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Mercer

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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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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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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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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Telemedicine services offerings continue to rise as not only employers, but also hospital systems step up to meet the demand for convenient and cost-effective care. Mercer’s latest National Survey of Employer-Sponsored Health Plans saw a significant increase in telemedicine offerings among large employers, from 18% in 2014 to 30% in 2015. Spectrum Health, a hospital system in west Michigan, now offers their own telemedicine solution, MedNow, which replaces MDLive, one of the more prevalent telehealth providers in the industry. They cited the need for a more “comprehensive offering” and the need for physicians to “have access to patients’ electronic medical records” as the key reasons for bringing this service in-house. Inside the article, Mick Young from Mercer’s Grand Rapids office comments on the growth of telemedicine as an employer offering, particularly as a strategy to impact rising medical claim costs.

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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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A recent study reported that the US government saved millions through the Medicare Pioneer Accountable Care Organizations (ACOs) — $212 million in year one and $105 million in the second year. Physicians who participate in these ACOs follow quality standards and in return share in a portion of the cost savings. Employers have also been successfully testing ACOs and other value-based care models. If structured and deployed appropriately, we believe value-based care has the ability to improve quality, reduce costs, and enhance the patient experience.

 

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Since the passage of the ACA in 2010, we’ve seen large increases in funding for health care technology and some really interesting innovations. We are quickly moving into a time where there will be more information available than health care providers can possibly interpret on their own. Here’s an interesting look into the future and what may be possible if we can learn how to harness the information and customize care for each individual. But, this innovation comes at a cost. Employers should expect more controls on data use and privacy.

 

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There are many forces at play in the market that will drive the movement to value-based care. The creation of Accountable Care Organizations is one of the major initiatives driven by the hospital and physician community.  This article makes the case for the importance of leveraging community health programs that offer cost-effective, non-medical ways to prevent and improve chronic conditions.  Programs that focus on fitness and nutrition are low cost and address the root causes of preventable conditions. As you evaluate new partnerships for value-based care, find out whether they are drawing on these types of resources, which could be an important key to success in improving member health and holding down cost. 

 

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