National Healthcare Reform Magazine
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National Healthcare Reform Magazine
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EDITORIAL Editor-in-Chief
Jonathan Edelheit
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Tercy U. Toussaint
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CONTENTS
The Next Phase of CDHP…
And What Reform of Healthcare in the United States Should Be… by Jerry Van Ness
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from the Editor 04 Letter Comfortable with Healthcare Reform
by Jonathan Edelheit
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Healthcare: East or West who is the best? by Rajeev Mudumba
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What will the health insurance market look like in 2020? by Tim DeRoche
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Dependent Eligibility Under Healthcare Reform
Cost-Containment Strategies for Employers Health Reforms by Rich Flaherty
the “ Rules of the 16 Understanding Game” in Healthcare Reform
A New Wellness Intervention that Can Increase Cancer Screening Rates for Employers by Dr. Bruce Sherman and David Nikka
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Cross Selling Your Way to Success in 2011 by Bob Jabour
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Early Detection is Key ~ Breast Cancer Awareness by Melissa Mayfield
by Dr. Salinder Supri and Prof. Karen Malone
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Executives At The Human Resources Table
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Employer Sponsored Cancer Screening by Jonathan Spero
by Ed Bray
Copyright © 2011 Healthcare Reform. All rights reserved. Healthcare Reform Magazine is published monthly by. Material in this publication may not be reproduced in any way without express permission from Healthcare Reform Magazine. Requests for permission may be directed to info@HealthcareReformMagazine.com. Healthcare Reform Magazine is in no way responsible for the content of our advertisers or authors.
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EDITOR’S LETTER
Comfortable with Healthcare Reform
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he dust is finally settling from healthcare reform. As an industry we are starting to see everyone understanding how healthcare reform works and will effect them and they are starting to get back to business as usual and moving forward. It is nice to see the industry no longer stuck on an uncertain future, not sure what direction to move in, or even to move at all because of how unsure they were about healthcare reform Everyone has gotten into their post healthcare reform routine, and they are finally comfortable with it. Some may not be happy with it, they may not even like it, but they finally understand it and are moving forward accordingly. This is important, because our industry needs to move forward and not be stuck in time, or so focused on uncertainty that we are afraid to make decisions.
Jonathan Edelheit Editor-In-Chief Jonathan Edelheit
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jon@employerhealthcarecongress.com
HEALTHCARE: EAST OR WEST
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WHO IS THE
BEST? by Rajeev Mudumba
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bout 2 weeks ago, our dinner table conversation at home was around healthcare in general and the changing dynamics of U.S. healthcare as in many households in recent times. My 8 year old son turned towards me and asked, “Dad. Which country has the best healthcare in the world? Is it America?” That set me thinking… There are two schools of thought in the U.S. One, which believes that U.S. healthcare system is one of the better systems in the world or perhaps even the best and the other, believes we have a long way to go. If you put on the TV or the radio, you will hear politicians out there telling you how the U.S. healthcare system is the best in the world irrespective of the escalating costs, myriad complexities of law, growing number of uninsured Americans, Medicare and Medicaid cuts and, if you, like me, tie quality of healthcare with longetivity statistics, U.S. placement as the 50th in a list of 229 countries for which it was tabulated[1]. U.S. healthcare has often been argued as one of the better systems based on some myopic stats such as lesser wait times for care compared to some of the other developed countries, better access to medical technology and vast majority of healthcare innovation happening in the U.S. The World Health Organization (WHO) conducted the first analysis to rank the world’s health systems in 2000. Using five performance indicators to measure health systems in 191 member states, it concluded that France provides the best overall w w w. H e a l t h c a r e R e f o r m M a g a z i n e . c o m
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healthcare followed among major countries by Italy, Spain, Oman, Austria and Japan. United States was a dismal 37th [2]. The five indicators were: overall level of population health; health inequalities (or disparities) within the population; overall level of health system responsiveness (a combination of patient satisfaction and how well the system acts); distribution of responsiveness within the population (how well people of varying economic status find that they are served by the health system); and the distribution of the health system’s financial burden within the population (who pays the costs). In other words, the quality of healthcare systems is based upon factors such as accessibility, affordability and the level of care and qualifications achieved by the professionals working within.
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WHO compared each country’s healthcare system to upper limit of what can be done with the level of available resources in that country. It also compared each country’s healthcare system accomplishments with those of others. The WHO report concluded that health and wellbeing of people depend critically on the performance of the health systems that serve them. However, there is disparity in performance, even among countries with similar levels of income and health expenditure. Virtually all countries were underutilizing their available resources. The goal of the analysis was to provide a comparative guide to help countries learn from each other and thereby improve the performance of their health systems.
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In 2009 & 2010, The Commonwealth Fund conducted studies comparing the United States with about 10 other advanced nations through surveys of patients and doctors and analysis of other data. Its report ranked the United States on most measures of performance, including quality of care and access to it. The 2009 survey[3] concluded that there were wide differences across countries in access, healthcare technology, priorities and care quality. U.S. stands out for reporting cost-related access problems, lack of after-hours care, and lag in IT adoption. The 2010 survey[4] reflected cross-cutting themes and implications for U.S. Reform. United States stood out for access problems because of costs, difficulty paying medical bills, insurance complexity, and disparities by income. Symptoms of weaker primary care were seen in U.S., Canada, and Sweden. Germany, Switzerland, U.S., Netherlands and U.K. showed rapid access to specialists. Swiss were notable for rapid access to primary and specialized care. According to the survey, U.S. health reforms will make a difference. This includes many elements seen internationally such as premium assistance for low and modest income people; Medicaid expansion, Benefit standards with limits on out-of-pocket spending and Insurance exchanges and standards to reduce complexity. The Commonwealth Fund’s 2011 International
Health Policy Survey is currently in progress. French medical care is deemed to be one of the best in the world. While it is true that you can get excellent care in France, it comes at a price. Individuals who are not French nationals pay extremely high rates while French nationals are taxed extremely heavily. That being said, France still has one of the longest life expectancies in Europe, with 81 years of age. The U.S. has been on the forefront of healthcare in terms of the % of GDP spent, innovation and cutting edge advancement in medical technology. We have produced the best of drugs and innovative surgery practices, but when it comes to making them economically viable for end consumers, we have miserably failed. From an economic perspective, such medical treatments are increasingly out of reach to many Americans. Healthcare costs are multiplying with each passing year, rising twice or faster than inflation and health insurance is getting to be out of reach for more Americans. There is a major disconnect between the progress made in health technology and its affordability for Americans. Healthcare as a fundamental right is an ongoing debate in the U.S. while most of the developed countries are already there, although they have their share of issues to contend with. Most of these developed countries have universal publicly funded healthcare. Not to say, that
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universal healthcare is the silver bullet for healthcare woes, but it is an interesting point to note. World healthcare ranking may not be a true indicator of our quality of care in comparison to the rest of the world based on the subjective nature of these studies. But, with the U.S. leading the world in total spending; the question arises as to whether the quality of healthcare is comparable to the amount of money spent on that care. Studies have shown that some of the reasons for United States spending a larger percentage of its GDP on healthcare include higher labor, administrative and malpractice insurance costs. These studies; though subjective, do reflect that there are no particular areas in which U.S. healthcare quality is truly exceptional. Instead, the available data depicts that the US health system performance is a mixed bag, with the United States doing relatively well in some areas, such as cancer care and medical technology and less well in others such as mortality, accessibility etc. Although, the U.S.; like other countries has its own share of strengths and weaknesses in terms of the healthcare it imparts to its citizens; the value obtained for money spent on healthcare is drastically lower than the other countries. Important lessons can be drawn from countries doing better than the U.S. in various realms of healthcare. While US is a trendsetter in healthcare innovation and technology, these lessons will take it on the path of a true healthcare trendsetter in terms of providing efficient, accessible and quality healthcare to its citizens. The hope is that the healthcare reform (estimated to cost nearly $2 trillion over 10 years) will References:
1. The World Factbook - https://www.cia.gov/library/publications/the-world-factbook/rankorder/2102rank.html 2. World Health Organization Assesses the World’s Health Systems - http://www.photius.com/rankings/who_world_health_ranks.html
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decrease healthcare costs and effectively provide millions with affordable insurance options. Health reform provides an opportunity for us to build on strengths, correct weaknesses and improve our framework. Perhaps, then, the U.S. healthcare system will improve quality and care statistics to measure up to other countries. The healthcare overhaul we have all been hearing about over the last couple of years underscores the need to take steps towards quality improvement; further, reform is needed to improve healthcare delivery, propagation of prevention over care, employment of technology and innovation to facilitate cutting edge health management, and help consumers demand focus on a health based economy than a sickness based economy which will pave the way for better health dynamics and make U.S. healthcare truly, “the best healthcare in the world.”
