Amidst Political Uncertainty, the Shift to Value Continues

The year 2017 will be dominated by the continued shift toward value in healthcare as the industry adapts to a new era under the administration of president-elect Donald J. Trump, according to PwC’s Health Research Institute (HRI). PwC surveyed 1,750 consumers and interviewed health industry leaders to find forces that are expected to have the most effect on the industry in the coming year.

Pharmaceutical companies will look to better engage with patients as Trump indicates a move toward a patient-centered healthcare system that promotes choice, quality, and affordability. Additionally, the training wheels will ease off of value-based payments, as MACRA’s first performance year kicks off in 2017 and the Centers for Medicare and Medicaid Services offer more bundled payment programs. Health systems will need to modernize payment systems to be low-risk, low-complexity and secure in order to deliver more consumer-centered experiences.

As one of his top priorities, president-elect Trump aims to repeal the ACA and replace it with a mix of tax credits, health savings accounts, high-risk pools, state Medicaid block grants and a transference of regulatory control from federal to state government.

To date, new programs and payment models have largely involved upside risk for healthcare providers. But this will begin to change next year as the training wheels for these risk-based arrangements are eased off.

Health systems will need to modernize secure payments with low risk and low complexity to prepare for creating more consumer-centered experiences. PwC estimates 5% of healthcare provider revenue comes through credit card transactions, which is likely to double by 2020. According to a recent HRI survey, one in four consumers in poor or fair health said that their experience with hospital billing and payment damaged their opinions of the organizations.

In 2017, the healthcare industry will need to prepare for emerging technologies, such as artificial intelligence, virtual reality, and 3D printing and their impact on business models, operations, workforce needs and cyber-security risks. The battle against infectious diseases will also contribute to collaboration among public health agencies and private industry across the U.S. and Europe. In addition, growing awareness of diet as a key driver of U.S. healthcare costs may fuel the creation of inventive programs across the industry.

Due to sustained market pressures, industry trade organizations and pharmaceutical executives may set new pricing restrictions in 2017. Healthcare mergers & acquisitions are likely to continue in 2017, but there may be more alternative transactions as organizations try to stay competitive. As the healthcare landscape continues to evolve, innovative programs are preparing medical students for work in a value-based world. “Today we have a health system that is more connected, transparent and patient-centric than ever before. Over the course of the past decade, the healthcare industry has witnessed significant improvements, but also consistent challenges in the New Health Economy,” said Kelly Barnes, PwC U.S. Health Industries leader.

The drive toward value-based care is prompting established health organizations and new entrants to focus on nutrition as a way to prevent costly medical problems and improve the health of the populations they serve.

Three years of ongoing pressure on the biopharmaceutical industry’s drug pricing practices may lead to new pricing restrictions led by industry trade organizations and pharmaceutical executives, not regulators.

The health industry is likely to experience continued consolidation through mergers and acquisitions in 2017, with an uptick in alternative transactions, such as joint ventures, partnerships, strategic alliances and clinical affiliations. For the full report and graphics illustrating each issue, visit:

Individual Market at Risk if ACA Is Repealed Without Replacement

In a Dec. 7 letter to the leadership of the U.S. Congress, the Health Practice Council of the American Academy of Actuaries warned of severe consequences for the individual health insurance market if the Affordable Care Act (ACA) is repealed without a viable replacement being enacted at the same time. Eliminating reimbursements to insurers for cost-sharing reduction subsidies would raise similar concerns. The consequences could include spiraling premiums, insurer withdrawals from the individual market, and loss of coverage for millions of Americans.

With plans for repeal of all or part of the ACA being prioritized for action early in the 115th Congress, the Academy urges Congress to consider what would be needed if a repeal proposal does not include significant measures to prevent substantial disruption and instability in the individual market. Avoiding these consequences means having incentives for enrollment and prevention of adverse selection. Delaying the effective date of repeal while a replacement is worked out likely won’t be enough to ensure the stability and sustainability of the individual market. Read the letter and learn more about the Academy’s work on health reform by visiting the health section under the Public Policy tab at

Telemedicine: How Does Such a Great Idea Underperform?
by Randy Baker, CEO MedCall Advisors
It is undeniable that telemedicine is a great invention. It is not a new concept, but rather a practice that has been around for a very long time, yet still suffers from shocking under-utilization. I was born in 1959 when Dr. E. C. Neeland, a family physician, gave me a gentle pop and introduced me to the world. Over the next 10 to 15 years, Dr. Neeland would attend to each medical event I encountered including the measles, flu, a broken arm, pink eye and more. Often my mom would call Dr. Neeland who dutifully took the call to listen, calm my mom and offer his sage medical advice, and to determine if an office visit was appropriate. He would routinely call the drugstore next to his office to authorize a prescription if needed.

