Greater Insurer Competition Leads to More Satisfied Consumers
Health plan members are most satisfied when there is more competition among health plans, according to a J.D. Power study. The study rated satisfaction on a 1,000-point scale. The study rates satisfaction as follows:
- Cost: 610 in competitive markets versus 606 in markets dominated by a single plan.
- Customer service:743 in competitive markets versus markets 740 dominated by a single plan.
- Information and communication: 646 in competitive markets versus 641 in markets dominated by a single plan.
When one carrier controls more than 50% of the market, member satisfaction is significantly lower when it comes to communication and customer service. Greg Hoeg of J.D. Power said, “Carriers are shifting toward member satisfaction as they face more legal restrictions on profitability. Having a choice of providers boosts member satisfaction in markets with less competition. “Sometimes, having fewer, simpler plan choices makes it easier for the member,” says Hoeg.
The ACA’s medical-loss ratio has forced health insurers to focus on increasing their market share to compensate for slimmer margins. Carriers are paying particular attention to cost management. One way to do that is to combine with other carriers, says Hoeg. Traditional plans are merging to reduce costs and increase market power. Examples are the merger of blue plans, national deals like Aetna/Humana, and Anthem/Cigna, and major market-driven acquisitions for UnitedHealthcare/Optum. Many have speculated that Anthem’s proposed acquisition of Cigna will harm competition and consumers by reducing the ability of other health insurers to compete with Blue plans.
Member satisfaction averages 688 in 2016, up from 679 in 2015, and 669 in 2014. Driving increased satisfaction are coverage and benefits (+12 points), information and communication (+11), and customer service (+10). Nationwide, member satisfaction has improved nine index points in 2016 at 688. This follows a 10-point improvement in 2015. Member satisfaction with health plans reached a low in 2014, following the introduction of the health insurance marketplace as part of the Affordable Care Act (ACA).
Health plans with integrated delivery systems are poised for success as health insurance focuses more on member satisfaction. An integrated system includes a hospital organization, a multi-specialty medical care delivery system, the capability of contracting for any other needed services, and a payer. Integrated plans have an average satisfaction score of 746, which is 63 points higher than that of non-integrated plans.
There has been a slight decrease in members’ monthly premiums. On average, the monthly premium for a family plan is $355 in 2016, down from $374 in 2015 while individual plan premiums are $207, down from $216.
Satisfaction is highest among health plan members in California (707), Michigan (699), Mid-Atlantic states (698); Illinois-Indiana (697), and Northwest states (692). Satisfaction is lowest among members in the Southwest (661) and Minnesota–Wisconsin (666) regions.
Groups Says that Divestitures Don’t Keep Medicare Advantage Competitive
Requiring companies to divest does not maintain competition amid health insurance mergers, according to an issue brief by the Center for American Progress. (Competition authorities frequently require merging parties to divest a number of brands or operations in order to clear a proposed merger.) The Center says that divestitures don’t restore competition with Medicare Advantage plans. Also, seniors pay higher premiums for divested plans. By 2015, acquiring partners exited more than half of the affected counties. Only two of the 15 divested plans are offered, and premiums increased an average of 44% for more than half of the divested plans. Researchers at the Center say that divestitures in the proposed Aetna-Humana merger won’t be successful in maintaining competition and protecting seniors. In fact, the proposed Aetna-Humana merger would greatly reduce market competition for Medicare Advantage beneficiaries. In markets where Medicare Advantage beneficiaries have a choice of insurers, Aetna’s average annual premiums were lowered by as much as $302 and Humana’s annual premiums were lowered by as much as $43. Under the merger, premiums could increase beyond these amounts because of the greater market power of the combined company.
Medicare’s Competitive Bidding Program Drives Up Costs
Medicare’s competitive bidding program is driving up costs for diabetic patients, according a study by the National Minority Quality Forum. The study found that the competitive-bidding program disrupted beneficiaries’ ability to get diabetes testing supplies. Not having access to these supplies is associated with increased mortality, hospitalization rates, and inpatient costs. The Centers for Medicare and Medicaid Services (CMS) claims that the competitive-bidding program poses no health threat. However, the Government Accountability Office (GAO) says that CMS statistics did not reveal whether beneficiaries got the durable medical equipment they needed on time or whether they experienced health problems due to problems accessing the equipment. Jaime Davidson, M.D. of the University of Texas said, “We are particularly concerned about the disruption we detected in our analysis given the predominant use of rapid- and short-acting insulin by Medicare beneficiaries who are at significantly greater risk for hypoglycemia than younger individuals with insulin-treated diabetes.” For more information, visit www.nmqf.org.