Bio
Rajeev Mudumba works with a leading HRO/ Healthcare organization. Rajeev has over 16 years of leadership experience in the HRO, Healthcare and Technology consulting industries. His distinguished record of accomplishment and innovation includes high level strategy and ideation, precise execution and enhanced focus on efficiencies through the use of technology in business across various verticals. He can be contacted at rajeevsagar@gmail.com.
3. 2009 Commonwealth Fund International Health Policy Survey - http://www.commonwealthfund.org/Content/Surveys/2009/Nov/2009-CommonwealthFund-International-Health-Policy-Survey.aspx 4. 2010 Commonwealth Fund International Health Policy Survey - http://www.commonwealthfund.org/Content/Surveys/2010/Nov/2010-InternationalSurvey.aspx
National Healthcare Reform Magazine
What will the health insurance market look like in 2020? by Tim DeRoche
FOUR SCENARIOS AND THE LAW OF UNINTENDED CONSEQUENCES
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f someone tells you they know how healthcare reform is going to impact the health insurance market, feel free to ignore them. From where we stand right now, it’s impossible to know what Americans’ health insurance will look like in 2020, even if healthcare reform is implemented in its current form. Projections by the respected Congressional Budget Office (CBO) suggest that reform may reduce the number of uninsured by 56% by 2019. The CBO projects that some employers will cut insurance, but millions of the previously uninsured will enroll in Medicaid or use subsidies to purchase insurance on the individual market.
billion, even if premiums are held constant in 2010 dollars.
Unfortunately, this base case will probably turn out to be wrong in significant ways. The law will almost certainly produce unintended This CBO base case suggests the individual consequences. But there is no way to know market for health insurance may grow by $80 with certainty what those consequences will be.
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Here are four possible scenarios:
The OPM plans, for example, will have the imprimatur of the US government and will be allowed to sell to consumers across state lines. If the OPM plans are able to offer better benefits and lower premiums, they may be able to achieve significant scale, which would further increase their competitive advantage.
Scenario #1 – The Rise of the Individual Market. We have an employer-based system because the government gives employers a tax deduction for premiums, making it economical for companies to buy insurance and pass the tax savings on to their employees. But the reform bill significantly undermines this economic tilt If most Americans feel comfortable with by providing subsidies to individuals who earn government-sponsored options, then employers will likely cut coverage, driving even more up to 400% of the national poverty line. people into these plans. It’s not hard to imagine If Americans respond to this shift in incentives, that this positive feedback loop could – over then the CBO base case may significantly decades – create a de facto public plan covering underestimate the disruption in the private the vast majority of Americans. market. Small employers – those with less than 51 employees – are not required to provide Scenario #3 – Much Ado About Nothing. In any insurance to their employees, and large this scenario, all the hullabaloo around reform employers can eliminate coverage by paying turns out to be just that. The typical American a paltry $2000 fine per employee. If there expects his or her employer to provide health are good options available on the individual insurance, and companies may have a difficult market, then employers of all sizes may dump time cutting coverage, even if the new law gives them the incentive to do so. their coverage. In this case, reform only impacts the health insurance market on the margin. The vast majority of Americans still receive coverage through their jobs, and the increase in Medicaid enrollment and the individual market is less than the CBO base case. Congress will likely repeal – or regulators will water down – any provisions of the bill that produce significant disruptions. HHS has already granted waivers to employers like McDonald’s who offer “minimed” plans that were supposed to be outlawed Scenario #2 – The Public Option in Disguise. by the bill. The bill provides for the creation of two Scenario #4 – Armageddon. The reform bill types of government-sponsored health plans: – and the CBO’s projections– are based on a the so-called CO-OPs and the Multistate delicate balance between coverage requirements Plans sponsored by the Office of Personnel for insurers and mandates on individuals. If the Management (OPM). These plans may have bill got this balance wrong, then prepare for significant advantages over traditional private possible doomsday. health plans. The American Action Forum – headed by a former director of the CBO – has calculated that the advantage of employer-based insurance may disappear for a family of four making less than $60 thousand, and up to 40 million Americans could shift to the individual market if employers and employees follow their economic interests. That could result in an individual market up to 5X as large as it is right now, and twice as large as the CBO projects for 2019.
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In this scenario, employers find it economical (and politically viable) to cut coverage. Healthy individuals, knowing they can’t be denied coverage, refuse to buy insurance until they get sick. The fines for being uninsured prove to be too small (or the government doesn’t enforce them). With a risk pool made up of the sick, insurers are forced to raise premiums, which causes even more individuals to drop coverage. The resulting negative feedback loop pushes insurers into a death spiral, and the government is forced to step in and bail them out. In the 1990’s, several states - including Kentucky, Maine, and Washington – passed laws requiring insurers to offer coverage to all comers (guaranteed issue) and limit price discrimination (community rating). In those states that didn’t have an effective individual mandate (like Massachusetts does), the individual market soon dried up, as healthy individuals declined to purchase coverage and
insurers withdrew their offerings. In almost all these states, reforms had to be repealed. Of course, the law may be repealed, amended, or even overturned by the courts. But – even if it stands - no one knows what’s going to happen.
Bio Tim DeRoche is the founder and president of DeRoche Consulting Group, a boutique consultancy that specializes in strategy work for senior executives. He has previously written for the Washington Post, Education Week, and the Los Angeles Business Journal. tim@derocheconsulting. com
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DEPENDENT ELIGIBILITY UNDER HEALTHCARE REFORM COST-CONTAINMENT STRATEGIES FOR EMPLOYERS by Rich Flaherty
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he Patient Protection and Affordable Care Act (ACA) and the Health Care and Education Affordability Reconciliation Act (HCEARA) have changed the landscape of dependent eligibility for employer-sponsored health coverage. Much of the uncertainty about the new healthcare legislation has yet to be clarified by the regulatory bodies, and legal challenges and calls for repeal of the law do nothing to simplify its implementation. However, the Department of Health and Human Services (HHS) has issued interim final rules regarding how dependent eligibility can be defined under healthcare reform. Based on these rules, HMS has identified some strategic actions employers can take now that will reduce the financial impact of the health reform laws on their health plans.
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Impact of Legislation on Enrollment in Employer-Sponsored Health Plans According to the Congressional Budget Office (CBO), roughly 150 million people are covered by employer-sponsored health plans. Prior to the enactment of healthcare reform, that number was projected to increase to 153 million in 2011. However, the CBO now estimates that the combined effect of ACA and HCEARA will cause that initial estimate to increase by an additional 3 million lives in 2011 alone.1 Over 95% of this estimated increase will result from dependents joining a parent’s plan according to the new policy.2 This increase will be felt immediately and persist through 2015, as illustrated in Figure 1.
Figure One - Lives Covered By Employer-Sponsored Health Care (In Millions) The key ACA provision that drives this growth is the change in age threshold for dependent eligibility, rising from age 19 to 26. The policy has two primary components: • “Coverage Extended to More Children. The goal of this new policy is to cover as many young adults under the age of 26 as possible with the least burden. Plans that offer dependent coverage must offer coverage to enrollees’ adult children until age 26, even if the young adult no longer lives with the parents, is not a dependent on a parent’s tax return, or is no longer a student. The policy applies to both married and unmarried children (although their own spouses and children do not qualify). There is a transition for certain existing group plans until 2014 if the adult child has another offer of employer-based coverage aside from coverage through the parent. • “Same Benefits/Same Price. Any qualified young adult must be offered all of the benefit packages available to similarly situated individuals who did not lose coverage because of cessation of dependent status. The qualified individual cannot be required to pay more for coverage than those similarly situated
individuals. It is important to note that the new policy applies only to health insurance plans that offer dependent coverage in the first place: while most insurers and employer-sponsored plans offer dependent coverage, there is no requirement to do so.” 1 In order to formulate an effective cost-containment strategy, employers must understand how an adult dependent’s employment affects their eligibility for coverage under a parent’s plan. According to the U.S. Census Bureau, there were nearly 9 million uninsured adults ages 19 up to 26 in 2008. Nearly half of those uninsured adults worked fulltime, and one quarter worked part-time during that year. Many had access to their own employersponsored coverage, but chose not to obtain it. The Kaiser Family Foundation indicates that “young adults are less likely to take-up the employer coverage that is available to them”.2 The lower health coverage take-up rate of young adults is most likely due to differences in income level, health status, and attitudes about the importance of health insurance coverage.3 1. Young Adults & the Affordable Care Act: Protecting Young Adults & Eliminating Burdens on Families & Business 2. Changes in Employer-Sponsored Health Insurance Sponsorship, Eligibility, and Participation 3. Urban Institute - Health Insurance Coverage of Young Adults
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To address this dynamic, an important provision of ACA allowed “grandfathered plans” to be exempt from most of the changes imposed under reform. Grandfathered plans are defined as pre-existing health plans that maintain the majority of their pre-reform characteristics. With respect to the enrollment of employees’ adult dependent children up to age 26, grandfathered plans were permitted to exclude, through 2014, those children who are eligible for coverage through the child’s own employer.
approach is to conduct an “eligibility review” that requires the employee to submit, for each adult dependent on the plan (such as those over age 19 and older), proof of their relationship to the adult dependent (such as a birth certificate) and a signed statement indicating that the adult dependent is not employed. For adult dependents who are employed, eligibility can be verified by requiring the submission of a signed statement from the adult dependent’s employer indicating that he or she is not eligible to enroll in the employer’s health plan. In the course of conducting this type of eligibility This is an important benefit that can allow an review, HMS has found that many young adults employer with a grandfathered plan to avoid who were originally enrolled are removed as a significant expenses during the period 2011-2014. result of requiring proof of their eligibility. Taking advantage of the benefit requires that the employer implement a procedure to determine Finally, employers may wish to consider that ACA which adult dependents have access to their own has no broad requirements regarding the extension employer-sponsored coverage. A straightforward of supplementary benefits, such as dental coverage.
