May
6

Health care reform – what are the chances?

Pretty good. I’d say better than 50:50; probably 60:40 or better that there will be major reform in the next Congress.
Here’s why.
Sen Ron Wyden’s (D OR) Healthy Americans Act has six D and six R Senate cosponsors, including Bob Bennett (R UT). There is broad bipartisan support for the bill, which mandates universal coverage.
WalMart and the SEIU back the bill.
The National Federation of Independent Businesses backs some form of ‘universal’ reform.
Both Democratic Presidential candidates back major reform.
Congress has been stung by criticism of its inability to get much done – and health care reform is something big that needs doing.
Many of the Fortune 500 back reform, including automakers, service companies, and manufacturers. And the unions that represent their workers do too.
This impressive array of supporters is opposed by…well, it must be opposed by some groups, companies, politicians, lobbies, but it is hard to find much in the way of opposition, at least using internet search engines. We can look to California to find out how and why their efforts to pass reform failed. A loose coalition, comprised of Republican legislators, Blue Cross of California [WellPoint], the state Chamber of Commerce, and the tobacco industry joined together to oppose the bill, and their efforts got a major push from legislators’ deep concerns about the cost of the initiative and the Golden State’s financial straits. A closely related issue is the concern by many that states, acting alone, cannot enact meaningful reform for the simple reason that 1/3 of all health care dollars are controlled (to a great extent) by the Feds, and if these dollars, and the care they pay for and members they cover aren’t integrated into a comprehensive reform measure, the effort is doomed to fail. Cost shifting, contradicting priorities, differing measures of success and evaluation methodologies will result in a confused, bifurcated system that serves neither population well.
Similarly, the problems emerging in Massachusetts and Maine make it less likely that states will successfully pursue reform measures. Instead, the states, a powerful lobbying group in and of themselves, will likely join others to support national reform.
As General Eric Shinseki, former Chief of Staff, U. S. Army, said “If you don’t like change, you’re going to like irrelevance even less.”


May
5

Agents who get it

I’m at the annual meeting of the Institute of WorkComp Professionals in Asheville, NC today. A very impressive group; what is notable is these folks actually do ‘get it’; they do understand that workers comp is not just a spreadsheet game, a price war, a contest to see who can squeeze the carrier the most.
These agents understand that the value they must deliver is to develop and implement long term programs, programs that attack cost drivers, that reduce injuries and speed return to work.
And those programs, and the results they provide, can’t be done on the cheap.


May
2

Weather and recovery from it – the hot thing at RIMS

the new big thing at RIMS this year seemed to be weather; the prediction of it (both long and short term forecasting), and the closely related business of disaster recovery. There were several vendors marketing sophisticated technology that ostensibly enables users to predict the date time and precise location of tornado touchdowns, along with the precise path and extent of destruction and list of addresses that will be affected (well, I may be exagerating just a touch).
Just in case an insurer hadn’t taken advantage of that new technology, there were several disaster recovery firms pitching their incredible ability to make disaster damage disappear overnight. Perhaps they should market themselves to parents of teenagers for those inevitable parents-out-of-town-party cleanups. Now that would be a test…
If it is any consolation, there were dozens of security firms at the 2002 RIMS: they’ve all but disappeared from the show floor, perhaps due to the lack of unfortunate events in 03, 04, 05…


Apr
30

McCain’s health reform plan – More costly, less coverage

I and others have taken Sen McCain to task for his wildly expensive health reform plan that somehow manages to cost more than the Obama or Clinton plans, while insuring far fewer people.
How does he do this?
By relying on tax breaks and the existing completely broken health care system, making no changes to insurers’ current ability to medically underwrite, deny coverage to those with pre-existing conditions, and allow insurers to write policies across state lines, thereby contributing to the likelihood that adverse selection will speed the death spiral of plans that take all comers.
Brilliant.
Bob Laszewski provides us with a trenchant review of Mccain’s latest attempt to justify/explain his ‘plan’. Hint – it is neither a justification or explanation, but then again, it isn’t a plan.


Apr
30

Medcor’s value

I had a chance to spend more time with the Medcor folks this morning at RIMS, and liked what I saw. They’ve been doing the combo first report of injury (or most of it)/nurse triage/network direction work for ten years now, and some of their nurses (all calls are answered by nurses) have logged over 5000 calls.
Because they don’t have any stake in any network, they don’t worry about increasing network penetration (a wholly misguided metric used to evaluate managed care plans) per se, but rather focus on getting claimants to the right doc. They do have the ability to send patients to specific docs based on the type of injury – but (here’s a shocker) most of their customers are not yet sophisticated enough to be able to identify those ‘right’ docs.
The value? Avoided ER admissions and reduced claim frequency.
Not an earth-changing business, but one with a lot of potential – even more if the employer is somewhat sophisticated.


