The Benefits Package, 6th Edition, Up At Enabling Healthy Decisions!

Massachusetts schools weren’t the only ones taking a break last week…

The highly anticipated Benefits Package Blog Carnival was scheduled to be published last Monday, but due to the school vacation week, it made sense to slide it back one week.

For those looking for your benefits fix…look no more!

The 6th Edition is up at George Van Antwerp’s site, Enabling Healthy Decisions.

What, you’re still here?  There are exciting posts waiting for you!  Go…check them out!

The Broker (R)Evolution

Years ago, there was no Internet.

And there were travel agents.  People that could help you book a trip to your favorite get-away.

Then the Internet arrived (thank you, Al Gore).  Sites like Travelocity and Expedia helped make trip booking as easy as a click of a mouse.

Then there were no more travel agents.

Ok, so that’s not entirely true.  There are still travel agents, but the demand for them has shrunk significantly.  And those who use travel agents are typically those who want the all-inclusive trip with flight, hotel, car, tours, etc.  Those who have lesser needs utilize the Internet.

Thus, the travel agent hasn’t gone away.  They still exist.  In fact, travel agents use sites like Travelocity and Expedia to serve their customers.  The travel agent has embraced change and done what it needed to do to survive. The travel agent has evolved.

In the insurance world, there are insurance brokers.  Brokers are the people who help individuals and businesses buy insurance including health insurance, dental insurance, short-term/long-term disability, and life insurance to name a few.

Then the Patient Protection and Affordable Care Act (PPACA) came along.

Will there soon be no more brokers?

Of course not.  Similar to the travel agent, the brokers aren’t going anywhere. Some will go out of business. Some will be bought. Some will merge.  But they will still be around.

What you can count on is this: they will need to evolve.  In fact, some already have.

Just like the travel agents did when the Internet arrived, the brokers are in the process of evolving to assure that they will still be relevant and needed post PPACA.

Perhaps I’m unfairly tying the evolution of the broker to PPACA, but there is a lot in the healthcare reform bill that will impact brokers.

One of the biggest changes that will affect brokers is due to a trickle down piece of PPACA.  When the bill was passed there was a component in it stating that medical insurance companies need to have a medical loss ratio (MLR) of 85% for large group health plans and 80% for small group and individual plans.  This was to take effect in 2011.  If the insurer did not meet the MLR guidelines, the penalty was to provide rebates to the plan members.

For those of you who have health insurance through a not-for-profit health insurance carrier or have coverage through a large employer – guess what?  Your insurer likely has an MLR that meets the criteria or is pretty darn close to it.  (No rebates for you!)

However, many of the insurers our there, especially those serving the small group market, are going to feel this trickle down.

So what the heck is the importance/significance of MLR?  To put it simply: insurers allocate dollars towards the payment of claims – their medical loss ratio.  Anything else is typically considered “administrative”.  This includes administrative expenses, overhead and, of course, profit.  So if the MRL is 80%, then the idea is that 80% of every dollar goes to pay claims and the remaining 20% goes into the administrative bucket.

With PPACA limiting what insurance companies can put in the administrative bucket, it is cutting into their profit.

What is the impact on brokers?

Many brokers are paid a percentage of the medical premiums that their clients pay to the insurers.  This is generally in the low single digit percentage range though it fluctuates based on broker/agreement with employer.  Since medical insurance is typically the biggest line item on any employer’s budget, it is also the largest source of income for brokers.

Additionally, there is something known as contingent commissions or bonus that brokers are paid by insurers.  Many times this bonus is tied to volume, meaning if broker A sends xx number of new clients to insurer B, then insurer B will send an additional amount of compensation to broker A.

Aside from the conflict of interest that this poses (brokers being paid additional compensation tied to volume regardless if the health insurance plan isn’t the best choice for the broker’s client), this additional compensation has long been an accepted business practice.  Though it’s not shouted from the roof tops, it’s also not done behind closed doors and in back alleys. Many employers are aware that their broker is receiving additional compensation from their insurer and do not have an issue with it.

Regardless of how one feels about this practice, it is likely to change.

With the MLR rules affecting insurance company profits, insurers need to find a way to become more lean.  They can only pass along so many double-digit rate increases before an employer leaves them.