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If these benefits are offered, they may continue to be restricted according to the plan document. In many cases, it will be cost-effective for an employer to verify student status, in addition to employment status, of adult dependents, in order to determine their eligibility for these other types of coverage.
mobility is quite high, and spouses and adult dependent children are eligible to change their health coverage options annually, it is cost-effective to re-verify eligibility at least annually for these dependents whose eligibility for an employer’s plan are based on the dependent’s employment status.
Employers should act now to protect themselves from the increased cost burden that they may As an employer, it is essential that you communicate shoulder as a result of healthcare reform. Although what healthcare reform does and does not mean there are still many unknowns, employers who take for employees. Confusion about healthcare reform action now to review the eligibility of dependents among the general public is very high. Employers on their plan may set themselves up for substantial that proactively address healthcare reform with healthcare cost savings over the coming years. their employees will reduce the administrative costs and employee anxiety associated with any About HMS misconceptions. Employers should incorporate guidance into any health plan communications they HMS is the nation’s leader in coordination are currently engaging in with their employees. of benefits and program integrity services for healthcare payors. HMS’s clients include health and human services programs in more than 40 states; Establish a Process commercial programs, including commercial plans, Employers who maintain their grandfathered group employers, and over 120 Medicaid managed care health plan status have a very strong advantage in plans; the Centers for Medicare and Medicaid their effort to reduce the cost impact of the new Services (CMS); and Veterans Administration facilities. As a result of the company’s services, dependent requirements. clients recovered over $1.8 billion in 2010, and The requirements regarding coverage of adult saved billions of dollars more through prevention dependent children are quite similar to provisions of erroneous payments. in many health plans that require that an employee’s spouse take health coverage from his or her own employer, if available, or face surcharges, secondary coverage or exclusion from the plan. HMS has long used the process of requiring statements from Rich Flaherty is the employees, spouses and spouses’ employers to Vice President of Sales enforce compliance with these requirements. This and Marketing for the process, incorporated into the overall dependent Employer Solutions eligibility review process, is quite effective in division of HMS. Prior removing spouses who had avoided enrollment in to HMS he worked in their own employer’s plans simply because they the technology and healthcare industries, were previously able to violate their spouse’s plan including 17 years with Hewlett-Packard. rules with impunity. Considering that employment
Be Proactive
Bio
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UNDERSTANDING THE “RULES OF THE GAME” IN HEALTHCARE REFORM by Dr. Salinder Supri and Prof. Karen Malone United States’ medicine, once regarded as the best in the world, is in a sorry state of health. Although U.S. life expectancy has risen by 8.3 years over the last half century, compared to medical progress in the rest of the developed world we are falling enormously behind. In 2010, the Commonwealth Fund ranked the U.S. last in its international comparison of health care systems, behind Canada, Germany, the Netherlands, Australia, New Zealand and the United Kingdom. Another report, by the editor of the Real-World Economics Review, ranked the U.S. 28th out of 30 countries, lagging behind not only Western Europe and Australasia, but also Poland, the Czech Republic, and Slovakia.
many acute care hospital beds. Infant mortality in the U.S. is more than double that of many countries in Europe, and life expectancy at birth is lower. America has a health care system that is frankly third-rate. To add insult to injury, the U.S. has by far the most expensive health care system in the world – indeed, spending is the only category of health care in which the U.S. ranks first. Annually we spend more than double the OECD (Organisation for Economic Co-operation and Development) average on health care – $7,290 in tax dollars for every man, women and child in America. To make matters worse, only a paltry proportion of this figure is actually spent on health – the remaining monies are siphoned off all across the medical system, in multi-billion dollar leakages of which the public is largely unaware.
What does this really mean for the average American? It means that twice as many Americans die before the age of 60, as compared with Europeans. Greeks have access to twice as many doctors, and in Japan there are over three times as How do we explain the paradox that we have the 16
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most expensive health system in the world and one Take for example the health insurance industry. of the lowest performing? In search of answers, There are hundreds of health insurance companies, we need to take a different perspective from those each with a bewildering array of policies. ordinarily rehearsed. This is a system of health insurance so vast that To gain a better understanding of the situation, we many of the insured have no real idea of the type need to take a perspective that focuses on the U.S. and extent of coverage they are buying, and what institution of medicine as a whole, and exposes care they may ultimately receive should they fall the hidden rules by which this institution operates. ill. No wonder that many Americans have to carry As an economist and an academic working in the more than one health insurance policy, or have international health arena, with knowledge and Supplement Insurance Plans, to ensure that they experience of health care in the U.S. and across are adequately covered. However, despite such an the world, we discuss how powerful organizations elaborate insurance system, many Americans are shape, control and perpetuate an ailing system that failed by the insurance companies. Between third serves their own ends, and not America’s health and a half of personal bankruptcies result from the needs. medical bills that insurance does not cover.
The U.S. Institution of Medicine
Setting the “Rules of the Game” Not only is the institutional structure large, it is dynamic. That is, the structure itself actively creates, shapes and maintains the institution of medicine. It does this through what we label setting the “rules of the game,” that is by imposing the terms by which the system operates.
The U.S. institution of medicine is not a single, comprehensive and cohesive system of health care. Instead, it is comprised of a myriad of large and powerful organizations, including the insurance companies, HMOs (Health Maintenance Organizations), corporate for-profit hospital chains, and pharmaceutical companies.
Insurance companies have set the rule “restrict choice and coverage.” They enact this through the creation of an elaborate system of co-payments and deductibles, exclusion clauses and loopholes, which are designed to deter patients from claiming the health care they need, and to override medical judgment as to the treatments patients receive.
HMOs have set the rule “manage care.” This rule serves to restrict patients’ utilization of health care, by limiting the number of treatments patients can have, the number of days spent in hospital, patients’ choice of provider, and even the specific doctor(s) patients can see. These rules deny patients access to the full range of treatment options and to the quality This institutional structure is large and vast, and has of treatment they require and to which they have a over the years has become ever more labyrinthine. right. w w w. H e a l t h c a r e R e f o r m M a g a z i n e . c o m
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The pharmaceutical industry has set the rule, “charge as much as we want, because insurance will pay.” This rule has resulted in prescription drug prices that are much higher than anywhere else in the world – nearly 60 per cent higher than in Canada and nearly 100 per cent higher than in Europe. Not only that, it has led to patients being prescribed sometimes unnecessary, often useless, and even potentially dangerous drugs – a recent study found that 85 per cent of all new U.S. pharmaceuticals either do not work, or have serious side-effects.
developed world, routine chest x-ray screening in America often involves the administration of x-rays both frontally and laterally, even where a single frontal x-ray may be sufficient for basic screening, unnecessarily exposing patients to higher radiation doses.
By each setting their own “rules of the game,” the large and powerful organizations that make up the U.S. institution of medicine shape the system to their own interests and distort health care. In creating the system they want, the institution of medicine Corporate hospital chains have set the rule “test as has shifted the balance of health care provision in much as we want, because insurance will pay.” Under its own favor, to the disadvantage of patients. The this rule, they try to extend the insured patient’s average American plays little part in this process of range of tests and procedures. However, this can determining the shape of U.S. health care, and gets be damaging and costly to patients. Americans are what he or she is given. We are neither in charge of routinely exposed to excessive x-rays, tests and our own health care, nor of the health care system. operations. For example, unlike in much of the 18
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Complexity and Quagmire
complexity make it extremely difficult for patients to obtain appropriate high quality health care, but As each organization is acting largely independently they end up paying for it through the nose. It is one and setting its own “rules of the game,” what has of the main reasons why the cost of health care has emerged is a bloated and inefficient health care spiraled out of control. Indeed, over the last five years contributions to company health insurance system, now mind-boggling in its complexity. have soared by 143 per cent, and out-of-pocket This complexity has created confusion for patients, costs by 115 per cent. administrators and physicians alike. It has led to the emergence of a huge administrative quagmire, which generates a mountain of paperwork inconceivable in any other health system in the world. Johns Hopkins Hospital for example, has to bill more than 700 different payers and insurers, each with their own stipulations regarding services covered, reimbursement, documentation, and preapproval. Is it any wonder then that administrative costs account for more than 30 per cent of our health care spending – and even as much as 50 per cent according to some estimates – compared with other advanced nations whose expenditure on health administration is only 10 per cent?
