ACA rollout – how’s California doing?

If there’s a state that’s key to the success of the ACA, it is California.  Peter Lee, Exec Dir of Covered California (the Golden State’s exchange) gave a status update.

Lee reported enrollment in insurers via CC is right about a million people – and this doesn’t include the Medicaid expansion. Looks like about 20,000 are signing up per day of late. 

Here are the highlights.

– success is predicated on providing affordable health plans – and there are several plans available in each area, with some having a dozen or more options.

– about 26% of enrollees are in the 18-34 demographic; Lee sees this as a work-in-progress, and considers them the “Young Convincibles”.

– CA is an “active purchaser”, which means they carefully oversaw the health plan bidding process to ensure the plans available on the exchange were comprehensive, affordable, and many.

– about 2 million will get subsidies to buy health insurance

– LOTS of marketing, outreach, advertising, partnering with agencies.  But the most effective part has been via community organizations.

– enrollment has been greatly aided by facilitators.

– a lot of analysis will continue to assess outcomes, access, and disparities by different demographic group, and Covered California will move past the enrollment phase and into the improvement phase over time.



ACA – how California’s health plans are adapting

I’m honored to be speaking at Keenan & Associates’ annual Summit today, and they’ve graciously allowed me to live blog from the Summit.

The day begins with a panel of California health care executives discussing how their companies are adapting to ACA.  Representatives from Kaiser Permanente, Aetna, Anthem, HealthNet, United Healthcare, and Blue Shield of California answered questions from Keenan’s Henry Loubet and the audience.  Here are a few highlights.

First, the pace of innovation, the investments these companies are making, the focus on smart disease state management, and the effort to get closer and closer to the member are all striking.  There is a LOT going on and I got the sense that these companies are working feverishly to adapt and build and innovate.

A big area of focus was on ACOs/tailored/narrow/high quality networks, which evidently have been a big part of most health plans’ strategies. Loubet wrote about this recently here.  The companies represented seem to be fully invested in ACOs, with several working with multiple ACOs.  They are measuring results, and according to Blue Shield, the metrics are looking quite positive.

ACOs are not monolithic or identical across companies, rather they are highly customized with geographic areas, populations, reimbursement models, and state regs all influencing design and structure.  Simply put, they are akin to the old HMOs, where the focus is on an integrated health care delivery system and consistent, high quality care management.

Working with docs to identify and assertively manage patients with specific disease states is also a big focus, and several of the speakers discussed how they are using technology – smartphones, apps, on-line video consults with a doc, and electronic medical records – to do this.

Someone asked about the integration of WC and group health, and the speakers seemed to agree that ACA’s data integration may help move this closer however there’s so much focus on addressing ACA implementation that tying group and work comp together won’t happen any time soon.  

Finally when asked about possible changes to ACA going forward, the panelists’ comments included; a delay in implementing the small employer mandate; allow consumers to keep their current plan for longer; and possibly postpone fees and taxes (which ones weren’t identified).


Reality vs magical thinking

Too many workers’ comp execs are allowing their political viewpoints to cloud their business thinking. They can’t abide the notion of PPACA/Obamacare, and along with the majority party in the House of Repesentatives, want it repealed or blown up or completely emasculated.

This is magical thinking.

And magical thinking will not help those execs, or their companies, prepare for or deal with the implications of Obamacare.

Look, as an proud socially-liberal Democrat (as if that’s any new news to you, dear reader), I had to suffer thru 8 long, painful, miserable, agonizing, soul-destroying years of George Bush.  For those of you on the other side of the political spectrum, I feel your pain.  Really.  Even if the current resident of 1600 Pennsylvania Ave is pretty far from a liberal (sorry, had to slip that in!).

That said, it’s time to accept reality.

PPACA/Obamacare is the law of the land, it is not going to be repealed, substantially delayed, or emasculated. It is here, and it is going to stay.

Despise it you might (as I despise Medicare Part D and the Medicare Modernization Act of 2003, and the Iraq war) but accept it you must.  If you spend your work time focused on what you don’t like about health reform, you’re not spending your time thinking about reform’s implications for workers’ comp – how you can mitigate any problems, leverage any advantages, and monitor and measure ways reform affects your business.

What does this mean for you?

Those who do focus on the business implications are going to be better prepared, and therefore more likely to be successful, than those who dwell on uncontrollables.


Obamacare’s success is NOT about enrollment

At least not ONLY about enrollment.

What’s missing from the reporting on and discussions about how many and who and where they signed up for health insurance is a much more important issue – what are the health plans doing to improve health and control cost?

