Thursday, November 06, 2008

Reforming "healthcare"

Healthcare reform has been talked about a lot in the last couple months. However, there has been little, if any, coverage or discussion about the real reason medical insurance is expensive - medical treatment is expensive.

One big reason medical insurance is expensive is the fact that 70% or more of medical claim costs can be connected to individuals lifestyle!

Looking at some details on medical treatment cost I think some points from the CEO of a medical insurance company in Mass. are very important. I can also confidently say the same points applies here in Conn. James Roosevelt, Jr., president
and CEO of Tufts Health Plan, advocates for "eliminating wasteful spending".

He brought out in an article that the New England Healthcare Institute (NEHI) has" identified "five sources of wasteful practices that, if eliminated, would offer dramatic cost savings." They include:
+ "wide variations in patterns of care"
+ "medical mistakes,"
+ "overuse of hospital emergency departments for non-emergencies"
+ "underuse of drugs and other therapies to manage chronic conditions"
+ "overuse of antibiotics for viral infections."

In his article he also recommends improving "strengthening the primary-care system" and putting "an emphasis on health rather than healthcare".

Will plan to comment more on the importance of working on medical treatment and medical claim costs since these are solutions vs. all the "talk" about access and things like bringing small groups of individual together which will have little affect.

Tuesday, September 23, 2008

Consumers are looking for more than getting

Want to share the info from a new survey that indicates - "Many American consumers want more from their health care system than they’re currently getting – including greater online connection to health care providers and medical records, customized insurance coverage and wider access to emerging innovations such as retail clinics."

The Deloitte Center for Health Solutions, part of Deloitte LLP conducted the survey, which brings out useful information.

One insightful point from the survey which is a good cost containing step - "84 percent prefer generics to name-brand drugs"

Saturday, September 13, 2008

Improving health = productivity

Want to share some of the things behind today’s high medical insurance costs – extensive and expensive medical treatments:

  • Recent research tells us 51% of those who have medical insurance are using medication to treat one or more chronic medical conditions.

  • 20% of the population is using prescriptions to treat 3 or more chronic situations.

  • These individuals are not just among the older population. One of the largest Pharmacy Benefit Manager firms tells us 48% of females between 20 and 44 have a chronic condition. Related to this is the growing problem of obesity among younger people. This issue has various effects on their health which requires treatment.

In thinking about the above points one reaction is - it’s great they are receiving treatment to deal with these conditions since medications are a better approach vs invasive procedures such as surgery. However, as our population gets older the number of us receiving treatment will go up! !

Bringing these national numbers down to our neck of the woods one health insurance company found over 70% of their medical treatment costs are coming from conditions connected to an individuals lifestyle. Wow - what does that tell us! !

What can be done about rapidly growing medical treatment expenses such as these?

  • Implementing a consumer choice medical insurance plan such as a health savings account is one step.

  • A very effective approach for employers, willing to make a long term commitment, involves starting an education program stressing the value to employees of taking steps to improve their health. It involves various steps to follow up the education including testing, analysis, and feedback and coaching on ways to improve. Incentives are used to encourage participation. Hopefully it will soon be available to the smallest of employers.

BTW - Just offering discounts, such as to area fitness programs, will not be effective. Employees who are currently active may take advantage. Those who have health risks and need to get involved, will not. Education and incentives are important steps.

Note: Efforts are underway in Eastern Connecticut to bring an employee wellness program to the many small employers in our area.

Bottom line – when employees feel better they are more productive.


Wednesday, August 27, 2008

Government run medical plans don't work!

Recent media coverage about the problems Connecticut's new Charter Oak medical coverage plan was having bring out the issue - medical plans which pay providers low government rates for services don't work.

Some insights:
+ Connecticut's payment level to physicians through the Medicaid (welfare) system had dropped to around 45% of what Medicare pays. During the 2007 General Assembly over 100 million was appropriated to raise the payment level. The result - it now around 57% of Medicare. It is obvious the new payment level is still way below a physician's normal service charge.

+ Now if you were a physician and were contacted by a health plan organization, you had no previous working relationship with, and were asked to participate in a plan that pays about 57% of Medicare what might your reaction be? Note: The primary welfare plan company did not bid on the new plan.

Is there a solution? Yes.
+ One effective and more economical approach for the state would be to provide premium subsidies to low income individuals. Thus those who need coverage could enroll in a individual medical insurance plan from a private company. This would go a long way toward lowering the number of individuals who are uninsured.

+ Change the operation of Connecticut's high risk pool so most of the treatment cost for individuals with significant on going medical conditions would be covered by the pool. Thus, these individuals would not be turned down when they applied for private company coverage.

Wednesday, April 30, 2008

Unrealistic proposal to expand health plan

The Connecticut General Assembly is considering an unrealistic proposal to save medical insurance costs for municipalities and small businesses by allowing them to have access to the state employee medical plans at the state rate.

Some legislators have the perception
this would create savings for a city or town so they could then lower property taxes, etc, However, facts tell us it will not really save. Why?

Connecticut’s Secretary, Office of Policy and Management, brought out in public testimony on the proposal that it included many problems.. He indicated: “We have not seen any data to back up the savings often claimed to be associated with this proposal.”

The American Academy of Actuaries in a Sept. 2006 Issue Brief concluded when employees of non related organizations are brought together theses groups tend to have higher claim costs.

This proposal will be seen as a way to achieve cost relief by organizations with high medical claim costs. They may achieve a one-time savings by enrolling but the proposal does nothing to address why their current medical treatment costs are high. It does however create adverse selection for the state employee plan and will thus increase plan costs. The big question becomes:

+ Who will make
up the difference between the premium organizations pay, which are to be the same as the state employee plan, and the actual medical treatment costs this group of employees creates? The state employee plan? Taxpayers?

The bottom line on unrealistic proposals like this - state legislators have a responsibility to make decisions based on facts not perceptions.

Monday, February 18, 2008

Where is the value legislators suggest can be gained by pooling medical insurance?

The idea being floated around the Connecticut General Assembly of “pooling” various organizations together in a medical insurance pool does not gain anything.

This statement is not an opinion but based on the conclusions in an American Academy of Actuaries Sept. 2006 Issue Brief.

The Actuaries concluded little administrative savings will be gained when the employees of various organizations are brought together into a new medical insurance pool. Why?

• The organization running the pool will have to interact with all the various

organizations which might join and thus no real admin. savings.

• Employees have already been pooled by their current medical insurance

JCP Note: Many of the medical pools of Conn. medical insurance companies
are much bigger than all possible participants in this proposed pool. Thus, no
“pooling” savings will be gained by putting them in a new pool.

• As time moves on pools made up of non-related groups tend to have higher claim

costs which quickly results in higher rates than in the commercial market.

Another important point to keep in mind is the make up of total claim costs. According to the Center for Medicare & Medicaid Services only about 15% of costs come from admin. related activities. All the attention and effort being put into the idea of “pooling” does nothing to address the 85% of claim cost, which is the real issue we face today.