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“I’m Ready for Something to Change Here”

May 26, 2010
12:05 pm

Further dispelling the misconception that health industry leaders are opposed to health reform, one of the nation’s most respected health insurance executives, Vicky Gregg, the CEO of Blue Cross Blue Shield of Tennessee, spoke to a Chattanooga audience yesterday about the need for system change.

She said, according to the Chattanooga Times Free Press, “You feel like you have been working all your career trying to make sure people get coverage, get care, and you keep in some ways, beating your head against a wall.”  Ms. Gregg said she hoped the new health reform law would achieve meaningful progress in improving both the cost and quality of healthcare.

Ms. Gregg did, however, sound a cautionary note – and a well-founded one, in my opinion – that is captured in the attached video.  As she noted, the health reform legislation passed by Congress includes more than 1000 instances in which various policy changes are left to the discretion of the Secretary of Health and Human Services.  That means the success or failure of health reform will be determined, to a large degree, by the writing of rules and regulations to implement congressional legislation.  That process has just begun.

Vicky Gregg and her fellow panelists at the Chattanooga event make a number of very important points.  There is broad agreement on the need to make our system more affordable, to contain costs and to elevate quality.  There’s a lot of sorting out to do to determine if we’re on the right path to achieving those goals.

One Nation, Overweight

May 19, 2010
12:58 pm

One doesn’t think of CNBC as a diet and fitness television channel, but the fact that the network is airing a special, “One Nation, Overweight”, this week is an indicator of the toll obesity is taking on our nation’s economy and on company budgets.

In this clip from the program, Johnson & Johnson CEO William Weldon, a Healthcare Leadership Council member, explains that an escalating obesity problem and the various illnesses and chronic diseases that result from it will inevitably drown employers in healthcare costs.  Johnson & Johnson, by the way, is one of the real success stories in this country in developing employee wellness programs.

“One Nation, Overweight” will air again on CNBC this Saturday, May 22 at 7 p.m., Eastern time and Sunday, May 23 at 10 p.m., Eastern time.

Empowering Consumers to Protect Their Own Health

May 11, 2010
3:33 pm

We’re witnessing more encouraging new developments in empowering consumers to protect their own health, and attack the chronic diseases that are the most potent cost drivers in the U.S. healthcare system.

Today, HealthcareIT News spotlighted the employer organization Dossia for partnering with Mayo Clinic to provide employees with an online wellness application that enables them to better manage their health.

EmbodyHealth is a personal health management portal which offers resources such as health assessments, behavior change programs, tailored behavioral messages, instructional videos, questions and answers from Mayo Clinic specialists and a health reference library.

Dossia is a consortium of top U.S. employers dedicated to empowering individuals to improve healthcare. Healthcare Leadership Council members Cardinal Health and sanofi-aventis are amongst their founding organizations which also include AT&T, Applied Materials, BP America, Intel, Pitney Bowes, Abraxis Bioscience, Vanguard Health Services and Walmart. 

“Dossia is committed to facilitating a consumer-led revolution by equipping employees with the tools necessary to better educate themselves about their health and healthcare decisions,” said Steve Munini, Dossia’s chief operating officer.

We all know that chronic disease accounts for 75 percent of the nation’s $2 trillion medical care costs.  As I have said on this blog before, there is no doubt that employer wellness programs can play an enormous role in controlling healthcare costs.  Additionally, a multifaceted approach, including greater emphasis on prevention and chronic disease management, the promotion of better nutrition, and fitness, is necessary to create lasting changes that will increase the health of Americans.

Employer-Based Health Coverage and the Law of Unintended Consequences

May 07, 2010
11:50 am

Robert Jordan’s book, The Path of Daggers, has one of the best descriptions of the Law of Unintended Consequences.  He wrote, “Whether or not what you do has the effect you want, it will have at least three you never expected, and one of those is usually unpleasant.”

