Posted by John Carradine on Fri, Nov 04, 2011 @ 05:58 PM
As we have noted on many previous occasions, in order to make real change happen in the healthcare industry, we need less, not more government intervention in order for programs to really succeed and make a difference in the lives of employers and employees. We need to continue the use of self-funding (or self-insurance; the terms are used interchangeably for our purposes here) as a mechanism for employers to get their employees the coverage they need.
Self-Insurance is growing, and is emerging as an option, not only for large corporations, but smaller organizations too. According to the Kaiser foundation, approximately 60% of all workers covered by private health insurance in 2011 are in self-funded plans. This percentage is up from just under 50% in 2000. It is an increasingly sensible route for employers to provide healthcare benefits to their employees, while forgoing the typical route of paying premiums to insurance companies. Part of the growth has been driven by smaller employers. This is because small companies are discovering the benefits of greater flexibility in these self-funded plans in comparison to traditional, fully-insured plans, at a cost that is sometimes significantly lower. Self-funded plans are allowing companies to save as much as 40% on their overall cost, while still allowing for custom-design of their plans.
There are many reasons why employers choose the self-insurance option. The following are typical:
- According to a Deloitte study of self-funded plans, premium growth from 2005-2010 has been 35% in fully insured plans, but only 26% for self-funded plans. For 2009-2010, the average premium dollar growth was $808 in fully-insured plans compared to $248 for self-funded plans.
- The employer can customize the plan to meet the specific health care needs of its workforce, as opposed to purchasing a 'one-size-fits-all' insurance policy.
- The employer maintains control over the health plan reserves, enabling maximization of interest income - income that would be otherwise generated by an insurance carrier through the investment of premium dollars.
- The employer does not have to pre-pay for coverage, thereby providing for better cash flow.
- The employer is not subject to conflicting state health insurance regulations/benefit mandates, as self-insured health plans are regulated under federal law (ERISA).
- The employer is not subject to state health insurance premium taxes, which are generally 2-3 percent of the premium's dollar value.
- The employer is free to contract with the providers or provider network best suited to meet the health care needs of its employees.
While over the years, there have been criticisms of self-funding, it has come primarily from state legislators and insurance regulators who feel that these plans should fall more under their control. As mentioned above, self-funded plans are subject primarily to federal law. There is no evidence to support the notion that more governmental control is needed. Healthaxis believes that self-funding needs to be better understood by everyone, employers and regulators alike. Anything that disrupts the effective use of self-insurance is bad for corporations and the employees that work there.
Posted by John Carradine on Tue, Jul 26, 2011 @ 07:14 PM
On January 16, 2009, the Department of Health and Human Services required that ICD-9 codes be replaced by ICD-10 codes by October 13, 2013. ICD-9 codes are used to report diagnoses and inpatient procedures and help classify patient sickness and death information.
This conversion has become a necessity because ICD-9 code sets have become outdated and maxed out, as they do not acknowledge the new advances in technology and knowledge, and the more complex body systems are running out of coding options. Furthermore, this code overload has resulted in new codes assigned to other body systems which have made the coding more complicated and disconnected to their classification type.
The new ICD-10 Clinical Modification codes offer 68,000 variations whereas the ICD-9 offered 14,000 variations. ICD-10 also expands the coding to identify the body system, root operation, body part, approach, and device used in a specific procedure. These precise codes should offer fewer rejected claims, improved quality and care management, better benchmarking data, as well as improved health reporting.
While this conversion will allow a more specific coding ability for physicians to diagnose their patients and help increase efficiency, the conversion will also require significant planning, training, system and software upgrades, as well as many other investments to ensure its success.
Originally, this conversion was supposed to take place on October 11, 2011, but the American Medical Association, along with a hundred physician state and specialty societies, expressed worry that it would not be feasible to complete a transition in such a short amount of time. Therefore, the new date of the ICD-10 conversion will be October 1, 2013.
Healthaxis, like all companies which provide comprehensive systems for claims benefits administration, is preparing for the upcoming implementations of the ICD-10 coding structure, as well as the new HIPAA 5010 standard. These will be challenging times, but the outcomes will ultimately be worth the effort. Healthaxis continues to be on the forefront of adapting to new technology and policies to help ensure that it is offering its customers the latest and most efficient ways of conducting business.
Posted by John Carradine on Thu, Jun 02, 2011 @ 10:47 AM
How many times has paper based information been lost unexpectedly with no record of when or where it was received? Payers and administrators have a lot of responsibility when it comes to keeping up with the overwhelming number of documents that come in their doors. Payers can now find new methods to eliminate the paper workflow to help improve efficiency and reduce costs. From book readers to iPads, the world is going paperless, and so is healthcare.
With the increasing volume of correspondence, miscellaneous documents, and non-standard processes, healthcare administrators need more efficient systems to combat the otherwise paper intensive method of processing and filing. Companies can strive to improve productivity on processes that are heavily reliant on the movement of paper documents, as well as offer better customer service to their customers, and comply with records management mandates more effectively through the use of information technology.
By combating “paperflow,” payers can help to reduce, if not eliminate altogether factors such as personnel time for paper distribution, postage costs, process flow lag time, lost paper documents, and storage space. So what products are available for payers to help streamline their processes?
For over eight years now, Healthaxis has been leading the pack of creating paperless workflows through its Microsoft- based DocTrax software platform. DocTrax has been successfully used in a variety of situations to improve productivity and management of previously paper intensive business processes. The software automates paper flows for documents such as contracts, enrollment forms certifications, tax forms, claim attachments, and tracks every queue that the document has gone through. The powerful software helps companies improve and track turnaround time for all processes, which is a win-win for all parties.
DocTrax is fully customizable, so companies can integrate the system into their current environment and add features that are important for the company. For more information about DocTrax and other products that Healthaxis provides, check out www.healthaxis.com
Posted by John Carradine on Mon, Apr 04, 2011 @ 09:59 AM
Accountable Care Organizations (ACO) are getting more and more attention, especially as we progress closer to 2012 when most of the provisions for ACOs go into effect. An ACO is an association that consists of a group of doctors and hospitals that have decided to come together with the intended purpose that through collaboration, transparency, and cooperation, they can provide the best care for their patients. In ACOs, doctors are accountable for improving the health of their patients. It’s a team effort, not an individual effort. In these practices, doctors are rewarded for meeting targets that improve outcomes and lower costs. Their benchmarks are based on regional standards of care, so that local factors impacting health can be taken into account. The idea originated out of the need to create a system that would help to ensure that all patients receive the best health care possible. In order to realize this necessary change, there had to be a shared responsibility by all involved parties.
New Healthcare Law
Accountable Care Organizations are included in the Patient Protection and Affordable Care Act and even though the new rules take up only a few pages, they are one of the most highly discussed facets of the new health care bill and accordingly are a hot topic for debate. Along with bringing a new approach to delivering medical care, there will be new payment models under Medicare and most likely private insurance as well. What seems lost in the discussion is that ACOs cannot be particularly small, and managing populations of members and dealing with the administrative requirements of doing so requires sophisticated systems, not just for healthcare delivery, but for administration.
Affect on TPAs and Insurance Payers
Third Party Administrators and Insurance Payers will have a role in the administration and delivery objectives of ACOs. Right now, ACOs are focused on organizing, contracting and determining how these new provider groups will work. But someone has to handle the administration and payment processes for these groups, and that’s where we see forward looking administrative organizations going. Payers will see an increased need for transparency as institutions and systems begin to merge and may find that some administrative duties will soon either be shared or reduced. In addition, new payment and reimbursement models will need new administrative systems capabilities.
Healthaxis’ Role
Healthaxis is looking at the specific needs of ACOs and their administrative partners to understand how we adopt our systems and solutions to meet this new model. We know that our history of core benefits administration is a key building block, and we are making use of the flexible nature of our systems technology to build new and more advanced capabilities that will be able to meet the needs of a changing landscape. We’ve been meeting with industry leaders to understand the Payer’s role in administration, and we expect to be one of the leaders in systems development for this potentially large segment of the healthcare market.
Posted by John Carradine on Thu, Jul 15, 2010 @ 02:11 PM
Sometimes a quick joke illustrates an important point better than anything else. Here's one I heard that is particularly salient on the issue of controlling corporate medical costs.
A woman brought a very limp duck to her vet. As she laid her pet on the table, the vet pulled out his stethoscope and put it to the bird's chest. After a moment or two, the vet shook his head and sadly said, "I'm sorry, your duck, Cuddles, has passed away."
Distraught, the woman cried, "Are you sure?"
"Yes," the vet said, "you're duck is dead."
"How can you be so sure," she said. "You haven't done any tests or anything. He might just be in a coma."
The vet excused himself, and left the room. A minute or so later, he returned with a Labrador retrieiver. As the duck owner looked on in amazement, the dog stood on its hind legs, put its paws on the examining table, and sniffed the duck. He then looked at the vet, and with sad eyes, shook his head.
The vet left the room again, but soon returned with a cat. The cat jumped on the table and likewise sniffed the bird from head to foot. Quietly, he sat back on his haunches, meowed softly and then jumped down and left the room.
The vet looked at the woman and said, "I'm sorry, but as I told you before, this duck is definitely, 100% certifiably, dead.
The vet turned to his computer, punched a few keys and printed a bill. Handing it to the woman, he said, "That will be $150.00."
The woman, now in greater shock than before, said "150.00? Just to tell me that my duck died?" The vet shrugged his shoulders and said, "I'm sorry, if you had just taken my word for it, the bill would have only been $20, but with the lab report and the cat scan, it's now $150.00"
Understanding utilization, and it's impact on medical costs, is important. In fact, it's possibly more important than the discounts your plan may be getting from its network arrangements. If your administrator isn't providing you with tools to keep down unnecessary medical costs, or to control those costs that are necessary, it won't matter how good the discounts are, your organization will be spending money it shouldn't.
Companies should have programs in place to educate their employees on the appropriate use of the healthcare system. They should be encouraging people to question their doctors about the tests they perform, the procedures they recommend, and the drugs they prescribe. The company should encourage its employees to make use of their employee assistance programs, nurse lines, wellness portals; all the tools the organization has to help them understand their medical conditions and the appropriate steps to ensure they are properly cared for. It's hard to convince people that it's ok to ask the person in the white coat - why, or how much, or is there a less costly alternative, but it's absolutely necessary.
Your benefits administrator should be talking to you about how to manage utilization. You should be asking them about the tools you need and the communication processes that work. You should also be asking them whether their benefits administration systems and web portals are designed to seamlessly interact with and promote the kind of education you want your employees to have. If they don't have the answers you expect, it may be time to look for a new administrator.
If you're a benefits administrator, and your system vendor doesn't have the web portals and the level of automation you need to properly serve your clients, you should call Healthaxis.
Posted by John Carradine on Wed, Jul 07, 2010 @ 07:34 AM
A few years ago, I was traveling with my colleague, Larry Thompson, now Senior Vice-President of Large Accounts at HealthNow, and we began talking about why companies have such a difficult time lowering healthcare costs. I thought the problem was primarily because CEO's didn't take the issue seriously enough. That may seem hard to believe, because CEO's are always insisting that the costs of health benefits are hurting their companies' bottom lines. But instead of taking charge of the situation themselves, they often delegate the issue to other executives or outside consultants and insurance brokers. Unfortunately, this delegation of responsibility is seldom accompanied by a commensurate delegation of authority that could effect real organizational change. The result is that the "benefits problem" is viewed as a cost issue to be dealt with, and approaches to lowering costs typically are either trying to achieve higher network discounts or cost shifting from the employer to the employee. The usual outcome is that it is either not enough, or it is unacceptable because employees don't like it. Ultimately, nothing really changes.
