Remember, Mom: Digital is Forever.
Humana has launched a social network for its Medicare Advantage and Part D members called "Humanaville." No word yet if members have started posting embarrassing pictures of shenanigans in the skilled nursing facility...
Actually, it's not exactly a social network like Facebook. Rather, the design and functionality more closely resembles Second Life, in which users build an avatar and move within a multi-dimensional space, meet others, barter/trade, etc. This is not the first medical network of its kind. The Starlight Children's Foundation maintains a space for chronically ill teens called Starbright World, which more closely adheres to the Facebook model.
No doubt the plan should be given credit for pushing the boundaries of member engagement. However the model--and more specifcally the decisions made by Humana for the members within the model--seems to adhere to an older model of communication. At a cursory glance it appears Humana is attempting to carefully script and guide users' experiences, rather than create an environment, a social utility, full of user-defined content.
Like society at large there must be rules of engagement in these environments. But the brilliance of the social media model as an economic force (that's why Facebook is in the news... it's not because of Farmville) is that by allowing participants to wander around at will "liking" stuff and joining groups they track people's actual interests. This means that by the time Facebook puts a particular Old Spice ad in front of you the algorithm already knows: you're a man, you have a slightly juvenile sense of humor, and you care how you smell.
There is much talk in clinical circles about the tyranny of the internet on two fronts: in making every patient an expert via WebMD et al., and in the public rating of physicians. An entire industry called "Reputation Management" has sprung up in the last two years to protect physicians (and lawyers, and others) from the ignominy of having patients share their experiences with each other. This is a losing battle. It remains to be seen if payers or providers will rise to the challenge of the digital age--which has heretofore been defined by the inability of choice-makers to control it--or if they will revert to type and attempt to narrow choice and access to information along prescribed paths that lead inevitably to the next sale.
11th Circuit Court Strikes Down Mandate
Much of the news related to healthcare last week focused on those headlines. Those who have consistently argued that the Health Care Reform act is bad policy hailed the circuit court's decision as a victory. Those who believe in the mandate that every American have access to and be motivated to buy health insurance, decried the decision as just another example of "kicking the can down the road".
So who is the real winner? The real loser? It depends on who you ask (and whether the respondent already has insurance) and on who is taking care of the uninsureds' health needs. The provider community continues to be stuck with providing care to the uninsured, the cost of which is estimated to exceed 40 billion dollars per year, at last count. The tax payer, you and me, doesn't benefit by this ruling because ultimately that 40 plus billion comes out of our pockets in the form of higher insurance premiums and higher bills from the hospitals and the practitioners (it is called cost shifting).
And, believe it or not, it also impacts the cost of providing care under Medicare, because if I am an uninsured individual who does not seek healthcare unless it is an emergency—by the time I am eligible for Medicare I tend to be sicker than my insured counterpart and consequently my cost to Medicare will be significantly higher. Not a good situation, given that the Medicare ranks will swell by some 76 million people over time. Even if we account for a certain portion of Medicare eligibles dropping from the rolls due to death, without significant changes to how we finance and deliver healthcare, Medicare will become the single most costly program in the history of this country - and most of us will be around to see it and suffer under it.
In my last blog I talked about how a financial approach to solving the healthcare crises in the US is, at best, a short term approach akin to sweeping the problem under the rug (the "kick the can" analogy comes to mind one more time).
As an example, let's focus on the Medicare-eligible individual for the moment, to illustrate why a financial solution is not going to solve the problem. Assume that Medicare funding is cut across the board (that is exactly what is anticipated if the debt ceiling super committee cannot get its act together). The impact of such cuts? Providers are paid less (some suggest that they should be paid significantly less), which could result in primary care physicians and specialists closing patient panels to new Medicare patients; inpatient and other allied healthcare providers raising rates to balance out the cuts; and the individual Medicare-eligible exhausting their savings more quickly due to higher out of pocket costs. That in turn will lead to greater reliance by those individuals on other community services such as food stamps, Medicaid, state funded social and aging services, which will in turn drive up those expenditures and create significant budget issues in those programs.
By now you are probably thinking that this is just rambling with no real end purpose. Not really.
My point is that decisions we make in the healthcare field have far reaching consequences, whether they are made in a physician's office regarding how to treat a particular pathology, or whether they are made at the national policy level. Isolated decisions such as striking down the health insurance mandate set into motion a series of events, the impacts of which may not be felt for years, but can be very damaging once they become apparent.
No one disputes that the current health care reform has significant failings. This writer is amongst those who decried the process as well as the outcome. But irrespective of political leanings or philosophical differences, the Affordable Care Act and its emphasis on tying future provider reimbursement to better conceived approaches to patient communication, treatment and access is much better than the potential for an arbitrary cutting in healthcare financing as part of resolving this nation's debt crises.
All of us; providers, payers, healthcare industry professionals and patients, have a vested interest in reengineering our approach to health services delivery and financing through logic and rationality. After all, we will be customers of the system sooner or later. At that point in time, I for one would like a say in what I experience.