Since it makes sense for employers to stay with an insurer long-term so that insurer-sponsored disease management and wellness programs have time to take effect, insurers should be looking to retain customers rather than raise premiums and make up for the MLR loss elsewhere.

Where do you think the next cut will be?

Let’s just say that brokers can count on getting squeezed by medical insurers in the form of lower bonus and commission.

So now you have brokers being paid less.  And with state exchanges due to roll out in 2014, do you think brokers are going to be needed for those individuals and small groups that are most affected by the MLR change and most likely to be the biggest customers of these state exchanges?  Likely not.

Thus, we have the fixings for a broker (r)evolution. I  throw the “r” in there because some may revolt.  But the smart ones will evolve.  Here are a few ways that I believe they will evolve.

First, get into shape.  Similar to companies cutting costs prior to being acquired, brokers need to position themselves to succeed in a new market.  This may mean merging with other brokers, or selling their books of business and stepping out of the game to let those who are “in shape” take the lead.  Those who refuse to get in shape will likely go out of business. It may also mean discussing alternative payment models with their clients or perhaps adding additional services to their portfolio (maybe both!)

Since the creation of state exchanges are likely to make it pretty easy for individuals and small businesses to buy insurance, it is the broker serving individual and small markets that have the biggest need to evolve.

Second, brokers need to become more than just brokers.  If the single benefit a broker brings to the table is the ability to shop for insurance and then pound on the insurance vendors to get the lowest rate…sorry.  This is the basic broker transaction that every other broker brings to the table.

Brokers need to do more – they need to become extensions of their clients, helping with employee communications and education, introducing vendors who can help employers save money and cut costs, navigating the maze of healthcare reform so that their client partners in HR can focus on their employees.

This evolution is already occurring to some extent, but I believe there’s more work to be done.

I often wonder if the role of brokers will become more employee-facing rather than strictly a “Benefits Manager – Broker” relationship.

Think about it:  if a broker can take on a larger role in open enrollment communications and education…if they can conduct educational seminars on how employee decisions and lifestyle affect premium…if they can become more involved in promotion of wellness programs and become more involved in the creation of total rewards programs to increase employee engagement…isn’t this a natural progression for today’s broker?

Similar to the travel agent being the one-stop shop for all travel needs including being the first person called when the traveler loses his/her purse or wallet, the broker can evolve to be the first person a benefits manager calls when its time to educate their employees on the new Consumer Directed Health (CDH) plan with HSAs or discuss how more treatment doesn’t necessarily translate into better health.

Are we still a few years away from this model?  Definitely.

But it does appear to be the natural evolution of the broker…especially if survival is at stake.

Now if you’ll excuse me, I need to call my travel agent.  The picture of the hotel in the brochure looks nothing like the place I just checked into.

[Note: My thoughts and comments in this blog are my own and do not in any way represent my employer or my employer’s views.]

Percolate The Perks

When it comes to the benefits that employers offer to their employees, the basic “perks” aren’t even perks anymore.

They’re essentials if an employer is to be competitive and attract and retain good employees.  This includes the medical, dental, life and disability, 401K and paid time off for example.

But what about the other perks?  The actual value-adds? The differentiators?  The creative products and services that benefits managers work hard to research, evaluate and implement?  And what about the ones that, if utilized regularly/properly, could save the employer money?  

If you’re a benefits manager (or finance person) at a self-funded employer, I do believe I’ve got your attention.

There are a number of challenges when it comes to employee benefit “perks”.  Evaluating vendors is one of them.  Let’s use wellness companies as an example.  And why not?  With HHS investing $750 million in wellness, I’m sure you’ll be hearing more about wellness.

Many companies look to their trusted broker to help evaluate vendors for services such as prevention and wellness.  But even that can get cloudy.  In my days I’ve seen a company’s health plan pitch their wellness solution and then the broker brings forth their wellness solution.  Many times neither is used and the employer asks their broker to go to market and get bids on a number of other vendors before making a decision. Whew!

After the challenge of choosing the “perks” vendors, how do you make your employees aware of these great employer-covered services? How do you educate your employees to know when and how to engage the perk vendors?

In short – how do you percolate the perks?

You can do what many do these days and put together a fancy benefits booklet complete with information and phone numbers. But keep in mind that only geeks like me are likely to read through each and every detail.