An article in today’s Fortune magazine and also available on CNNMoney.com delves into detail on one of the potentially unpleasant consequences of the new health reform law.  The new healthcare system that may emerge from health reform, according to the article, may cause many large U.S. employers to stop providing health coverage for their employees and, in so doing, radically change the healthcare landscape.

This information emerged when companies like Caterpillar, John Deere and AT&T went public, after Congress passed health reform legislation, with comments about how the significant financial losses they would absorb as a result of the new law.  The comments prompted Congressman Henry Waxman (D-CA), chair of the House Energy and Commerce Committee, to demand that these companies turn over their confidential financial documents and be prepared to send their top executives to Capitol Hill for hearings.

Those hearings were never held.  After seeing the information in the documents the companies provided to Congress, we understand why.

Large employers at AT&T and Verizon, while they have not acknowledged any immediate plans to change their practices, are conducting their own analyses that show they will generate significant savings by dropping their employee health coverage and sending their workforces into the new health exchanges to find their own insurance plans.  Even with paying the financial penalties for violating the new employer mandates, they will still save a great deal of money.

An AT&T PowerPoint slide indicates that 2009 medical costs for company employees and retirees totaled $4.7 billion, a total that will continue to escalate.  Paying penalties for not offering coverage to its 283,000 employees would cost $600 million.  Looking at similar numbers for his own company, the vice president of labor relations for John Deere wrote in an internal e-mail provided to Congress that the company should look at the option of “denying coverage and just paying the penalty.”

Of course, if these developments occur, that would result in more burden placed upon American taxpayers.  Fortune calculated that, if 50 percent of workers currently on company-sponsored health plans have to begin getting coverage through the federally-sponsored health exchanges, federal health costs will rise by $160 billion a year by 2016.

These revelations spotlight two serious flaws in the new health reform law that need to be addressed when Congress revisits this issue.  First, mandates don’t work if they don’t provide an adequate incentive for acquiring or maintaining health coverage.  We’ve already expressed concern in this space that the relatively low penalties tied to the individual mandate may lead many healthy households to decide it’s cheaper to pay the fine and wait to buy insurance when they get sick.  Now we’re seeing that the employer mandate also may lead companies to the logical conclusion that paying the penalty is the more sensible alternative.

More importantly, though, more needs to be done to address the cost and value issues tied to American healthcare.  If costs continue to increase at a rapid rate, dropping employee coverage or not purchasing coverage in the first place becomes a more desirable option for many individuals and employers.  Congress needs to take bolder action in advancing delivery and payment reforms to make healthcare more cost-effective and value-driven.

The good news is we still have time to prevent these unintended consequences from taking effect.  Not that much time, though.  The next Congress will need to make the next steps in health reform a major priority on its agenda.

Physicians and Medicaid

May 03, 2010
3:25 pm

One of the concerns about using Medicaid expansion, as is the case in the new health reform law, to reduce the nation’s uninsured population is the belief that many physicians won’t see Medicaid patients because of the program’s very low reimbursement rates.

Now, we have new numbers to underscore that worry.

A new survey published today by the American Medical News, a publication of the American Medical Association, found that even with the higher Medicaid primary care reimbursements for 2013 and 2014 that was included in health reform legislation, new Medicaid patients will have difficulty finding a regular physician.  Among the survey findings:

·         10 percent of primary care physicians believe new Medicaid enrollees in their area will have trouble finding a suitable primary care doctor.

·         49% of primary care doctors would be willing to see new Medicaid patients if Medicaid rates reached the same level as Medicare, 47% would not.

·         81% of primary care doctors would see new Medicaid patients if rates reached private insurance levels.

This survey, conducted by United Health Group’s Center for Health Reform and Modernization, reminds us that coverage does not necessarily equal access.  This situation will bear monitoring to ensure that our nation’s uninsured crisis doesn’t simply transform into a growing healthcare access problem because of Medicaid’s inherent limitations.