Quote of the Day

“If you put a drug on a formulary exclusion list, that means the member bears the entire drug cost. And in some cases, depending on how the exclusion is designed, it wouldn’t even apply to the deductible. So we’d rather not [make exclusions]. But I will say that we are being asked more and more about formulary exclusion lists from both our fully insured business at each Blues plan and especially among our self-insured employer groups.”



— Pat Gleason, Pharm.D., director of health outcomes at Prime Therapeutics LLC, and a co-author of a paper appearing in the October issue of Health Affairs, told AIS’s Drug Benefit News.

ACOs Fuel Narrow-Network Trend in 2015 MA Plans

By Jill Brown - October 31, 2014

Some hospitals and physicians initially fought the move toward narrow provider networks, charging that they were being unfairly excluded in favor of lower-cost — and possibly lower-quality — providers. But with the rise of accountable care organizations (ACOs), many providers are partnering with insurers to form narrow-network Medicare Advantage plans — or even forming MA products of their own that cut out the insurer middleman.

Among them, Aetna Inc. launched a new zero-premium Medicare Advantage HMO plan that’s based on a network of three New Jersey health systems. Two of the providers — Atlantic Health System and Hackensack University Health Network — participate in the Medicare Shared Savings Program (MSSP), while Hunterdon Healthcare has commercial ACO-based contracts with Aetna and Horizon Blue Cross Blue Shield of New Jersey.

UnitedHealthcare established an ACO with two Illinois-based health systems to provide care for more than 65,000 Illinois residents enrolled in the insurer’s MA plans. Advocate Health Care’s ACO joined MSSP in July 2012, and Illinois Health Partners joined on Jan. 1.

And MedStar Family Choice, the insurance subsidiary of Maryland health system MedStar Health, is offering its own MedStar Medicare Choice MA plan for 2015.

Even a recent New England Journal of Medicine “Perspectives” piece championed insurers’ efforts to narrow networks. In the Aug. 14 article, Emory University health economist David Howard noted that CMS recently proposed network adequacy regs for exchanges. However, he warned, “These regulations promise to expand plans' networks, but regulators should not assume that a pro-provider stance is inherently pro-consumer or even pro-patient.” In fact, he wrote, “CMS network-adequacy regulations may lead to higher reimbursements, insurance premiums, and ultimately costs to taxpayers. These regulations could spur further consolidation, as independent physicians and smaller hospitals seek to negotiate under the umbrella of the ‘must have’ systems.”

What do you think? Is there still a coming backlash for narrow-network health plans? Or with providers on board, are they inevitable?

http://aishealth.com/blog/health-plan-business/acos-fuel-narrow-network-trend-2015-ma-plans?utm_source=Real%20Magnet&utm_medium=Email&utm_campaign=56807019

According to a recent survey of adults ages 18 to 64 with private health insurance:

• 19% don’t go to the doctor when they are sick
• 18% go without preventive and recommended care
• One eight face major financial hardships such as going without food or using up all of their savings due to medical bills
• Among those covered by a high deductible health plan, almost 1 in 4 said that paying for health care caused them to use up their savings
• 52% would prefer to pay higher premiums in exchange for limiting their out-of-pocket costs
• 40% would prefer to trade lower premiums for higher out-of-pocket costs

Source: "National Survey: Privately Insured in America: Opinions on Health Care Costs and Coverage," The Associated Press-NORC Center for Public Affairs Research Press Release, October 13, 2014, http://www.apnorc.org/PDFs/Coverage/NORC-AP-NORC-Release-Privately-Insuredl.pdf

Only 7% of Physicians gave the ACA an "A" for Improving Efficiency

According to a recent physician survey conducted by The Medicus Firm:

•  8.6 % of physicians gave the ACA the highest overall grade, (A).
• 22.3% of physicians gave the ACA a failing grade overall, (F).
• 23.4% of physicians gave the ACA an "A" in improving access to healthcare.
• 27.1% of physicians gave the ACA a "B" for improving healthcare access.
• 13.6% of physicians gave the ACA a failing grade for improving healthcare access.

Note: The Medicus Firm is a national healthcare recruiting firm based in Dallas, TX and Atlanta, GA. Since 2001, The Medicus Firm has provided permanent placement solutions to group practices, hospitals, and medical systems nationwide.


Source: The Medicus Firm

11 questions about the hybrid market answered

Nov 04, 2014 | By Warren S. Hersch

Three to four times more advisors are placing hybrid products as are writing stand-alone long-term care solutions.

LifeHealthPro senior editor Warren S. Hersch recently interviewed two executives with Lincoln Financial Group: Mike Hamilton, vice president of product development for Lincoln Financial’s MoneyGuard Solutions; and Steve Schoonveld, head of Linked Benefit Products.

The interview explored hybrid or linked benefit solutions — permanent life insurance policies with riders covering long-term care and chronic illness expenses — that are increasingly displacing stand-alone long-term care products. The following are excerpts.

Hersch: Describe for me the typical long-term care or chronic care scenario and how a hybrid solution might aid in meeting the resulting financial need.

a typical scenario, a 65-year-old couple with a $1 million nest egg needs to draw down the retirement asset by $35,000 annually. Factoring in other assumptions — a 5 percent annual growth on the asset, a 3 percent rate of inflation, a long-term care event at age 81 and end-of-life LTC expenses averaging $100,000 annually over three years — the retirement savings declines significantly in value, placing the couple’s retirement and legacy planning goals in jeopardy.  

Schoonveld: Research findings have shown that about 70 percent of people age 65 will need some type of long-term care — and it won’t come cheap. The Bipartisan Policy Center estimates that Americans have at least a 25 percent chance of incurring $25,000 in long-term expenses during their lifetime.

Hersch: Can you speak to differences in claims required to invoke a long-term care or chronic illness payout on a hybrid product?

Schoonveld: Hybrid long-term care products provide for recoverable conditions, such as a broken hip requiring three months of care. But with a chronic illness rider, the expectation is that the physical or mental condition is permanent.

Hersch: Is a linked benefit product with the chronic illness rider generally less expensive than a hybrid long-term care solution?

Schoonveld: Yes, for a couple of reasons. The CI rider calls for an acceleration of the life insurance policy’s death benefit — nothing more. The hybrid LTC product provides for an acceleration of the death benefit, plus additional funding to cover long-term care needs.

Hamilton: Someone interested in the chronic illness rider usually starts the conversation with the need for life insurance. The additional expense of adding a CI rider generally ranges between 7 and 10 percent of the life premium.

Schoonveld: The low cost of hybrid products relative to stand-alone long-term solutions accounts for much of their growing appeal. A LIMRA report shows five straight years of double-digit growth for hybrid products, whereas sales are plummeting in the LTCI only market.

Hersch: We've been talking so far about hybrid products riding on a permanent life insurance chassis. Are the LTC and chronic illness riders also available on term life insurance products?

Schoonveld: They are. I own a 20-year term life policy that comes with a chronic illness rider attached. I purchased the policy through my employer, but carriers apart from Lincoln offer hybrid term life products sold at the worksite.

Hamilton: Term life hybrid products in the individual market are not, however, widely available. One reason likely has to do with cost: The additional premium needed to fund a long-term care or chronic illness rider on a term policy would likely be greater than on a permanent life contract. With the rider attached, fewer term policies would lapse; an increase in the premium would therefore be needed to fund the anticipated increase in claims.

Hersch: Point noted. Nonetheless, many middle class households depend on term insurance to cover most of their income replacement needs. If a hybrid permanent insurance product provides for only a portion of the death benefit — say 10, 20 or 30 percent — can these households reasonably expect to fund long-term care or chronic illness costs?

Hamilton: Maybe not all costs, but a good portion of them. With a modest amount of permanent coverage, a hybrid solution can go a long way for middle class families, particularly if inflation protection is included.

Schoonveld: Also to consider is the flexibility of the product. With our MoneyGuard solution, policyholders have three options: use the money to cover long-term care expenses; secure a return of premium; or, on their passing, have the death benefit paid to the policy beneficiary.

Hersch: Turning to distribution, are the advisors who sell hybrid products also in the stand-alone LTC market and vise-versa? Or do producers tend to focus on one or the other of the two product lines?

Schoonveld:  The advisors who sell hybrid products tend not to be the same sales people who sell traditional stand-alone long-term products. Generally with hybrids, the advisor knows clients’ assets and can talk about protecting them within the context of a comprehensive financial plan. Advisors who market stand-alone LTC products often don’t do such planning.

Hersch: Are hybrid products also available for couples that, like certain stand-alone permanent life products, only pay a long-term care or chronic illness benefit for just one or another spouse?

Hamilton: Some policies have shared long-term care benefits, but we haven't seen joint policies in the market. Typically, each spouse would buy a separate policy.

Schoonveld: Often among budget-conscious couples, long-term care coverage will be purchased only for a surviving spouse who won’t have anyone to rely upon financially. Usually this is the wife because she has a longer life expectancy.

Hersch: Do you also see situations where adult children purchase long-term care policies on parents in order to limit the financial burden the kids might otherwise incur if they have to cover long-term care costs out of pocket?

Schoonveld: Indeed we do. In these cases, the advisor may actually have four potential clients: the parents and their adult children. Advisors love that — being able to sell to four people at the same time. But the best time to do this is when parents are nearing retirement, not after, when policy premiums may be prohibitively expensive.

Hersch: You alluded earlier to other LTC carriers. How do you see Lincoln positioned relative to its competitors and the market for all the key players?

Schoonveld: We've been in this business for 26 years. And for the last 7 years, we've grown the business to the point where we're starting to become a very strong player. All carriers in the hybrid market — Lincoln and other insurers, some that have been in this space for as long a period — are enjoying a maturing market that avails consumers of a broadening array of products, both linked-benefit and stand-alone long-term solutions.

 

Hersch: Given advances in technology that more efficiently enable direct carrier-to-consumer transactions, do you expect that hybrid products will remain chiefly advisor-sold products? Or might we see more products sold through direct sales channels?

Hamilton: Certain types of insurance are more amenable to a direct sale, such as simplified term insurance that doesn't entail a lot of moving parts. But a significant part of the population still looks to financial professionals for advice on covering long-term care and other aspects of a financial plan.

Sometimes talking about long-term care is not easy for the advisor. One way to broach the subject is to ask prospects whether they’ve personally seen a friend or relative deal with the emotional and financial hardship resulting from a long-term care or chronic illness event. This and other topics addressed covered a conversation, such as the desire to preserve wealth and provide for a secure retirement, can ease the sale.

Hersch: Does Lincoln have certain expectations in respect to sales for its hybrid products in the years ahead?

Hamilton: The Lincoln MoneyGuard solution has been a very strong part of Lincoln's success, in part because the offering appeals to a lot of advisors who have never sold a linked benefit product before. And we expect this to continue across all of our distribution channels: independent advisors who sell under the Lincoln name, life brokerage agencies, banks, wirehouses and financial planners. We have a very broad reach across distribution channels.

Schoonveld: But this isn’t just a Lincoln success story. Over the last five years, while sales have increased by double-digits on the hybrid side, the actual number of advisors who are talking about long-term care and chronic illness has probably quadrupled because all carriers marketing hybrid solutions are bringing new advisors into the new fold. As a result, there is now at least three to four times the number of advisors placing hybrid products as there are those writing stand-alone long-term care solutions.

 

http://www.lifehealthpro.com/2014/11/04/11-questions-about-the-hybrid-market-answered?eNL=54590484160ba0bc3a55e9a9&utm_source=LifeHealthProNewsFlash&utm_medium=eNL&utm_campaign=LifeHealthPro_eNLs&_LID=97698134

New Hospital Safety Scores Help Patients Find the Safest U.S. Hospitals

Washington, D.C., October 29, 2014 – At a time of unprecedented attention on U.S. hospitals, statistics suggest that more than 1,000 people die each day in the U.S. because of preventable hospital errors. That doesn’t include the many others who survive accidents and injuries that take place in a hospital setting, reinforcing the need for hospital vigilance and patient awareness. However, not all hospitals are equal. Released today, new data from The Leapfrog Group (Leapfrog) provides updated patient safety ratings for more than 2,500 general hospitals, helping consumers to make smarter choices in their personal health care.

The Fall 2014 update to Leapfrog’s Hospital Safety Score, which assigns A, B, C, D and F grades to hospitals based on their ability to prevent errors, injuries and infections, shows that while hospitals have made significant improvements when it comes to implementing processes of care and safe practices, performance on outcomes lags behind. Since April 2014, there’s been improvement on all 15 of Leapfrog’s “process” measures—such as hand hygiene and physician staffing in intensive care units. However, the data also points to a lack of progress on outcomes, with hospitals even declining on certain measures, such as preventing surgical site infections in patients who have undergone major colon surgery (SSI: Colon). 

