Healthcare Charges WILL Continue to Rise</h1> <article> <h1>Healthcare Charges WILL Continue to Rise</h1> <p>Dwight Mankin — Fri, 01 Apr 2011 15:41:00 GMT</p> <p></p> <p>Today is April 1 and tradition says we should try to do some type of prank or joke to pull the wool over someone’s eyes to have fun. Just over a year ago PPACA was signed into law and with much fanfare over how the bill will change healthcare for the better, we are now scratching our head and wondering was this some type of April fool’s joke. First lets be fair, there needed to be something done to the current healthcare system. Some of the provisions of the law I do agree with however, we are no closer to resolving the real problem and that is affordability of healthcare. Just providing access and coverages for certain ailments are important but not addressing the real issue of “charges” will send us back to where we started, and that is more and more employers and individuals going without health coverage.</p> <p style="float: undefined;">In the <a title="March 21 issue of FORTUNE the CEO of Humana, Michael McCallister " href="http://money.cnn.com/2011/03/17/news/companies/leadership_michael_mccallister_humana.fortune/index.htm" target="_blank">March 21 issue of FORTUNE the CEO of Humana, Michael McCallister </a>was interviewed. The interviewer asked him this question and I have posted his response:</p> <p style="padding-left: 30px;"><strong>Q: What’s your bottom-line prediction of what will happen to health care costs in the next five to 10 years?</strong></p> <p style="padding-left: 30px;">A: <em>“They’re going to rise because we have not addressed the drivers. Nothing in this bill (PPACA) has done that. We have a system where we’re insulated from real-world cost and quality measures, and we as consumers can’t behave in the way we normally do, and we’re not taking care of ourselves in an appropriate way.”</em></p> <p>His comments are right on. We have not addressed the key drivers of charges within the healthcare delivery system. Add to this the consumer is removed during most of the interactions of what is being charged, how it’s being charged and if what is being charged appropriate. </p> <p>Today is April fool’s day. But it is not joke, charges will continue to rise in healthcare and that is no laughing matter.</p> </article> <article> <h1>What's Essential in 'Essential Benefits'</h1> <p>Dwight Mankin — Mon, 28 Feb 2011 18:40:00 GMT</p> <p></p> <p>In today’s Wall Street Journal article there is a very good overview of some of the next challenges that have to be worked due to the recently passed PPACA. Specifically what will be required to be considered “essential benefits” in the health law? The legislation gives 10 categories of care that plans must provide for customers of the health-insurance exchanges that are launching in 2014. But the law leaves details up to regulators, who are now starting to develop the rules.</p> <p>I think this is where we are going to see tremendous debate over the next few weeks. There are certain areas of healthcare we can all agree need to be considered “essential” but there will be tremendous challenges in agreeing on all areas of what should be considered essential benefits. As we all know the more items are added as essential benefits the higher the price tag. What you may consider as essential benefits might not be considered essential benefits by someone else. </p> <p>Check out the 10 general categories of benefits that the health law considers essential at:</p> <p><a href="http://online.wsj.com/article/SB10001424052748703905404576164904171231570.html?mod=WSJ_hpp_sections_health">http://online.wsj.com/article/SB10001424052748703905404576164904171231570.html?mod=WSJ_hpp_sections_health</a></p> </article> <article> <h1>Is the Concern About Balance Billing Out-of-Balance?</h1> <p>Dwight Mankin — Fri, 11 Feb 2011 17:47:00 GMT</p> <p><a href="http://www.businessweek.com/magazine/content/08_36/b4098040915634.htm" target="_blank"></a>When networks were first created (nearly 25 years ago), you had a select few groups of providers who agreed to a discount, with the notion that giving a discount will drive more business to the provider. Right idea, but where did we go wrong? Fast forward to today and nearly every provider is in a network; so are you really getting a discount? In fact, somewhere between 2% to 8% of claims occur outside of PPO network. A very small number.</p> <p>So between 92 - 98% of the population are in a PPO accessing a network where there is a “contract” between the provider who agrees to perform services at an agreed-upon rate. For those who seek care within the “network” of providers, a member supposedly gets a discount off a billed charge and no balanced billing is to occur. That has been the “mantra” for years. Go to the network of providers, get a discount and <span style="text-decoration: underline;">no balanced billing</span>. If you go outside the “network” you pay a higher portion of the fee and deal with potential balance billing issues.</p> <p>Cost containment organizations like NCN have worked with providers in the out-of-network setting: clients want some rate reduction for out-of-network claims and don’t want to pay retail. However, the moment you work on out-of-network claims, clients have a “deep concern” about the patient not being balanced billed. </p> <p>I can understand the need to work in partnership with the provider and patient to create a resolution that provides a rational payment for the provider. However, when the focus is placed squarely on the issue of “balance billing” in the out-of-network setting, clients assume that balance billing does not occur in the in-network setting when in fact, balance billing could possibly be bigger issue for in-network claims. As provider incomes continue to be cut due network agreements, government cuts, etc, balance billing may be a bigger problem for in-network claims than out-of-network claims. </p> <p>An article published in <a title="BusinessWeek in 2008 " href="http://www.businessweek.com/magazine/content/08_36/b4098040915634.htm" target="_blank">BusinessWeek in 2008 </a>highlighted a growing issue with balance billing occurring with providers who had