You wouldn’t know that from the press or pundits.

The are fighting the proverbial last war, and are not thinking about what it will take to succeed in this one. Amidst all the back-and-forth about young invincibles and risk corridors and subsidies is this reality; the basis for health plans’ financial success has changed – dramatically.

Health plans will no longer succeed by underwriting; that’s dead.  Yes, pricing is critical, but it can’t be used to drive demographics and enrollment, and neither can benefit design.

These tools – benefit design and underwriting – had been the fundamental business drivers for decades.  Now, they no longer exist.

They have been replaced by population health management.

Going forward, health plans’ success will be driven by much-improved, streamlined, integrated health care delivery systems focusing on population health management.

This means identifying those members with chronic health conditions and reaching out – assertively and proactively – to those members.  It means keeping them healthy; the annual cost of an asthmatic that has an acute episode is 20x more than one who doesn’t. Hypertension, diabetes, depression, COPD are all major contributors to health costs, and those health plans that get their members to higher health status will win.

They will have lower total medical costs, and will be able to offer lower premiums, which will drive more enrollment, including enrollment of younger, healthier (that means cheaper) members.

The “how” to do this is incredibly complex, requiring multiple stakeholders to completely change their thinking and success criteria and financial orientation.  To wit:

  • Docs will no longer be motivated to admit/treat/prescribe, but rather to work with patients to get those patients to “do the right thing”
  • Hospitals will want fewer transplants/surgeries/ER admits
  • Medical people will run insurers and health plans
  • In some markets, health plans all become appendages of delivery systems, while the big national players will continue their efforts to partner with local health care delivery systems.
  • Expect much faster and deeper adoption of evidence-based medical guidelines as health plans and their provider partners rely on science to drive improved outcomes.
  • Some smart health plans may actually figure out how to market themselves.  Seriously, it is possible!  Yep, after many, many years of underinvesting in marketing, branding, positioning, health plans are going to spend tens of millions in an effort to brand themselves and achieve “mind share” among consumers.
  • Employer involvement in arranging for employee health benefits will diminish – a lot.

This is already happening – it isn’t pretty, there are lots of starts, stops, and dead-ends, plans will fail and providers go belly-up, but the market will determine the winners. Notably, this wouldn’t have happened without guaranteed enrollment and pre-set benefit plans.

What does this mean for you?

The current flattening of health care trend will continue due to this transformation.

With clear boundaries set by Obamacare, health plans will succeed – or not – based on their ability to do what they should have been doing all along – deliver the best outcomes for the lowest cost.



Are Narrow Networks Bad or Are There Bad Narrow Networks?

This is a guest post from Tom Barrett of BBG, a highly-regarded employee benefits consulting firm with deep expertise in flexible spending programs and medical management.

The title above plays off of an old adage wisely employed by a very sharp and highly respected colleague.

Here’s one take on narrow provider networks as seen from the trenches.  While it’s mostly informal and unscientific it is cast with an experienced eye when it comes to networks:

Many of the narrow networks offered prior to 2014 placed a more discerning emphasis on contracting with higher performing providers.  We think these networks at least leaned more toward striking the combination of higher quality and lower cost.

Some (“some” emphasized) of the new narrow networks, especially those created primarily for the exchanges, appear almost exclusively aimed at low cost.  In fact, during the run-up to 2014 some carriers indicated that on the exchanges especially, low cost would win. Period. They indicated that network contracts comprised of low fee schedules was the way to get there.  New networks were developed with the key goal of being on the “first page” (lowest cost, think airfare searches, rental cars, hotels, etc.,) when plans were shopped.

Describing how carriers built these new networks, one highly respected industry insider indicated that contracts containing these low fee-schedules were mailed out to the provider community.  Carriers then waited to see which of the providers would accept the low fee schedules and sign-up.  The new networks were then built accordingly.

Probably not surprisingly, some of these new narrow nets bear a striking resemblance to Medicaid networks and are comprised mainly of providers willing to accept Medicaid-like fee-schedules.  We think that it’s safe to say that the quality and outcome side of the equation did not rule the day in the development of these networks.

So what’s the “net” for all of us?

Caveat emptor.  We’re not suggesting it’s necessary or even wise to shy away from all the narrow nets.

Rather, make darn sure you do your homework before building or selecting a plan that’s associated with one.

We don’t expect this to go away and expect provider and network evaluation to continue to grow in importance for everyone going forward, most especially for individuals and small and mid-size businesses ……….