Opportunistic Advantage
Behavior
and
Taking
This complexity is highly conducive to opportunistic behavior, allowing organizations to take advantage of the system, and to make “supernormal” profits. We only have to look to the U.S. drug industry to appreciate the levels of profits that can be made. U.S. pharmaceutical companies’ profits are the largest in the world, and at a median profit rate of nearly 20 per cent, are four times higher than those of the average Fortune 500 company. As each organization has created its own “rules of the game,” the institution of medicine has grown into a complex entity that few really understand. This very complexity actually works to the advantage of the organizations that comprise the system, creating an operating environment that allows them to siphon off billions of dollars. So, not only does this
Moreover, the complexity is designed to restrict policy makers’ ability to reform the U.S. health care system, since it makes it almost impossible for them to see through the impenetrable fog of a system that has been created, and to identify where to start to disentangle it.
Preserving the Status Quo This large, highly complex and confusing system of health care creates the ideal operating environment for the organizations that have created it. The complexity and resulting confusion help these organizations to perpetuate the current system and preserve the status quo. Although each organization sets their own “rules of the game” individually, w w w. H e a l t h c a r e R e f o r m M a g a z i n e . c o m
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they are at the same time strongly and deeply interlinked. When necessary, they will cooperate and collaborate to protect the system of health care that they have devised, so that it remains intact and continues to serve their own interests.
Real reform demands a fundamental transformation of the “rules of the game” that govern the prevailing institution of medicine. Until then, any reform, whosoever proposes it, will merely amount to tinkering with the system, and is ultimately doomed to fail. It is only through such root and branch reform Whenever reforms threaten, they band together. that we can ever hope that our tax dollars are spent For example, they oppose the formation of a on health, instead of propping those organizations regulatory authority – the proposed American with a vested interest in maintaining the status quo. version of the UK’s National Institute for Clinical Excellence – which seeks independently to test and If fundamental reform of the “rules of the game” of evaluate the relative merits of drugs and medical U.S. health care is not forthcoming, and institutional procedures. They do not want these ever tested by inertia is allowed to persist, the cracks in the system an independent body, since losing such decision will become critical. If unchecked, by 2015, onemaking power would weaken their control, and fifth of the country’s expenditure will be spent on ability to shape the health care system. health care, and yet at the same time we face the looming possibility that we will fall still further in So, not only do they set the “rules of the game,” but international rankings of health care quality. Even through these strong and entrenched relationships, worse, we may actually find ourselves overtaken they work together to stabilize the system and by China, which in three years’ time will have create institutional inertia. Through the creation of extended health care to all its citizens. this impasse and their strong motive to maintain the status quo, it is almost impossible to dismantle the For how long are Americans going to have to do system, and easy to resist reforms to health care. without the quality of health care that so many other countries now simply take for granted?
Real Reform Requires Understanding the “Rules of the Game”
The sum of the “rules of the game” devised by the collaborating organizations, and shaped by their interests, has resulted in the fragmented, haphazard and broken system of health care in the U.S. Reform is long overdue. To make any inroads toward meaningful reform, we need to begin by first identifying and understanding who is setting the “rules of the game,” what the rules are, and how these rules are being used to exploit the system of medicine. Only in this way can we truly understand how the system is being shaped, and begin to treat and heal our ailing health care system.
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Bio The authors have worked at senior and executive levels in the United Kingdom and New Zealand, and have published together and separately, on a variety of topics and areas including Enterprise and Entrepreneurship; Economic and Business Development; Institutional Economics; Health Policy; and Education Reform. Most recently the authors have published “On the Critical List: The US Institution of Medicine,” in the American Journal of Medicine, March 2011 issue.
National Healthcare Reform Magazine
EXECUTIVES AT THE HUMAN RESOURCES TABLE by Ed Bray WHAT YOU DON’T KNOW ABOUT THE FINANCIAL EFFECTS OF HEALTHCARE REFORM ON YOUR ORGANIZATION
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ith the first anniversary of national healthcare reform behind us, you’ve likely survived your first employee benefits renewal implementing the 2010/11 healthcare reform provisions affecting your organization, or you soon will. Thus, it is likely that you have a good idea of the initial cost impact on your organization. But what you may not realize is that you’ve just scratched the surface. As it stands now, the next eight years will require unprecedented organizational review and discussion of employee benefits. This includes recognizing and reacting to new internal and external costs; increased responsibilities from different functional areas and external vendors; implementing healthcare reform provisions in a volatile benefits environment; and performing an in-depth examination of the future of employee benefits within your organization. Welcome to the new world of employee benefits!
The Financial Impact of the Key Healthcare Reform Provisions No doubt you realize that healthcare reform will result in increased benefit costs over the next few years. But are you aware of the magnitude of such costs, when you’ll incur them, and the financial analyses associated with each? The table below answers these questions for some of the key provisions. Every organization’s plan is different, so the exact cost implications will vary. In addition to addressing the cost implications of these key provisions, there will be significant financial and operational analyses associated with the employer “play or pay” provision as we head towards 2014. This provision will prompt
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to create efficiencies. In addition to Human Resources, consider including staff from each affected functional area, such as: • Finance and Accounting for the provisions with a financial impact • Payroll, Legal, HRIS, IT, and Communications for the provisions requiring new reporting and plan testing • Communications, HRIS, IT, and Legal for the provisions requiring increased employee communications • HRIS, IT, and Communications for the provisions requiring benefit system modifications. * Do not need to introduce while deemed “grandfathered” ** Will become effective when regulations are released. Could be earlier than 2014.
your organization to seriously review the cost/ benefit value of continuing to provide health coverage to your employees. With such crucial outcomes, it’s imperative that you work with qualified experts who can provide comprehensive and reliable financial modeling and guidance to help you make the right decisions.
Building Cross-Functional Teams Human Resources cannot implement healthcare reform alone. They will rely on peer functional areas for help in executing requirements that fall into their respective areas of expertise. That means you will face new budget decisions associated with adding staff and resources not previously engaged in the introduction of new benefit initiatives. Thus, it’s more important than ever to have operational efficiencies in place to make the road ahead manageable and affordable. Healthcare reform implementation is a marathon, not a sprint, and failure to manage the implementation process could take a serious toll on your company. Creation of a dedicated task force is one reasonable strategy
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If you currently use external vendors for any of these responsibilities (e.g., administer your payroll or manage your HRIS systems), be prepared for additional costs associated with the healthcare reform provisions, especially the new plan testing and government reporting requirements (e.g., non-discrimination testing and Form W-2 benefits information) and any benefit system modifications. Determine which Human Resources staff will lead the implementation of the healthcare reform provisions within your organization. Because many Human Resources teams have grown leaner as a result of the recession, you may find that you must fill voids to meet upcoming challenges. Be sure you turn to a solid benefits advisor or consultant who can provide strong guidance as well as hands-on support. This will most likely result in additional costs.
Dangerous Turns Ahead In just one year since its introduction, you have already seen the volatility of the Affordable Care Act through pages and pages of legislative guidance, carrier interpretations, state actions, and substantive changes to future provisions. Postponement of the
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Form W-2 benefits value reporting requirement and the non-discrimination requirement for fully-insured plans are prime examples. Awareness and respect for every resource and functional area involved will be critically important as these continual twists and turns will impact your decisions even after they are made. It’s simply the nature of such intricate legislation.
Uncovering the Silver Lining While it’s a given that you and your staff will be consumed with the costs and operational requirements associated with healthcare reform within your organization, the legislation provides some inherent opportunities for cost savings and reasons to consider tabled benefit initiatives. There are a number of cost-saving provisions within healthcare reform, including a small-employer tax credit, an early-retiree reinsurance program reimbursement, and small-business wellness grants. You will want to take a look at these opportunities as well as any others introduced in the future to offset some of your costs. In addition, now is the time to reconsider benefits initiatives that can offer cost-saving opportunities. For example, many employers are seriously looking at introducing employee wellness programs to not only mitigate increasing health insurance costs but to ensure that employees take better care of themselves—especially if you decide to not offer health insurance in a few years.