And if you have a large male population, it’s quite likely that they don’t even open the booklets – they just bring them home to their significant other.  I’ve attended many benefits meetings in my day and very often heard benefit managers say “make sure you bring this information home to your wife!” knowing that the Mrs. is the one making the decisions on this matter. 

Aside from that…what else can a benefits manager do?

A while back, I did a piece entitled “In Good Companies” which was about some of the cool vendors that sell value-added services to employers.

For the sake of this discussion, let’s say that you are a benefits manager who has selected WhiteGlove House Call Health and Best Doctors as value-added services for your employees in addition to choosing U.S. Preventive Medicine for Prevention and Wellness. You put together a fancy employee benefits guide that gets mailed to each employee. You make it available online through your company’s intranet.

Now it’s 5 months later.

A show of hands as to how many employees recall that you have these cool value-added services – maybe a few.  Maybe your organization is a proponent of wellness so there is a wellness calendar full of events.  But what about the other services – an EAP program for adoption, stress management, or depression for example?

There are always some that take full advantage of every program their employer offers. But these days, that’s just not good enough. You need more engagement.  You need to get the word out about these great services that can help reduce costs and improve the general health and happiness of your employees.  As we all know, a happy employee works harder and its less likely to leave.

I’ve often wondered what could be done to further educate employees on the value-added services that exist.  And I’ve come up with a few ideas:

1)  Constant marketing – think of a drip marketing campaign where there is information presented to employees each month about the services the employer offers. Heck, check out this article on how some employees are getting creative and “stalling” their employees.  (Talk about a captive audience!)

2)  Make it worth their while – with many companies requiring employee actions to get employer dollars into their employer-funded HRAs (think biometric screenings), why not hold education sessions on each and every service available to an employee. I’m talking EAP, Wellness, etc. The more sessions they attend, the more money they get into their HRA. Perhaps you hold the training sessions after hours and invite spouses and family members to attend too.

Another approach would be to offer prizes/raffles at these training sessions.  Perhaps raffle off a gift card or an extra day off. Maybe a “come to work in jeans for a week” prize. Maybe free parking or a “benefits champ” parking spot.  Maybe a Wii with a fitness game to encourage activity. Get creative – but make sure it gets the employees and any family decision makers involved.

3)  Share success stories – it doesn’t have to be employee specific, but ask the vendors to share other employer success stories – about weight loss through a group challenge, about how convenient it is to utilize XYZ service, about walking clubs – get a buzz going and get folks interested.  Perhaps create a competition to increase employee involvement.

4) Create easy to use reference tools with phone numbers – I’ve seen magnets with the phone number for the 24-hour nurse line to encourage use rather than a trip to the ER for example.  Some employers laminate information (for durability) and ask their employees to hang them up at home or make them wallet-sized for employees to carry with them.  Simple, but effective.

5) Ask for help – talk to the vendors that you use including the health plans, the brokers and the other “perk” companies.  Many times they have swag that they’ll provide free-of-charge or educational pieces/sessions that they can provide or vendor portals that employees can use. It doesn’t come out of your budget and it helps with communication, education and engagement. Win-Win.

These are just a few of the ways that Benefits Managers can educate and engage their employees on the wonderful value-added programs that are available and that they’ve worked so hard to select and implement.  

Many of these ideas may sound a little bit like spoon-feeding, but my guess is that benefits managers are used to this – they know their employees and what works.

But look on the bright side – if these programs are utilized regularly/properly…heck, you might just see a flat trend next year.

Now if you’ll excuse me, I need to go through a pile of papers to see if I can find my employee benefits guide from last year.  What’s the phone number for Jenny Craig again?

The Benefits Package, 6th Edition, Coming Soon To Enabling Health Decisions!

If you eat benefits for breakfast, lunch, and dinner…have I got great news for you!

The next edition of The Benefits Package is coming soon to George Van Antwerp’s blog, Enabling Healthy Decisions!

Please send your submissions by Friday night, February 18th!  Instructions on submitting can be found on George’s blog.

It will be published on Monday, February 21st.

Don’t worry…the benefits served are low-fat and part of a healthy diet.

And in case you missed the 5th Edition of The Benefits Package, here it is!

Eh, What’s App, Doc?

Recently I viewed a “2011 mhealth Trends” webinar produced by mobihealthnews and sponsored by Diversinet as a preview of HIMSS 2011.