network agreements but were balance billing anyway. I realize this can occur accidentally. Providers have so many different networks they work with that it is hard for them even to know what is to be reimbursed. Add this to the fact most hire outside billing/collection agencies to handle their business and you have another layer of potential miscommunication. All said, it is important for all of us to realize that balance billing is not an exclusive issue for out-of-network claims. It is occurring in the in-network environment. </p> <p>Members should be given tools, such as data and support, to negotiate with providers for a satisfactory solution. NCN published an article, <em>Negotiating a Balance Billing Solution</em>, that a member recently used to save more than $1000 on a balance bill for ambulance services. <a title="Download it here." href="http://info.ncnelink.com/negotiating-a-balance-billing-solution/Default.aspx?utm_campaign=Dwight's-Blog-on-Balance-Billing" target="_blank">Download it here.</a> </p> <p> </p> </article> <article> <h1>Delay in seeking healthcare? Aetna's 2010 earnings show maybe Mom was right.</h1> <p>Dwight Mankin — Tue, 08 Feb 2011 15:37:00 GMT</p> <p><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;"><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;"></span>Last Friday, <a title="Aetna announced their earnings report " href="http://investor.aetna.com/phoenix.zhtml?c=110617&p=irol-newsArticle&ID=1524683&highlight=" target="_blank">Aetna released their earnings report </a>and as expected had an increase in profit. When you read the news release you will see a common theme in theirs that you also see in UnitedHealth, Cigna and WellPoint: more and more members are delaying to seek care. As the economy is struggling to regain stability, and those covered under insurance today have very high deductibles and coinsurance, people will delay seeking treatment for services. </span></p> <p><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;">In some ways having people delay going to the doctor and asking the question, “do I really need to seek care?” is a good thing. Why may you ask? Many years ago we introduced the very low copay option to insureds. We did this as an incentive to go to a PPO/HMO provider as an incentive to try this “new” concept out. What we created were people going to the doctor with the slightest sniffle or ache. The cost was minimal; why wouldn’t you? </span></p> <p><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;">Fast forward to where we are today. Those covered by insurance with high deductibles are now saying “maybe I’ll feel better tomorrow,” or “let me look online to see if I really need to see a doctor.” This is a culture shift from when we had low copays, no claim forms and unlimited access. Today, the consumer is thinking with their pocketbook. Again, people should seek care that they need, it but it is interesting to see how the culture shift is being played out in the financial numbers with the carriers. </span></p> <p><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;">No doubt they will have to adjust their assumptions, but stay tuned. I guess my mom was right, “unless you are bleeding and pass out, there is no reason to go into town to see a doctor.” (I lived on a farm in Nebraska)</span></p> <p><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;">Listed below is the highlight of <a title="Aetna’s earnings news release" href="http://investor.aetna.com/phoenix.zhtml?c=110617&p=irol-newsArticle&ID=1524683&highlight=" target="_blank">Aetna’s earnings news release</a>: </span></p> <p style="padding-left: 30px;"><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;">“Aetna said the profit boost was "largely the result of higher commercial underwriting margins driven by management actions to appropriately price the business," along with lower health care use. Aetna had struggled through 2009 with medical costs that climbed higher than the company expected when it set prices for that year. Company leaders said then that they repriced a significant portion of Aetna's commercial insurance business.</span></p> <p style="padding-left: 30px;"><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;">Aetna is the third largest commercial health insurer based on enrollment, trailing WellPoint and UnitedHealth. Those insurers and Cigna Corp. have all seen a slowdown in health care use over the last part of 2010.</span></p> <p style="padding-left: 30px;"><span style="font-family: 'Arial','sans-serif'; color: black; font-size: 10pt;">Industry observers have said use slowed due to a mild flu season that followed the swine flu outbreak of 2009 <span style="text-decoration: underline;"><strong>and because consumers tend to cut back on care during a struggling or recovering economy.</strong>”</span></span></p> </article> <article> <h1>Doctors concerned about effects of healthcare reform</h1> <p>Dwight Mankin — Fri, 21 Jan 2011 20:20:00 GMT</p> <p></p> <p>In a recent survey conducted by Thomson Reuters/HCPlexus, physicians were asked a series of questions relating to health reform and the future of healthcare. Of the 3,000 physicians surveyed, 65% worried that healthcare reform would produce lower pay and lower quality of care. As the old saying goes, be careful for what you wish for. During the debate the AMA came out in support of the health reform bill. I realize the AMA does not have the strong voice with providers as they did in the past but they still carry weight in their support or lack of support of health issues. </p> <p>As reported by Bernie Monegain the key findings of the survey showed the following:</p> <ul> <li>During the next five years, 18 percent say the quality of healthcare in this country will improve, 17 percent say it will stay the same and <span style="text-decoration: underline;">65 percent say it will deteriorate</span>.</li> <li>9 percent of the doctors surveyed say The Affordable Care Act will result in physician reimbursement becoming fairer, while 17 percent say it will neither be fair nor unfair and <span style="text-decoration: underline;">74 percent</span> believe it will be less fair.