I guess this early experience tuned my ear to catch Dr. Ben Carson discussing the complexity of medicine and proclaiming the only thing required for effective medicine is a doctor and a patient. I was engaged in the great debate of the Affordable Care Act. Most government policies may be well intended, but the creators and enablers lack the capacity to contemplate the unintended consequences of their actions. Just a few of the unintended consequences are increased pressure on emergency departments, dissatisfied and frustrated providers, decreased capacity, longer wait times for care and the slow degradation of the quality of care.  Telemedicine should be an effective cost containment strategy for individuals, employers, and carriers. It also deserves a starring role in value-based care and accountable care models. When done correctly, Telemedicine will deliver quantifiable economic triage.

On the surface, telemedicine appears to be an effective tool at increasing access and lowering costs. The problem is that it seldom does. With utilization rates mired in single digits, it simply is not working. If you are paying just $1.50 per month for 1,000 employees and $49 per encounter with a 3% utilization rate, the cost of each telemedicine visit is $649. At a 10% utilization rate, the cost is still $229 per visit. So the solution is to increase utilization, right? But how?

It is frustrating when a patient calls seeking medical advice only to be told their condition is not on the list or that the symptoms need to persist for seven days or more, and we’ve likely lost another telemedicine client. Telemedicine companies blindly hire thousands of physicians or outsource overseas physicians who accept random assignment of calls resulting in a lack of continuity of care. Follow-up is virtually non-existent creating a risk to care quality.

The only way to drive utilization and increase access is to remove all barriers to quality medical care. Real-time intervention by a qualified physician into medical events can substantially reduce emergency department and urgent care visits.

Telemedicine can be an effective tool when telegraphed as a targeted strategy. Regardless of whether it’s used for healthcare or workers’ compensation medical cost reduction, you must first understand the pain. Business experiences and cost issues are not one size fits all. Therefore, any telemedicine strategy presented with a price sheet will remain largely ineffective, and a standard price sheet is basically a bet against the business. Combining a commitment to care with real-time intervention, patient satisfaction, and a transparent reporting system will increase utilization. For more information, email or call 855-963-3225

Why Obamacare Got Trump Elected
by Dr. Hank Gardner, the CEO of HCMS Group
In the many election post-mortems, it’s clear that dissatisfaction with Obamacare helped Donald Trump win the presidency. What isn’t clear is exactly why or what the healthcare crisis is that needs to be addressed.

Over-treatment by providers and uninformed and risky over-utilization by consumers – accounts for 30% of our $3.2 trillion annual healthcare bill. Healthcare waste has many outrage-inspiring faces. They include multi-million dollar salaries for health insurance, drug and hospital CEOs. They include astonishing price hikes for life-saving drugs. And they include countless expensive, needless, risky tests and drugs.

Waste was a pre-existing condition. The Affordable Care Act broadened access to insurance but made healthcare waste worse by prescribing four levels of coverage in public exchanges. However well-intentioned, this unbalanced risk pools so that insurance companies could never get premium revenue to match medical expenses. The same thing happened in employers’ private exchanges.

The part that hurt Trump voters the most was that healthcare waste depresses wages – and has been doing so for years. According to research by HCMS, wages adjusted for inflation have barely budged since 1960. Meanwhile, health costs have soared 10-fold to more than $9,000 a person. (See the research findings here.)

Another HCMS study showed that between 2013 and 2014, healthcare costs rose more than 10% for a group of 140,000 people in the HCMS database. Their wages went up just 4.1% (better than the general population’s inflation-matching 2%). But for working-class people making less than $30,000, healthcare costs soared almost 17% while wages inched up just 0.5%. (See the study results here.) These are people who have had food taken off the table by healthcare waste, Gardner said. Yes, repeal and replace Obamacare, but we need to address healthcare waste. Don’t count on a government fix. There are too many powerful special interests for government to make tough decisions. But private employers can use market-based, data-driven measures to lower healthcare waste. That would be real healthcare reform.


Bankers Sells Life Insurance Business
Bankers Insurance Group sold of Bankers Life Insurance Company (BLIC) to Global Bankers Insurance Group, an insurance affiliate of Eli Global, effective December 15th. BLIC, which offers a range of annuity options, will remain based in St. Petersburg. The deal has received regulatory approval from all required parties. Terms were not disclosed. “The BLIC portfolio reinforces our commitment to providing policyholders convenient and affordable options to meet their individual financial planning needs,” said George Luecke, vice Chairman & Co-CEO of Global Bankers.

The Life Insurance Industry in 2017
The coming year promises to be a year of continued disruption on several fronts for the insurance industry: changing consumer demands, digital technology advances, cybersecurity, and the shifting political landscape are just a few, according to the 2017 EY U.S. life-annuity and property-casualty insurance outlooks.