Data Security & Compliance: The Dwayne Johnson of Risk Adjustment
These days, Risk adjustment is a lot like WrestleMania these. I am not sure if that makes CMS John Cena…but I am certain health plans should be prepared for that folding chair to the head move.
Health plans need a new training regime and a new foundation. Security and compliance is the cornerstone on which a health plan's risk adjustment strategies should be built, and it must be supported not only by all health plan departments, but also health plan vendors.
As stated in the CMS call letter, you need to know your business, which also applies to your vendor processes and procedures. In a poll during our August 18 webinar, our audience of health plans shared that they only conduct onsite vendor audits twenty five percent of the time when they outsource risk adjustment servics. Gorman Health Group can help you create the data security checklist, but health plans have to get in the routine of going onsite. Get in the ring!
The health plan IT liaison needs to see the server room, understand the data back-up plan, notification process, and especially how the vendor handles data day-to-day. Is it sitting out on desks? In employees' car? Scary things happen when you don't ask questions.
Even scarier was this poll result: only 55% of health plans read their vendor's compliance plan. You need to know not only what the vendor is doing on your behalf but also how. With PHI fees and RADV extrapolation, make sure your vendor has a compliance plan and that you know what it says.
Download a copy of last week's webinar here.
How's their security and compliance? Your vendor oversight checklist
Yesterday Gorman Health Group Executive VP Steve Balcerzak and CenseoHealth's Director of Techology Archie Block joined me for one of our Flash Webinars, which covered the security and compliance points every health plan should review with their vendors.
We'll follow up later today with a recap of the event's live polls and surveys, as well as a final PDF of the webinar materials. Stay tuned!
We're offering 30 minute Flash Webinars every week this summer and invite you to join us. The next event is Wednesday, August 24 at 3 pm EDT: What's so important about prospective analytics anyway? Health plans can register by clicking here.
Obama and Boehner Have Forever Changed the Medicare Debate
President Obama and House Speaker Boehner may have failed to strike a "grand bargain" on the nation's deficit, but they have accomplished one thing in our world: they have forever changed the terms of the Medicare debate. There is an air of inevitability about some of the proposals they have put forth brewing here in DC.
Obama says he could accept "means testing" the program, which would require affluent seniors to pay more for services. Obama used himself as an example of someone who would pay a higher rate. Obama has also been open to other proposals, including charging co-pays for home health services and for lab work.
Obama also floated on several occasions a provision that would raise Medicare's eligibility age from 65 to 67 -- one that Boehner agrees with him on. In doing so, they gave a controversial idea legitimacy and high political cover. The concept is now likely going to be a fixture in the Medicare debate.
The idea has drawn some support from the GOP in the past. Senators Tom Coburn (R-OK) and Joe Lieberman (I-CT) introduced a bill last month moving the eligibility age up by two years, and Democrats ran from it like scalded dogs. Senate GOP Leader Mitch McConnell didn't endorse the proposal but applauded the effort. Grover Norquist -- the guy behind the GOP's stalwart refusal to move one inch on taxes in this debate -- backed it too.
Under the ACA, in 2014 insurers are banned from turning down any patient — and that could make increasing the eligibility age an easier pill to swallow because 65-66 year-olds would ostensibly have access to coverage in the exchanges. It also means that any increase in eligibility age is unlikely to pass until the exchanges and subsidies are in place in 2014.
The "agreement" between Obama and Boehner -- before talks collapsed last week -- bumped up the eligibility age from 65 to 67 over about two decades. One approach called for increasing the age by one month per year beginning in 2017 until it reached 66 in 2029. In 2030, it would increase two months each year until it hit 67.
The Congressional Budget Office said raising the eligibility age to 67 would save $125 billion over 10 years, adding that the savings would be somewhat reduced by new spending on Medicaid and insurance subsidies to cover the uninsured 65- and 66-year-olds. It's still too big a number to ignore when the bills come due next month.
Expect to see a lot more discussion about these ideas in the coming weeks as we hopefully find our way out of this looming mess. I'm turning 43 next week -- and my retirement plan assumes no Medicare or Social Security for me or my wife by the time we're ready for it. Our generation should be prepared for a very different look to Medicare now that the once unthinkable has become a fixture of the debate.
Medicare Advantage and PDP Plans Continue Robust Growth
The August enrollment numbers are in from CMS. 61,000 new MA members in August and 544,000 year-to-date. MA and PDP plans continued their robust growth on pace to exceed 2010's enrollment gains. Year to date it appears Boomer "age-ins" are continuing to choose MA at a higher rate than their forebears -- more than 40% for the last two years. With major MA/PDP sponsors like Aetna and HealthNet now relieved of marketing and sales sanctions from CMS, MA enrollment growth may exceed 7% for the year.
The story behind the numbers is clear: MA plans are adjusting just fine to the "new normal" post-ACA. Benefit designs have held relatively steady, and plans are making big investments in better revenue management, like mastering risk adjustment and the new Star Ratings bonuses, to offset the ACA's cuts. Many are revisiting their entire service model in response to Stars, recognizing that keeping members is the new selling.