</li> <li>27 percent of physicians believe the impact of the Affordable Care Act for patients will be positive, 15 percent say it will be neutral and <span style="text-decoration: underline;">57 percent</span> say it will be negative.</li> <li>8 percent of physicians believe the impact of the Affordable Care Act on them will be positive, while 14 percent say it will be neutral and <span style="text-decoration: underline;">78 percent</span> say it will be negative.</li> </ul> <p>We are now entering the next round of debates with the House voting to repeal the bill and waiting to see what the Senate will do; the next few days will be interesting. We all know that repealing the ACA will not be possible. What is clear, based on this survey, is that physicians are realizing the next few years will be a defining moment. Things have to change. They must change. We must provide a rational system where providers, payers and consumers are all sitting at the table and developing solutions that will balance the competing interests of the marketplace. If we don’t, I would hate to see if the survey is conducted two years from now what the results will look like.</p> <p>Source:</p> <p><a href="http://www.hcplexus.com/survey">2011 National Physicians Survey</a> polled 2,958 physicians of varying specialties and practice types in all states. Thomson Reuters and HCPLexus conducted the survey in September 2010 and updated it in December 2010 and January.</p> </article> <article> <h1>Happy New Year – The New Reality of Healthcare</h1> <p>Dwight Mankin — Wed, 12 Jan 2011 22:44:00 GMT</p> <p></p> <p>As we start the New Year we are faced with the reality that healthcare rates continue to rise and the employers who just received their renewal rates for health premiums are increasing their deductibles and coinsurance for their employees. Gone are the days when employees had a $100 to $200 deductible with coinsurance ranging from $750 to $1,500. Today individual deductibles are at $500 to $1,000 (and even higher) with coinsurance at the $3,000 to $10,000 range. This is the new reality. </p> <p>With this new reality, patients are going to have to be fully engaged in the pricing discussion with their provider. No longer is the discussion centered on should a certain treatment or medication be received. It now includes “what are you going to charge me for this service?” and “can I afford this treatment?”</p> <p>Just walking in a plopping down an insurance ID card with a simple $10 copay for office visit has gone the way of Leisure Suits and 8-track tape players. </p> <p>In the January 8<sup>th</sup>, edition of the New York Times there is an interesting <a title="article on how to negotiatie with a provider for care" href="http://www.nytimes.com/2011/01/08/health/policy/08patient.html?_r=1&scp=1&sq=A%20Talk%20With%20the%20Doctor%20May%20Help%20Patients%20Afford%20Care&st=cse" target="_blank">article on how to negotiate with a provider for care</a>. We will be seeing more of these articles in the coming months and employers will need to start arming their employees with tools and solutions to help them navigate the new reality. We offer such tools through our ConsumerScope web tool and iPhone application, and many more tools will be implemented in the coming months.</p> <p>This country's current system of every provider being in a Preferred Provider Network (PPO) while rate increases keep going up by 20-40% per year is not sustainable. The “New Reality” is here. New solutions and ideas will need to be implemented or the system that will likely occur is one few will enjoy. Have you negotiated for care?</p> <p> </p> <p>A Talk With the Doctor May Help Patients Afford Care:<br /><a title="http://www.nytimes.com/2011/01/08/health/policy/08patient.html?_r=1&scp=1&sq=A%20Talk%20With%20the%20Doctor%20May%20Help%20Patients%20Afford%20Care&st=cse" href="http://www.nytimes.com/2011/01/08/health/policy/08patient.html?_r=1&scp=1&sq=A%20Talk%20With%20the%20Doctor%20May%20Help%20Patients%20Afford%20Care&st=cse" target="_blank">http://www.nytimes.com/2011/01/08/health/policy/08patient.html?_r=1&scp=1&sq=A%20Talk%20With%20the%20Doctor%20May%20Help%20Patients%20Afford%20Care&st=cse</a></p> </article> <article> <h1>Smart Phones Strike Fear into the Healthcare System</h1> <p>Dwight Mankin — Wed, 22 Dec 2010 02:41:00 GMT</p> <p></p> <p>In the December 15<sup>th</sup> issue of the Wall Street Journal there was a headline that caught my eye. It read, <a title="“Phone-Wielding Shoppers Strike Fear into Retailers.”" href="http://online.wsj.com/article/SB10001424052748704694004576019691769574496.html?mod=WSJ_Tech_RightMostPopular" target="_blank">“Phone-Wielding Shoppers Strike Fear into Retailers.”</a> In reading the article it describes how consumers are using the smart phones to comparison shop in real-time. An example given was a consumer who walked into Best Buy looking for a Garmin GPS system. He found one at Best Buy for $184.85. Taking his Android phone he typed in the model number and immediately a listing of prices from other retailers offering the exact GPS system were listed. He found that the same system was offered on Amazon for $106.75. No tax and free shipping included. With a few quick strokes this consumer ordered the GPS system from Amazon (while in the Best Buy store) saving him nearly $80.00. </p> <p>Full price transparency at the touch of the button is making retailers fearful. In the next five years, nearly every consumer will have a smart phone. With that, new and innovative applications to drive price transparency will be available. An application called <a title="RedLaser" href="http://redlaser.com/" target="_blank">RedLaser</a> which allows shoppers to use mobile phone cameras to scan bar codes and compare prices has been downloaded six million times; the consumer is in control. </p> <p>Now let’s take what’s happening in the retail sector and apply it to the healthcare sector (I know what you are thinking, there is no way you can do this. Let’s just remember that same thinking occurred in the retail space; now look at it today). Let’s assume you are scheduled for surgery for routine knee surgery, hip surgery, routine colonoscopy, etc. Could you take your smart phone and with a few simple clicks find the highest quality, lowest cost facility in your area that can to the procedure? Hmmm…well it’s here today. Our organization offers ConsumerScope for iPhones. This is an application that can be downloaded free to view what facilities typically charge for a procedure and what it actually costs for the procedure to be performed. </p> <p>In a few short years I believe the next headline in the Wall Street Journal will read, “Smart Phones Strike Fear into the Healthcare System.”