For those interested in the presentation, you can find the link to the slide deck here:  v3_webinar_csp_2_10_2011final.

I found it quite interesting and am now pretty bummed I won’t be going to HIMSS. Since I can’t attend HIMSS, I figured I’d add my two cents to some of the things I heard in the seminar and, of course, share my own thoughts as to how one can begin evaluating the different mhealth vendors and solutions out there.

But first, a bit about mhealth. 

mhealth stands for mobile health and it generally covers any sort of mobile devices used by clinicians and other end users in a healthcare environment.  The devices include smart phones with health apps, tablets, ipads and other mobile health related devices.

What struck me in the presentation is the rate in which the mhealth market has taken off and how quickly it is expected to grow. It is predicted that by 2014, 100% of doctors will be working on a mobile device with apps. That’s not 40% or 80% or even 99.9%.  That’s 100%. 

That’s also moving from the bottom of the S-Curve (early adopter area) to the middle/high-end (point of product/service maturity and market saturation) in a hurry.

(There’s also the HIPAA/PHI risk if the mhealth device is stolen, but I digress).

Healthcare organizations are running to catch up.  The heads of health systems know they need to be doing something, but there are a variety of vendors out there and a bunch of new products.  Who/what does one choose?

This challenge falls upon anyone who regularly needs to keep up with technology. And I do not envy those who have to make the decision. With the speed of mhealth adoption, it’s almost like sticking your hand into a bag and grabbing the first thing your hand touches.  Don’t forget that budgets are already tight and one can’t afford a “wrong” solution.

So how do you assure you’re getting the right solution?

There is a term called dominant design and it refers to a device or technology that leaves all others behind and becomes the market standard. 

When Betamax and VHS were vying for market share, the battle waged and, when the dust cleared, VHS won.  With TVs, there is still a choice between LED, Plasma, and LCD.  Blu Ray disks and players seem to be upending the standard DVD though DVDs are still hanging tough. And streaming movies may upend both DVDs and Blu Ray.

So what is going to be the dominant design for mHealth? 

Short answer is this – it’s way too early to tell.  (If you were expecting an actual answer here – wow, you hold me in some pretty high regard!)

As you’ve heard me say before, I’m no expert. But there are a few key points that I’d be watching to see who or what is poised to be the dominant design in mhealth:

1) Functionality – what does it do and how well does it do it?  If it’s an app that shows a zippo lighter with a flame that you can hold up at a concert in lieu of an actual lighter, well…enjoy the concert while your competition leaves you in the dust.  If the app tells a patient that their blood pressure is dropping, but doesn’t tie to some sort of alarm or 24-hr monitoring or emergency personnel, does it do anyone any good?

I suppose knowing what it is your organization hopes to accomplish helps mitigate any wasteful and impulse purchasing here.  Applying meaningful use standards probably wouldn’t hurt either. 

2) Ease of use – does it require a three-week seminar on how to turn it on?  If yes, then look elsewhere. You need something that can be adopted quickly by the health professionals.  And keep in mind the audience may not be folks in their 20s who are already tech-savvy. 

In fact, with doctors already spending less time with each patient and 32 million more insured coming on board, it’s likely that nurses and other healthcare professionals will be the primary users of the new mhealth technologies.  The folks at mobihealthnews stated that the nurse is going to be the focus of mhealth in the future and I agree.

3) Interoperability – how well does it play with other in-house systems?  If you want the new technology to work in your current IT environment, make sure the new solution plays well with other operating systems.  Make sure that any new solution won’t cost you more than the new solution itself meaning if you have to upgrade every other bit of hardware and software that you own, that particular mhealth solution may not be worth the hassle.

4) Does it bring a real solution to an actual problem?  In other words, does it help streamline your business and make it better?  In the case of health systems, better should ultimately mean better patient outcomes.  Does your mhealth solution result in healthier patients? 

Because in the end, that’s what this is all about – utilizing technology to advance solutions resulting in better health.

To take a quote from the presentation:  “We are only as good as the information we have delivered at the point of decision” – David Blumenthal. 

Hear, hear.

Now if you’ll excuse me, it’s time for me to see if my flip phone can cure the common cold.  Or maybe I’ll just use it to make my next doctor’s appointment.  Hey, we all have to start somewhere, right?