“While the data tells us that hospitals are improving their safe practices, it’s concerning to see them moving backwards on any measure. Patients enter a hospital trusting they’re in a safe place, but with 41 percent of hospitals receiving a ‘C,’ ‘D’ or ‘F’ grade, it’s clear that some hospitals are safer than others,” said Leah Binder, president and CEO of Leapfrog, the not-for-profit organization that administers the Hospital Safety Score. 

Binder notes the Hospital Safety Scores are being released to the public at a time when Ebola has drawn the subject of patient safety into sharp focus. More specifically, the spotlight has landed on Texas Health Presbyterian Hospital in Dallas for its apparent missteps in diagnosing an Ebola patient. This hospital received an “A” grade on the Fall 2014 Hospital Safety Score for its past performance on safety measures.

“Though we don’t have much data on infectious diseases specifically, such as Ebola, we know that some hospitals are much better than others at preventing harm. Yet even “A” hospitals make mistakes, and sometimes patients are harmed. Based on the data Leapfrog used in the Hospital Safety Score, Texas Health Presbyterian is among the safer hospitals in the nation. The recent mishandling of Ebola cases proves that as a country, our hospitals must work harder to become prepared for this and any future threats,” added Binder.

Binder notes that with up to 400,000 lives lost annually and one in 25 patients acquiring an infection in the hospital, it’s crucial for consumers to be proactive about their health care.

“Consumers have largely taken the time to educate themselves about insurance plans and pricing. Now, we need patients to take the next step, putting safety first, for themselves and their families, and that means seeking out the safest hospitals in their area. The Hospital Safety Score arms consumers with that information,” added Binder. 

Additional Key Findings:

• Of the 2,520 hospitals issued a Hospital Safety Score, 790 earned an “A,” 688 earned a “B,” 868 earned a “C,” 148 earned a “D” and 26 earned an “F.”
• On average, hospitals have shown statistically significant improvement on all 15 Hospital Safety Score “process” measures since Spring 2014. These measures include hand hygiene, physician staffing in intensive care units and medication reconciliation.
• Of the Hospital Safety Score’s 13 “outcome” measures, the only significant improvement since Spring 2014 was seen in preventing central line-associated bloodstream infections (CLABSI) in intensive care units.
• While the number of CLABSI infections decreased, there was a statistically significant increase in another hospital acquired infection –surgical site infections among patients who have undergone major colon surgery (SSI: Colon). 
• For the third time in a row, zero hospitals in the District of Columbia received an “A” grade. Additionally, North Dakota had zero hospitals with an “A” grade. That said, this shows some improvement over Spring 2014, when four states and the District of Columbia had zero hospitals receiving an “A.”
• Maine once again claimed the number-one spot for the state with the highest percentage of “A” hospitals, with 67 percent of “As” (12 of 18 hospitals graded).
• Several states moved up in the “A” rankings, including Wisconsin and Florida—which broke into the top 10—and Virginia and New Jersey, which broke into the top five.
• 72 hospitals (or less than 3 percent) changed by two or more grades, showing either a significant improvement or significant decline.

The Hospital Safety Score is calculated by top patient safety experts, peer-reviewed, fully transparent and free to the public. A full analysis of the data and methodology used in determining grades is available online at New Link. The newly re-launched website now includes consumer-friendly videos and tips for patients and their loved ones. A Hospital Safety Score mobile app is also available for download.

For more information about the Hospital Safety Score or to view the list of state rankings, please visit www.hospitalsafetyscore.org. To learn how employers are footing the bill for hospital errors, visit Leapfrog’s Cost Calculator. Journalists interested in scheduling an interview should contact LeapfrogMedia@sternassociates.com.

About The Leapfrog Group

The Hospital Safety Score is an initiative of The Leapfrog Group (www.leapfroggroup.org), a national, nonprofit organization using the collective leverage of large purchasers of health care to initiate breakthrough improvements in the safety, quality and affordability of health care for Americans. The flagship Leapfrog Hospital Survey allows purchasers to structure their contracts and purchasing to reward the highest performing hospitals. The Leapfrog Group was founded in November 2000 with support from the Business Roundtable and national funders and is now independently operated with support from its purchaser and other members.

http://www.hospitalsafetyscore.org/about-us/newsroom/display/35149

Today's Datapoint

11% lower per-member per-year medical costs were experienced by patients whose pharmacy benefits are integrated with their employer-sponsored health plan, as opposed to carved out to a separate employer-PBM agreement, according to a two-year study conducted by Prime Therapeutics LLC, which is owned by 13 BCBS plans.