Apr
29

News from the Workers Comp pharmacy world

Here, in no particular order, are some findings gleaned from my wanderings around the show floor at RIMS in San Diego.
MSC has rebounded nicely from the loss of Liberty Mutual’s pharmacy business last year (awarded entirely to Progressive Medical). Sources indicate MSC’s run rate is back above where it was when Liberty terminated the business, primarily from a few wins and no appreciable losses in the interim. Kudos to CEO Joe Delaney, COO Mitch Freeman et al – while the ship may not be altogether righted, they have done a remarkable job in turning the company around.
Progressive Medical is also doing well, adding some incremental business while maintaining its reputation for stellar customer service.
Cypress Care (an HSA consulting client) is on a strong growth track, closing major deals with the California Insurance Guarantee Ass’n and Pennsylvania’s state fund (SWIF). Sources indicate Cypress is close to a couple other significant deals.
Express Scripts has released its annual workers comp drug trends report. Here’s the link. Maybe that’s why all the red-shirted ESI staff were plastered with smiles.
Larry Marsh of Lehman Brothers issued a scathing report on AmerisourceBergen, taking company management to the woodshed for their inability to sell off sub PMSI/Tmesys. Marsh hammered ABC, lowering his eps forecast by $0.05 on the basis of the no-sale of PMSI alone. The PMSI folks are doing their best to ignore the goings-on at Corporate HQ; as noted earlier today their MSA division is pressing ahead and delivering solid results despite downward pressure on pricing in that fast-maturing sector.
Finally, one of the last remaining third party billers, Third Party Solutions, is reportedly on the block – again. Loyal readers (and industry geeks) will recall TPS was for sale about a year ago, with no takers. Now that TPS has bought WorkingRx, it looks like owner Fiserv is thinking someone will pony up big bucks to own a monopoly in that space.


Apr
28

Where innovation can be found

The periphery of the trade show floor at RIMS is where you’ll find innovators – new companies, with new ideas and concepts, new solutions to old problems, all described by their owners, founders, and top execs. To give credit where credit is due, this isn’t my observation but rather one made by friend and colleague Peter Rousmaniere.
The choice spots on the exhibit floor are occupied by the seniority; RIMS assigns spots according to how many years an exhibitor has been attending, These spots are taken up by the big carriers, brokers, software suppliers, and managed care firms. Not a lot in terms of innovation here, although there are a couple of interesting new solutions to old problems.
Medata’s at RIMS with a new booth, new team, and renewed commitment to customer service. Long hampered by a (to be generous) lackadaisical approach to customer service, Medata is back, looking to take advantage of the turmoil in the market created by Coventry’s aggressive push to consolidate share; ACS’ acquisition of CompIQ; and the sale of FairIsaac’s bill review unit to Mitchell Medical.
Coventry is promoting a medical triage/first notice/network direction product that they’ve been working on for over a year. Early indications are the service can help reduce frequency – significantly. Kudos to the 900 pound gorilla; although the product looks a lot like Medcor’s version (which was developed earlier) at worst it shows Coventry knows a good thing when it sees it.
Medcor’s service combines the best of nurse triage, first notice and provider network direction, reducing the number of calls the payer (or its designees) need to make and the calls the injured worker needs to answer.
Datacare has a unique data aggregation platform, enabling payers to capture and integrate all documents in one location and automate links between UR and bill review – an all-too-often ignored but nonetheless critical part of the medical management process.
Paradigm has been in business for 15+ years, but this is the first year they’ve exhibited at RIMS. The company’s newest offering is a chronic pain program, which has shown strong results after a five-year development effort.
More tomorrow after my feet recover.


Apr
28

MSAs – what next?

Medicare Set Asides were a hot business for a couple of years with NuQuest HealthAdvocates and Gould and Lamb dominating the industry. Then Coventry entered the market thru its priority services sub, quickly moving up to the fourth spot. Coventry stumbled with its guarantee recently, losing a couple of clients (namely AIG and Macy’s).
Today the MSA business is growing but not nearly as fast as in 2006. The big jumps in volume in the sector are pretty much over; while most vendors are seeing some increases in volume, the double-digit growth of the past looks to be gone.
There are still new entrants but the show floor isn’t nearly as crowded with erstwhile MSA vendors as it was last year.
What’s next? Depends on the Feds and adoption rates in other lines of business. Expect to see MSAs become more prevalent in other P&C lines especially GL and other liability lines.


Apr
28

RIMS begins

Last week it was the World Health Care Congress (perhaps the best conference I’ve ever attended in terms of content and quality). This week it is RIMS, the annual property and casualty get together, where brokers schmooze and vendors vend and risk managers are feted by carriers, TPAs, managed care firms and consultants.
Here’s what I’m looking for at RIMS 2008. New and different approaches to managed care, approaches that are not merely based on discounted care, but outcomes. And not just lip service or ‘we’re seriously studying this’ but programs that are in place, working, and delivering results.
Straight talk from vendors – what they can, and cannot, do. Results they’ve been able to deliver, and the keys to that performance. (Knowing that vendors can’t be successful unless payers work cooperatively with them)
Evidence that payers are not just talking about outcomes and smaller networks and ‘the right docs’ but actually doing something.
New trends, products, ideas, and companies – something that has been in short supply in this industry for too long.
Stay tuned.


Apr
24

Wall Street gets a butt whippin’

Friend and colleague Bob Laszewski has shined a very bright light on Wall Street’s ignorance about the health insurance business.
Bob notes: “We are way past the time the really smart people on Wall Street (that would be all of you) needed to start asking just what the future of this business is. If the answer you get is that the future of managed care is just to ride an unsustainable health care cost trend rate many more years into the future[bold is mine] you might just want to dig a little deeper this time.”
As usual, Bob is dead on. Health plans make their money by pricing just above trend, selecting risks, and avoiding claims wherever and whenever possible. They are getting (justifiably) hammered by regulators and the press for claims avoidance, and Wall Street may have finally woken up to the inherent problems in the standard health plan business model.
There are far too few health plans that actually do anything remotely resembling ‘managing care” – they manage risk, they manage reimbursement, they manage analysts – but they do not manage care.
I’ve said before, and repeat here – health plans that know how to manage care, particularly for the previously-uninsured, are going to do really well when universal coverage becomes the law of the land.
Unfortunately, there are few plans that qualify.