</p> <p><a href="http://online.wsj.com/article/SB10001424052748704694004576019691769574496.html?mod=WSJ_Tech_RightMostPopular">http://online.wsj.com/article/SB10001424052748704694004576019691769574496.html?mod=WSJ_Tech_RightMostPopular</a></p> <p> </p> </article> <article> <h1>Doctors Dropping Medicare Patients</h1> <p>Dwight Mankin — Tue, 07 Dec 2010 14:44:00 GMT</p> <p></p> <p>A great <a title="article appeared in the Washington Post by N.C. Aizenman " href="http://www.montereyherald.com/news/ci_16732816?nclick_check=1" target="_blank">article appeared in the Washington Post by N.C. Aizenman </a>recently regarding doctors who are dropping Medicare patients from their practice. We are reaching a tipping point in healthcare. Doctors are struggling to determine what their business model will look like month-to-month. As congress continues to delay a decision on Medicare rates, it is almost impossible for physicians to run a business. Those plans who have stated that they will just pay a percentage of Medicare will be challenged. Any mention of payments being made on a percentage of Medicare will be severely challenged. </p> <p><a href="http://www.montereyherald.com/news/ci_16732816?nclick_check=1">http://www.montereyherald.com/news/ci_16732816?nclick_check=1</a></p> </article> <article> <h1>Accountable Care Organizations – Are they the answer?</h1> <p>Dwight Mankin — Mon, 29 Nov 2010 18:17:00 GMT</p> <p></p> <p>There was an interesting <a title="Op-Ed piece in the New York Post " href=" http://www.nypost.com/p/news/opinion/opedcolumnists/health_reform_competition_crushers_f2dIEwqEdJYvA3tsNH37wM#ixzz16gezziMu" target="_blank">Op-Ed piece in the New York Post </a>on November 22 by Scott Gottlieb. Over the last few months we've been seeing more and more interest in Accountable Care Organizations (ACO). Some are saying this is the answer to controlling healthcare costs; others are saying this will speed up the rising costs of healthcare. At this point the verdict is still out since we are in the early stages of this process. What we do know is that healthcare today is very fragmented and uncoordinated. Ask anyone who has been in the hospital for a period of time and you hear a consistent story. Doctors are highly specialized and don’t talk to each other. A patient may have 3 to 7 different doctors working with a patient and at times they are not on the same page of care coordination. The ACO’s were created to bring sanity to a fragmented process. It looks good on paper, but can you execute on this idea? It will require technology, a willingness on the part of providers to communicate with each other and with members, etc.</p> <p>It’s important we review the pros and cons of ACO’s. Another <a title="excellent piece appeared in the recent Wall Street Journal " href="http://online.wsj.com/article/SB10001424052748704526504575634720264849264.html?mod=rss_Health " target="_blank">excellent piece appeared in the recent Wall Street Journal</a> giving a good balance to both sides of the argument ACO argument. The bottom-line is that the current system is not working, and healthcare delivery must change. The biggest challenge within the ACO’s is determining a fair pricing model for all involved. Also, a rational payment methodology must be incorporated for the participants who go outside the ACO for care. Are ACO’s the answer? Stay tuned.</p> </article> <article> <h1>Tweet Before Helping (Bill Nye the Science Guy) - Really?!</h1> <p>Dwight Mankin — Thu, 18 Nov 2010 20:40:00 GMT</p> <p><a href="http://twitter.com/#!/claimabetterway" target="_blank"></a>Yesterday I came across a very interesting news item. It seems that one of my idols, Bill Nye the science guy, was about to speak at an event hosted by the University of Southern California. <a title="As news reports have it" href="http://www.upi.com/Entertainment_News/2010/11/18/UPI-NewsTrack-Entertainment-News/UPI-61361290106800/" target="_blank">As news reports have it</a>, as Mr Nye was walking up to the podium to speak and on his way he collapsed. Reports say he is fine but what is so interesting about this story is not that he collapsed, It is that no one ran from the audience to help him. Rather, the students were more interested in updating personal Twitter accounts or Facebook updates. As Alastair Fairbanks, a USC senior is quoted, "nobody went to his aid at the very beginning when he first collapsed — that just perplexed me beyond reason." The student added, "Instead, I saw students texting and updating their Twitter statuses. It was just all a very bizarre evening."</p> <p>I love technology and it is changing the world but at what point to we step back and say “really?” As this relates to healthcare, I’m hopeful that if I collapse on the way to the hospital, the EMT or doctors would at least check my vital signs to before Tweeting. </p> </article> <article> <h1>Unintended Consequences: Physicians Selling Out to Hospitals</h1> <p>Dwight Mankin — Mon, 08 Nov 2010 17:09:00 GMT</p> <p>A great <a title="article appeared in today’s Wall Street Journal " href="http://online.wsj.com/article/SB10001424052748703856504575600412716683130.html?mod=rss_Health" target="_blank">article appeared in today’s Wall Street Journal </a>written by Anna Wiled Mathews. This highlights the unintended consequences of a healthcare system that is spinning out of control. Employers continue to raise deductibles and coinsurance in order to offset the increases in premium, thus forcing doctors and hospitals to chase more out-of-pocket dollars. Doctor today are not only healthcare providers but financial service companies. Their receivables are at record highs today. It used to be that providers only had to work with insurance companies to collect the fees for their services. Today, they are not