Notes from the New Product Innovation, Design & Development for Health Plans Conference

This week I am in Chicago attending a conference called New Product Innovation, Design & Development for Health Plans. It is being billed as “The Most Comprehensive Conference with Key Thought Leaders from Commercial Group, Individual/Retail & Medicare Markets.” The conference has attracted about 100 health plan product development specialists from all over the country.

The meeting kicked off on Wednesday morning with a banker addressing the attendees. Shane A. Johnson Vice President, Innovation & Product Excellence at Bank of America examined the macroeconomic shifts at play in the world that drove Bank of America towards innovation as a company. Johnson talked about the tools used by B of A to drive innovation such as ethnography, prototyping, the use of Cx (Customer Experience) models, product management and pricing excellence.

Johnson said that the most important ingredient for encouraging innovation within an organization is inclusiveness – allowing good ideas to bubble into the ideation process from any source.

Next up was Bob Wadsworth, VP, Product Development at Blue Shield of California. Bob told how his company has invested years of planning to build an infrastructure for a future online, real-time selling and quoting interface, allowing consumers to build tailor-made health insurance products. In other words, they have developed a modular product approach that allows customers to build health plans in the same way that consumers can build a Dell computer online or order a latte at Starbucks (e.g. a tall, skinny, vanilla, latte).

This is a big step forward in the ability of a carrier to provide employers and even individuals with a health plan that is really tailored to meet their unique needs and only pay for the level of coverage that they want.

Wadsworth described how this innovation has taken his group years to implement and how his team had to overcome doubters at almost every turn including executives, actuaries, legal and compliance, and state regulators.
Health Plan Innovation’s Take: It is encouraging to see so many product development specialists gathering here at this busy time of year for health plan employees to explore ways that they can improve on the products that they provide. Some even attended a series of workshops held on Tuesday designed to help them become more creative in the way they think about product design possibilities. Best of all it seems that these professionals are all looking for ways to lower health care costs while providing the means to finance quality health care.

More to come…

Utah Employers Want the State to Embrace Consumer-driven Health Care.

The Utah state legislature asked the question and the state’s businesses responded – “We want the state to embrace a consumer-driven health system.”

An Article appearing on AHIP Hi-Wire news site reported that The Health System Reform Bill of Rights, signed by a cross section of leaders who together employ about 400,000 people, was to be unveiled Tuesday by the Salt Lake Chamber of Commerce in a Capitol Hill news conference.

According to the report the state’s business sector — which provides health insurance to 1.8 million Utahns, or 79 percent of the insured population – called the health-care system “outdated and flawed,” and wants every person to have access to affordable, basic insurance.

The employers envision that these health plans would be both portable and paid for with pretax dollars by the policyholders and in addition to a fixed contribution made by employers to their employees as they set up their plans. These plans would also be guaranteed issue — which would limit when insurers could reject applicants — with rates based on a broad-based risk pool.

The plan also suggests that consumers would have access to more complete information via an Internet portal with costs of procedures, doctors’ success rates, the costs and details of health insurance plans, insurance companies’ denial rates “and other information that will support a vibrant health market.”

Another news report stated that health system reform could be one of the most pressing issues of the upcoming Utah legislative session. Businesses and individuals are demanding a system that makes more sense and offers more choices to stay healthy. By signing a bill of rights, this group is sending a message that this won’t be put on the back burner.

Health Plan Innovation’s Take: With the economy becoming a bigger issue on the national level, look for health care reform to continue to come primarily from the nation’s statehouses.

White Paper Touts Telehealth for both Episodic and Chronic Health Care

Have you ever suffered form a cold or the flu and wished you could just phone your physician, describe your symptoms and have a prescription ordered through you local pharmacy? Sounds too good to be true, right? In today’s healthcare environment, physicians have no way to bill for the time they spend talking to you on the phone. They only have the means to bill you for office visits or procedures. So instead of a quick call, you are required to schedule an office visit, and take the time to travel to the doctor’s office in order to be diagnosed and get the medication that will send you back on the path to good health.

This is all starting to change thanks to a Dallas-based company called TelaDoc Medical Services ( With TelaDoc,most visitsoccur in less than 30 minutes from the time of request,patients now have a guaranteed encounter in under three hours, with a flat rate fee per visit and 24/7 access to quality medical care.Covering physicians havethe patient’smedical record as well as the meansto update itelectronically.Most importantly, the physician is now paid for the encounter.

This concept of delivering medical care recently got a boost from a Former Acting Surgeon General of the U.S A. A newly released white paper entitled “Telephone Connectivity Supports Medical Home Model and Removes Barriers to Care,” authored by Kenneth P. Moritsugu, M.D., M.P.H., F.A.C.P.M., articulates the value of telehealth – namely the utilization of the telephone to provide physician or consumer-directed cross coverage 24/7 – as an emerging and effective application in tackling specific issues related to episodic care as well as chronic care management for diseases such as diabetes, cancer, and cardiac disease.

A press release issued by TelaDoc noted that Moritsugu examined the wide-ranging impact and value of telehealth in helping the medical home model to address coordination of care for individuals with episodic as well as chronic diseases by looking at:

Access to Healthcare: Telehealth, as practiced by TelaDoc clinicians, utilizes the telephone to provide physician or consumer-directed cross coverage 24/7. This model tears down seemingly formidable barriers including financial constraints; lack of transportation; work/family responsibilities; physical limitations; psychological problems and personal stress; stigma of certain diseases; and social and cultural challenges.

