Economies of Scale for Small Businesses

ebso-embIn late June, the Department of Labor introduced final rules on Association Health Plans (AHP), which will allow bonafide associations to offer healthcare plans to member companies. While we had hoped for a different approach to regulating these plans, association health plans will be regulated by states as MEWAs.

According to the final rules, an association that wants to establish a healthcare plan must already exist for another purpose. In other words, an association cannot be formed for the exclusive purpose of offering healthcare plans to its members. Another stipulation is that new self-funded association health plans cannot be established until April 1, 2019.

Association Health Plans will be exempt from the federal mandate on essential health benefits, but will remain consistent with popular Obamacare rules such as coverage of pre-existing conditions and bans on lifetime limits.

While reserve requirements will vary from state to state, we expect that these plans will be quite costly to establish and closely monitored by state regulators. Nonetheless, for large associations with significant cash reserves, we expect this option to make it possible for thousands of small businesses to lower their cost of employee health benefits.

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Employees’ health care burden growing 8 times faster than wages

This article was published on October 3, 2018 on BenefitsPro, written by Emily Payne.

When the Kaiser Family Foundation started tracking employer health benefits 20 years ago, employee deductibles weren’t a concern. Over the years, though, the survey has adjusted to reflect not just the growing percentage of employees with a deductible (85 percent in 2018) but the growing amount of that deductible ($1,573 for an individual in 2018) .

In fact, according to the 2018 KFF Employer Health Benefits Survey, the burden of deductibles has tripled in the past decade and increased eight times faster than wages. Among small employers, 42 percent of workers pay a deductible of $2,000 or more.

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“Rising health care costs absolutely remain a burden for employers, but they’re a bigger problem for workers, as cost-sharing has been rising much faster than wages in recent years,” KFF president and CEO Drew Altman said in a press briefing.

This year’s survey shows no dramatic shifts in the employer-sponsored health care space but continues to illuminate a number of trends, including increasing health care premiums, greater focus on employee wellness and alternatives to traditional health care providers.

Premiums have increased five percent this year, costing a family for four an average of $19,616. Of that cost, employees contribute $5,547, and employers pay the rest. For single-coverage, premiums increased 3 percent to $6,896.

“Premium growth is important, but it’s only part of the story,” noted Altman. “The bigger issue is rising cost-sharing. What happens with wages can be as important to closing that gap as what happens to cost-sharing itself.”

Almost half of employers continue to offer PPO plans, while three in 10 offer a high-deductible plan with a savings component. Some employers (13 percent) offer an incentive to encourage employees to opt for one plan over another.

HDHP adoption is stagnating, comprising 29 percent of all plans. Part of this slowdown may be due to the uptick in the economy. “Given the economy is good and health care costs are relatively tame, I think employers don’t have a strong incentive at the moment to push people into plans they may not be as comfortable with,” said Gary Claxton, KFF vice president and director of the Health Care Marketplace Project. “I think we’ve stalled a bit on the growth of HDHPs. Things will get more interesting if we move into a recession.”

Wellness is getting more of employers’ attention. Seventy percent of large firms now offer health-risk assessments, and 81 percent use data from those assessments to better understand health risks, target their wellness program promotions, design new programs and/or measure health care costs. “As employers have gotten more involved in trying to develop programs to encourage employees to be healthy, having the info is necessary to determine what kind of programs to sponsor and what employees need information about,” Claxton said.

More employers are looking at workers’ activity data–21 percent now collect information from a wearable device as part of their wellness program, an increase from last year’s 14 percent.

Interest in telemedicine and retail clinics continues to grow. Among large employers, 74 percent offer telemedicine services, an increase of 63 percent since last year. In addition, 76 percent cover retail clinic services, and some offer employees a financial incentive to choose these services.

A number of factors, including wages and the economy, will continue to impact the employer health care space in the coming years. Ten percent of employers expect that the elimination of the individual mandate will result in fewer workers purchasing employer-sponsored coverage.

Another factor asked about during the briefing was the increase in prices by health care systems and providers. Consolidation among major health care systems continues to shift the balance of power when it comes to price negotiation. “We’re in a competitive health care system,” Claxton noted. “We rely on private insurers and employers to mediate prices. They haven’t been very successful in recent years. It is hard because most workers work for fairly large employers with multiple locations. It’s hard to develop narrow, efficient networks that would cover all of your employees, and the large health plans don’t really have an incentive to create these options.”

