According to a public-private partnership launched by HHS, the percentage of U.S. healthcare payments tied to value-based care rose to 34% in 2017, a 23% increase since 2015. Fee-for-service Medicare data and data from 61 health plans and 3 fee-for-service Medicaid states with spending tied to shared savings, shared risk, population-based payments and bundled payments were examined in the analysis.
Another recent proposal of the Trump Administration would allow employers to fund tax-exempted Health Reimbursement Arrangements to help pay for an employee’s individual health insurance premiums. In addition, the proposal would also allow employers that offer group health coverage to fund an HRA of up to $1,800 to reimburse employees for “qualified” medical expenses. Easing restrictions in this manner is seen by many as a big boost for small businesses that are unable to provide employer-sponsored healthcare. Comments are being accepted through December 28, 2018 and if approved, the new rules would apply for plan years beginning on or after January 1, 2020.
You might be surprised to hear that millennials represent one third of the American workforce, but Pew Research Center confirms it. If your health benefit plan hasn’t adapted to the needs and lifestyles of these young people, you’re missing an opportunity to boost retention, build loyalty and enhance wellness.
For starters, it’s important to realize that 45% of young adults age 18 to 29 do not have a primary care doctor. They do, however, have a smartphone and you can bet they use it to access the internet constantly. With online sources like WebMD offering so much healthcare information, it’s no wonder that millennials are likely to self-diagnose and even treat one another at home before seeing a doctor. If young people can find much of the healthcare information they need in the palm of their hand, you can bet they expect to find benefits and enrollment information easily accessible as well.
They Want Information Now
Just like so many of us who have come to expect an immediate response to everything, millennials who do need a doctor expect the visit to happen quickly and easily. According to PNC Healthcare, this explains why 34% of millennials prefer to use a retail clinic rather than waiting several days to see a primary care physician in their office – a rate twice as high as baby boomers. It would also seem to point to an increased use of telemedicine.
Cost Matters to Millennials
Millennials face more than their fair share of financial pressures and take their finances seriously. Surveys show they are more willing to request a cost estimate prior to choosing a treatment option than baby boomers or seniors ever were. This not only makes cost transparency tools important, but it’s a very positive trend that should contribute to lower claim costs going forward.
Whether it be treatment options, provider access or cost of care, the demand for health and benefit plan information will only increase as more and more millennials enter the workforce. In order to respond to change, self-funded employer groups will need the resources of an independent TPA that can combine the right plan design with more personalized, interactive communications and more innovative ways for younger employees to access the more personalized care they will need going forward.
Currently, only 21 states offer some protection against balance billing and most existing laws apply to emergency services required from out-of-network providers. Few, if any, address balance bills received for treatment by an out-of-network provider in an in-network hospital. In Pennsylvania, the Governor and General Assembly have introduced two bills aimed at taking consumers out of the middle of the reimbursement process. These bills have come after several other states have adopted more comprehensive laws that prohibit balance billing entirely.
Some measures addressed in Connecticut, New York, Maryland, Florida and New Jersey include:
- Protections in emergency department and in-network hospital settings
- Prohibiting providers from balance billing and requiring carriers to hold their members harmless
- Adopting reimbursement rate standards and a payment dispute resolution process
- Applying these laws to all types of managed care products, including HMOs and PPOs
The goal of the proposals is to keep covered persons out of the middle of carrier-provider payment disputes. In non-emergency procedures, healthcare facilities in New Jersey are required to disclose whether they are in-network and advise the covered person to ask if their physician is in or out-of-network. Individual healthcare professionals must inform the patient if they do not participate in the person’s plan network and provide a billing estimate and applicable CPT codes. With healthcare costs continuing to rise and a lack of federal regulations, we can expect more states to take measures to protect healthcare consumers. We will strive to keep our clients informed as changes develop.
The International Foundation of Employee Benefit Plans reports that individuals enrolled in employer-sponsored healthcare plans are now paying an average deductible of $1,491 for individual coverage and nearly $2,800 for family coverage. These numbers are up from $1,300 and $2,500, respectively, in 2016.
Individuals covered by HDHPs have average deductibles of $2,296, with families averaging $4,104 – more than twice the averages for traditional, non-high deductible plans. The online survey included nearly 700 U.S. members of IFEBP and was conducted in February.
In an effort to take control of their healthcare spend, more employers continue to move to self-funding. But as those who have used this funding mechanism for some time have learned, designing a self-funded health benefit plan is just the beginning. When a health plan is self-funded, the entire healthcare supply chain is unbundled, giving everyone a clear, unobstructed view of the healthcare spend. An experienced Third Party Administrator will help you identify exactly where your healthcare dollars are going. Providers can be evaluated. Opportunities to achieve quality outcomes and lower costs can be explored. Best of all, unlike fully-insured health plans that are carrier-based, employers who self-fund their health benefits have the flexibility to act.
Target Cost Transparency
According to the Centers for Medicare and Medicaid Services, healthcare costs have increased by more than 260% since 1999. One of the biggest problems is costs for the same service can vary drastically from one provider to the next, even when the providers are located in the same marketplace. One way to attack this problem is with Reference Based Pricing, which typically allows qualified self-funded health plans to pay for medical services based on a percentage of Medicare, rather than by applying a percentage discount to a facility’s billed charges. Using an accepted index such as Medicare has enabled a growing number of health plans to bring cost transparency and consistency to hospital billing, since Medicare sets prices for every procedure.
Communicate with Purpose
From mobile cost transparency tools to telemedicine, employers are doing more than ever to help plan members utilize their benefits. Engagement rates, however, often tell a disappointing story as many employees are reluctant to use these new features. Experience tells us that whether we’re talking about a published provider directory or an online member portal, most people are confused by healthcare coverage.
Whether your company decides to place colorful posters in gathering spots, hold employee meetings or distribute email newsletters, emphasizing the steps you’re taking to make healthcare more accessible and affordable is critical. In this time of full employment and intense competition, health benefits can play an extremely important role in attracting and retaining valued employees. Don’t miss this opportunity to enhance your company culture and improve your employees’ quality of life.
Since 2007, adults ages 18 to 64 with employment-based coverage have increasingly chosen High Deductible Health Plans (HDHP), both with and without Health Savings Accounts (HSA), over traditional plans.
In 2017, the number enrolled in HDHPs without an HSA rose to 24.5%, while HDHPs with HSAs rose to 8.9%. Some employers are choosing to only offer HDHPs, helping shift employees away from traditional plans.
The healthcare landscape is changing as providers increasingly offer virtual care options, and naturally it’s taken some getting used to. A recent study by the Deloitte Center for Health Solutions found that while patients who have used virtual care reported a 77% satisfaction rate, only 44% felt that their wait time was reduced compared to an in-person office visit. Some offices are designating doctors for virtual care on specific days of the week to circumvent wait times caused by healthcare professionals bouncing between in-person and virtual patients.
Healthcare professionals that aren’t utilizing text communications are failing to meet their patients where they are. A 2018 survey found 11% of patients would rather communicate via text message, a number that is expected to grow as the Millennial population begins to outnumber Boomers. Text alerts and communications can be used for a variety of services, including preventative care such as periodic appointments and flu shots, post-treatment care information, remote health monitoring and chronic disease management.
From Amazon, Berkshire Hathaway and JP Morgan to Walmart and Humana – disruption is all around us. The future of our healthcare system is unfolding right before our eyes and regardless of how this giant chess match turns out, health plan participants just may be the biggest winners.
The Retail Effect
While many healthcare plans have done well under Obamacare, they need to review what many retailers have experienced since Amazon began building its Prime subscriber base of 100 million plus. When you consider the scope of Walmart, their potential for retail clinics is virtually unlimited. Whether by Amazon, Walmart or others, home delivery of prescriptions could make things very difficult for brick and mortar pharmacies. No matter what area you examine, these mega-partnerships have the potential to impact access to care in ways that most traditional healthcare providers have never imagined. And, if recent retail history means anything, healthcare consumers are sure to benefit.
Self-Funding Will Rule
Most working Americans are already covered by self-funded health plans, and we would expect the new Amazon, Berkshire Hathaway, JP Morgan family to offer at least one self-funded option. Studies show that self-funded plans offer employers far more flexibility than fully insured counterparts and Berkshire Hathaway’s Specialty Services unit certainly has the resources to provide the required stop loss insurance.
A Transparency Opportunity
With a little creativity, the transaction processing infrastructure of JP Morgan could make real-time claims processing a reality for fellow plan members. Real-time payments may encourage providers to discount more. Add telehealth and enable physicians to view electronic medical records and patients may know what to expect from their visit and what they will pay before they make the appointment. The bottom line is that as the level of information sharing increases, cost transparency and the potential for savings will grow.
As a TPA dedicated to controlling costs for self-funded health plans and members, we know these deals will keep more people out of the hospital and increase competition for outpatient care. Technology will move forward, actionable data will be more accessible and consumers will have their day as costs become more transparent and delivery more user-friendly.