When the independent think tank finds that on average, prices paid to hospitals by younger, healthier policyholders were 100 percent higher than what Medicare would have paid for the same procedures, it’s easy to understand the impact that payment contracts based on what Medicare pays can have on health plan costs.
In contrast to traditional fully insured plans, self-funded health plans with reference based pricing (RBP) enable consumers to learn the cost of treatment before they receive it. This is the advantage of basing provider payments on publicly available cost and quality data rather than arbitrary network discounts. And because Medicare varies its pricing by geographic region, providers are compensated fairly, and medical price inflation can be controlled.
From Big to Small
While very large employers were early adopters, the model is becoming far more commonplace among smaller groups that partially self-fund. TPAs are helping some of these plans realize overall savings in the 20 percent range and for a plan with 300 members, this can mean annual savings of $1 million or more.
In a marketplace that has lacked transparency and accountability for far too long, Medicare reference is proving to be not only a market disruptor, but an approach that can help employer-sponsored health benefits thrive. Contact us if you want to learn more about how a RBP plan could work for you.
In an effort to revive an important promise made to the American people prior to his election in 2016, President Trump recently signed 3 executive orders aimed at bringing the cost of prescription drugs more in line with what consumers in other countries pay. One order, directed at Medicare Part D plans, would require that PBMs pass discounts or manufacturer’s rebates directly to consumers rather than to their health plans.
A second order would permit individuals to import lower cost drugs from other countries, including Canada, and re-import insulin. The third order is intended to provide uninsured or underinsured individuals with life-saving medications such as insulin and epinephrine. It is doubtful that these executive orders will yield any immediate relief to consumers since legislative bodies and federal agencies will need to follow government protocols in order to put the orders into practice.
According to the 2019 edition of the Bloomberg Healthiest Country Index, the United States ranks 35th among 169 recognized by the World Health Organization. This was one position lower than the U.S. earned in 2017. Spain surpassed Italy to become the world’s healthiest country and four other European nations ranked in the top 10. While Japan was the healthiest Asian nation, China dropped from 51 in 2017 to 53 in the 2019 rankings. Based on data provided by the World Health Organization and the United Nations Population Division, the index evaluates health factors and risks including behavioral concerns, environmental characteristics and more.
When you consider that laws governing travel and social distancing vary from state to state, with a couple having no such laws at all, determining how your organization will regulate and discipline off-duty conduct is very challenging. And when an employee travels to another state that has different laws, which take precedence? Some experts have compared this debate to employer’s efforts to regulate employee use of social media, but it seems that how you regulate social media activity is much different than carrying out your responsibility to keep employees and working conditions safe during a public health emergency.
Given the fact that states have established their own guidelines, an example of an employee who traveled out of state to participate in a large public gathering can present a big challenge. While one employer might decide to quarantine the employee upon return because the gathering violates laws where the person lives and works, another might prefer to act in accordance with a less restrictive law that exists in the state where the gathering took place. Given the complexity of the COVID-19 pandemic, many will likely look beyond the laws and act in a manner consistent with their duty to keep their workplace safe for all employees.
One thing most employers and attorneys seem to agree on is that like so many employment issues, determining an appropriate course of action in matters such as these often comes down to whether or not your organization has a policy in place and how that policy has been communicated to employees.
Guidance recently released by the FDA outlining conditions for approving a Covid-19 vaccine includes a 50 percent benchmark, meaning that any vaccine must be at least 50 percent more effective than a placebo in preventing the disease. This is the same benchmark used annually to approve flu vaccines. In the announcement, Commissioner Stephen Hahn told a Senate panel that the FDA would not approve a vaccine for the general public without clinical evidence that it is both safe and effective.
In accordance with established FDA guidelines, an emergency authorization can move much quicker than a typical full approval, but would still require the vaccine maker to show through clinical studies that the vaccine produced lower levels of disease. Several clinical studies are underway, with one manufacturer having just initiated clinical testing by 60,000 adults.
Researchers at University College London found that ongoing negative thinking can increase the risk of developing Alzheimer’s disease. Nearly 300 people over the age of 55 were monitored in order to determine how much they dwell on negative past experiences or worry about the future. Approximately half of participants were also given PET scans to measure deposits of tau and amyloid, two proteins that build up in the brain to cause Alzheimer’s. Overall, several years of study produced results similar to other studies that have shown that people who maintain a positive attitude live longer and maintain better overall mental health. In contrast, chronic negative thinking over long periods of time increases the risk of heart attack, stroke and early death.
From fear of travel to feeling its simply not a good time to take time off, surveys show that the number of unused vacation days is building. Consulting firm Willis Towers Watson reports that a fourth of employers plan to increase rollover limits to minimize lost vacation days. Others are hesitant to relax their policy, citing financial concerns and the increased risk of employee burnout. Staycations, traditionally viewed as an opportunity to do things around the house and clear the mind, are being viewed very differently by those working from home.
What may be in short supply when a safe, effective Coronavirus vaccine is available? The medical glass needed to produce vials to hold the vaccine. With plans to produce more than a billion doses globally, Johnson & Johnson bought 250 million vials in the U.S. at the start of the pandemic. Corning recently signed a $200+ million deal with the U.S. government to expand manufacturing capacity to meet demand.
With many patients still worrying about contracting COVID-19 by visiting a doctor or pharmacy, large healthcare organizations are sponsoring ad campaigns encouraging people to return to their medical providers. Print ads, TV commercials and social media ads tell people that returning to their doctor for regular checkups, emergencies or diagnostic tests is not only important, but safe due to strict cleaning routines and office protocols that eliminate shared waiting areas. Providers and payers fear that leaving conditions untreated will result in more serious and costly medical concerns in the future.
In 2017, according to the Centers for Medicare and Medicaid Services, healthcare spending for every man, woman and child in the U.S. totaled nearly $11,000 – more than any other wealthy country. The interesting thing is that very few of us really know what goes into this number or who pays the bills. Here are a few facts you may find interesting.
- The average cost of employer-based health insurance for a family in 2019 was $19,616.
- The Census Bureau reports that 91.5% of Americans have health insurance coverage.
- In 2017, the average ER visit cost about $1,400 – an increase of 176% in 10 years.
- Federal, state and local governments currently pay for about 45% of all healthcare services.
- From 2000 to 2016, spending on prescription drugs rose by 69% – more than any other component.
- The Kaiser Family Foundation reports that in the past year, 50% of Americans put off needed healthcare because of cost.