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States Moving Forward on Telemental Health

ebso-telehealthStates are moving toward telemedicine to help students access mental health services. Minnesota and Utah have proposed telemental services in order to reach students with underserved mental health needs. Students with unmet mental health needs experience many obstacles, with conditions such as depression and anxiety negatively impacting their attendance and performance.

Telemental health is being utilized to reach those in areas without child therapists or in other “healthcare deserts”. Texas has successfully implemented telemental health programs since 2012, connecting thousands of students with much needed care and treatment. One proposed Minnesota bill suggests launching four telemedicine projects aimed at improving access to telemental health services for students. Proposed grants would help provide dedicated space in schools and the technology needed for students to access telemental health services. A bill in Utah would enable the Division of Substance Abuse and Mental Health to create a two-year program using a telemedicine platform to facilitate remote consults between children and child psychiatrists.

Legislators and school officials in a number of states see many benefits to pursuing a telemental health platform, including the potential to identify young people contemplating suicidal or homicidal actions.

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Transitioning small employers to self-funding strategies

This article was published on September 4, 2018 on BenefitsPro, written by Cort Olsen.

Source: BenefitsPro

With premiums constantly on the rise for employers offering fully insured health plans, brokers are searching for ways to convince their small and mid-size clients that switching to self funding can cut costs on their top line items.

Switching to one of these plans means that the employer assumes more risk, with stop-loss insurance providing financial protection against catastrophic claims. They can also pay medical claims as incurred as they would other corporate expenses, or can deposit expected or maximum costs into an account each month.

There are many ways brokers are going about convincing their clients to make the leap, from educating them on the cost of the medical loss ratio, highlighting the financial pressure health care is placing on their business, or just making them feel as uncomfortable as possible by explaining their fully insured payment methods.

Bob Gearhart Jr., partner at benefits brokerage DCW Group in Boardman, Ohio, says explaining the MLR and how it guarantees fully insured premiums will rise is a great starting point when initiating the conversation.

“Benefits is one of the few areas the CFO has not optimized and they are feeling pressure from the CEO to drive earnings to the bottom line,” Gearhart says. “This organizational pressure coupled with health care in the headlines is slowly changing the buyer within the organization.”

Gearhart adds that leading HR professionals recognize this and proactively engage the C-suite in the buying decision.

Robson Baker, employee benefits and HR adviser for Clarus Benefits Group in Houston, Texas, says getting the C-suite and HR through the awareness phase of the conversation is the hardest part.

“The broker needs to educate and bring the pain points to the forefront of their minds,” Baker says. “Then it moves to consideration — which can be led by a strategic CFO and compassionate HR department.”

Framing health care cost as a financial decision allows the broker to approach the CFO first and then bring the self funding plan down to HR and out to the other employees. Continue reading

For 2019, Employers Adjust Health Benefits as Costs Near $15,000 per Employee

This article was published on August 13, 2018 on SHRM.org, written by Stephen Miller.

Plans are steering employees toward expanded telehealth options and high-value centers of excellence

With the cost of employer-sponsored health care benefits expected to approach $15,000 per employee next year, large U.S. employers continue to make changes, new research reveals.

Many want to hold down cost increases and are steering employees toward cost-effective service providers, such as telehealth options and high-value in-plan provider networks, according to the nonprofit National Business Group on Health (NBGH) survey 2019 Large Employers’ Health Care Strategy and Plan Design. The survey was conducted from May to June with 170 large employers as they finalized their 2019 health plan choices; more than 60 percent of respondents belong to the Fortune 500.

Cost Increases Hold Steady

Big employers project that their total cost of providing medical and pharmacy benefits will rise 5 percent for the sixth consecutive year in 2019. If they weren’t making benefit changes, their costs would rise 6 percent, the survey showed.

The total cost of health care, including premiums and out-of-pocket costs for employees and dependents, is estimated to average $14,800 per employee in 2019, up from $14,099 this year. Large employers will cover roughly 70 percent of those costs, leaving $4,400 on average for employees to pick up in premium contributions and out-of-pocket expenses.

Health benefit costs are still rising at two times the rate of wage increases and three times general inflation, “making this [cost] trend unaffordable and unsustainable over the long term,” Brian Marcotte, NBGH president and CEO, said at an Aug. 7 press conference in Washington, D.C.