Impact of Telehealth on Chronic Disease: Individuals with chronic disease such as diabetes, cancer, or cardiac disease are the most likely to experience adverse health consequences as a result of disruptions in access to medical care. Telehealth bridges the gaps in care, facilitating communications between patients and the medical home PCP when the latter is not immediately available.

Telehealth Promotes Patient-Centered Healthcare: Telehealth’s direct communication model supports the transition from provider-centric to patient-centric care. It helps providers by empowering them to monitor and manage patient care from a distance, without regard to location, and minimizes the need for patient travel when not necessary for the interaction.

Health Plan Innovation’s Take: Sometimes a simple change in the system such as coming up with a way for physicians to be compensated for a telephone consultation can have wide ranging impact of the overall system. Look for TelaDoc and similar services to become a standard benefit in many health plans in the near future.

Progressives See Value of Consumer-driven Health Plans in Achieving Goal of Universal Coverage

A blog post appeared recently on that made the case for consumer driven health plans becoming a major part of healthcare reform to achieve near-universal coverage in this country.The author, Jon Ethington, acknowledged that “the majority of Americans will probablynever accept a one-size-fits-all health insurance system that is funded primarily with tax revenue” and went on to point out that the potential for consumerdriven careis currently overshadowed by “the perverse incentives for health insuranceplaced in our federaltax code.”Ethington wrote that the most perverse incentive in our tax code pertains to the deductibility of health insurance premiums by employees. He noted that the problem with this is that it benefits high income earners much more than people that live paycheck to paycheck. A taxpayer in the top tax bracket saves 35 cents for every dollarof salary reduction, but mostworkers save 15 cents or less due to the structure of our federalincome tax code.

Instead of the current system, Ethington proposed three basicideas that for reforming the tax code to create a more sensible tax policy:

1. Replace salary reduction plans with a refundable taxcredit between 15 to 25 percent depending on how much of the budget the federal government wants to devoteto this purpose to provide Americans a greater incentive to purchase health insurance for themselves.

2.Endthe “use it or lose it”provisionwith Flexible Spending Accounts. Employees should be permitted to roll over FSA balances to the next year if the balance is less than theannual maximum they are allowed to contribute on an annual basis.

3. Allow all small businesses and corporations to have the same flat refundable taxcredit for paying their portion of insurance premiums as part of their benefitspackage to employees.

Ethington went on to point out that a single payer system that guarantees everyone health care for life is just not realistic either form a budgetary or political standpoint.

These ideas actually sound quite a bit like the proposed McCain healthcare plan, and it is encouraging to see that this dialogue offered up in more progressive circles.

BlueCross BlueShield of Tennessee Launches Online Physician Database

At the risk of alienating some of their network physicians, BlueCross BlueShield of Tennessee rolled out an online tool this week to nearly 2 million of its members that provides cost and quality information on its doctors. According to a news story published in the Tennessean, members of the state’s largest health insurer can now see information such as what other physicians billed for procedures within a certain specialty. They also can see a doctor’s record on whether they performed screenings that include things such as mammograms or a test for cervical cancer.Apparently, the tool has drawn criticism from some of the health plan’s providers who claimed this information ultimately could be used to steer consumers to the cheapest doctors, who may not necessarily be the best.

To appease these doctors, BCBST made changes to the tool including allowing physicians to add to their profiles information from their own medical records that aren’t a part of BlueCross’ claims data, on which the program is based. Paul Kulpa, the insurer’s program manager for consumer-directed health care products, told Tennessean that 700 physicians took that opportunity and updated their information.

This rollout may not be perfect, but is another step in the push toward more transparency in health care and to provide health plan members with the tools they need to become health care consumers by being able to screen and engage their doctors and to make informed decisions.

Have you used an on line tool to research a physician or hospital? Share your experience by posting a comment below.

Health Savings Accounts are Working for Wide Range of People

More evidence is out today that shows that high deductible health plans (HDHPs) and Health Savings Accounts (HSAs) are working for a wide range of demographics — not just the “healthy and the wealthy” that some critics claim are the only ones to benefit.

UnitedHealthcare analyzed more than 200,000 of its 1.4 million members enrolled in an HSA-eligible health plan during the full year 2006 – the latest period for which full year data were available – and found that customers with Health Savings Accounts (HSA) are depositing money into the accounts and accumulating balances, regardless of their income level, age or employer size.

Here are some of the findings:

  • 74% work for small employers (<99 employees)
  • 64% earn less than $25,000 per year
  • 60% are singles, families and younger couples – consistent adoption across age, gender and life status
  • 88% had account balances greater than zero at the end of 2006 ($900 avg.)
  • 68% contributed their own money to HSAs

In a press release issued by the company, Meredith Baratz, vice president of Market Solutions at UnitedHealthcare said, “This latest research affirms our belief that Health Savings Accounts have broad appeal for many health care consumers, regardless of income, age or employer environment. More employers are realizing the value of health savings accounts as well, because HSAs enable businesses to help their employees play a more active role in their financial and physical well-being.”

Prior research from UnitedHealthcare found that members of a consumer-driven plan received preventive and evidence-based care at rates equivalent to, or in many cases higher than, members of traditional plans.

Has your company adopted an HSA-qualified health plan? Share your experiences by commenting about this post.