The real cost of rejecting Obamacare

“When one person suffers it is a tragedy, when millions do, it is a statistic.”

As abhorrent as quoting Josef Stalin might be, the monster was right.

Opponents of Obamacare love to cite specific examples of people “harmed” by PPACA. As we’ve seen, while their “examples” are false, wildly distorted, and/or fake, they are also powerful as few bother to read the follow-up debunking stories.

Amidst all the complaints about Obamacare from individuals “suffering” under their new policies, it is easy to miss out on the big picture..

From a reader (thank you JR) came this – 4 million people with mental health issues will not gain coverage under Obamacare.  They will not have access to Medicaid, because the state legislators and/or governors don’t want to accept federal dollars to expand Medicaid.

These are real people – boys, girls, moms, dads, grandparents, friends, neighbors, sisters, brothers, wives, husbands, classmates.

They are suffering from bi-polar disorders, deep depression, addiction, autism, severe anxiety and panic disorders.  We are talking about seriously ill people, some with disorders similar to the perpetrators of the Newtown Connecticut and Navy Yard shootings; others who, without treatment, will never become productive, fulfilled, tax-paying members of society.  Instead they will be a burden on us all.

There are 11 southern states that have, for reasons of their own have refused to expand Medicaid as of now.  According to the piece in Insurance Broadcasting, “More than 1.1 million uninsured people who have serious mental health and substance abuse conditions live in just two states — Texas (625,000) and Florida (535,000).”

What does this mean for you?

The next time someone tells you what a great country we live in, ask them if this is how great countries treat their most vulnerable citizens.

When state politicians cut their own social support budgets while refusing to help those desperate for help, we become a smaller, meaner, and less-civilized society.

The full report is here.



Exchange enrollment – the big picture

Looks like the glitches, gremlins, and guffaws are just about over; CMS reported today that enrollment via the exchanges is up to 4 million, an increase of some 700,000 over the last few weeks. That despite the ongoing efforts in some states to hinder enrollment, efforts which include outlawing “Navigators”, refusing to expand Medicaid, and prohibiting or barring various forms of consumer education.

Of course, there have been many, many stories of citizens disappointed/angered/furious with their new health plans.

There’s the one about the Michigan woman with cancer who has to pay more.  Oh, wait, she actually doesn’t; her new plan through Blue Cross Blue Shield cut her monthly premiums almost in half, from $1,100 to $571; that plus the annual-max-out-of-pocket pretty much assures her she’s fine after all.


Well, then there’s the woman who claimed “Obamacare raped her future”!  Wow, such inflammatory language!  Especially for one so…uninformed.  Ashley Dionne said her costs would go up by a factor of four, but she didn’t realize she’d likely qualify for Medicaid, which would have cut her monthly premium to, well, nothing.

And who could forget Bette from Spokane! She was socked with a $700-a-month increase!  Uh, well, not…exactly.

Oops.  Turns out Bette never checked the exchange, could have got a much lower price, and the price she was quoted was for a waaaay better plan than the cheap one she had – and that’s why it was more costly.

Huh.  Well, what about those folks in Texas?  You know the one Maggie Mahar wrote about, the poor woman (why are they always women?  why don’t we men get to be victims?) with MS who had her policy canceled and the new one cost – gasp – $1000 a month! The couple with a $20,000 deductible! OUTRAGEOUS!!!

Well, that was not true.  First, no policy for a 27 year old will cost that much.  Next, there are NO $20,000 deductibles.  Finally, the paper that printed this crap never fact-checked the piece, and didn’t print a correction, and the reporter assigned the story was told to “To find people who [had insurance policies that] were cancelled – and having some difficulty.”

There are more horror stories.  But please, before you read and repeat, think.  Does it make sense?  Is it objective?  Who printed/produced it?

What does this mean for you?

Yes, there will be horror stories.

But none as horrible as 50 million of our fellow Americans not covered by insurance.

None as horrible as a loved one with breast cancer who can’t get care.

Now that’s horrible.



So what’s really happening with Obamacare?

Amongst all the noise about the exchanges and enrollment, it is all-but-impossible to separate the BS from the RS  (real scoop).  So, here are a few factoids.

What’s the net?

Too early to tell.  Looks like things are going much better than late last year – but things were such a horror show that may be “damning with faint praise.”

We will have a much clearer picture in May, after the penalty period comes in to play, premium payment issues are straightened out, and most of the rest of the computer messes are cleaned up.


