Payers & Providers Midwest Edition – Issue of October 9, 2012

7/31/2019 Payers & Providers Midwest Edition Issue of October 9, 2012

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Payers & Providers Page 2

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In Brief

United Physicians,Beaumont PhysiciansOrganization Plan To

Merge

Two Michigan-based medicalgroups have announced theirintention to merge.

The fusion ofUnitedPhysicians Inc., the WolverineStates largest medical group andthe Beaumont PhysicianOrganization, the affiliatedmedical group ofBeaumont HealthSystem, is expected to becompleted by the end of the year.The merged group will operate asUnited Physicians, Inc.

The combined organizationwill help with development of aclinical integration program whereBeaumont and its private practice

and employed physicians worktogether to control costs andimprove the quality of health careservices in the population that itserves, said Ananias Diokno,M.D., Beaumonts chief medicalofficer.

Kaisers HalvorsonAnnounces Retirement

George Halvorson, the longtime chiefexecutive ofcer of Oakland, Calif.-based Kaiser Permanente, announcedhe will retire at the end of next year.

Although known as a blunttalker, Halvorson slipped hisretirement announcement into thesixth paragraph of a letter toemployees sent out last week.

When I joined (Kaiser), I toldthe Board that I would commit toserving one decade, and I said theycould count on me for that timeframe. I picked a decade, in part,because I thought it would take about

Continued on Page 3

NEWS

Most hospitals agree that penalties forexcessive readmission rates are fair, butgroups like the American HospitalAssociation and the American Association ofMedical Colleges contend CMS shouldconsider factors like a hospitalsdemographics that might factor into its rates.Issues like lack of primary care providers,high numbers of Medicaid patients and

unaffordable medication are often out of thescope of hospitals reach.

The national average for hospitalreadmissions within 30 days of discharge is19.9% for heart attacks, 24.8% for heartfailure and 18.4% for pneumonia. Studieshave estimated that unplanned readmissionscost Medicare about $17.4 billion annually. TAMMY WORTH

Readmissions (Continued from Page One)

Premium Increases Are ModeratingBoth Aon, Segal Project Relatively Calm 2013

Two new surveys by national healthcarebenet companies concluded that premiumincreases are at their most moderate levels inyears, but they have differing conclusionsabout trends for 2013 and beyond.

Although the surveys conducted by theNew York-based Segal Co. and Illinois-basedAon Hewitt both agree that health planpremiums will see mid to high single-digitincreases in 2013, there was some variance inhow their data was interpreted.

Segals data forecasts that health planpremiums will increase an unweightedaverage 8.7% in 2013, with increases rangingfrom 7.9% for health maintenanceorganizations to 10% for fee-for-serviceindemnity plans. Preferred providerorganizations, one of the most popular plans,forecast an 8.3% increase.

According to Aon Hewitt, premiums areforecast to increase 6.3% in 2013. That is upfrom the 4.9% increase reported in 2012, butsignicantly lower than Segals numbers. Theaverage healthcare cost per employee was$10,522 per employee in 2012, up from$10,034 in 2011.

Both Aon Hewitt and Segal ofcialsattributed a combination of the economicclimate, extremely conservative budgeting for

healthcare expenditures and cost-shifting forthe relatively low premium increases.

As actual results materialized, employehave seen some stabilization in employmentlevels, less severe impact of high cost claims,a general movement towards consumer-driveplans and greater clarity around the averagecost impact associated with healthcarereform, said Tim Nimmer, Aon Hewitts chiehealthcare actuary. As a result, 2012premiums were offset to reect the better thaexpected historical experience.

Segal mostly concurred with Aon Hewittndings. According to its survey, 86% of itsrespondents said that implementing AffordabCare Act requirements in 2012 primarilymandatory preventative care coverage had cost impact of 2% or less.

And while Segal projected 2013 increasethat are higher than Aon Hewitts, companyofcials believe it is part of a trend toward codeceleration. It projects that premiumincreases for most health plans will be aboutone percentage point lower than what wasexperienced in 2012.

Continued on Next Page

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Page 3Payers & Providers

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NEWS

In Brief

that long to make the kinds ofcontributions that I wanted to make,Halvorson said in the letter. I alsopicked a decade because I was 55years old at the time and I had longplanned to retire at age 65.

Halvorson spent nearly twodecades as CEO ofHealthPartners,

the Minneapolis-based health plan,before assuming leadership of Kaiserin 2002. Kaiser offers a health planand providers in Ohio.