Random Musings on Healthcare, Volume I

Sometimes life inspires you.  Sometimes it makes you think. Sometimes it makes you say NO MAS. And sometimes…just sometimes…it makes you blog about random stuff.

Over the past few months I’ve lived life just like the rest of you.  And since I’m such a fan of healthcare, I have begun compiling a mental checklist of random healthcare musings over these past few months.

They’re not in any particular order.  They aren’t really related to one another either.  And since this occurs somewhat often, I’m planning to blog about them.  Behold…you are now reading volume 1.

Consider this a warning: Trying to piece any of this together into some sort of comprehensible fashion may cause your head to explode.

Here it is – Random Musings on Healthcare, Volume 1:

Random Musing #1Children’s Healthcare & Global Billing Codes:  With two daughters, ages 2 and 1, I’ve been to the pediatricians office more than I ever thought I’d be. I’m on a first name basis with some of the staff.  For the record I don’t mind this – it beats waiting in the ER.

Recently I had to attend twice within two weeks for the same condition – an ear infection that decided to stick around even after the first round of antibiotics.

This got me thinking about the billing. Because I’m in a high deductible health plan, I’m going to be seeing these charges in some form or fashion.   Multiple times.  Likely an explanation of benefits (EOB) for each visit. So I can expect about 4 of them. Followed by four bills.  Very efficient…NOT.

This got me thinking even more.  Do you know how a pregnancy is billed in a hospital?  There is a global charge code that hits the insurance once the baby is delivered.  So all of the visits from the beginning of the mother’s pregnancy to the end of the pregnancy is covered under one global charge. Granted there are exceptions for this, like when the expecting mother changes insurance during pregnancy, but let’s go with the original example.

I also believe that global billing codes are used with physician office visits that result in a follow-up imaging test typically when the imaging center is owned by said physician. (Conflict of interests when on a fee-for-service arrangement?  Perhaps a topic for another blog).

So…random musing #1 (keeping in mind that I am not a billing/coding expert and have no idea what sort of affect this may have on the physician’s cash flow):  for conditions and illnesses that may require or typically require multiple visits, create global billing codes.  This could be for PT, OT…or sick kids!  In other words, don’t bill until the acute condition is cured/fixed.

Random Musing #2ER vs Urgent Care:  I have a sister who lives in Texas with her husband and two daughters.  We chatted recently – I was home playing Mr. Mom with my 2 girls while my wife headed out-of-town – and I was in desperate need of some support (for the mom’s out there – you’re all amazing).

Anyway, my sister had shared that she was in the ER recently because of her oldest daughter’s complaints of pain in her ear.  Yup, the ugly ear infection hits again.  Now, this kid is as tough as they come – not your average five-year old.  If she’s complaining of pain…there’s some real pain.

Of course it was Saturday night when this occurred.  Their pediatrician doesn’t have 24 hour coverage.  There are no 24 hour urgent care clinics in her area.  Guess what that meant?  A trip to the ER.  And we all know that trips to the ER are expensive in addition to being incredibly inconvenient – no one likes waiting around for 4 hours.

So here’s random musing #2:  24 hour care in the form of either urgent care clinics, 24 hour nurse lines/nurse practitioner lines (with the ability to prescribe basic meds), or round the clock on call doctors for pediatrician practices – I’m talking standard practice for all pediatrician offices.  Oh, and you might as well add 24 hour pharmacies to the list though I think I’ve seen more of them than anything else I mentioned above.

Random Musing #3ER in Mexico vs. United States: I was in Mexico in December due to a death in my wife’s family.  All of the family was gathering on short notice due to the suddenness of the event.  My brother-in-law’s girlfriend from Georgia, who is undergoing treatment for cancer, made the trip down despite the fact that she had just completed a round of chemo.

The toll on her body was so much that when she landed in Mexico City, she ended up in the ER.  In the ER they kept her for a bit, monitored her and then released her.

Guess what the cost was to this young foreigner?  $10.  Just $10.  I didn’t forget any numbers.

So, random musing #3 – heck I’m not really sure.  Either we need to re-evaluate our $300 ER visit co-pays here in the U.S. or Americans need to learn what a true emergency is before going to the ER and utilize 24 hour urgent care for all other urgent situations.

Say…that kind of ties nicely into random musing #2, doesn’t it? I didn’t even plan that…AND…my head didn’t explode!

It’s going to be a good day…I just know it.