PhRMA Opposes Part B Reimbursement
Last week, the Centers for Medicare & Medicaid Services (CMS) released a proposed demonstration through the Innovation Center to change how Medicare Part B drugs are reimbursed. The Pharmaceutical Research and Manufacturers of America (PhRMA) has the following objections:
- Limits would be placed on patient access and provider choice by allowing the government to make one-size-fits-all decisions about health care. Selecting the right treatment depends on a variety of clinical factors, as well as needs, characteristics and preferences specific to an individual patient. Medicare Part B was set up to allow physicians to make the best decisions for their patients, offering a wide range of treatment options for patients suffering from serious illnesses, including cancer, rheumatoid arthritis, autoimmune disorders and more. This proposal would come between providers and patients by allowing the government to make one-size-fits all value judgments about the best care for Medicare patients. As new medicines become available, especially new targeted and personalized medicines, like President Jimmy Carter’s recent cancer treatment, Medicare physicians and patients should have those options available to them.
- Mandating broad changes for the majority of Medicare beneficiaries is government overreach. The Center for Medicare & Medicaid Innovation (CMMI) has the authority to test alternative payment models and new ways of paying for care. But it is just that: for testing promising new practices in small controlled groups. This proposal is mandatory and nationwide, which marks a dramatic departure from CMMI’s usual, voluntary testing approach. Rather, this model flies in the face of testing by making changes to payment for nearly all Part B medicines and mandating participation for three in four Medicare Part B providers in diverse settings, including hospital outpatient departments, physician offices and pharmacies. As a result, this model will affect care for Medicare patients across the country. Physicians treating the sickest patients could have their reimbursement cut dramatically, disproportionately impacting specialists who treat complex diseases. To test this model, CMMI will waive several provisions of Medicare law. Mandating broad changes to laws established by Congress without a thoughtful stakeholder process before and during development is a government overreach – and sets a bad precedent for establishing Medicare coverage and reimbursement policy.
- Broad changes that fail to recognize the value of innovative, targeted therapies could hinder future innovation. While policymakers are emphasizing accelerating personalized medicine, cancer cures and more, this proposal has the opposite effect. It could discourage investment in future treatment advances, many of which are expected to be Part B medicines, as well as have a negative impact on the adoption of novel targeted therapies that benefit patients. Medicare Part B already uses an effective, market-based mechanism to pay for medicines, and research shows Part B medicines are a small and stable share of Medicare Part B spending. Mandating nationwide, sweeping changes to this program without thoughtful consideration and process puts Medicare patients at risk. For more information, visit catalyst.phrma.org.
Medicaid Managed Care Webinar
Eliza Corp. and Neighborhood Health Plan will present a complimentary webinar, “Reducing Churn: Strategies to improve member retention and loyalty for Medicaid MCOs and QHPs” on Tuesday, March 29 at 10:00 am PST. For more information, visit elizacorp.com.
Clinton Is Popular Among Healthcare Tech Pros
Attendees at a Healthcare Information and Management Systems Society conference in Las Vegas chose Hillary Clinton as the best choice for the industry among Democratic and Republican candidates with 37% of the vote, more than double that of second place finisher, Bernie Sanders (17%). The DataMotion survey reveals that 71% said that the next administration should keep ObamaCare, but make some changes. The survey questions and results are as follows:
Which presidential candidate do you think would be the best choice for the healthcare industry?
- Clinton 37%
- Sanders 17%
- Carson 14%
- Trump 13%
- Rubio 7%
- Kasich 6%
- Cruz 6%
For more information, visit datamotionhealth.com.
Key Trends in the Manage Care
Managed Health Care Associates reports key industry trends that emerged from its 13th Annual Business Summit at The Bellagio, Las Vegas, March 2 to 4: New payer models are emerging in patient management. Pharmacies will have a bigger role in managing the value based reimbursement environment. CMS is focusing on medication therapy management for Medicare Advantage and stand-alone prescription-drug plans in skilled nursing facilities. Provider-based organizations are viewing Medicare Advantage plans as a key component of success in value-based reimbursement. The FDA is working through a backlog of generic drug filings. If these filings are approved, they are expected to create additional competition in the generic market and rationalize pricing. For more information, visit www.mhainc.com.