Opening the Door to Human Resources Human Resources will no longer knock at your door twice a year—once to review the annual health insurance renewal costs and the other to request money for that one-off benefits project budget. Healthcare reform has raised the Human Resources Department to high-profile status given the fact
that they are responsible for leading the charge to incrementally implement a significant number of healthcare reform provisions over the next eight years in a very volatile environment. Each decision comes with significant financial implications and legislative maneuvering that will constantly change the rules for managing benefits programs. As such, prepare yourself for a much closer relationship with your Human Resources leadership, including monthly encounters that will require nimble decision-making. You and other forward-thinking executives must be ready and receptive to answer the door when Human Resources teams come knocking, again and again.
Bio Ed Bray helps corporate clients establish and maintain regulatory compliance for their health and welfare benefit plans. Prior to joining the Burnham companies, Mr. Bray spent 12 years managing and directing employee benefit programs at major national employers. Based in Irvine, Calif., Burnham Benefits Insurance Services, Inc., is one of the largest employee benefits brokerages in Southern California and one of the few to specialize solely in employee benefits. Working with its colleagues at Burnham Gibson Financial Services, and having the added expertise of an in-house underwriter, compliance officer, and communications specialists, Burnham Benefits provides an integrated approach to managing a client’s full spectrum of employee benefits. The company has three offices in California: Irvine, Los Angeles and Santa Barbara; as well as offices in Oregon and the Washington D.C. metro area.
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THE NEXT PHASE OF CDHP…
AND WHAT REFORM OF HEALTHCARE IN THE UNITED STATES SHOULD BE…
by Jerry Van Ness
National Healthcare Reform Magazine
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ack at the advent of PPOs, health insurance deductibles were extremely low, the insured covered by a group health plan had very little out-of-pocket liability, and the cost for a group health plan was a fraction of what it is today in relative dollars. So, what happened to this concept and just where did things go so wrong? Why is that in the era before group health plans and managed care that medical services were so readily available and relatively inexpensive? In this author’s opinion, there are three major reasons for our healthcare debacle: provider abuse of the system; ridiculous judgments by our judicial system and government intervention in general; and finally, but just as important to the financial sustainability of our healthcare system, the lack of financial responsibility of the patient. After the insured has met their deductible and out-of-pocket maximum, providers are many times free to do whatever they want by continuing to provide the patient with services that are of “medical necessity” in their judgment. For the most part, the services that are recommended by the provider are accepted by the patient without much question, partially because the patient has no further financial responsibility. “Who cares? The insurance company will pay for it” was, and still is, the prevailing attitude among those who have met their out-of-pocket responsibilities. This problem is obviously going to escalate with the continued decrease in patient responsibilities under healthcare reform. Sprinkle in the ridiculous judgments of our judicial system that have been raising malpractice insurance rates and other provider liabilities over the years, toss in the fact that after meeting deductibles and out-of-pocket maximums patient’s have no incentive to make sound financial decisions on their treatment,
and there you have it…a system out of control! These reasons, my esteemed colleagues, are THE fundamental problems with our healthcare delivery system, NOT the insurance carriers making too much money and having no competition. (Are you kidding me Mr. Obama? No competition? Then why don’t you have our government investing in the health insurance companies? And by the way, did you happen to mention to the American public that the majority of employees covered under group plans are actually self-insured by the employer, so there is no insurance carrier reaping the benefits?). Have you noticed how hospital systems all over this country are growing by leaps and bounds? THEY are the ones making most of the money in our healthcare delivery system. I can tell you that my health insurance company stocks are most certainly not! Okay...I’ll step down from my anti-PPACA soapbox and get back to topic, employeepaid benefits. So, just what should we do if employers still wish to provide valued benefits to their employees AND effectively control costs? There is a unique and simple solution that bundles the high-deductible “ConsumerDirected” concept (i.e. the insured taking more financial responsibility for their healthcare decisions) and combines it with a voluntary supplemental, $0 deductible defined benefit health plan that will cover the most frequently utilized healthcare services (Phys. Office Visits, w w w. H e a l t h c a r e R e f o r m M a g a z i n e . c o m
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high-deductible to cover large claims, and the employee would pay for the underlying limited medical coverage if they would like coverage for routine and maintenance services – but only if they want it. The employer has the option to design a major medical plan that would have a deductible of $5,000, $10,000 or maybe $15,000, depending on their budget and risk appetite. Employees, in turn, are offered several different levels of first-dollar limited medical plans (fixed-indemnity that are not subject to PPACA regulations) that will cover most routine and essential services that fall underneath the high deductible amount. This underlying coverage can be entirely employee paid (and pre-tax), employer paid, or a combination thereof (e.g. the employer might pay for a lower level limited medical plans and offer the employee a buy-up).
Diagnostics and Rx), and for a relatively nominal cost. The cost for this “first layer” of fixedindemnity limited medical coverage averages about $100 per single employee per month.
In one case example, a group provides a major medical plan that has a single employee deductible of $10,000, and is willing to take some risk and purchases reinsurance over a specific deductible of $75,000, and also provides a defined benefit limited medical plan that will generally pay about 85% of expenses incurred below the deductible level, the TOTAL cost for this plan would average about $225/single employee/mo. Due to budgetary constraints, if the employer wants to make the underlying fixed-indemnity medical plan entirely voluntary, their share of that cost would be less than half of that $225/month! (In addition to the self-funded risk, of course). If the employer does not wish to take any risk, and fully insure the high deductible, average savings are still substantial.
This Defined Benefit + Stop-Loss model is being dubbed by its creators as the “Benefit Partnership” concept. The basic idea behind the model is to create a healthcare partnership between the employer and its employees. Since employee contributions are continuing to increase as their employer needs to continue to shift costs to manage rate increases, the basic premise of employees sharing in the cost of insurance will be nothing new and unreasonable to most This two-pronged approach is a tremendously employees. The “partnership” is created in that cost-effective solution, which after routine the employer will absorb the entire cost of the 26
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services, transfers some financial responsibility to the insured so that they will be motivated to “shop” for their services and not abuse the insurance plan – especially considering the defined benefit structure of the underlying limited medical plan. Therefore, the “GAP” in coverage is between the first-dollar limited medical coverage and the high deductible plan, but this would generally be comparable to a gap at the front-end of a high-deductible plan in terms of overall exposure. But the key advantage with this model is that the majority of the time, the first-dollar limited medical coverage eliminates most of the out-of-pocket costs for the insured. Perfect! This concept is truly a Win-Win for the employer and its employees, and can also be a win for the savvy broker or consultant that is willing to think outside the box. This concept is truly a method to better ensure the economic sustainability of group healthcare in
the United States. Economic sustainability is where our government should be focusing its “reform” initiatives – just as the private sector is forced to do to ensure its survival. That is unless it gets bailed-out by the government… that is the taxpayers and consumers of goods and services sold in this country.
Bio Jerry Van Ness is the Director of Sales for The American Worker Plans, Inc. In his 20 years of experience in benefits he has represented several leading group insurers of all types of health & welfare products and administrative services, retail benefits consulting, and risk management at the employer level. He can be reached at Jerry@ TheAmericanWorker.com or 866-215-9300.
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A NEW WELLNESS INTERVENTION THAT CAN INCREASE CANCER SCREENING RATES FOR EMPLOYERS by Dr. Bruce Sherman and David Nikka
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s a component of corporate wellness programs, cancer screening provides one of the most direct and immediate health benefits. It requires only simple testing versus long term, sustained behavior modification and there is significant clinical and economic value in catching cancer early in its most treatable stage. As such, cancer screening has been an important benefit design consideration for employers for a number of years. Yet despite efforts to increase use of recommended screening tests, participation rates have been less than ideal, such that the benefit of this valuable wellness component has not been fully realized. In this article, we report on the results from a pilot of an innovative, cost-effective program that has the potential to significantly increase cancer
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screening rates for employers.
Why Early Cancer Detection is a Vital Wellness Issue Most cancers have few symptoms in their early stages. In general, symptoms don’t appear until the cancer has grown and perhaps spread, when the cancer is more difficult to treat. However, the outlook for cancer survival and even cure can be very good if cancers are diagnosed early in their most treatable stage (Figure 1). This is why many organizations have promoted the use of and compliance with cancer screening guidelines, including those from the US Preventive Services Task Force, the American Cancer Society, and numerous physician specialty organizations.
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Figure 1. 5 Year Cancer Relative Survival Rates by Stage at Detection
Cancer
Early Stage
Late Stage
Breast
99%
23%
Prostate
100%
29%
Cervical
91%
19%
Colorectal
90%
12%
While diagnosing cancer early improves survival odds, it also reduces metastatic disease and the costs and morbidity associated with chemo/radiation therapy and necessary surgical treatment. Cancer has been reported to be the leading cause of longterm disability and the second leading cause of intermittent short-term disability for U.S. employers (Figure 2).
National Cancer Institute, Seer Stat Fact Sheets, accessed 5/2011
Figure 2.
Most Frequent Disabling Conditions Early detection of cancer provides the opportunity for curative treatment and can minimize the significant healthcare expense of latestage disease. The cost of treatment in the last year of life for cancer patients under the age of 65 who die of breast, cervical, prostate or colorectal cancer ranges from $93,000 to $129,000 (Figure 3).
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Figure 3. Annual Cost of Care for Selected Cancers vs. Other Causes
Mariott A, et al, Projections of the Cost of Cancer Care in the United States: 2010–2020. JNCI 2011; 103:2
Figure 4. Aggregate Drug Cost for Metastatic Colorectal Cancer Treatment
The CEO Roundtable on Cancer reports that companies spend on average $3,000 in direct annual medical costs for employees without cancer vs. $16,000 for those with cancer. The National Business Group on Health states that the cost of cancer treatment is typically among the top three most costly conditions representing on average 12% of total medical expenses. The cost of late stage cancer care is also rising. For example, according to the Colon Cancer Alliance, the cost of early diagnosis of colon cancer is about $30,000. In contrast, the treatment cost for delayed diagnosis ranges from $120,000 or more with newer available treatment options. This is largely a result of chemotherapy costs, which have risen by as much as 800% between 1996 and 2007 (Figure 4).
Adapted from: Meropol N, Schulman. Cost of Cancer Care: Issues and Implications, J Clin Oncol 2007;25:180-186.
Current Status of Cancer Screening mammography. Depending on health benefits costs and access to care, screening rates for Colorectal cancer screening has perhaps the individual employers are often even lower. lowest participation rate of all screening tests, with nationally reported compliance rates In an effort to promote cancer screening, many of 54%, according to the Healthy People employers have eliminated out-of-pocket costs 2020 website (http://www.healthypeople. for screening tests; healthcare reform legislation gov/2020/topicsobjectives2020/objectiveslist. incorporates such first-dollar coverage as well. aspx?topicid=5). Approximately one-third This removes the financial barrier for employees of all women still do not receive annual to seek screening, but doesn’t necessarily
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motivate them to get screened. Other factors that contribute to low cancer screening rates include lack of understanding the relative importance and value of cancer screening, perceptions regarding the testing process and options, as well as access and convenience concerns.
The telephonic intervention was provided by ScreenCancer, Inc. which utilizes an outbound call-center approach and comprehensive, tailored algorithms optimized for individual healthcare conversations. The service provided assessment, education, test facilitation when requested, and follow-up to maximize completion of recommended testing. A Midwest Employer Study dedicated call center Navigator was assigned It is not difficult to appreciate that from an to each participant throughout the program. employer perspective, regular participation of Cancers included in the screening program were employees and family members in recommended breast, cervical, prostate and colorectal. cancer screening represents a source of value. While employers may be aware of low Participants were contacted at home at times compliance with one or more cancer screenings, selected during enrollment. The initial call began few options have been available to meaningfully with a review of each individual’s personal risk increase screening rates. Recently, an innovative factors and screening history. Depending on approach to increase cancer screening rates has the information obtained, targeted educational been developed using individualized telephonic information was provided along with a decision support. Our study, described below, discussion of appropriate screening options. evaluates the effectiveness of this program in an For colorectal cancer, colonoscopy was stressed employer setting. as the best option (and the only option for those at increased risk). If participants did not want colonoscopy, they were offered the option of Methods Employees and spouses aged 50 or older of an at-home fecal immunochemical test (FIT) a county government in the Midwest were sent directly to them. Initial calls ranged from given the opportunity to participate in a novel 10-15 minutes, and participants received up to telephonic health outreach program designed three follow-up calls to answer questions and to increase compliance with recommended track and encourage completion of testing. The cancer screening guidelines. The program was program ran for four months from the start of voluntary and communicated to employees enrollment through the last call. by mail, email, benefits meetings and was an offering at an annual health fair. Individuals Results could enroll onsite, by phone or on a dedicated One hundred twenty eight individuals signed up website. The existing employer self- for the program, with 12 not responding to initial insured health benefits design had, for some outreach communications. Of the remaining time, provided first-dollar coverage for all 116, 68 (59%) were already compliant with all recommended screening tests, so no financial recommended cancer screening, leaving 48 (19 barrier existed to individual compliance with males and 29 females) who were due or past testing. due for preventive care services, as shown in
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Figure 5. At the end of the program, 31 (65%) of these individuals successfully completed all of their recommended cancer screening services, bringing the overall compliance of the group to 85%. The effectiveness of the ScreenCancer Navigator™ approach in increasing compliance with screening for specific cancer types is shown in Figure 6. Of the different types listed, compliance with recommended colorectal cancer screening demonstrated the largest increase, with a 27% relative improvement in overall screening compliance and a post-program compliance rate of 87%, well above the national average of 54% (Healthy People 2020).
Figure 5. Pre and Post-Program Compliance with All Recommended Cancer Screenings
Figure 6. Pre and Post-Program Compliance with Recommended Screening by Cancer Type
A post-program survey was also conducted where participants were asked to rate their experience with the program on a scale of 1-5 (5 highest). The overall satisfaction rating was 4 out 5 with the results of individual
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Figure 7. Pre and Post-Program Compliance with Recommended Screening by Cancer Type
Discussion Existing communication and education strategies to promote cancer screening have helped to increase awareness and understanding of the value of testing and early diagnosis, yet overall screening rates remain less than optimal. The recently released Healthy People 2020 goals include a targeted colon cancer screening rate of 70.5% among adults aged 50-75 years, and increases of 10% for both breast and cervical cancer screening rates. The program used in this pilot is based on methods which have been shown to increase cancer screening in other settings. These include a study of more than 1400 patients enrolled in a one-on-one patient education program similar to the ScreenCancer Navigator that found patient adherence with prescribed use of a molecular colorectal cancer test increased from 29% to 73% (Bagshaw J, Bucher W, Am J Gastroenterology, 2006;101:S549). Other studies including variations of telephone outreach to increase compliance also show significant increase in cancer screening rates vs. control groups. The approach used in this pilot was shown to be efficient at increasing cancer screening rates, likely due the use of a cancer-focused staff utilizing computerized decision-support algorithms and tracking capabilities. This efficiency also allows for a low per-enrollee cost. Depending of the size of the company, the cost savings resulting
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from just diagnosing and treating one cancer at an early stage relative to delayed diagnosis may well cover the related program costs. Targeting only known non-compliant populations (established through HRAs, claims analysis, etc.) could further enhance cost-effectiveness. While the results obtained are significant, there are limitations of the pilot that deserve mention. First, program participants represent a self-selected subset of the entire employee population. As a result, these individuals may well have been more receptive to changing their use of cancer screening services. It is unclear how other individuals who did not elect to participate in the program would have responded to a similar intervention. Secondly, the enrolled population had a higher baseline compliance rate with cancer screening relative to national benchmarks. However, even with higher baseline compliance, the observed increase in colorectal cancer screening compliance in particular was significant. It should also be noted that while the program stressed colonoscopy as the best and primary option for enrollees who where non-compliant with colorectal cancer screening, many people elected to perform a FIT test instead with the understanding they would be testing annually (Figure 8). A FIT test, also in recommended screening guidelines if done annually, it is a test collected at home and then mailed to a testing laboratory to check for the presence of fecal blood, potentially indicative of cancer. When requested by the participant, the program provided FIT test education, ordering, tracking, follow-up and reporting to both the participant and their physician. This likely accounts for the high compliance rates for this test when compared to previously reported results.
Conclusion This pilot study has shown that significant increases
Figure 8. Colorectal Cancer Screening Test Utilization
1 Insure FIT, Quest Diagnostics
in individual participation in cancer screening, and in particular for colon cancer, can be attained using personalized and efficient telephonic decision support. Based on these results and data from other studies, employers with less than desired compliance with preventive care services may want to consider adopting a similar technique to increase screening participation rates. Broader use of this approach will help to clarify the value to both employers and eligible individuals.
Bio Bruce Sherman, MD, FCCP, FACOEM, is Director, Health & Productivity Initiatives with the Employers Health Coalition of Ohio, providing claims data analytics and health management strategies to employer members. Dr. Sherman is also consulting Corporate Medical Director, Whirlpool Corporation supporting the development of integrated, value-based health and productivity management strategies. David Nikka is CEO of ScreenCancer, Inc. a company that provides programs to costeffectively and significantly increase cancer screening rates for employers, insurers and other target populations. David has over 20 years of experience in healthcare, biotechnology, medical devices and human resources and can be reached at 339223-0573 or dnikka@screencancer.com.
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G N I L L E S CROSS
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O T Y A W YOUR N I S S E C SUC
1 1 0 2 by Bob Jabour
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hen national health reform legislation passed in 2010, many individual and small group health agents thought it would be the end of our insurance business. We figured that reduced commissions and state exchanges would seriously cut into our ability to be profitable. For me personally, when the law was approved I immediately began researching insurance products to complement my health insurance business and to replace my lost revenue. I attended agent seminars and watched webinars to learn as much as possible about supplemental products. I embraced the term “Cross selling” as my primary strategy for 2011. The one conclusion I came to quickly was that if I planned to survive I had to sell more than one insurance product per client. For 2011 I chose four supplemental products to help me survive our post reform world. I even believe with hard work I may actually thrive. When I say “thrive as a result of national health reform”… you must think I am crazy right..? Listen on and see if what I say makes sense for you. My new approach to recover lost commissions centers around the marketing of supplemental insurance products. Whenever I make a health sale I always make a concerted effort to recommend other insurance products to my new health client.
is usually issued in 3-5 days. It requires no medical exam or phone interview for the client. The commissions are excellent for this policy and I often earn a larger commission on the critical illness policy than on the individual health plan. For your client, a critical illness policy is extremely helpful because it pays a “cash lump sum” directly to the client. This money can be used for vital things such as their deductible and co-insurance, travel expenses or lost wages. Close behind critical illness, I recommend cancer policies. If you are working with a young couple in their early 30’s, then there is a good chance they will not be interested in a critical illness policy. The reason being at their age the thought of a heart attack or stroke is probably not yet, “on their Radar Screen”. However, every family, regardless of age, understands and knows someone impacted by cancer. It is the silent killer that can strike young children and the elderly alike. So it is much easier to bring up the concept of a cancer plan to a young couple than it is to promote a critical illness policy at that point in their life.
At the cornerstone of supplemental products is critical illness. For those of you not familiar with the term “Critical Illness” it refers to serious health issues such as cancer, heart attack, stroke, paralysis, blindness, For instance, recent statistics from the renal failure etc. The great thing about the American Cancer Association indicate insurance company I use for critical illness is that one out of three women and one their simple application. It can be completed online or with a short paper application and
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out of every two men will be diagnosed with cancer in their lives. For most of us it’s not if, but when, we will end up with some form of cancer. Fortunately with the advances in medical technology and early detection many forms of cancer have a high survival rate. But much like critical illness, the cost from cancer treatment, particularly chemo, radiation and surgeries can greatly impact any family’s resources. Plus, people often have to take time off from work to recover from cancer treatment. As their agent, if you help them purchase a cancer policy, then it will help provide additional funds to make house or car payments and their electric bill.
contributing factor for the claim.
Life insurance is an excellent product for young families that just had a new baby. I regularly suggest they purchase an additional $100k to $250k in life insurance for their new addition to the family. Often times they will come back to me with a request to get a quote for a larger face amount like $500k to $1 million. Another appropriate time to suggest life insurance is after you help a small business owner secure his/her first individual health policy. Many young entrepreneurs with families don’t realize that when they quit their job to start their career as a sole proprietor, they will lose their group sponsored life insurance. This Next on my list of favorite supplemental products group life policy may also be their only form of is an accident plan. I currently sell an accident life insurance. plan that pays up to $10,000 if a family member is in an accident with just a $100 co-pay. The cost Dental and vision coverage is at the bottom of my is around $50 per month for the entire family and supplement products list to sell. The main problem can be used at urgent care facilities or emergency is most dental and vision plans aren’t that great, rooms. This accident plan also has a benefit in my opinion, from a benefit to cost ratio. Also called “consult a doctor” that allows families the from the agents prospective you don’t make much opportunity to call a licensed physician 24 hours in commission which isn’t a great motivator as a day, seven days a week, to get a prescription for well. I consider dental and vision plans something minor things like colds, flu, allergies, and sinus you offer as a service to your clients and not as infections without a doctor visit. It helps buffer a primary income stream to replace lost health the out of pocket expenses for plans with $5,000 insurance commissions. or $10,000 deductibles when an accident is the In my revamped business model after reform, I
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next moved on to the challenge of writing small group health insurance. Here is the conclusion I came to regarding why it’s advantageous to write small group health insurance. First, it tends to stay on the books longer than individual plans. This is due primarily to the hassle factor of filling out new applications, new underwriting and getting cards out to employees, etc., so companies tend to not want to change insurance companies until the rates overwhelm them. The commissions on small group plans are level and don’t reduce in a year two, like individual plans. Most importantly, the cross selling concept I use with my individual clients works even better in a group situation. Here is a real world illustration using cross selling strategies with a small group I recently sold. I initially wrote them a high deductible major medical plan. To buffer their concern about the new higher deductible plan, I recommended a hospital indemnity that can potentially cover much of their deductible if they spend multiple nights in the hospital. They also elected to add dental, vision and life to their health plan. With this same client, I also started a discussion about the value of voluntary benefits such as cancer, critical illness, accident and short term
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disability. To begin to exemplify the financial value of selling voluntary benefits, I sold one client a small group health insurance plan, dental, vision, life and a hospital indemnity plan and it created 3 commissions and a bonus for me. This particular insurance company is currently offering a bonus if you package dental, vision and life with their major medical plans. Voluntary benefits are now positioned to grow significantly in the small group health insurance world in the future. Why is this suite of products positioned to be successful? Look at the “writing on the wall” as more employers choose higher deductibles, reduce benefits on their existing plans or worst yet cancel benefits altogether. How are voluntary benefits going to be “Your knight in shining armor” for your client? First, voluntary benefits cost the owner no money, it is simply a benefit that each employee either elects or declines at enrollment time. The premiums for their selections are deducted from their paycheck each pay period. Further it helps small business owners offer benefits like short term disability, cancer, critical illness and hospital indemnity plans that are normally only available in the large group market. It also increases employee retention and attracts new talent to the organization.
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Voluntary benefits are all well and good for the client and the employees but what is in it for the agent. First you have the opportunity to write multiple voluntary benefits policies at one “enrollment meeting” at the client’s office. Can you imagine how great it would be to spend an afternoon at your client’s office and collect 1015 applications? How long would it take you to write that many policies on an individual basis? Second the commissions on voluntary benefits are very attractive and it is not uncommon to make as much on the voluntary benefits commission than on the group health policy. Finally, voluntary benefits can be used as an effective prospecting tool for small groups. How many times have you contacted a new small group prospect and they give you the classic brush off, “Sure you can quote us at renewal time, in November.” If it’s only March, then you’re basically done if you think you are going to make that sale in 6 months, in most situations.
medical plans” to your uninsurable clients? How many times have you talked with good people that want to buy health insurance from you but they simply don’t qualify due to cancer, heart attack stroke, or diabetes? A word of explanation, a limited benefit plan pays a fixed amount for doctor visits, lab, surgeries, and hospitalization. It generally has little to no underwriting requirements to qualify. The better limited benefit plans have a good network which further helps your client receive negotiated rates from their doctor and hospital for their medical expenses. These plans aren’t for everyone both prospects and agents because some agents don’t want to stray from the major medical market. I personally never recommend these products when I can write a major medical plan. But in the right situation, it can be of great value to your client and the commissions are usually higher than the ones offered by most of the major health carriers in 2011.
Now, I know some of you are great small group To summarize, if you want to survive as a health sales agents and may actually still make the sale in agent you must diversify your portfolio of products November. However, wouldn’t it be better to say in both the individual and small group market. to the prospect, “Sure I will be glad to follow up with you in the Fall about your health insurance but before I go can I ask you about your voluntary benefits program.” You can bet that most small Bob Jabour is an independent health agent employers don’t even know what the term in Plano, Texas. He is a top producer with voluntary benefits mean. several of the largest health insurance carriers in Texas. He has been selling various Do you see the financial potential to you with this insurance products for 8 years but considers powerful statement? You can go into any small health insurance his passion and calling. business today, regardless of their size, and write His web site is www.texashealthnow.com a voluntary benefit package and then when their . If you have questions about the products major medical health plan comes up for renewal mentioned in this article or want to know you will be in much better position to write the how to get contracted to sell them, group business as well. Even if you don’t get the email bob@texashealthnow.com or group health sale you at least made the voluntary (972) 381-4232. benefit sale. Have you ever considered offering “limited benefit
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Early Detection is Key ~ Breast Cancer Awareness by Melissa Mayfield
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reast cancer is the 5th leading cause of death among women over the age of 40. However, if diagnosed with breast cancer in its earliest stages, it actually has a very high survival rate. This is why it is so important to inform the public on issues such as early detection, symptoms, risk factors and healthy habits to help ward off breast cancer.
Early Detection Women of all ages are advised to administer self breast exams on a monthly basis. Starting this at a young age familiarizes you with your own normal breast tissue; this will make you more capable of noticing an irregularity such as a lump if it should ever occur. Risk of breast cancer increases with age, which is why women should begin getting mammograms once they turn 40, on an annual or biannual basis. If you have an immediate relative who was diagnosed with breast cancer you should talk to your doctor about when you should start receiving mammograms, as they may want you to begin earlier. When breast cancer firsts strikes it may not have any signs or symptoms, which would make it impossible to pick up on a self exam. However, mammograms (X-rays of the breast) can pick up on breast cancer in its earliest stage; this makes them a doctor’s best chance to diagnose breast cancer early.
Symptoms
• A new lump or bump in the breast or underarm • Any discharge from the nipple • Irritation or dimpling of the breast skin • Change in breast size or shape • Inversion or pulling of the nipple • Flaky skin or (abnormal) redness in the nipple and/or breast • Pain in any area of the breast
Risk Factors Breast cancer occurs when breast cells begin growing abnormally and then these cells form a tumor. However, doctors have not discovered exactly what causes the cells to mutate in some people and not in others. Therefore, it is possible for anyone to develop breast cancer, but there are some factors that can increase your risk.
There are some common symptoms that many women experience when they have breast cancer. Being Female – Breast cancer is far more prevalent The symptoms below do not necessarily indicate in women than men. For breast cancer, but they can be a warning sign and should probably be checked out by a doctor just in case:
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every 100 women diagnosed, there is less than 1 man diagnosed
Hormone Therapy – Women who take hormone medications that contain estrogen and progesterone to help regulate symptoms of menopause have an increased risk
Personal Breast Cancer History – If you have already had cancer in 1 breast, you have an increased risk of developing it in the other breast Radiation – Repeated exposure to radiation, such as receiving a large number of chest X-rays also Family History – 5% - 10% of breast cancer cases increases breast cancer risk are linked to a genetic mutation that is passed down amongst family members, which raises one’s risk Healthy Habits Hormonal Changes – If you begin your period before age 12, have your first baby after age 35, or begin menopause after age 55, there is an increased risk
There are some risk factors that we can’t control such as being female or having a family history of breast cancer; however there are positive steps that we can take in our daily lives to help reduce the risk. Maintaining a healthy weight is an important factor Obesity – Being severely overweight increases your in reducing your risk of developing breast cancer. breast cancer risk Staying fit can be done through diet and exercise, both of which offer additional cancer fighting benefits. Alcohol – Excessive drinking may increase your risk Exercising for at least 30 minutes a day for
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5 for days a week has been shown to cut down cancer risk. Foods that are high in antioxidants and antiinflammatory properties such as tomatoes, broccoli, and cauliflower are thought to have powerful cancer fighting abilities. Fatty fish such as salmon has also been shown to help ward off breast cancer because they are high in omega-3 fatty acids, which have strong anti-inflammatory properties. Limited research has shown that cancer cells actually die in test tubes when exposed to garlic, so go ahead and pile it on! As for our cancer prevention beverage of choice, reach for some green tea. Green tea contains EGCG, which is an extremely powerful antioxidant. Limit your alcohol consumption, as an excess of one drink per day can increase your risk. Finally, if you are experiencing menopause, try to limit your use of hormone therapy. If your post-menopausal symptoms are unbearable use the lowest dose of hormone therapy possible for the shortest amount of time.
of surviving a breast cancer diagnosis, so be sure to schedule yourself a mammogram if you are over 40 and have not had one within two years! Employers who have an incentivized wellness program should consider including yearly mammograms for woman over age 40 part of the requirements for gaining incentives to help drive early detection.
About eni: eni provides customized wellness programs, designed with evidence based research and the medical expertise of the Harvard School of Public Health.
eni’s ultimate goal is to create dynamic solutions that actively engage, educate, and empower a happy, healthy, more productive workforce. Learn more at www.eniweb. Remember, early detection is a person’s best chance com or call us at 1.800.364.4748 42
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Employer Sponsored Cancer Screening by Jonathan Spero
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ith healthcare reform mandating coverage for many preventative services employers are taking a closer look at worksite health screenings. Health screenings not only assist in accessing the health risk of population or individual employee, but also pick up undiagnosed diseases that can be very costly if untreated. Employer sponsored metabolic screenings are growing in popularity and identify undiagnosed conditions such as high blood pressure, elevated cholesterol, and diabetes. So what about cancer screenings? Cancer screening exams and tests can pick up life threatening cancers early in the disease increasing the likelihood of a cure. 44
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Before employers implement cancer screening programs at the workplace, they need to understand what the research shows and be guided by evidence based medicine. Evidence based medicine aims to apply the best available evidence gained from scientific method to clinical decision-making. And when it comes to cancer screening, evidence medicine is even more important as the stakes are high and there exists much emotional bias. So what is the evidence for or against cancer screenings? And what are the nationally recognized guidelines? Over 11 million people in the United States have some form of cancer and there are more than 200
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different types of cancer. The following are the Colorectal Cancer 10 most commonly diagnosed cancer types in 2009 and the estimated number of new cancer Colorectal cancer screening, in general, begins at age 50. Patients have a number of options as patients diagnosed each year: follows: 1. Non-melanoma skin cancer - 1 million plus • Colonoscopy (every 10 years) OR (rarely deadly) • Flexible sigmoidoscopy (every 5 years) OR 2. Lung cancer – 220,000 • CT scan (every 5 years) 3. Breast Cancer – 200,000 4. Prostate Cancer – 195,000 PLUS yearly sampling of stool. 5. Colorectal Cancer – 150,000 Cervical Cancer 6. Bladder Cancer - 70,000 7. Melanoma - 69,000 • Regular female exam and pap smear as 8. Non-Hodgkin lymphoma - 66,000 recommended by your physician 9. Kidney cancer - 50,000 10. Leukemia – 45,000 Prostate Cancer Despite cancer’s enormous prevalence in our population, there exists only a handful of cancer screening tests and exams that have been proven to decrease the mortality related to a specific cancer. These screening tests must be done on a regular interval basis to be effective and include screenings for breast cancer, colorectal cancer, and cervical cancer.
Cancer Screenings Recommendations
The FDA has approved the use of the PSA test along with a digital rectal exam (DRE) to help detect prostate cancer in men 50 years of age or older; together, these tests can help doctors detect prostate cancer in men who have no symptoms of the disease. In fact, most doctors do recommend these tests for their male patients. However, as previously stated, the research has not yet proven that it will decrease the death rate related to this disease in a population.
Below are the current nationally recognized Is there any test for ovarian cancer? cancer screening recommendations. The timing and frequency of the testing can be modified Some employers have started ordering the cancer based on family history and genetic testing. antigen 125 (CA 125) blood test for their health screenings. This test is NOT recommended for Breast Cancer women with an average risk of ovarian cancer. Why? • Yearly mammograms are recommended starting at age 40 and continuing for as long a While women with ovarian cancer often have woman is in good health an elevated level of CA 125, an elevated CA • Clinical breast exam (CBE) about every 3 125 level doesn’t always mean you have ovarian years for women in their 20s and 30s and every cancer. Some women with ovarian cancer never year for women 40 and over have an elevated CA 125 level. And there exist
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However, at this time, effective cancer screening is limited to only a few cancers. Incorporating non-evidence based cancer screening tests into an employer sponsored health screening can actually do more harm than good. False positives can lead to unnecessary follow up procedures, costs, and employee concerns. Employers who are considering health screenings should keep this in mind and stick to nationally recognized cancerscreening guidelines.
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many other conditions (other than ovarian cancer) that can cause an elevated CA 125 level. For these reasons, doctors don’t recommend CA 125 testing in women with an average risk of ovarian cancer. Women with a high risk of ovarian cancer, such as those with mutations in the BRCA1 and BRCA2 genes, which increase the risk of breast and ovarian cancers, may consider periodic CA 125 testing. But even in these high-risk situations, there’s some disagreement about the usefulness of the CA 125 test.
Summary Over the next decade several major advances in cancer screening hold enormous promise.
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Jonathan Spero, MD, is CEO of InHouse Physicians and board certified in Internal Medicine. Dr. Spero is an expert in the field of targeted employee wellness programs with measureable ROIs. InHouse Physicians is a global employee health and wellness provider delivering innovative cost containment solutions to corporations around the world. InHouse Physicians high touch employee health services include a wide range of offerings such as cost effective worksite health centers, evidence based “pre-disease” wellness initiatives, health screenings plus analytics, flu vaccinations, and travel medicine. To learn more about InHouse Physicians visit their website at www. inhousephysicians.com or Dr. Spero can be reached at jspero@ihphysicians.com.
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