only working with the insurance companies to collect they are having to collect a record amount from the patient. </p> <p>You can’t blame the physicians for saying “enough.” They went to medical school to learn how to provide excellent healthcare, not to chase receivables. As Americans struggle with the increasing costs of healthcare, we will see a more severe price increase in health costs over the next few years. As doctors sell their practices to health systems and take themselves out of the billing nightmare, we are going to create another pricing issue. We will be left with mega systems controlling the pricing structure of healthcare with very little ability to control the pricing structure. With the consolidation of physician practices with facilities, there is worry that we will see an increase in pricing. As Karen Ignagni, CEO of AHIP, stated in the article, "We've always been concerned about combinations that are being done to increase prices." William F. Jessee, CEO of the Medical Group Management Association, said he expected to see "more physicians selling out to hospitals."</p> </article> <article> <h1>What Does a Governor from Tennessee Think about Health Reform?</h1> <p>Dwight Mankin — Fri, 29 Oct 2010 20:06:00 GMT</p> <p></p> <p>In the October 21, <em>Wall Street Journal</em> the Democratic governor of Tennessee, <a title="Philip Bredesen" href="http://online.wsj.com/search/term.html?KEYWORDS=PHILIP+BREDESEN+&bylinesearch=true" target="_blank">Philip Bredesen</a>, wrote a very thought provoking <a title="article on some of the unintended consequences" href="http://online.wsj.com/article/SB10001424052702304510704575562643804015252.html" target="_blank">article on some of the unintended consequences</a> of the new PPACA / ObamaCare. He does an excellent job in outlining what could happen with the state of Tennessee employees under the new health reform law. </p> <p>His argument is their state could save a substantial amount of money if their employees opt out of the employer plan (in this case, the state of Tennessee plan). One problem with his assumption is if all employees go into the exchange and the premiums continue to rise in the exchange that cost will ultimately come back to the state to make up. </p> <p>However, in the short-term, the governor makes a good argument for savings by moving employees to the exchange. Remember I said short-term. Long-term this is not a sustainable solution. </p> <p>Tennessee: call Massachusetts and ask them how their health program is doing now that it has been in place for awhile.</p> <address><a href="http://online.wsj.com/article/SB10001424052702304510704575562643804015252.html"> <param name="allowFullScreen" value="true" /> <param name="allowscriptaccess" value="always" /> <param name="flashvars" value="videoGUID=42B4E505-31D0-40A5-A9B8-10B9BD951F2E&playerid=1000&plyMediaEnabled=1&configURL=http://wsj.vo.llnwd.net/o28/players/&autoStart=false" /> <param name="src" value="http://online.wsj.com/media/swf/VideoMicroPlayer.swf" /> <param name="name" value="anonymous_element_1" /> <param name="bgcolor" value="#FFFFFF" /> </object> </a><br /><em>Editorial Writer Joe Rago on GOP plans for health-care reform.</em></address> </article> <article> <h1>Antitrust Lawsuit filed against Blue Cross and Blue Shield of Michigan</h1> <p>Dwight Mankin — Thu, 21 Oct 2010 15:00:00 GMT</p> <p></p> <p>It was reported the week that the U.S. Justice Department and Michigan Attorney General Mike Cox has filed an <a title="antitrust lawsuit " href="http://michiganlawyerblog.wordpress.com/2010/10/18/doj-state-files-anti-trust-suit-against-blue-cross/" target="_blank">antitrust lawsuit </a>against Blue Cross and Blue Shield of Michigan alleging the insurer's contracting methods with hospitals are creating higher prices and fewer choices for health coverage in Michigan. It is interesting to note that the Blues' policies cover about 60% of the commercially insured population in the state, a portion that reflects about nine times as many residents as are covered by the next largest competitor. The lawsuit states that it contracts with 22 hospitals, representing 45% of the state's tertiary beds, hospitals and are required to charge as much as 40% more than the rates negotiated with the Blues.</p> <p>Most likely we will see more of these lawsuits filed throughout the United States. There is tremendous pressure with each to allow greater competition, especially when staring at the insurance exchanges that will be coming in the near future. How this will help control the cost of healthcare is clear … it won’t. If you removed most favored nations clauses it will allow the provider groups to raise their prices, in this case, for Blue Cross Blue Shield members. Logic would say provider prices would come down since they wouldn’t have to cost shift to other payers to make up the difference for losses sustained with the Blue’s contracts. Do you think the providers are going to reduce their rates? Most likely not. The favored nation clauses will go away and prices will increase for the Blue’s members. Those in the non Blue’s program will still see higher prices and not much will change. </p> <p>Trying to develop contracts based on patient volume and patient mix will no longer work in today’s environment. We must get to a rational payment system that is based on “cost up” approach that looks at benchmarking like facilities with full transparency. The providers need to make money. The employers need to control the rising cost of care. The employees can only afford so much out-of-pocket charges. These three competing dynamics can only be solved with a different approach. The past approach is not working and we continue to put lipstick on the pig in hopes that it will get better.</p> </article> <article> <h1>I’ll take fries, hamburger, diet coke and oh may I keep my insurance please?