Los Angeles CFOs Expect Increased Hiring In Next Six Months
Los Angeles executives expect an increase in professional-level hiring in the next six months, according to a report from Robert Half. Twenty-two percent of chief financial officers (CFOs) in Los Angeles expect their company to create new jobs, up three points from the previous six-month period. Another 62% plan to hire only for open roles. Fifty-one pecent say it’s somewhat or very challenging to find skilled candidates for professional-level positions. This compares to 53% in the previous six months. Twenty-five percent say that it’s somewhat to much more challenging to find skilled candidates for finance and accounting positions compared to three years ago. Ninety-five percent of executives are somewhat or very confident in their company’s prospects for growth in the next six months, up two points from six months ago. For more information, visit https://www.roberthalf.com/los-angeles/blog/los-angeles-cfos-reveal-hiring-plans-for-next-six-months
Employers Struggle to Balance Benefit Costs With Attracting Talent
High performing large and mid-size employers are more strategic in managing employee health costs, according to a study by Arthur J. Gallagher & Co. (Mid-size employers are defined as having 100 to 999 full-time employees and large employers are defined at 1,000 or more.) The survey reveals the following:
Have a defined contribution philosophy:
- 38% of percent of high performing mid-size employers versus 29% of their peers.
- 52% of large high performing employers versus 35% of their peers.
Rate improving employee health as a top-three human resource challenge:
- 18% of high performing midsize employers ranked versus 9% of their peers.
- 41% of high performing larger employers versus 16% of their peers.
Offer flexible work schedules:
- 66% of high performing mid-size employers versus 50% of their peers.
- 68% of high performing large employers versus 47% of their peers.
Have a wellness program:
- 85% of high performing midsize employers versus 42% of their peers.
- 98% of high performing large employers versus 61% of their peers.
Promote employees’ long-term financial security:
- 59% of high performing midsize employers versus 29% of their peers.
- 65% of high performing large employers versus 32% of their peers.
For more information, visit gbs.ajg.com.
Group Hospital Indemnity
Cigna’s new group hospital indemnity insurance policy, called “Cigna Hospital Care,” provides individuals and families additional financial protection when an unexpected covered hospitalization occurs. It is available starting in April 2016.The insurance has the following features:
- Plans can be designed to include benefits for a wide range of hospital-related services.
- The coverage is portable.
- Plans are easy to administer and can be designed to fit into any comprehensive benefit package.
- Employers can add a wellness rider, which pays a flat dollar amount to employees who gets an annual health screening.
Guardian is offering hospital indemnity insurance that pays a lump-sum benefit to patients admitted to a hospital for a covered sickness or injury. The Guardian Hospital Indemnity plan is available to companies with at least two employees. It provides a core hospital admission benefit and optional benefits, such as payment for Intensive Care Unit (ICU) confinement, surgery, diagnostic tests, transportation, and lodging. Plan designs that are compatible with Health Savings Accounts (HSA) are available. These benefits can be offered as an employer paid coverage or provided to employees as a voluntary benefit. For more information, visit guardiananytime.com.
Aflac launched its newest product, Group Hospital Indemnity. It provides flexible coverage for routine medical care as well as catastrophic illnesses and accidents. It includes three plan levels and multiple optional benefit categories. Other enhancements are now standard, such as no pre-existing condition limitations, no termination age, first-child coverage included, simplified surgical benefits, and a two-year rate guarantee. Employers can build HSA-compatible plans. In addition to hospital confinement, admission and intensive care benefits, the base hospitalization plan will include an intermediate intensive care step-down unit benefit. It also includes a rider that increases the benefit amount automatically at each anniversary for five years, with no change in premium or additional underwriting. Covered treatments include outpatient doctor’s visits, telemedicine services, diagnostic exams, emergency room visits, prescription drugs and rehabilitation facility care associated with a covered accidental injury or sickness. It also covers health screenings. For more information, visit aflac.com.
Defined Outcome Funds
Jefferson National launched the JNF Exceed Defined Shield Index Portfolio to be managed by Exceed Investments LLC. Exceed is a New York-based boutique asset management firm that is pioneering defined outcome investing solutions. This liquid, transparent 40-act fund is designed to provide controlled market exposure with a preset, defined level of downside protection. It is now available for the first time within a tax-deferred wrapper. For more information, visit www.jeffnat.com.
Colonial Life partnership promotes Latino careers
Latino professionals will have greater access to career opportunities, thanks to a new partnership between Colonial Life & Accident Insurance Company and the Hispanic Alliance for Career Enhancement. Colonial Life and HACE will promote career opportunities at Colonial Life through HACE’s online career center and at HACE’s national career conference next month in Chicago. For more information, visit haceonline.org.