asks if it were my child or spouse who was ill, wouldn’t I want to exhaust all possibilities to cure them? How do we find the right balance between personal and global interests?
What this article points out, though, is that medical waste is not just a case of better safe than sorry. In many cases unnecessary medical procedures are actually harmful to the patient. Beyond throwing dollars down the drain, we are actually putting health and, in some cases, lives at risk.
As consultants, we continually work with employers to identify cost-effective solutions that improve the health and well-being of their employees and dependents. The value-based care movement has the potential to do just that, by creating financial incentives and accountability within the health care delivery system. These incentives, part of a broad payment reform movement, reward providers for managing cost, improving quality, and increasing patient satisfaction with the health care system.
Many aspects of our current health care system are broken, and it needs transformative change in order to address the fundamental problems that Gawande describes. There are grass-roots movements under way focused on driving this transformation, led by organizations like Catalyst for Payment Reform and National Business Group on Health, and as employers, you can lend your voice to the collective call for action. Wasteful spend for unnecessary tests and procedures not only pressures our profit margins and competitiveness in a global economy, it can harm the people we are looking to help — our employees and their families.
Learn more about value-based care and how you can help to drive this transformation.
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.
Using data from several national sources, Greggs, et al., were able to compare the incidences of serious diabetes-related complications, including lower extremity amputation, acute myocardial infarction or heart attack, and stroke. The findings are encouraging, with rates of heart attack or myocardial infarction decreasing by two-thirds and stroke and amputation each declining by about half. Of note, these improvements in the rates of serious complication in diabetics surpassed similar reductions in the general population without diabetes and the extent of the drop in rates did not differ by sex or race. The authors cite several important areas of progress that potentially contribute to these findings, including several that have been the focus of particular interest and effort by employers — health promotion, early screening, tobacco policies, enhanced management of cholesterol and blood pressure, and glycemic control.
However, the good news is tempered by the staggering number of people who are diagnosed with diabetes. Although the rates of complications have improved, the actual number of amputations, cases of end-stage renal disease, and strokes continue to grow because of the overwhelming growth in the absolute number of cases of diabetes. The grim reality is that despite strong improvements in management, the diabetes epidemic will continue to consume significant health resources and compromise the quality of life for millions of Americans. Still, employers should take pride in their contributions, along with the broader health community, in improving the management of this substantial population.
The best strategy for the future remains prevention, and all organizations would be wise to take vigorous action to identify and target high-risk populations of pre-diabetics and apply proven, evidence-based strategies such as those used in the NIH’s Diabetes Prevention Program in an effort to stem the tide of the newly diagnosed.
There are a number of effective programs with solid track records in the market, ranging from established vendors such as UnitedHealth Group and The Diabetes Prevention and Control Alliance, to newer entrants such as EOS and Omada Health, which offers digital programs guided by live health coaches.
Changes in Diabetes-Related Complications in the United States, 1990–2010 Edward W. Gregg, Ph.D., Yanfeng Li, M.D., Jing Wang, M.D., Nilka Rios Burrows, M.P.H., Mohammed K. Ali, M.B., Ch.B., Deborah Rolka, M.S., Desmond E. Williams, M.D., Ph.D., and Linda Geiss, M.A.N Engl J Med 2014; 370:1514-1523April 17, 2014DOI: 10.1056/NEJMoa1310799
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.
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.
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.
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.
Further, our analysis showed average annual savings of $338 per employee along with significant improvements in the quality of care for the most ‘at-risk’ patients. Based on 2014 clinical results, there was a much sharper decrease in hospital admission rates for the MHA-engaged (-18%) compared to the non-engaged (-5%) population.
MHA drives coordinated patient engagement -- at the right time, with the right providers. Individual health plan programs vary, but the core MHA model is based on a single registered nurse from a given health plan working with a dedicated team of other specialty clinicians, including social workers, pharmacists, physicians, and behavioral health specialists from the plan to coordinate patient care. This holistic, high-touch approach encompasses not only clinical care, but also addresses such important issues as spousal/family involvement, mental/psychological monitoring, and post-care monitoring.
Be sure to check out this case study to learn how a large aerospace company used Mercer Health Advantage to better control costs and improve patient outcomes.
*ROI is based on an analysis of claims data and program activity. Various best-practice methods are used to estimate savings from avoided costs attributable to program activity. The Mercer Health Advantage service was available through Aetna, Anthem, HCSC and UHC in 2014, and, as such, the ROI result herein is based on their combined performance.
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.
There are two things to keep in mind here. First, the uptick in these “new” HMOs is being seen primarily on the state exchanges. In employer-sponsored plans, national HMO enrollment peaked in 2001 at 33% of all covered employees and has been on a steady decline ever since, slipping to 16% in 2015, according to Mercer’s National Survey of Employer-Sponsored Health Plans. Second, the outlook on HMOs varies by region. In some parts of the country, HMOs aren’t making a “comeback” because they were never out of style to begin with. For instance, Kaiser Permanente in California is widely considered one of the most desirable health consortia in the country, though it’s important to note that Kaiser has its own doctors and hospitals, whereas most insurers offering HMOs contract with a network of providers.
Even if your organization was one of those that dropped HMO offerings due to cost and member dissatisfaction, it makes sense to keep your eye on new options appearing in the market to see if they’ve truly cracked the code of how to offer first-dollar coverage while still controlling cost.
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.