</h1> <p>Dwight Mankin — Wed, 20 Oct 2010 22:12:00 GMT</p> <p></p> <p>Recently an <a title="article appeared in the Wall Street Journal " href="http://online.wsj.com/article/SB10001424052748703794104575546052343243306.html?KEYWORDS=mcdonald%27s" target="_blank">article appeared in the Wall Street Journal </a>where McDonald's is considering dropping their health coverage for the more than 30,000 employees who have enrolled in their program. Most of the employees are covered under a mini med program and with the new health reform act PPACA that was passed now is considering doing away with this plan. Due to the requirements for medical loss ratio and the restraints put on mini med plans, McDonalds is faced with a critical decision and has asked HHS for a waiver. It was granted. Now HHS is granted other waivers to employers. </p> <p>We are entering a very interesting period of time as the renewal rates are hitting the employer market and many of the requirements of PPACA are starting to take effect. With that said one of our clients shared and op-ed piece that appeared in <em><a title="Investor's Business Daily" href="http://www.investors.com/NewsAndAnalysis/Article/549026/201009301853/The-Big-Mac-Attack-On-ObamaCare.aspx" target="_blank">Investor's Business Daily</a></em> and raises some very interesting points. </p> </article> <article> <h1>Signs That ObamaCare is Unraveling</h1> <p>Dwight Mankin — Fri, 15 Oct 2010 02:46:00 GMT</p> Check out this great editorial from Investor's Business Daily about <a title="The Unraveling of ObamaCare" href="http://www.investors.com/NewsAndAnalysis/Article/549883/201010081837/The-Unraveling-Of-ObamaCare.aspx" target="_blank">The Unraveling of ObamaCare</a>. In the light of day this bill that lawmakers signed without reading, is being revealed as an "unaffordable fraud." </article> <article> <h1>Multiple Choice: Name that Politician</h1> <p>Dwight Mankin — Wed, 29 Sep 2010 21:31:00 GMT</p> <p></p> <p>Recently I came across a quote that I thought I would post and see if you can guess who made it (I marked XX to specific names so not to give identity away).</p> <p>“I ran against XX, a sitting president from my own party, in large part because of this disagreement. Health reform became central to my 19XX presidential campaign: I argued then that the issue <span style="text-decoration: underline;">wasn’t just coverage but also out-of-control costs</span> that would ultimately break both family and federal budgets, and increasingly burden the national economy.”</p> <p>Who made the statement above?</p> <ol> <li>Ronald Reagan</li> <li>Dwight Eisenhower</li> <li>Ted Kennedy</li> <li>Barrack Obama</li> <li>None of the above</li> <li>All of the above</li> </ol> <p>Have you selected an answer? If you selected 5 or 6, you are way off base. Try again … Okay time's up. The answer is Ted Kennedy. </p> <p>When I saw this quote from the late Senator Kennedy that appeared in the <a title="July 18th, 2009 issue of Newsweek" href="http://www.newsweek.com/2009/07/17/the-cause-of-my-life.html" target="_self">July 18</a><sup><a title="July 18th, 2009 issue of Newsweek" href="http://www.newsweek.com/2009/07/17/the-cause-of-my-life.html" target="_self">th</a></sup><a title="July 18th, 2009 issue of Newsweek" href="http://www.newsweek.com/2009/07/17/the-cause-of-my-life.html" target="_self">, 2009 issue of Newsweek</a>, it was referring to his presidential run against Jimmy Carter in 1980 and how healthcare was a central focus for him. </p> <p>It made me think that he had it right (well almost right). You can’t just provide coverage to everyone and believe the problem is solved. You must also address the out-of-control costs that are in our system today. Targeting insurance companies and condemning them for ongoing rate increases is an easy thing to do, but keep in mind when a provider submits astronomical charges for a procedure, who is confronting the provider? Who is asking the tough question of what is a rational payment for care? </p> </article> <article> <h1>Friday Funny: The Worst Sportscaster Ever</h1> <p>Dwight Mankin — Fri, 17 Sep 2010 20:52:00 GMT</p> <p> <param name="allowFullScreen" value="true" /> <param name="allowscriptaccess" value="always" /> <param name="src" value="http://www.youtube.com/v/ehhCvk03tNI?fs=1&hl=en_US&rel=0" /> <param name="allowfullscreen" value="true" /> </object> </p> <p>Over the last few months we've been hearing the following sentence, “This is the worst legislation ever passed.” They are referring to the healthcare reform legislation better known as PPACA. Listen to most news channels you will hear various groups share their sentiments that this is “the worst ever.” Those are strong words and especially when you say “worst ever.” Hearing this common theme I thought I would research on YouTube a category of “Worst Ever” and see what pops up. Based on my search, my Friday funny identified what I believe as “the worst ever.” No it has nothing to do with a piece of legislation or political candidate. It has to do with a sportscaster who has been given the dubious honor of “worst sportscaster ever.” Enjoy the clip and after you watch this I’m sure you will be more careful in what you classify as “world’s worst.” You have the sportscaster to compare it to.</p> <p>Enjoy the weekend!</p> </article> <article> <h1>20 Percent Premium Increases – The New Normal</h1> <p>Dwight Mankin — Fri, 17 Sep 2010 12:00:00 GMT</p> <p>This week I came across an <a title="article in the Hartford Courant" href="http://www.ctnow.com/health/hc-health-insurance-rate-hike-0914-20100914,0,5611833.story" target="_blank">article in the </a><em><a title="article in the Hartford Courant" href="http://www.ctnow.com/health/hc-health-insurance-rate-hike-0914-20100914,0,5611833.story" target="_blank">Hartford Courant</a></em> written by Matthew Sturderant. The gist of the article centered on how health insurers are asking for immediate rate increases of more than 20 percent in Connecticut for certain health plans. The rate increases still need to be approved by the state for the individual health insurance market, but what we see happening in Connecticut will be occurring throughout the United States. How each state will handle this is yet to be seen but bottom line, the new normal is in progress. </p> <p>Connecticut Attorney General Richard Blumenthal has weighed in on the increases when he said, "These outrageous requests demonstrate the need for stronger Department of Insurance authority to block unjustified health insurance premium increases, as I strongly advocated in the last