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Consumer-Directed Health Plans

“The most unexpected data point in the survey this year is that employers are dialing back their move to consumer-directed health plans”―or CDHPs―especially as a full replacement for other health plan options, Marcotte said. CDHPs typically combine a high-deductible health insurance plan with a tax-advantaged account that employees can use to pay for medical expenses, most commonly a health savings account (HSA) or health reimbursement arrangement.

“We may be at a tipping point in terms of cost-sharing with employees,” Marcotte said.

In 2019, the number of employers offering CDHPs as a sole option will drop by 9 percent, from 39 percent to 30 percent, “reflecting a move by employers to add more choice back into the mix” by also offering traditional health plans such as preferred-provider organizations, he noted.

To lessen the pain of high deductibles while maintaining incentives for cost-conscious spending, large employers are contributing to their employees’ HSAs, on average, $500 for an individual and $2,000 for a family, NBGH found.

The shift to CDHPs as a sole option over the last decade was driven, in part, by the Affordable Care Act and its 40 percent “Cadillac tax” on high-value health plans, originally to take effect in 2018, Marcotte said. “A lot of companies moved to high-deductible health plans to minimize the impact of the Cadillac tax or to delay its impact, but the Cadillac tax has been kicked down the road, first  to 2020 and now to 2022,” Marcotte said. Many believe it may be further delayed or repealed altogether, “so employers are relaxing” about the need to reduce the scope of their plans. Continue reading

Reference Based Pricing Gaining

ebso-rpbWhile plenty of folks talk about reference based pricing as though it’s a fad that has come and gone, we’re finding more interest from employers all the time. This may be because many like to brand it as another form of disruption, but regardless of how you brand it, reference based pricing is becoming a more important part of our value proposition all the time. It’s becoming more widespread because it enables a self-funded plan to limit costs to an extent that few other measures, if any, can match. This is primarily because by negotiating in advance with hospitals to accept a schedule of fixed payments for certain healthcare services, carrier-sponsored provider networks can be bypassed.

The fact is that while reference based pricing may be considered disruptive by many hospitals, it works. It is a transparent approach that can save a lot of money for self-funded health plans and their members. And finding ways to help self-funded employer plans provide high quality, high value healthcare to their members is our most important job.

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Jury deems Centura Health $230K surgical bill ‘unreasonable,’ awards $766

This article was published on June 21, 2018 on BenefitsPro, written by Greg Land. Photo Source: BenefitsPro.

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A Colorado jury declared a hospital’s billing unreasonable, turning aside its lawsuit demanding almost $230,000 from a patient whose insurer already covered the cost of her surgery.

The patient had already paid her deductible and her insurer had paid the hospital about $75,000, which an audit deemed the “reasonable value of the goods and services” she had been provided, her lawyer said.

Lead attorney Ted Lavender of FisherBroyles’ Atlanta branch, who represented the former patient with office partner Kris Alderman and Denver partner Frank Porada, said testimony in the case revealed just how murky hospital billing can be and how some patients are targeted for whopping bills to make up for those who pay substantially less for the same services.

“The hospital experts explained how the rates get set, and it ultimately devolved into this idea that paying patients have to pay more to make up for nonpaying patients, the uninsured, those on Medicare and Medicaid, who don’t pay full price,” Lavender said.

In his client’s case, records showed that surgical spinal implants cost the hospital about $31,000.

“They turned around and charged $197,640 for those items on the hospital bill,” said Lavender. “That is a 624 percent markup.”

The hospital is represented by Traci Van Pelt, Michael McConnell and David Belsheim of Denver’s McConnell Fleischner Houghtaling.

Van Pelt said they will file posttrial motions and appeal the verdict.

The case involved back surgery performed on Lisa French in 2014 at St. Anthony North Health Campus, north of Denver. Hospital filings said French’s surgery was to relieve back pain and was “considered elective.”

French’s employer had a self-funded ERISA insurance plan, and she was told prior to surgery that she would owe $1,336, of which she immediately paid $1,000.

French’s contract included phrasing that she “understand[s] that I am financially responsible to to the hospital or my physicians for charges not covered or paid pursuant to this authorization.”

St. Anthony’s billed her insurance plan $303,888 after the surgery and for two presurgical consultations based on its “chargemaster” billing schedule, an industrywide practice whereby providers list all the prices they charge.