The GOP’s Alternative to Obamacare

Three republican senators have proposed a bill – the Patient CARE Act – to replace PPACA aka Obamacare.

Kudos to Senators Burr Coburn and Hatch for their efforts – and for staying away from the useless ideas of selling insurance across state lines, high-risk pools which are never adequately funded, and that favorite non-solution, tort reform.

In a nutshell, the GOP bill does away with most PPACA regulations including the mandate, reduces the tax break on employer-sponsored insurance, does away with Medicaid expansion, and gives low income folks tax credits to buy insurance.  There’s not a lot of detail, and it’s clear this is a work in progress.  I would note the GOP’s claim that their bill expands coverage without increasing taxes is sophistry;  according to many in their party, eliminating a tax break IS raising taxes.

There is no mechanism or approach or tools that would reduce health care costs, no assurance that those with pre-existing conditions will get coverage (unless they constantly maintain insurance, something that many folks don’t do), no control over benefit design (which is skillfully employed by insurers to discourage the unhealthy from signing up)

While a home-team analysis indicates the GOP bill will reduce uninsurance by about the same amount as Obamacare, the analysis isn’t credible.  For one thing, the “coverage” provided under the GOP bill would be a LOT thinner than that provided under Obamacare – they’d have to be, as the maximum credit for young singles would be $1,560, hardly enough to pay for anything but the skimpiest of catastrophic coverage.  This may be “insurance” but it certainly isn’t “coverage” .  In addition, doing away with the Medicaid expansion would dump millions of just-covered folks back on the safety net, aka emergency rooms, charity care, and community health centers that have been hammered by budget cutbacks.


Finally, the provider, payer, information technology, supplier and health system communities have all been working feverishly to prepare for and implement Obamacare.  This train left the station four years ago, and Burr, Coburn, and Hatch are just now showing up trackside with a revised itinerary.

Moreover, the passengers on this train – the middle class, health care providers, and older folks – are going to be adamantly opposed to the GOP plan as it:

  • raises taxes on the middle class;
  • undoes Medicaid expansion thereby harming health care providers; and
  • increases insurance costs for older people.

Politically brilliant it’s not.

As Jonathon Cohn notes; “It would have been a lot more productive if these three senators, or any other Republicans, had been similarly constructive back in 2009…”

He also thinks it is better late than never – I disagree.

Obamacare is the law of the land.  It is not going to be repealed.  The triad would have better spent their time working on something more productive; say immigration reform or revamping the tax code.  Alas, this is an election year, and the GOP bill is a political ploy.

But it’s not a very smart one.

What does this mean for you?

Not much.




More states will expand Medicaid

Even those dominated by Republicans.

To understand why, here’s a quote from a conservative GOP legislator from Michigan:

State Rep. Al Pscholka: “When people say Medicaid expansion, I think to a lot of us that meant bigger government, and it meant expanding a program that doesn’t work very well…When I understood how it worked, and what we had done in Michigan in the late ’90s, that was actually pretty smart, we’ve privatized a lot of that already, which I think a lot of folks didn’t understand.”

But it’s more than that.

Hospitals and health care systems will be in dire shape without expansion.  Already the feds are reducing the amount of funds they are transferring to hospitals that provide a lot of uncompensated care and Medicaid services. The federal DISH (disproportionate share) allotments are established, HHS has a formula in place for rolling out those changes but that formula doesn’t account for states that don’t decide to use expansion. States that don’t expand Medicaid will see a reduction in these payments, and no increase in Medicaid, leaving the hospitals in a financial bind.

Without Medicaid expansion, hospitals and health systems will find it increasingly costly to care for the uninsured  – and they will pass that cost along to privately insured patients and workers’ comp payers.  This already happens, and is one of the arguments in favor of universal coverage.

More significantly, the poor uninsured with chronic conditions (diabetes, asthma, hypertension, depression) will become increasingly expensive to care for.   The lack of primary care will mean when they do get care, it will be much more expensive than if they’d been able to effectively manage their health and thus avoid hospitalization.

Unhealthy people find it harder to get and keep a job, don’t do well in school, and thus are less able to contribute meaningfully to society than those of us with insurance.

That’s not to say that Medicaid shouldn’t be modified; for example, some sort of nominal copay or coinsurance so services aren’t just a freebie makes sense to me. That’s happening in some states.

Finally, there’s a bit of history here; when Medicaid was originally introduced, many states opted out.  Within a few years, each one had signed up.

What does this mean for you>

History will repeat itself, and that’s good news indeed.

Thanks to Kaiser Health News for the heads’ up.