Does UnitedHealth’s Strong 1Q11 Results Bode Well for Health Plans in General?

April 25, 2011

Not clear.  Citi analyst Carl McDonald says, “United’s results are a positive indicator for the rest of the industry,” with the implications of lower cost ratios obvious.  But UBS analyst Justin Lake notes, “We would caution that UNH business momentum is beyond that of its peers and others may not have the same” benefit from prior period development.  Complete coverage appears in the latest issue of Health Plan Market Trends.


Exchange of the Week: David Blitzer Discussing Rising Healthcare Costs on CNBC

April 22, 2011

Click here to watch David Blitzer of Standard & Poor’s discuss rising healthcare costs withMark Haines of CNBC.  Below is an excerpt

Blitzer: Despite all the excitement about technology and drugs, healthcare is a very labor intensive activity, and people — labor — costs a lot of money, and that seems to be the key factor driving it up.”

Haines: “Logically, then you would find the worst or the most inflation occurring in hospitals.”

Blitzer: “You would and indeed on the commercial side you do.  On the Medicare side you don’t, and I think that brings up a different aspect.  Over the last few years, we’ve heard a lot of arguments about single-payer plans versus other kinds of plans.  Single payer means Uncle Sam pays for all the healthcare.  We pay him.  Medicare for people over 65 is a single-payer plan, and indeed we consistently see smaller rates of increase in Medicare items than we do in commercial insurance — the kind of insurance that employers provide for their employees.”

Haines: “O.K., I’m going to leave that lying there because some of our viewers right now are going apoplectic, thinking that you have just endorsed single-payer healthcare.”

Blitzer: “I haven’t.  I’ve only reported the numbers.  I’m not endorsing anything.”

Haines: “Believe me, I  understand you’re just quoting the facts.  Some people think facts are partisan.  I don’t know how they get there, but they do.”

Specialty Drugs and Chronic Disease

April 18, 2011

For what it’s worth, here’s a UnitedHealth white paper — based on a roundtable discussion — titled Slowing the Impact: The Role of Specialty Pharmacy in Managing Progressive and Chronic Diseases.   Among the recommendations from members of the forum was the need to convene more forums.

Humana, Brown and Toland, BCBS-IL, Qliance Join ACO Forum

April 15, 2011

Here are some of the featured speakers at the ACO Provider Forum, June 24, 2011 in Chicago.

Tom James, M.D., Medical Director, Kentucky Operations, Humana Inc.
Keith Pugliese, Vice President of Accountable Care and Public Policy, Brown & Toland
Scott Saran, M.D., Chief Medical Officer, Blue Cross Blue Shield ofIllinois
Norm Wu, CEO, Qliance Medical Management
Carl Mercurio, President, Corporate Research Group

Managed Clinical Networks – One of the Missing Links in a Cohesive ACO Chain

April 12, 2011

By Alan Gilbert
Vice President, Business Development
AxSys Health

Managed Clinical Networks (MCN) are an important component in the support of better patient access and treatment through a coordinated care approach.  The MCN concept was created in Scotland in 1999 by the Scottish Department of Health.

Their definition of MCNs is defined as “linked groups of health professionals and organizations from primary, secondary and tertiary care, working in a coordinated manner, unconstrained by existing professional and Health Board boundaries, to ensure equitable provision of high quality clinically effective services throughout Scotland.”

Like a fine wine, this definition has aged well and seems to translate into the current goals of ACOs.

Some features of a MCN include:

  • The application integrates primary, secondary and tertiary care services
  • A care plan is established which will serve all network stakeholders
  • The care plan has the capability to incorporate evidence-based medical practices
  • All participating members of the multi-disciplinary care team will have equality of access to the care plan (access rights can be granted, partly or whole)
  • Multi-disciplinary team meetings are facilitated through the telemedicine and teleconferencing. Experts at remote sites are able to discuss the patient review patient notes simultaneously
  • Automated generation of referral letters, summary documents and discharge letters
  • Educational and patient advice leaflets can be accessed and distributed

A specific client example is a Gynecological MCN for the West of Scotland that was established in 2000 to ensure the highest standard of care for all patients with gynecological cancers across the region. This was to be achieved by enhancing the referral system for specialist opinion and treatment, encouraging a multidisciplinary approach and educating all clinicians involved in the care of these patients by open discussion and debate. Participants would include medical & clinical oncologists, gynecologists, radiologists and pathologists. A weekly videoconference was instituted to enable clinicians from across the region to participate in discussions on their patients. The patient data was redacted so that the care-giver did not know if the patient was in their hospital or one of the other 9 hospitals in the region.

Benefits Realized by implementation of the Gynecological MCN included:

  • Reduced travel and delays – The MCN was able to discuss individual cases without extensive travel and patients are able to be referred and seen without delay
  • Equitable access to care – Patients are guaranteed that they will receive specialist review regardless of geography and that all clinicians involved in their care participate in establishing and reviewing their care plans
  • Improved care delivery – The speed of delivery of the treatment plan has improved as all relevant information such as laboratory reports and pathology is recorded and collated through one central system
  • Improved education – Clinicians have benefited from the sharing of knowledge through the cross specialty discussions and the meetings also provide an excellent training ground for junior doctors and other clinical staff who attend
  • Improved data quality – through a central repository with better audit trail and introduction of standardization and accountability

I believe that as ACOs continue to form collaborative patient care in a community, that models like Managed Clinical Networks should be studied.

Do MLR Regulations Mean Lower Premiums?

April 12, 2011

From a Citi research note on not-for-profit Blue Cross Blue Shield plans:

We didn’t think minimum medical loss ratios would be much of a concern for the non-profit Blues, but after the big improvement in financial performance in 2010, that is no longer universally the case. Health Care Service Corp., for example, enrolled almost 307,000 individual members in Illinois in 2010, generating just over $800 million in premiums, and a loss ratio of just 72.1%. In Oklahoma, the 2010 individual loss ratio on the company’s 73,500 individual lives was just 73.5%. And in Texas, where HCSC enrolls 415,000 individual lives, the loss ratio was just 64.4% last year. Everything else being equal, and assuming the Blue were able to increase the reported medical loss ratio by 400 basis points through SG&A and tax adjustments, we estimate the rebate on the individual product from just these three states alone would have amounted to $146 million last year.

So clearly this is one Blue plan that will likely have to adjust its premium rates going forward, particularly in the Texas market, since the bulk of the rebate relates to that market. By our calculations, in order to have achieved an 80% loss ratio on the individual product in Texas, the Blue would have needed to price its individual product almost 12% lower than it did in 2010.

MLR Waivers Would Save Health Plans At Least $68 Million in 5 States

April 11, 2011

Here are my back-of-the-envelope calculations.  Note: a total of nine states have asked for MLR waivers.  Maine’s was approved.

%d bloggers like this: