• February 2007 FEATURE ARTICLES •
Industry Watch for February 2007
Slowed Growth for Healthcare Spending
Recent studies find that multitiered formularies are a significant
factor in decelerating the growth of U.S. healthcare spending in both
the public and private sectors over the last three years. That’s
according to a recent study by actuaries at the Centers for Medicare and
Medicaid Services (CMS), which is being echoed by a separate study
conducted by PricewaterhouseCoopers. Government officials have chimed in
with a lowered estimate of Medicare prescription drug plan cost. In
fact, the growth rate slowdown beat government projections for 2006.
According to the PricewaterhouseCoopers study, average senior premiums
decreased to $22 a month, some 40 percent lower than forecast.
It was further stated that increasing Medicare Health plan competition
and the resulting cost containment strategies they increasingly employ
will save taxpayers some $113 billion over previous projections. Karen
Ignagni, President and CEO of America’s Health Insurance Plans (AHIP),
stated that the PricewaterhouseCoopers study shows that the Medicare
prescription drug benefit has lowered expected premiums and therefore
out-of-pocket costs for seniors’ prescriptions. The CMS study was
recently published in Health Affairs while the PricewaterhouseCoopers
study is entitled, The Factors Fueling Rising Healthcare Costs.
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Personal Health Management |
Interactive Healthcare Portal
Getting employees to take charge of their health is at the heart of
the Mayo Clinic Health Solutions’ new personal health management portal,
Mayo Clinic EmbodyHealth. The portal allows businesses and organizations
to partner with their employees in the goal for better individual
health, thereby lowering the skyrocketing costs for employers and
employees. Smart Web technology coupled with proven behavioral changes
drive the interactive online format of the portal so that individuals
can get answers to health questions, determine and understand their
health risks and gain access to the tools for lifestyle changes that can
lower those risks.
As part of EmbodyHealth, the Mayo Clinic Health Risk Assessment (HRA)
tools provide the 11 key risk factors that impact health the most and
connects individuals with programs and information that can further
organizational and individual health goals. Personalized content
tailored to the person’s unique health risks and strengths can be
generated so that provided goal-setting tools for behavioral changes,
health appointment calendars and other components have greater impact on
their health.
A customized incentive program for an individual’s continued use of the
portal can also be part of the interactive content so that organizations
can reward individuals who reach milestones in the goal toward long-term
health changes. Organizations can also track health trends throughout
their populations and gauge the impact of health programs across its
population. Full details are available at
www.mayoclinic.com.
Healthcare Options Portal. Californians now have the Health Insurance Store
to aid them in online comparison-shopping for providers and healthcare options.
Consumers can compare prices and coverage options from insurance plans such as
Blue Cross of California, Blue Shield of California, Aetna and PacifiCare, among
others. They can also get rate quotes and answers on over 100 healthcare options
for individual and family healthcare, dental, seniors and small business plans
from the store’s insurance experts. More information can be obtained at
www.healthinsurancestore.com. The Health Insurance Store is a member of the
National Association of Health Underwriters.
Ethics in Pharmaceutical Marketing. Ethical promotion of products to
healthcare professionals is what drives the updated International Federation of
Pharmaceutical Manufacturers & Associations’ (IFPMA) Code of Pharmaceutical
Marketing Practices, which took effect January 1, 2007. Applicability of the new
Code, which imposes stricter and clearer requirements on pharmaceutical
companies, extends to every country and is a requirement of all IFPMA members.
IFPMA Director General Dr. Harvey E. Bales stated that upon being informed of
any breach of the stricter ethics code, the organization will, upon verification
of the violation, be publicly announced by company name and a written agreement
will be obtained from them to end the practice(s). Different language versions
(English, French and Spanish) of the new IFPMA Code can be downloaded from the
IFPMA Web site.
Health Law Attorney’s Top 10 Issues for 2007.According to the current BNA
Health Law Reporter (HLR) survey of top health law attorneys, fraud and abuse
ranks as the number one issue that will take up the majority of time for health
law attorneys in 2007. The 27 members of the HLR editorial advisory board
concluded that the interrelated nature of compliance issues was the key factor,
as compliance solutions for one area often affect others. The informal
predictive survey ranked health information and technology as second and
taxation as third followed by Medicare, quality of care, antitrust, Medicaid,
labor and employment, health plan regulation and finally corporate governance as
the issues rounding out the top ten.
PHR Interoperability Study
In an effort to bring portability to Personal Health Records (PHR),
America’s Health Insurance Plans (AHIP) recently released the results of
an 18-month pilot project involving 10 AHIP member companies. The goal
of the project was the study of how insurance companies can help make
PHRs interoperable. The project’s focus is on core elements of PHRs and
is being conducted in partnership with the National Health Council and
in consult with IT standards organizations such as the American National
Standards Institute. AHIP states that the PHR portability project
supports the planned National Health Information Network project to
interconnect all of the regional health IT networks. The organization
further states that PHRs are the best place to start as the data for
their establishment is already contained in company databases.
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Healthcare Plans and Payers |
Government Dangles CDHP Carrot
A press release and discussion paper from the American Academy of
Family Physicians (AAFP) says projected high deductibles for
consumer-driven health plans (CDHP) may reduce the number of patients
coming to their physicians for preventative services. That is what the
AAFP says some industry analysts see as the likely resultant impact from
legislation recently signed by President Bush encouraging enrollment in
CDHPs. The legislation gives consumers the ability to invest up to
$5,650 in tax-free health savings accounts (HSA) in addition to a
possible one-time tax-free transfer from a flexible spending account, a
health reimbursement account, or an individual retirement account to a
patient’s HSA. Enrollment in high deductible health plans and CDHPs have
leveled off, according to research by the Employee Benefit Research
Institute.
Overcrowding Top Issue According to New Survey
A recent survey of more than 200 hospital executives, administrators
and managers across the nation reveals that overcrowding remains a
serious concern that continues to force hospitals to divert patients in
need of urgent care to alternate facilities. Eighty percent of the
respondents placed overcrowding in their top five management challenges,
and 70 percent admit that, though their goal is to admit ED patients
within 2 hours of arrival, 48 percent fail more than half of the time.
Regardless, hospital executives and administrators continue to express
optimism and believe technology will enable them to improve patient
flow, reduce overcrowding and manage costs. More than 94 percent of
respondents indicated that technology combined with staff and process
changes is the cure.
Other results from the survey: 28 percent of respondents reveal that
surgeries had to be postponed or canceled due to bed shortages; and, 80
percent of the organizations who responded have a standing committee to
address patient flow issues.
P4P Gains Steam
The pay-for-performance (P4P) debate heats up as Congress approves a
1.5 percent bonus in the second half of 2007 for doctors who report data
on the quality of their care, but only using government-specified
measures. Some doctors and lawmakers on both sides of the aisle
expressed concerns for benchmarks set by federal agencies and question
whether the government can accurately measure or even define the quality
of care, not to mention concerns of developing those standards by a July
1 implementation date.
Although doctors were in fear of legislated Medicare payments cuts,
Congress deferred this year’s 5 percent cut, opting instead to freeze
rates at current levels. The issue will definitely be revisited next
year as doctors face steeper cuts of 5 percent to 10 percent in the
coming year.
AMA Agenda Tackles Medicare Reform
Speaking of the freezing of those cuts, the AMA’s 2007 Advocacy
agenda includes the blocking of those proposed cuts for 2008 as part of
their Medicare payment system reform. Additionally, the agenda will
include progress on: coverage for the uninsured; medical liability
system reform; clinical quality improvements through standards
development; closing the minority healthcare gap; disaster and health
emergency response preparedness; and, the promotion of healthier
lifestyles.
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Employer-based Healthcare |
Are Company Clinics Becoming Fashionable Again?
More than 250 of the nation’s 1000 largest employers are expected to
offer some form of onsite primary care or preventative health services
by year’s end. According to healthcare specialist David Beech of the
Watson Wyatt benefits consulting firm, large-scale employers such as
Toyota, Pepsi, Sprint and Florida Power and Light, all of whom have
recently opened or expanded onsite clinics, expect to recover millions
of dollars in premiums and lost productivity. In many instances, the new
centers offer the same primary care or urgent services employees can
receive at their doctor’s offices, often for little or no out-of-pocket
expense. Toyota recently opened a 20,000-square-foot medical center at
its truck assembly plant in San Antonio, the largest onsite primary care
clinic to date. The $9 million facility is available to more than 4,000
Toyota employees and suppliers and features two full-time doctors, a
part-time physician, a blood-test lab and an X-ray center.
Large health insurers, such as Cigna and Aetna, are closely watching
these developments, and studying ways to “partner” with the employers
and clinic providers to ensure patients’ medical needs are met, and to
integrate their own programs, such as disease management, with
employers’ onsite wellness programs.