Will ACOs Usher in a New Era of HMO-Style Managed Care?

Amber May has published an article on BenefitsPro.com that recalls a time in the 1990s when HMOs were the biggest thing in health care. She points out that the most obvious benefit of an HMO system is the coordination of care the organizations facilitate and how, since 1995, the National Health Insurance Law in Israel made participation in one of the four Israeli HMOs compulsory for all Israeli citizens.

May points out that once again the United States is experimenting with managed care. She notes that the Patient Protection and Affordable Care Act (PPACA) is attempting to address the lack of care coordination that’s developed in the American health care system by creating provisions for accountable care organizations (ACOS), coordinated groups of health care providers that provide care for specific populations of patients and are accountable for the quality, cost and outcomes of that care.

She notes that through PPACA, ACOs are tied to Medicare and speculates that a universal managed care system similar to Israel’s may be a long way off for the U.S. – To learn more see benefitspro.com.

Highmark Recruits Nurse Practitioners as Primary-Care Providers

Jan. 19, 2011 | Camp Hill, Pa. In order to give Highmark members more health care options, Highmark is working with certified registered nurse practitioners (CRNPs) to expand their role to serve Highmark members in much the same capacity as a primary care physician (PCP).

“The health care reform legislation that was passed earlier this year will likely mean more people will be getting health care coverage and seeking health care services,” said Carey Vinson, M.D., Highmark’s vice president of quality and medical performance management. “By recognizing CRNPs’ ability to work up to the full scope of their medical license, it will allow greater access for members.”

Highmark is reaching out to several hundred CRNPs across Pennsylvania to determine if they would like the designation to serve Highmark members as a network primary care CRNP.

Currently, Highmark works with CRNPs primarily in two ways. The CRNP may work with a physician now and are not credentialed. They typically work closely with a physician in a primary care or family practice setting or they may work for a specialist. The second area where Highmark engages CRNPs is when they function independently. They do, however, collaborate with physicians in the Highmark network, even when working independently.

A CRNP’s duties may often include diagnosing, treating, evaluating and managing chronic disease. Their duties also could include ordering routine tests and prescribing medication.

“During the next few months, we will see just how many of the CRNPs choose to apply for this designation,” said Vinson. “Over time, we believe this is another way to make the state more attractive to CRNPs.” Highmark is also making various CRNP training programs aware of this change.

Dr. Vinson also noted that in many cases CRNPs work in a retail clinic setting, something Highmark supports. These clinics have proven to be cost efficient and very convenient for members.

About Highmark Inc.
As one of the leading health insurers in Pennsylvania, Highmark Inc.’s mission is to provide access to affordable, quality health care enabling individuals to live longer, healthier lives. Based in Pittsburgh, Highmark serves 4.7 million people through the company’s health care benefits business. Highmark contributes millions of dollars to help keep quality health care programs affordable and to support community-based programs that work to improve people’s health. Highmark exerts an enormous economic impact throughout Pennsylvania. A recent study states that Highmark’s positive impact exceeded $2.5 billion. The company provides the resources to give its members a greater hand in their health.

Highmark Inc. is an independent licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield Plans. For more information, visit www.highmark.com.

CaliforniaChoice Becomes First Health Insurance Exchange in America to Reach 20 Million Member Plateau

CaliforniaChoice® announced today that it has become the first health insurance exchange in the nation to reach the 20 million member-month plateau, solidifying its position as the country’s most successful health insurance exchange for small and mid-size employers.

Founded in 1996, CaliforniaChoice is a product of CHOICE Administrators®, the nation’s leader in developing and administering health insurance exchanges.

Health insurance exchanges promote choice and make health insurance purchasing more value-based by allowing an individual or small business to compare the costs and benefits of various health plans and benefit options. With such information in hand, purchasers are able to do a better job selecting a health plan that best fits their needs and budget.

A key part of the recently passed healthcare reform legislation mandates that every state establish a health insurance exchange by January 1, 2014.

Member months reflect how long an individual has been a member of the exchange and are a vital metric for measuring an exchange’s ability to retain members over an extended period of time. The 20 million member-month milestone is particularly significant given that similarly structured state-run small-group exchanges have either failed or are still feeling their way, especially in serving the group market.

“If done properly – as the privately run CaliforniaChoice has shown it can be – exchanges have the capacity to help us move to a more rational method of purchasing health coverage while getting society closer to achieving the noble goal of universal coverage for all its citizens,” said Ron Goldstein, president of CHOICE Administrators.

Key to the success of an exchange is an integrated and seamless network of strong health plans and decision support tools that bring to the purchaser a wide choice of products at different price points and benefit levels. Participating in CaliforniaChoice are Anthem Blue Cross; Health Net; Kaiser Permanente; Sharp Health Plan; Western Health Advantage; and numerous leading dental, vision, chiropractic and related ancillary benefit plans.

Under the new legislation taking effect January 1, 2014, exchanges must be made available for both individual and family plans (IFP) and small groups with possibly up to 100 employees. Each of the health plans offered in an exchange will include an essential set of benefits that provide comprehensive healthcare services with different levels of cost sharing. Annual out-of-pocket expenses for individuals will be limited to an amount equal to the Health Savings Account current law limit. Multiple benefit categories will exist so purchasers can choose the one that best meets their needs and pocketbook. Individuals who cannot afford to purchase a plan in an exchange may be eligible for a subsidy from the government based on income and family size.

“In many ways the exchange is like a giant, online health shopping mall filled with an assortment of carriers offering their products at various price points and benefits,” said Goldstein. “The CaliforniaChoice model has witnessed unprecedented success, and it’s not a stretch to call it a model for how exchanges should be established and administered under the new regulations.” CHOICE Administrators® Exchanges is the nation’s leader in developing and administering health insurance exchanges.

About CHOICE Administrators®:

Currently serving more than 10,500 employers and more than 180,000 members, CHOICE Administrators® is a member of The Word & Brown Companies, the nation’s leading developer and administrator of consumer choice exchange models. Among the products currently operated by CHOICE Administrators® are the CaliforniaChoice® small group (2-50 employees) and mid-market (51- 199 employees) private exchanges and Quotit, one of the nation’s largest individual/family proposal and online enrollment systems that generated 2.5 million individual health quotes nationally in 2009. Further information may be obtained at www.choiceadmin.com.

So, What if We don’t Pass Healthcare Reform?

Joanne Wojcik over at the Benefits Beat blog on the Business Insurance website recently posted an article that may be of some interest to readers of this blog.

In a post entitled “What if we don’t pass health reform?”, she points out that flat out opposition to health care reform may not be an option.

Citing an Economic Policy Institute report released last week, Wojcik notes that the escalating cost of the current system is placing a strain that on employers, families and individuals. The report, “Employer-sponsored health insurance erosion continues,” shows that employer-sponsored health care coverage has declined every year since 2000, leaving a disproportionate number of young, Hispanic, lower-educated and lower-income people uninsured.

Wojcik writes that the report projects that another 10 million people could be without employer-sponsored insurance by 2010 unless the economy makes an unpredicted swift rebound or there is large-scale health reform.

The EPI report asserts that without health reform, the total number of uninsured Americans under the age of 65 could swell to more than 50 million by next year. To give us an idea of just how many people that is, the EPI points out that it’s the number of people living in California and Illinois combined.

What would this mean for health insurers? Clearly, there would be opportunities to develop some very low cost plans for the personal health insurance market. Of course, there may be a push in Congress for COBRA extensions and continuation of subsidies, but the patience of taxpayers and employers are starting to run thin.

What do you think might happen if health care reform does not happen? Leave your comment below.

Op-outs, Co ops, and Triggers. Oh, my!

The conservative think tank, The Heritage Foundation, in todays Morning Bell reacted to Senate Majority Leader Harry Reids (D-NV) announcement that the health care legislation he is drafting will include a government-run health insurance plan by saying that it doesnt matter what vehicle he chose. Op-outs, co ops, and triggers all lead to the same place everyone in a government-run health plan.

Take the op-out. The piece notes that Reid has not provided a lot of details about how the plan would work. But, what we do know is that the plan would take effect in 2013 and states would have until 2014 to pass legislation declining participation in the program.

Here is what has the Heritage Foundation so worried.

In 17 states Democrats control both houses of the legislature and the state house. In another 24, Democrats control at least one legislative chamber or the governors mansion. That, they say, leaves a total of only 9 states where Republicans run the entire show Texas, Utah, South Carolina, South Dakota, North Dakota, Missouri, Idaho, Florida, and Georgia. That, according to the Heritage Foundation, means Americans in 41 states are all but guaranteed to have no choice but to endure the government run health plan.

Turning to the idea of the co-ops that Sens. Chuck Schumer (D-NY) and Kent Conrad (D-ND) have both been pushing, the Heritage Foundation reminds us of the collapse of the mortgage market in warning us that this is a model guaranteed to fail.

Simply calling some form of a government-sponsored enterprise (GSE) a cooperative, for instance, would be only another type of public plan in disguise. One need look no further than Fannie Mae and Freddie Mac to see how GSEs can distort the market and leave taxpayers with huge liabilities. Decades of market distortions generated by their implicit government backing, compounded by the effects of repeated political meddling by Congress, put those GSEs at the very epicenter of the mortgage market collapse that triggered the current financial crisis and recession.

Lastly, there is what the Heritage Foundation calls the Trigger Trap, an approach favored by Senator Olympia Snowe, (R-ME). A trigger is a legislative tool that would put in place automatic benchmarks that if not met, would immediately unleash the government-run system into the market. For example, if 95% of Americans as defined by the bill dont have adequate health coverage by a certain date, the public option would be triggered.

The Heritage Foundation:

What a trigger does is hold off the tough decision until future, uncertain circumstances. The public option would essentially become law today, but not go into effect until an undetermined time when economic conditions could be even worse. Had Congress enacted a trigger to save Clintoncare, the trigger would have forced states to implement HMOs at exactly the time everyone was moving away from that overly rigid version of managed care.

Is it any wonder that the public option has become the most contentious aspect of the healthcare reform debate? It is shaping up to be the overarching factor that will determine how healthcare is financed and delivered going forward. Regardless of your point of view, this is where the action will be going forward.

Scary Numbers.

With Halloween right around the corner, this is the season for scary things. One of the scariest things Ive see recently appeared on the pages of the Wall Street Journal. It had to do with the ability of Congress to predict the cost of health care entitlement programs.

In an opinion piece entitled Health Costs and History, the WSJ examined the record of Congressional forecasters in predicting costs starting with Medicaid, the joint state-federal program for the poor. According to the WSJ, the House Ways and Means Committee had estimated that first-year costs for this program would be $238 million. Instead it hit more than $1 billion, and costs have kept climbing.

In fact, the article says, Medicaid now costs 37 times more than it did when it was launchedafter adjusting for inflation. Its current cost is $251 billion, up 24.7% or $50 billion in fiscal 2009 alone, and that’s before the health-care bill covers millions of new beneficiaries.

The article goes on to examine Medicare and found that it has a similar record. In 1965, Congressional budgeters said that it would cost $12 billion in 1990. Its actual cost that year was $90 billion. Whoops. The hospitalization program alone was supposed to cost $9 billion but wound up costing $67 billion. The article points out that these aren’t small forecasting errors. The rate of increase in Medicare spending has outpaced overall inflation in nearly every year (up 9.8% in 2009), so a program that began at $4 billion now costs $428 billion.

Now we are being told a new health-care entitlement will actually reduce red ink by $81 billion over 10 years. Does anyone actually believe that? If they do, that is really scary.

Chart by The Wall Street Journal.

Galen Institute Releases Poll Showing Overwhelming Opposition to the Individual Mandate and Other Key Components of Congressional Health Reform Proposals.

The Galen Institute today released new survey results showing overwhelming opposition to the individual mandate and other key components of health reform legislation Congress is considering.

These findings illustrate strong opposition to fundamental aspects of the bills moving through Congress, said Galen Institute President Grace-Marie Turner. People dont want to be forced to buy insurance they cant afford or that might not fit their needs, yet the proposals would slap a tax on them if they dont. And people overwhelmingly oppose reducing seniors health benefits or raising taxes on the working and middle class in order to expand coverage to some of the uninsured, yet many in Congress continue to push exactly that.

What the public does favor is a targeted approach to solving problems in our health sector, but not a complete Washington-style overhaul of one-sixth of our economy. Washingtons failure to listen is causing great apprehension and concern among the public, added Turner.

The nationwide random survey of 510 adults was conducted October 8-11, 2009 and has a +/- 4.34 margin of error. International Communications Research (ICR), a non-partisan research firm based in Pennsylvania, conducted the survey.

More Than Seven in Ten Oppose the Individual Mandate

Seventy-one percent of those surveyed said they would oppose a new law saying that everyone either would have to obtain private or public health insurance approved by the government or pay a tax of $750 or more every year. Only 21 percent said they would support the law. More than half (54 percent) of all respondents indicate a strong opposition to the individual mandate, including 58 percent of those 45-54 years of age and 58 percent of those 55 years and older.

More Than Two-Thirds Oppose Reducing Seniors Health Benefits to Pay for Covering the Uninsured

More than two-thirds (68 percent) oppose reducing some health insurance benefits for senior citizens in order to expand health insurance for some people who are uninsured, while 28 percent support the idea. Opposition is spread across political party lines as 86 percent of Republicans, 66 percent of Independents, and 59 percent of Democrats oppose this idea.

Opposition to Raising Taxes on the Working and Middle Class to Cover the Uninsured

Fifty-eight percent disagree, most of them strongly (44 percent), with the following statement: I would support an increase in taxes on the working and middle class if it would help provide health insurance to more Americans. Only 39 percent support the position.

Seventy-one Percent Are Concerned Current Health Insurance Will Change if Congress Passes Health Reform

Seventy-one percent said they were concerned that their current health insurance would change if Congress passes health reform legislation. One-quarter (25 percent) said they were not concerned. Groups with the highest level of concern include: people 55 years and older (84 percent), those aged 45-54 (80 percent), Republicans (82 percent), and Independents (78 percent). Almost half (47 percent) of all respondents indicate they are very concerned. Sixty-two percent of people aged 55 years and older are very concerned, along with 61 percent of Republicans, 63 percent of those in the South, and 54 percent of Independents.

Support for a Targeted Approach to Addressing Health Care

Forty-nine percent support, A targeted approach that addresses a few problems at a time. Forty-one percent support, A comprehensive approach that makes significant changes to our current health care system.

Online Tool Shows Government Assistance Available Under Healthcare Reform Proposals.

The Kaiser Family Foundation has come out with a nifty tool to illustrate premiums and government assistance under the types of reform proposals being considered in Congress. The online calculator works for people under age 65 who purchase coverage on their own in an Exchange or Gateway and are not covered through their employer, Medicare or Medicaid.

The tool allows the user to start with the provisions from one of several proposals and examine the impact at different income levels. Advanced settings even allow users to change assumptions to show the effect of different policy choices.

This information is intended to show how people in different circumstances would be affected by the types of reforms under consideration. However, it does not provide estimates of the impact of reform for those with employer or public coverage.

You can check it out at: http://healthreform.kff.org/Subsidycalculator.aspx

Baucus Bill by the Numbers.

$774 billion the estimated credits and subsidies to be provided through the insurance exchanges, increased net outlays for Medicaid and the Childrens Health Insurance Program (CHIP), and tax credits for small employers.

$215 billion the revenues expected from the excise tax on high-premium insurance plans.

$20 billion the estimated penalty payments made by uninsured individuals.

$27 billion the estimated penalty payments to be made by employers whose workers will receive subsidies via the exchanges.

$12 billion the estimated indirect effects on federal revenues associated with the expansion of federally subsidized insurance.

$500 billion the projected net cost over 10 years for the proposed expansions in insurance coverage.

$49 billion the estimated net reduction in federal budget deficits of over the 20102019 period.

29 million The number of uninsured nonelderly people who would have coverage by 2019.

25 million the number of nonelderly residents who would still not be insured by 2019 (about one-third of whom would be unauthorized immigrants).

11 million the projected increase in the number of enrollees in Medicaid.

Source: Congressional Budget Office.

Will the Dems Go It Alone on Health Reform?

CapitolThe New York Times is carrying an article this morning saying that two of the three Republicans in a small group called the Gang of Six who are trying to forge a bipartisan compromise on health care have requested numerous major changes in a proposal drafted by the chairman of the Senate Finance Committee, reducing the chances that he can win their support.

Some of the issues they are raising drive right at the core differences between the parties. For example, the Times says that the Republicans, Senators Michael B. Enzi of Wyoming and Charles E. Grassley of Iowa, have told Senate Finance Committee Chairman Max Baucus of Montana that health legislation must include language affirmatively prohibiting the use of federal money to pay for abortion.

The report says that the two senators are asking for the restriction to apply to any subsidies that help low-income people buy insurance. In addition, they said, health plans should not be obliged to provide abortion. Thus, they said, the bill should include a conscience clause to protect entities from being required to contract with abortion providers.

In addition to this objection, Enzi and Grassley have raised a number of others. For example, they have apparently objected to the fees that Mr. Baucus wants to impose on health insurance companies, clinical laboratories and manufacturers of medical devices.

Five year wait for legal immigrants.

They also want a five-year waiting period for legal immigrants to receive tax credits, or subsidies, to help them buy insurance.

Perhaps one of the biggest philosophical objections the republicans are making has to do with the individual mandate that would fine a family that went without coverage up to $3,800 a year. Grassley, according to the Times, has reservations about this approach. He believes that the individual responsibility to have health coverage should be reconsidered and replaced with a reinsurance policy to ensure that affordable health coverage is available to everyone in a voluntary system, with a lower overall cost for the package, one document says.

This final objection, to me, is sounds like Grassley is saying, Lets start over. While this may not be a bad idea, it will not produce a bill out of the Senate that has bi-partisan support, and could force the Democrats to try to pass a bill without republican support.

Attention shifts to “Group of 17.”

It seems that President Barack Obama recognizes this and is already gearing up for such a fight. According to the Washington Post, he has already turned his attention from the “Gang of Six” to the Group of 17 who are moderate Democrats in the Senate and who are leery of the high price tag of health care reform and its impact on the federal deficit.

Nevertheless, the Post points out, if Democrats turn to reconciliation, a procedural move that would cut off a Republican filibuster and enable the bill to pass with 51 votes, the 17 votes could become even more important.

In the next day or, two, we will probably know whether a bill will surface that has bi-partisan support, or if the Democrats will try to go it alone.

Meanwhile, I am sure that many Democrats are reading a USA TODAY/Gallup Poll conducted after President Obama’s speech to Congress last week that “shows Americans almost evenly divided over passing a health care bill. According to the poll, six in 10 “say Obama’s proposal, if enacted, would not achieve his goals of expanding coverage to nearly all Americans without raising taxes on the middle class or lowering the quality of health care. For the first time, a majority disapprove of the way he’s handling health care policy.”

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