session. My proposed bill would have allowed the commissioner to consider insurer profitability, required insurers to inform customers of rate requests and mandated an up or down ruling on all increases." </p> <p>As I mentioned in my previous posts, these increases may be unjustified and outrageous but for the sake of argument, what if these increase ARE justified. What makes them justified? The higher charges being submitted by the healthcare delivery system. With that said, has there been any government official sending out “threats” for outlandish charges? Most of the discussion today is on the insurance companies rate increases, salaries of the insurance companies executives and how they are the problem. Again, there may be justification in these arguments but do not lose sight that there are more people involved in this equation. </p> <p>In my next post I will share some of the interesting findings of the recent healthcare salary survey. As the old saying goes, it takes two to tango.</p> </article> <article> <h1>US Government to Health Insurers: I’ll Be Watching You</h1> <p>Dwight Mankin — Thu, 16 Sep 2010 15:54:00 GMT</p> <p>In a recent Wall Street Journal article by Janet Adamy the headline read <a title="“U.S. Rebukes Health Insurers.”" href="http://online.wsj.com/article/SB10001424052748704644404575482213099258430.html" target="_blank">“U.S. Rebukes Health Insurers.”</a> In the article it shared that the Obama administration will “track those who enact unjustified rate increases linked to the health overhaul.” I find this statement very interesting. We are “threatening” health insurers for putting into place rate increases to reflect the new health reform act. This threat is coming from the same group that has yet to finalize the PPACA regulations –HHS. We are taking the caps off lifetime limits, including children to the age of 26, developing regulations on how to define a grandfathered plan from non-grandfathered plan. How can you add all these benefits and have no experience, and yet “threaten” the insurers if they raise rates? </p> <p>I’m all about keeping people in check for unjustified price gouging but I would also hope the administration would issue the same threat to the medical community. If providers charge “unjustified” prices what are the ramifications? The insurers and providers must work together. If the current administration is only focusing on insurers we are in trouble. As Karen Ignagni, President of AHIP stated, “To suggest that cost containment can be achieved by singling out health plans ignores the very inconvenient truth that premium increases reflect increases in the underlying cost of medical services,” Ignangi says. “Regulating premiums won’t do anything to reduce the soaring costs of medical care. This would be like capping the prices automakers can charge consumers, but letting the steel rubber and technology manufacturers charge the automakers whatever they want.”</p> <p>We must have a rational, transparent payment system in place.</p> </article> <article> <h1>The ABC’s</h1> <p>Dwight Mankin — Fri, 10 Sep 2010 20:30:00 GMT</p> <p>It’s Friday and it has been another full week (excluding Labor Day) of activity. Renewal rates are now starting to hit the streets for employers and the reality of what health reform looks like is starting to reveal itself. I will be writing more about this next week but since it is Friday and I designate Friday with a funny, I thought I would pass along this old video of how to keep selling even when things go terrible wrong. As they say in selling, you must be ABC – Always Be Closing. Enjoy the weekend and remember, “now it’s locked.”</p> <p> <param name="allowFullScreen" value="true" /> <param name="allowscriptaccess" value="always" /> <param name="src" value="http://www.youtube.com/v/DlgYQwf1Pug?fs=1&hl=en_US" /> <param name="allowfullscreen" value="true" /> </object> </p> </article> <article> <h1>Health Insurers Plan Rate Hikes</h1> <p>Dwight Mankin — Thu, 09 Sep 2010 14:40:00 GMT</p> <p><strong> <param name="allowFullScreen" value="true" /> <param name="allowscriptaccess" value="always" /> <param name="flashvars" value="videoGUID=E367ACF3-34B7-4689-ABC3-A03F7C3EEA4D&playerid=1000&plyMediaEnabled=1&configURL=http://wsj.vo.llnwd.net/o28/players/&autoStart=false" /> <param name="src" value="http://online.wsj.com/media/swf/VideoMicroPlayer.swf" /> <param name="name" value="anonymous_element_1" /> <param name="bgcolor" value="#FFFFFF" /> </object> <br /></strong></p> <p>Yesterday’s <a title="Wall Street Journal an article written by Janet Adamy" href="http://online.wsj.com/article/SB10001424052748703720004575478200948908976.html?mod=wsj_share_twitter" target="_blank">Wall Street Journal an article written by Janet Adamy</a> deals with the rise in health insurance premiums. As insurers start to assess the costs associated with the additional benefits mandated under PPACA we are seeing the beginning of what many people predicted: higher premiums. We all know that premiums were rising before the passage of PPACA and again I believe health reform is needed but what we are now seeing is how insurers are starting to assess the additional costs for the mandates provided under PPACA and this is where we get “unintended consequences.” The article highlights the premium increases for individual plans. Over the next few weeks we will have a clearer picture of what the landscape looks like for group plans. Between 65-75% of group plans renew January 1 so the renewal rates are now being shared with employers. It is again anticipated we will have double digit increases for group plans and when you include the likely repeal of the Bush tax cuts for 2011, employers will have to make some very serious decisions on how they will remain competitive in the marketplace. </p> <p>I encourage you to watch and listen to the video above. Ron Williams, CEO of Aetna, is interviewed by Alan Murray of the Wall Street Journal, and Mr. Williams makes some excellent points regarding cost and quality in today’s healthcare environment. If we are to have true reform, we must have a rational payment system that us fully transparent to all parties. The time is now. </p> </article> <article> <h1>Sutter Health’s Pricing