As Lavender explained, French’s employer’s insurance plan contracts with a health care consulting firm, ELAP Services, which audits claim costs and negotiates with providers for self-funded insurers. On its website, ELAP says it “assists in plan design and jointly establishes limits for payment of medical claims that correlate to the providers’ actual cost of services.”

ELAP audited the fees St. Anthony’s charged French and determined that her actual charges came out to about $70,000, Lavender said. Between her co-pays and the insurance plan, St. Anthony’s was paid $74,597.

St. Anthony’s parent company, Centura Health Corp., sued French in state District Court in Adams County, Colorado, seeking an additional $229,112 in 2017.

ELAP provides legal representation to clients facing suit pursuant to its services, and Lavender, Alderman and FisherBroyles Denver partner Frank Porada were assigned French’s defense.

According to defense filings, Fishers contract with St. Anthony’s contained no stated price and was thus ambiguous.

The hospital was already paid the reasonable value for the services, according to a defense account. The chargemaster rates are “grossly excessive and defendant had no choice but to sign the Hospital Service Agreement, making them unconscionable” and thus unenforceable, the defense said.

During a six-day trial in Brighton, Colorado, before Judge Jaclyn Brown of Colorado’s 17th Judicial District, Lavender said the entire dispute was over the prices and methodologies medical providers use.

“We had one expert, and they had three,” said Lavender. “They spent $100,000 on experts.”

“The reality is that there’s nobody to say how much they’re charging is reasonable,” Lavender said.

The jury made that determination for French on June 11, answering “no” when asked whether her bills were reasonable. The panel agreed she had a contract with St. Anthony’s to pay “all charges of the hospital,” but that those charges were “the reasonable value of the goods and services provided,” not those set by the hospital’s chargemaster.

The jury awarded the hospital $766.74.

The hospital’s attorneys did a good job explaining how hospitals have to shoulder the burden for underpayments and nonpayment by other patients, Lavender said.

“They know they’re not going to collect from everybody,” he added. “But in the end, it just reveals how antiquated and nontransparent the system is, because nobody understands the bill.”

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IRS Penalties Are Being Issued

The Internal Revenue Service is finally issuing penalty letters to employers who failed to provide health coverage, in compliance with the employer shared responsibility provisions of the ACA, for the 2015 tax year. Some letters may describe a no coverage excise tax while others may assess an excise tax for failure to provide “adequate or affordable” coverage. The notices are catching many employers off guard because issuance of these letters was delayed several times.

Those who receive a letter describing the specific violation, could be liable for penalties ranging from $2,080 to $3,480 per affected employee, depending on the violation and the plan year involved. Regulatory experts recommend that employers refer to the data submitted on forms 1094-C and 1095-C and respond to the IRS on time, even if they don’t believe the tax is owed.

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4 Ways Social Media is Changing the Healthcare Industry

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This article was published on May 30, 2018 on Businessmole, written by Sam Allcock.

Social media and healthcare may not seem like two things that should go hand in hand. Social media is all about sharing information whereas the health sector is mostly about privacy. So, how is social media changing the healthcare industry?

Like most industries, healthcare is moving to be more digital. The main reason being that the general population is becoming increasingly more ‘plugged in’, therefore to reach prospective clients, those in healthcare need to move with the times and get online.

Social media isn’t just an outlet to share pictures of food, funny videos or stories of your day, but it in fact is a powerful communication tool that is shaping the success of many businesses.

Here are just a few ways in which social media is changing healthcare:

Improving the physician-patient relationship

Social media has provided the opportunity to develop relationships between patients and physicians. Instead of only being able to communicate with a patient for the 10 minutes given for an appointment, doctors are now able to share valuable health information on their social media platforms. This helps physicians further improve the lifestyle choices of their patients, through reinforcement of health studies, research and messages on this media patients will be exposed to health information on a daily basis.

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Social media also helps to expand the reach of information: there will be patients that only visit their local GP or hospital very occasionally, meaning their exposure to important health information is limited. Through the sharing of these messages on social media, members of the public that would otherwise miss these important notices are exposed to them.

Similarly, it helps develop trust between patient and consultant. By allowing the physician to share up to date health research and stories on their accounts, patients can be confident that their physician is ahead in their education and patient care. Not only does this build confidence with existing patients but is excellent for ‘word of mouth’ referrals. People are likely to share what the doctors are putting on their feeds, this will then be seen by a new circle of people and is likely to influence their healthcare decisions.

