Merry Christmas

December 23, 2011

This blog will be off until after New Year’s Day.  Thanks to all the faithful readers. 

Carl Mercurio
President, CRG


Exchanges? We Don’t Need Your Stinking Exchanges

December 21, 2011

From Deutsche Bank’s annual employer survey:

One of the more noteworthy takeaways from our survey is that compared to last year, fewer employers are considering migrating their employees into the new Exchanges starting in 2014. Specifically, 11% of employers in our survey are actively considering migrating employees into exchanges in 2014, down materially from 35% that said they are considering shifting employees into the Exchanges in 2014. Note that our industry market model currently assumes that around 10% of the employer market will shift into the Exchanges in 2014, so current employer sentiment appears to be exactly in line with our industry forecast.

We think the drop-off in interest in the Exchanges likely reflects the generally disorganized state of affairs around Exchange planning at both the state and federal levels, which has created significant uncertainty around the path to implementation of the Exchanges in 2014.

’12 Premium Hikes to Slow, Deutsche Bank Says; Downgrades Health Net, Coventry

December 21, 2011

Deutsche Bank has released its annual employer health benefits survey, which projects 2012 commercial healthcare premiums to rise 7.2%, down from an increase of 8.2% in 2011.  That’s a lower rate of increase (for both years) than found in other surveys; however, the direction is the same: a slowdown.  After benefit design changes, premiums will rise 6.8% in 2012, Deutsche Bank projects, indicating buydowns of 320 basis points.

All of which could put pressure on health plan profits in 2012.  Deutsche Bank projects that the spread between pricing and costs will tighten to 50 basis points in 2012, compared to 190 basis points in 2011.  In other words, health insurance will be a riskier business next year will less room for error.

Based on the findings, Deutsche Bank has downgraded Coventry and Health Net shares to sell from buy, “given their higher exposure to the Commercial risk market.”  Deutsche Bank continues to rate as buys Aetna, Amerigroup, Cigna, Magellan, UnitedHealth and WellPoint.

Deutsche Bank surveyed 432 self-insured and fully funded employers offering 628 unique plans.

HHS Names 32 Pioneer ACOs

December 20, 2011

Notes HHS: “The Pioneer ACO initiative will encourage primary care doctors, specialists, hospitals and other caregivers to provide better, more coordinated care for people with Medicare and could save up to $1.1 billion over five years.”  Other ACO options — like the Medicare Shared Savings Program — remain available to providers.

  1. Allina Hospitals & Clinics
  2. Atrius Health Services
  3. Banner Health Network
  4. Bellin-Thedacare Healthcare Partners
  5. Beth Israel Deaconess Physician Organization
  6. Bronx Accountable Healthcare Network (BAHN)
  7. Brown & Toland Physicians
  8. Dartmouth-Hitchcock ACO
  9. Eastern Maine Healthcare System
  10. Fairview Health Systems
  11. Franciscan Health System
  12. Genesys PHO
  13. Healthcare Partners Medical Group
  14. Healthcare Partners of Nevada
  15. Heritage California ACO
  16. JSA Medical Group, a division of HealthCare Partners
  17. Michigan Pioneer ACO
  18. Monarch Healthcare
  19. Mount Auburn Cambridge Independent Practice Association (MACIPA)
  20. North Texas Specialty Physicians
  21. OSF Healthcare System
  22. Park Nicollet Health Services
  23. Partners Healthcare
  24. Physician Health Partners
  25. Presbyterian Healthcare Services – Central New Mexico Pioneer ACO
  26. Primecare Medical Network
  27. Renaissance Medical Management Company
  28. Seton Health Alliance
  29. Sharp Healthcare System
  30. Steward Health Care System
  31. TriHealth, Inc.
  32. University of Michigan

Aetna Bets on ACOs, Health IT

December 19, 2011

Aetna continues to see a future dominated by accountable care and information technology.  That’s not news, but Aetna CEO Mark Bertolini did a nice job of laying out the case at the company’s annual investor meeting.  Below are a few slides from his presentation (the full deck is here).  Note: Aetna’s investment in decision-support tools and technology now includes iTriage (along with Medicity and Active Health).  As reported in our sister publication ACO Market News, Aetna plans to enter into hundreds of ACO arrangements over the next three years.

HHS Releases Draft Rules on ‘Essential Benefits’ for Exchange Health Plans

December 19, 2011

The proposal would allow states to choose one of the following “typical employer plans” as a benchmark:

  • One of the three largest small group plans in the state by enrollment;
  • One of the three largest state employee health plans by enrollment; 
  • One of the three largest federal employee health plan options by enrollment;
  • The largest HMO plan offered in the state’s commercial market by enrollment. 

In addition, the plan would have to offer coverage in 10 key categories:

  1. Ambulatory patient services
  2. Emergency services
  3. Hospitalization
  4. Maternity and newborn care
  5. Mental health and substance use disorder services, including behavioral health treatment
  6. Prescription drugs
  7. Rehabilitative and habilitative services and devices
  8. Laboratory services
  9. Preventive and wellness services and chronic disease management, and
  10. Pediatric services, including oral and vision care

All of which means I still don’t know what my health plan will cover when I’m really sick, but at least there’s a good chance I will have coverage.

Mahar on Ryan-Wyden Plan

December 15, 2011

I asked Maggie Mahar (formerly of HealthBeat and whose posts I sorely miss) what she thought of the Ryan-Wyden plan to reform Medicare.  She wrote me a lengthy response.  Here’s an excerpt:

When it comes to health care reform, I have never trusted Wyden. The private insurers have had him in their pocket.
The premium plan simply represents a way to shift the cost of Medicare (and Medicare inflation) to seniors — who can ill afford it. (The average senior has a median income of $20,000 — half earn less.)  Wyden says that the premium that seniors receive will “rise and fall” with the cost of insurance. What that means is that insurers will be the price-makers, seniors the price-takers. The subsidy that seniors receive will be enough to buy the poorest private plans, but not enough to buy the better more comprehensive private plans.
Only traditional Medicare has the clout to bring down the cost of Medicare without undermining the quality of care by using financial carrots and sticks to:
a) force hospitals to be more efficient (fewer preventable medical errors that hurt patients and cost a fortune; fewer preventable readmissions; less over-spending on hotel-like amenities; over-priced equipment that is no better than existing equipment; fewer unnecessary tests (often an ER will simply order a battery of tests before a doctor has even taken the patient’s history or done a hands-on exam);  
b) encourage doctors to focus on chronic disease management before the disease turns into a crisis that lands the patient in a hospital; encourage doctors to be more cost-conscious when prescribing drugs (ignoring bribes from the drug industry);
c) “bundle” payments to doctors and hospitals so that they have an incentive to coordinate care (no one gets the bonus unless everyone does)
These are just a few ways that traditional Medicare can bring down costs. And it’s already working!  As I wrote in one of my last columns, growth in Medicare spending has fallen to about 4% during the past two years –down from double-digit inflation in the preceding years. This is because hospitals, in particular, are working to become more efficient as they prepare for 2014. Former CBO director Peter Orszag confirmed what I said in a column that he wrote for Bloomberg, quoting HealthBeat.
There is no need to “compromise” with the Republicans over Medicare. Medicare is one of the most popular programs that we have.  And the carrots and sticks in the health reform legislation already are working to rein in the costs — even before 2014. 

%d bloggers like this: