Stop the (healthcare) madness! I often lecture (both when asked and not) about one of the most defective, yet easily correctable parts of our healthcare system. That is…our penchant for insuring risks that are neither catastrophic nor unexpected in cost or aspect. The administrative costs associated with processing lower cost healthcare claims slows down the system, and inflates already high premium costs
Both the pace and scope of changes in the healthcare/health insurance space accelerated this past week (7/15/19-7/19/19) with several important developments. Here’s a recap of what all took place…
Since the passage of the Affordable Care Act (ACA) in March of 2010, much has been discussed, debated, written, and deployed relative to healthcare FINANCING reforms (see insurance, Medicare, Medicaid, self-insured employers, fees/taxes, pre-existing conditions, essential health benefits, community rating, minimum loss ratio, etc.). But very little has been written, or even revealed for that matter, about the ACA’s healthcare DELIVERY reforms and incentives. This is too bad, since we know that $.80 to $.85 of every dollar of billed health insurance premium is directly related to healthcare delivery. So it stands to reason that if we could reduce health CARE costs, health insurance PREMIUMS would follow suit. Enter Accountable Care Organizations (ACO) into the equation. Let’s examine what ACO’s are…who they are…and why many are looking to them to save America’s healthcare system from imploding.
As employers, patients, and other stakeholders continue to struggle with the rising cost of healthcare (and health insurance!), one particular component of overall healthcare spending seems to be occupying the majority of attention – prescription drugs! In 2019, the U.S. is projected to spend $500 billion on prescription drugs alone, which marks a 12x increase from less than 20 years ago!* A number of factors are at play in the cost pressures affecting drugs, on both the supply and demand side. Much is being discussed and debated on the topic of addressing skyrocketing drug prices, including government intervention on a number of fronts. Needless to say, we are closely monitoring developments in the area of prescription drug trends. So here is the first of likely several posts addressing some of the more pressing matters affecting prescription drug use and spending.
The “consumerization” of healthcare continues with the advent of a relatively new concept – prepaid healthcare! A company called – MDsave – is making headlines with their prepaid voucher concept for healthcare, which strongly resembles travel sites like Orbitz, Kayak, Expedia, and Travelocity.
Since the arrival of high deductible health insurance plans (HDHP) coupled with tax preferred spending accounts (SA) on to the employee benefits scene nearly 22 years ago, a number of “best practices” have emerged to assist employers and brokers/consultants in deploying them. These types of plans, often referred to as “consumer driven health” plans…or CDH, have five (5) specific employer best practices I have developed for successful introduction/open enrollment of such plans.
The United States Department of Justice (DOJ) has given the necessary approval of Cigna’s acquisition of pharmacy benefit manager (PBM) – Express Scripts. The $52 billion deal will result in a consolidated healthcare behemoth that some say, is in reaction to recent healthcare sector entrant – Amazon. Another large scale healthcare acquisition/merger – CVS/Caremark and Aetna – is currently under DOJ review, but is expected to be approved soon, in a $69 billion transaction. The Cigna/Express Scripts transaction is scheduled to be completed by the end of 2018.
Among the strategies being deployed by benefits brokers/consultants, on behalf of employers feeling squeezed by ever increasing health insurance costs is REFERENCE – BASED PRICING (RBP). Variances in the price of healthcare can be as much (or even more) as 500% for the same services…with little to no difference in quality. Don’t believe me? See forLEARN MORE