My view was, and still is, that to fix healthcare, we must first "fix" our approach to solving the problem. We must focus on changing the way we as leaders comprehend and manage the idea of healthcare. We must begin to see healthcare not as a benefits program with a bundle of disintegrated parts, but as a process that can be managed and improved upon with tangible financial results. In the end, it's about creating a fully integrated health and benefits administration system and combining that system with a new cultural identity that makes "health" the primary focus.
As Larry and I continued our conversation, I described an approach I had developed that was based on the SEI Capability Maturity Model. I called this approach the CorporateHEALTH Maturity Model (CHMM). The CHMM describes a collection of tiers of corporate health maturity. Each maturity level has a set of process areas and performance standards that determine the effectiveness of corporate response to healthcare process initiatives. The processes can be managed and refined to increasingly higher levels of capability so that the corporation can measure its progress toward a goal that achieves the highest level processes for improving health and lowering cost.
The five maturity levels are:
- Insurance for basic care,
- Insurance as a benefit,
- Health as a corporate objective,
- Health as a guiding principle,
- Health as a corporate value.
The elements of CHMM program management range across a total of twelve different but complementary categories. Examples of categories would be plan design, funding mechanisms, and communication.
Once Larry understood the idea, he and I quickly began outlining a framework that describes how organizational effectiveness for "Corporate Health," could be measured, and further, at any given level of maturity, what the next steps were for improving the process. The result was compelling.
Why do we need the CHMM? To me it's obvious. The healthcare system in America is broken. Costs are high, returns are low - and let's face it, no one really fully grasps the whole picture. It simply is too complicated. Where do we start? First, corporate leaders need to begin dealing with the issue of "Corporate Health" in a more business-like manner. They need to stop viewing it as "benefits cost." It's an operational problem, not a cost problem. Expensive consultants or reliance on government intervention are not the solution. The solution lies in using a systematic and integrated approach to problem solving, similar to the way other major operational issues are handled.
In future blogs, I'll write about the CHMM framework in more detail and offer some solutions for how companies can get started improving their Corporate Health processes.
Posted by John Carradine on Thu, Jun 17, 2010 @ 01:13 PM
Wellness programs are one of the most important aspects of implementing an effective benefits program for corporations. Connecting those programs to benefits plan design is a requirement if you want to ensure that your employees truly see the importance of engaging in healthy and life-changing behaviors. History has proven that purely voluntary programs have no meaningful participation, while programs offering incentives - like premium credits, reduced co-pays and co-insurance, or even cash rewards achieve much higher participation. In other words, if you want to maximize the chance that employees will engage your wellness initiatives and programs enthusiastically, tie their involvement to your plan design and make it profitable for them to do so.
Involving your benefits administrator in the program is key as well. What good is it to promise employees better benefits, if after their engagement, you don't deliver the rewards? But this can be a daunting task for an already overworked human resources team.
One key is to ensure that whoever supplies your benefits administration system, or core benefits administration platform can automatically adjust the plan design for each individual with only minimal effort on the part of your corporate staff. For instance, you may want your employees to be able to report via a web portal that they signed up for a softball team and are therefore able to receive a reward. Likewise, because you need to tie the rewards to behaviors that are ongoing, and to stop the reward if the employee stops complying with the requirements, you want the system to automatically stop calculating the benefit without any intervention from corporate staff.
Additionally, if you were working with one of the leading providers of health management solutions such as Viverae (http://www.viverae.com/), or a consumer care management system like WorldDoc (http://www.worlddoc.com/), you would want to be able to automatically link activities from their portals to a core benefits platform like Healthaxis and provide seamless integration and reporting.
In sum, we need to find ways to help our employees lead better healthier lives. The rewards to the business are ultimately immeasurable. However, we also need to be able to administer our programs with healthcare information technology systems that don't require an army to support our initiatives.