The slow growth of the U.S. economy, coupled with adapting market shifts, are predicted to be prominent factors in 2017. However, converging demographics and regulatory and technological changes are also opening new opportunities for insurers to reach consumers and to strengthen their workforces.

Technology will be a driving force in 2017. According to Douglas French, Principal, Ernst & Young LLP, Insurers are looking at different technologies. They are looking at machine learning to make underwriting decisions. They are looking at all kinds of data, from medical to behavioral. They know they cannot take months to underwrite a policy. They need to do it in days – and soon, even quicker.

Insurers must go beyond the customer experience and consider internal stakeholders as well. Dave Hollander, EY Americas Insurance Leader, sees this as an ideal time to make plans that take into account the future of the nature of work. Insurers now have the opportunity to introduce new technology, such as robotics, and more effective workforce management activities, says Hollander. By taking out repetitive tasks, they can produce an even more industrious and stimulating work environment for people.

When it comes to life insurance and annuities, for regulatory change. From rules on consumer protection and transparency to financial solvency and cybersecurity – and now a potential shift in policy direction – the regulatory landscape for life insurers has never been more complex. Insurers should develop a strategy to comply with the new DOL fiduciary rule, and be prepared to course-correct, and confirm that internal systems can keep up with regulatory change. The customer can be a valuable compass to companies mapping a strategy in changing times. Insurers should make use of this resource by applying analytics to gain deeper customer insights, creating a strong cross-channel customer experience and rethinking go-to-market approaches to meet changing investor needs.

With the industry in transition, and a new administration taking office, this is an ideal time for management teams to carefully asses their market position and plan for where they would like to be long term. In addition to reassessing strategic positioning for the years ahead, insurers should also consider using M&A to improve competitive positioning and should also look to find the right InsureTech strategy for the firm.

Insurers should be prepared to enter the next phase of digital innovation by getting control of data across the enterprise and using technology to improve business approaches. Given the vast amount of personal and health data that resides in insurance firms, and their complex vendor relationships, building a robust data security system is crucial and challenging. To do this, insurers should look to make cybersecurity a continuous business activity by drawing on technology and people to secure data.

The year 2017 is the year to determine the critical workforce skills that insurers will need to drive the business forward. Insurers can build new talent management strategies by assessing whether the firm has the needed talent for the future and by creating clear pathways to transfer knowledge.

To adapt to a fast-moving marketplace and differentiate themselves from competitors, insurers must stay focused on the customer and adapt their go-to-market strategies. A culture of innovation will help accelerate the development of new products and business models. In the face of shrinking returns, insurers will need to apply advanced analytics and save money by automating insurance processes and building smart technology.


EPIC Recognized As a Best Place to Work in the Insurance Industry
EPIC Insurance Brokers & Consultants, a retail property, casualty insurance brokerage and employee benefits consultant, has been recognized by their team members as one of the Best Places to Work in Insurance in a survey conducted annually by Business Insurance Magazine and co-sponsor Best Companies Group. This is the 7th time that EPIC has received this significant and meaningful award.

Only 75 companies nationally are selected as Best Places to Work in Insurance, based largely on a high level of employee engagement and satisfaction with company culture, benefit programs, management practices, career opportunities, and work-life balance. Based on employee feedback, EPIC was ranked #10 in the medium employer category (250 – 999 U.S. employees), where just 17 companies were recognized. According to Business Insurance, The 2016 Best Places to Work in Insurance feature showcases the firms that are leading the industry as employers of choice. What they all have in common is a strong commitment to attracting, developing and retaining great talent through employee benefits and other programs that their people value. Mary Smith, executive vice president of human resources said, “At EPIC, we believe that a strong, positive culture is built on opportunity, personal responsibility, mutual trust and respect, commitment to the community, a healthy work/life balance, and having fun.”

Covered California Shows How Consumers Can Save by Shopping
Covered California released new data that demonstrates that affordable health care is within reach of consumers and that renewing consumers can save money when they shop around and switch to a lower-cost plan within the same metal tier. Peter V. Lee, executive director of Covered California said, “Covered California has built a competitive market where the consumer is in the driver’s seat and our health plans are fighting for their business. Consumers who are shopping and switching to the lowest-cost plan in the same metal tier are saving more than $450 per year.”

The data reveals two key points for the approximately 1.3 million Californians who are renewing their coverage with Covered California:

  • Enrollees who have switched their health plan for 2017, but whose plan remains within the same metal tier, have saved an average of $38 per household per month or $456 per year.
  • The majority of renewing enrollees, 78%, could pay less than they are paying now if they switch to the lowest-cost plan within the same metal tier.