At the pace we are on, MA will hit 15 million beneficiaries sometime in 2016. But that of course assumes Congress and the debt reduction "supercommittee":
- don't require another pound of flesh from the plans in whatever deal they hatch up in November
- get the Medicare physician pay fix enacted permanently. There's an enormous price tag of over $300 billion over 10 years for this, but without it, MA rates could be cut another 7% in 2013 and beyond. This is the single largest threat facing the program in the next several years.
Let's hope the noble experiments in creating insurance markets that are MA and Part D are allowed to continue when Congress reconvenes in September.
What If the Individual Mandate is Overturned?
If the individual mandate is overturned, what will happen next will largely depend on the outcome of the 2012 elections. At the moment, it is hard to imagine that the Congress could compromise on any legislation related to health care reform. But that could change.
The biggest problem will be the issue of adverse selection in the individual market with the result that premiums will skyrocket. Even with federal subsidies, the premiums in the individual exchange may not be affordable. Congress might consider delaying the insurance market reforms to see if competition and transparency in the exchanges impacts affordability. Or Congress could consider allowing insurers to return to the practice of waiting periods.
Congress might also consider enacting tax policies that would be more effective than penalties in the ACA to encourage healthy individuals to buy insurance, e.g. allowing full tax credit when individuals purchase qualifying policies or imposing higher taxes on everyone that will go away when purchasing qualifying policies. Or the Congress could do nothing and allow states to consider enacting an individual mandate. And of course insurers will undertake marketing campaigns to remind individuals of limited open enrollment periods and the consequences of failure to buy coverage or lobby for smaller essential benefit policies.
Without an individual mandate, incremental reform will still continue with the addition of 16 million new Medicaid beneficiaries. States will operate exchanges for small groups that will offer more affordable choices for employers and employees. In the meantime states that are moving forward with implementing the individual exchange like Maryland will continue to proceed without regard to the fate of the individual mandate. The federal government will continue to urge states on, fill in the gaps where states need help, and proceed to develop the federal fallback plan for states that are opposed to health care reform or who run out of time while they wait on the fence for the Supreme Court decision.
President Ryan?
Washington is abuzz this week that Paul Ryan is considering a run for President. Remember him? He reportedly is in Colorado with his family at this time discussing their position on turning their life into a 24/7 freakshow. Say what you will about the Roadmap--- a Ryan candidacy would put Medicare solvency and Government-sponsored health care in the middle of what has been shaping up to be a jobs election. Can you mount and sustain a campaign based on deficit reduction?
Stephen Hayes of the Weekly Standard gets credit for the scoop... Or rather, his editors get the credit for putting virtual ink to what has simply been cocktail party chatter since last Friday. Not that I go to those sorts of parties.
Timing is Everything
We chatted with several health plans during the GHG August 11, 2011 webinar.
The purpose was to highlight that the earlier you begin your risk adjustment the better because you have more chances to:
• Get the data
• Interact with the member
• Impact the member's satisfaction
• Link the findings to care
• Impact the premium sooner
We found that most of the health plans listening:
• Start their retrospective program in April
• Start their prospective program in March
• Have 50% of the prospective evaluations completed by June
• Evaluate 51-75% of their membership each year via member evaluation
Really? These answers bring a tear to our eyes. Be proud if this is your program.
Our tip: Shoot a little higher in your evaluation program next year; a better target is 85%.
Again, shifting your start dates to earlier in the year will help you get to know your member and increase the closure rates or acceptance rates of your evaluations. Plus getting that premium bump in January of the 2012 will answer questions about expansion plans, bid application, and benefit design.
P.S. Join us for the next flash webinar in our series: Your Vendor Security Checklist, August 18 at 3:00 pm EST
The Medicare "Doc Fix" Will Get Pegged to Quality Measures
We're hearing from friends on the Hill that Republican staff on the Energy and Commerce Committee are thinking about attaching a pay-for-performance system to any fix of the Medicare Sustainable Growth Rate. The new approach would cost less than a straight fix of the SGR, which will slash Medicare payments to doctors by 29 percent at the end of the year if Congress doesn't intervene.
It's still early in its development, but we heard that after a year or two freeze in payment rates, a new, tiered system would be implemented. Physicians in ACOs would get the highest pay rate, followed by doctors in fee-for-service Medicare who meet performance standards, followed last by docs who don't.
There's huge issues all over the concept -- but I like it. And it has an air of inevitability all over it. It will cost close to $300 billion to permanently fix the SGR. There's no way Congress is going to lay down that kind of money without some stiff expectations on quality in return. And it could finally have the effect of breaking the curse that is fee-for-service reimbursement in Medicare -- the root of all evil in the program's cost explosion.
And remember: if Congress doesn't intervene on the SGR, that 29% hit on docs' rates will translate into a 7% whack on Medicare Advantage payments in 2013. It's imperative for both sides of the program that Congress get this done. Stay tuned.