Gives Insurers a Headache</h1> <p>Dwight Mankin — Wed, 08 Sep 2010 13:28:00 GMT</p> <p></p> <p>In the recent Bloomberg Businessweek magazine the above headline caught my attention. Reading the article highlighted the problems the healthcare industry is faced with in the coming years. In this article it shared the pricing disparity for services performed at a Sutter facility vs. other facilities in the area. The example given was a simple MRI. At the Sutter California Pacific Medical Center an MRI brain scan had a charge of $3,484 while the same type of brain scan performed at Seton Medical Center had a charge of $1,150. Why such a huge difference in charges? As the article shares, Sutter Health, a non-profit healthcare organization owns nearly a third of the medical-care market in the region going from San Francisco to Sacramento. Charges typically are 40 to 70 percent more than competing hospitals. </p> <p>If you were working on a network agreement or trying to negotiate with their facilities you would be trying to negotiate from a starting point that is nearly double of their competitors. Typical negotiation is working off a billed charge (that is already higher than surrounding markets) and trying to work down from this. A losing proposition. </p> <p>We must look at a rational payment approach that looks at payments in a fully transparent fashion. This includes looking at what the facilities true costs are to deliver care and do a comparison of like facilities and what costs their structures look like. From this a rational margin is applied to insure profitability. If we are to continue to pay or try to negotiate from a “billed charge” basis, we are headed for an unsustainable payment environment. This article highlights the environment we are dealing with. Providers must make money, but employers must be able to afford it. This is only achieved when we bring a fully transparent and rational payment approach to the market. <a title="Read the full article" href="http://www.businessweek.com/magazine/content/10_36/b4193015983853.htm" target="_blank">Read the full article</a>.</p> </article> <article> <h1>We all Need a Little Matt Foley in Our Lives</h1> <p>Dwight Mankin — Fri, 03 Sep 2010 21:00:00 GMT</p> <p>I hope all of you are looking forward to the upcoming holiday weekend. The dog days of summer have come and gone and now we are entering the last phase of 2010. It’s hard to believe we only have around 80 business days left in 2010. With the struggling economy, uncertainty of healthcare and what will happen with taxes in the upcoming year, we all could use a little motivational boost to get us through the remainder of the year. For some, this is achieved by reading motivational books. I’ve come across a little video that may help keep you motivated as we move into September (well at least through the weekend). </p> <p> <param name="allowFullScreen" value="true" /> <param name="src" value="http://www.hulu.com/embed/jT5PtOqWjmH9J-RxMLvkXw" /> <param name="allowfullscreen" value="true" /> </object> </p> <p>Enjoy the weekend!</p> </article> <article> <h1>HIT Infrastructure for ObamaCare - Follow Up</h1> <p>Dwight Mankin — Thu, 02 Sep 2010 18:35:00 GMT</p> <p>Yesterday I blogged about the webinar I attended sponsored by HHS. One of the key items I took away from this webinar was the challenges states will face in trying to put together an IT infrastructure to handle the many requirements to support the insurance exchanges that need to be in place by 2014. After I posted my thoughts, I came across this article that I thought I would share for your review. This article appeared on Civsource Online, a site that focuses on items of interest for state and federal agencies.</p> <p>Read the article:<br /><a title="Nation’s health care infrastructure a point of concern for states" href="http://civsourceonline.com/2010/08/25/nation’s-health-care-infrastructure-a-point-of-concern-for-states/" target="_blank">Nation’s health care infrastructure a point of concern for states</a></p> <p>Over the next few years there will be a mad scramble to put into place all the necessary pieces for states to support PPACA. With states burdened by a decreasing tax base and increase in overall program costs, finding additional dollars to put in place a system and infrastructure to support the insurance exchange will be very challenging. Stay tuned.</p> </article> <article> <h1>Y2K was a Breeze Compared to State IT Prep for ObamaCare</h1> <p>Dwight Mankin — Wed, 01 Sep 2010 21:27:00 GMT</p> <p>This week I listened in on a webinar sponsored by HHS. This was a day-long session where a number of people spoke about the implementation of PPACA and some of the barriers that need to be addressed in order for the regulations to be fully implemented. One key area that I did not give much thought to prior to hearing this webinar was the state’s ability to implement the required healthcare exchanges with its current IT infrastructure. We all know how challenging it is in the private sector to implement a major strategy shift within our own business and the need to line up the appropriate IT resources and structure to handle the changes. Multiply this exponentially when the public sector is involved. Some of the speakers were from states that are responsible for IT. All agreed that most states will need tremendous resources (people and money) to get their systems up to speed to handle insurance exchanges. </p> <p>I remember back to the times when the state and federal governments required a substantial amount of additional funding just to get computer systems to be Y2K compliant. Think back to that time and remember how many consultants, new IT infrastructure and dollars were required by each state and federal agency to get their systems to recognize the year 2000 correctly. </p> <p>Now fast forward to where we are today and each state will have to create a system that will be able to handle enrollment, family change status, billing, online tools, customer service, etc. This is to be done within the next three years. Oh yeah, we still don’t know what the final regulations look like. I thought getting through Y2K was a challenge. States…get ready.</p> </article> </main></body></html>