For both those renewing their coverage and those getting covered for the first time, Covered California released data confirming the affordability of health insurance for the close to 90% of consumers who benefit from federal tax credits:

Nearly half of all Covered California consumers, 49%, can get a Silver plan costing less than $100 per month. All of these consumers would benefit from financial assistance to lower their out-of-pocket expenses at various levels. In fact, 195,000 people, or 17 percent of current Covered California enrollees, can visit their doctor for only a $5 copay and will have an annual deductible of only $75 for an individual and $150 for a family. (The deductible only applies to hospital care.)

For all Silver plans, no outpatient services – such as primary, urgent and specialist care, and diagnostic tests and generic prescription drugs – are subject to a deductible.

Fifty-nine percent of consumers receiving a tax credit can get a Bronze plan for less than $10 per month. Bronze plans offer three visits to a primary care physician or specialist that are not subject to a deductible. Covered California also announced that as of the end of Jan. 3, more than 258,000 people have signed up for health insurance coverage through or a certified enroller.

Open enrollment runs through Jan. 31, 2017. Consumers who enroll by the Jan. 15 deadline will have their coverage start on Feb. 1. Those who enroll between Jan. 16 and Jan. 31 will have coverage beginning March 1.


New Book Explains How Healthcare Could Crash the Economy
In his new book, “Flatlining: How Healthcare Could Kill The U.S. Economy,” Ron Howrigon, president and CEO of Fulcrum Strategies, breaks down the complex system that is healthcare in the U.S. and helps people gain a deeper understanding of the issues that will arise in 2017.

With 30 years of experience as a managed care executive, economist, and consultant, Ron Howrigon brings a broad perspective on the healthcare system and the view is an unsettling one. Noting the crippling economic impact on failure in the auto and housing markets much smaller sectors of the economy. Readers will learn about the following:

  • The unsustainable rate of inflation in the cost of healthcare and the market adjustment that could send the U.S. economy into a tailspin.
  • The three economic factors that explain why healthcare costs keep rising, and the changes necessary to reverse that trend.
  • The Affordable Care Act, six years on its unanticipated effects on the healthcare system, and why the exchanges are at risk of failing.
  • How Repeal and Replace could set the stage for a meltdown of the U.S. healthcare system.

He offers seven areas where decisive action is needed to create a more sustainable model for healthcare.

Benefit Aministration
Benefitfocus updated its software to support consumerization of employee benefits and flexibility. Reporting enhancements streamline the administration of more personalized benefit packages, which include a variety of voluntary benefits. The software release features enhanced reporting and data insights that help HR leaders optimize plan to fit and performance. New features help increase engagement, improve productivity and reduce costs. For more information, visit

iHEAR Partners with Ameritas
iHear Medical partnered with Ameritas to offer next generation invisible hearing solutions at a fraction of the cost.  iHEAR’s offerings include the iHEARHD and iHEARMAX invisible hearing aids, and the iHEARTEST, the first and only FDA-cleared home hearing screener. iHEAR’s advanced hearing solutions are offered at $299 before reimbursement, compared with programmable hearing aids available at hearing centers costing $2,400 on average for a single hearing aid, and often over $6,000 for a pair. iHear products combine high-quality sound and online self-programming and are backed by a 45-day satisfaction guarantee, professional support and remote programming by licensed hearing professionals. For more information, visit

Exchange-Traded Managed Funds

Nationwide introduced NextShares exchange-traded managed funds, offering an innovative way to invest in actively managed strategies. The funds offer the potential for benchmark-beating returns by applying their manager’s proprietary investment research. As exchange-traded products, NextShares may offer cost and tax efficiencies that can enhance shareholder returns. The first NextShares funds began trading on the Nasdaq Stock Market LLC earlier this year.  For more information, call 877-877-5083, option 3, or visit

Fiduciary Outsourcing Services
Envestnet | Retirement Solutions (ERS) is offering retirement advisors an integrated platform that combines practice management technology, research and due diligence, data aggregation, compliance tools, and intelligently managed account solutions. For more information, visit

 Variable Annuities
A new living benefit is now available with most Transamerica variable annuities to enable Baby Boomers and Generation X to better plan their retirement income. The new optional living benefit allows lifetime income payments after age 59 and offers investors the opportunity for up to a 6% annual income payment rate for life if they begin drawing income anytime between ages 65 and 79. For investors who are concerned about planning for longer lives and rising costs as they age, the living benefit offers the opportunity for an annual payment rate of up to 7% for life if they defer drawing income until age 80 or later. These annual income payment rates are based on a single life withdrawal after five complete rider years. To learn more about Transamerica Income Edge, visit

Term Life
SoFi and Protective are offering a term life insurance product that provides up to $1 million in coverage through an easy, online application with competitive pricing and no medical exam for a majority of people under 40. “This is a first in the industry: coverage in minutes without a medical exam in many cases, and at incredibly competitive prices,” said Andrea Blankmeyer, SoFi’s VP of Finance. For more information, visit