The example below shows an oncologist sharing news about a new cancer treatment, this then has been retweeted by three separate accounts. This news is relevant to the industry that Dr. Greg Wilson is in, making him appear to be up to date with developments in his field but also, by sharing it on Twitter, he has made that information available to other accounts who then have shared this information to their own following, further spreading the news and his name.

In a 2016 Forbes article, it was mentioned that “Social media will be THE place patients go to for information on doctors and hospitals and will be a major referral source for healthcare providers.”

Patients using social media to make a decision

In a similar way to people using social media reviews to choose a restaurant, more and more people are turning to social media before they make a decision about a healthcare provider. 41% of people say social media would affect their choice of a specific doctor, hospital or medical facility.

The image below shows three negative reviews of a GP surgery and outlines issues people have had with that particular facility. A new patient may look at these reviews and make the decision not to register with that particular doctors’ surgery.

People are able to research a healthcare provider before making a decision. By being able to read real life reviews they can ensure that they are making an informed choice when they choose a medical facility.

These reviews can also help to improve the quality of these services. If enough people are leaving feedback about any poor or unacceptable aspect of a business, changes are likely to be made to improve them.  Even if patients are not using social platforms to leave reviews, healthcare providers are able to distribute surveys or run polls via social media in order to obtain feedback on their services and then use this data to make changes to improve quality.

Raising Awareness

Social media is an effective platform to share information with the population and raise awareness about important subjects. Nothing is more important than health concerns. By creating shareable content healthcare providers are able to have their important subject spread wider, and faster, than if they used traditional media.

Social media can be used for targeted local campaigns. For example, every year the NHS call for vulnerable groups and those working within the healthcare sector to get their ‘flu jabs, you can usually see leaflets in the doctors surgeries and banners in local pharmacies. However, these marketing materials are easy to ignore when you are out and about. Social media targets the public when they are unlikely to be focusing on anything else.

South Tees Hospitals NHS Foundation Trust ran a campaign through October, 2016 called #Flutober. The campaign was aimed at the staff of these hospitals and involved a set of emotive pictures of vulnerable patients who would risk further harm by contracting ‘flu. This risk would be reduced by those working at the hospital getting the flu jab.

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As a result of the campaign 600 more staff, compared to the same period in the previous year, were vaccinated.

Due to a lack of funding and tight marketing budgets, marketers in this industry should ensure that healthcare call tracking software is applied to their campaigns as it will allow marketers to track which campaigns are bringing in the most leads and, as a result, they can determine which have been successful in raising awareness and which platforms have the most engagement. This can help marketers allocate budget effectively to achieve the greatest results with the budget provided.

Engaging with patients in real time

Social media has the benefit of being able to reach more people worldwide than most other media, according to numbers from Statista, the number of social media users worldwide is set to reach 2.62 billion in 2018. This reach is useful when there are global health crises as it provides a platform for sharing important information about epidemics. It also has the advantage of being a fastmoving media, there is no waiting for material to go to print or for footage to be edited, and it works in real-time.

An example of this in action was the Zika outbreak in Brazil in 2016. This virus is spread through mosquito bites and exposure to this virus while pregnant can produce life-altering birth defects. Due to the speed at which the disease was spreading in 2016, and being so close to the Rio Olympics, which were forecast to bring thousands of tourists to the country, it became a global issue. Using social media, healthcare providers, news outlets and charities were able to create content and spread important information about the virus, such as how to prevent it from spreading, how to avoid mosquito bites if you are traveling to the infected area, risks for vulnerable individuals such as pregnant women and symptoms to look out for.

The Centers for Disease Control and Prevention (CDC) won ’Social Media Campaign’ category of Ragan’s 2017 Health Care Marketing & PR Awards for their campaign during this health crisis. The campaign produced more than 6,800 messages to deliver information about prevention, updates on the outbreak and news of the CDC’s response. The videos were published 92 times across the CDC’s social media accounts and were viewed more than 680,000 times.

On a smaller, local level, GP surgeries and other medical facilities can update patients on waiting times, staff absences and closures in real-time through their social media pages, see the example below:

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Advice of this sort stops patients from making unnecessary trips only to discover they can’t see their preferred doctor or that the waiting time is over an hour; it also allows healthcare providers to keep patients informed even when they are out and about.

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