Besides being one of the mostvisible advocates of healthier lifestylesfor Americans, Halvorsons signatureachievement will likely be thelaunching of a comprehensive andintegrated electronic medical recordssystem, which ofcials say helped itmake dramatic quality gains andboosted patient satisfaction over thepast decade. Kaiser completed therollout of KP HealthConnect in early2010.

No successor to Halvorson has

been named. He announced hisdeparture with 15 months notice inorder to ensure a smooth transition.

Study Has Mixed DataOn Statin Use, Costs

A new study conducted by St. Paul,Minn.-based pharmacy benetsmanager Prime Therapeutics inconjunction with Blue Cross and BlueShield of Minnesota concluded thatthe regular use of statins improvedpatient health but raised their overallcosts.

According to the study of nearly46,000 Minnesota Blues enrollees,those who were adherent to theirstatins regimen were 2.6% less likelyto visit the emergency room. As aresult, their overall medical costs were$767 lower. However, thepharmaceutical costs of those whotook their medications as prescribedwere 45% higher a difference of$1,606.

Although prior studies of statinadherence had concluded they lowermedical costs overall, the populationdifferences in this study including arelatively young population mayhave played a role, according toresearchers.

United Grants $20M To Install EMRsCritical Access Hospitals Recipients of Largesse

Minnesota-based insurer UnitedHealthCare is ponying up $20 million for 11 criticalaccess hospitals to improve their healthcareinformation technology systems and adoptelectronic medical records.

The hospitals, which are all in rural andremote communities in Central and NorthernCalifornia, have 25 or fewer beds and are atleast 35 miles from another hospital or are inmountainous regions serviced only bysecondary roads.

The interests of rural people must notbe lost or dismissed because of distance,geographic isolation and lack ofconcentrated resources, said California StateRural Hospital Association ExecutiveDirector Steve Barrow, whose group workedwith UnitedHealth and two otherorganizations, the California Critical AccessHospital Network and the California RuraleHealth Information Network, to determinethe needs of each hospital and the sums theyrequired.

Under the arrangement betweenUnitedHealth and the hospitals, the insurerwill purchase $19.4 million in privateplacement bonds directly from the facilities.

UnitedHealth is contributing another$577,000 toward additional costs associatedwith the nancing.

The grants average just under $1.8million per hospital, most of which are

governed by quasi-public healthcaredistricts. The individual range in value from$800,000 to $2.5 million.

The awards were announced last week the annual Rural Healthcare Conference inLake Tahoe, Calif.

Were grateful to play a role in improvthe health and well-being of so manycommunities served by critical accesshospitals, said Dan Rosenthal, chief executofcer of UnitedHealths western region. It important that theyhave access to technology that will enablethem to deliver quality care to their patients.

The money is a boon for these facilities,which usually have annual operating budgetunder $25 million and treat large numbers ouninsured, elderly patients, and Medicaidenrollees. And although electronic medicalrecords and telemedicine systems can improthe quality of care for their patients, few

smaller rural facilities have thenancialresources to purchase, install and maintain

them.Tim McGlew, CEO ofKern Valley

Healthcare District in Lake Isabella, Calif.indicated it would be unable to deploy anynew technology without the grant.

We would not have been able to upgraand implement our electronic medical recorinitiative, which is improving the quality ofcare and access to medical records to bettercare for our patients, he said.

UnitedHealth is based in Minnetonka,Minn. but has 2.3 million health plan enroll

in California. It has pledged $200 million ovthe next decade to improve rural healthcaredelivery throughout the Golden State.

Premiums (Continued from Page One)

However, Segal was unable to afxprecise drivers.

While medical and prescription drug

trends are projected to decelerate in 2013, wedont know if deceleration is a long-term trendor a temporary result of current economic

forces, said Edward Kaplan, a Segal seniorvice president and head of its healthcarepractice. We question whether medical care

that is being delayed or avoided could lead tohigher rates of undetected or untreatedconditions in the future.

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Payers & Providers Page

Paul Hsieh, M.D. is a practicing diagnosticradiologist in Colorado and co-founder ofFreedom and Individual Rights in Medicine.He hates both government involvement inhealthcare as well as the idea that fundingrestrictions and not the free market would beused to control costs.

In a recent Op-Ed article for Forbes, Dr.Hsieh argued against rationing in Medicareand Medicaid in favor of the freemarket.Rationing is inevitable whenever thegovernment controls medical spending. Hewho pays the piper calls the tune. UnderObamaCare, government control of health

spending will quickly expand to affect mostAmericans, not only the elderly, hewrote. Note that we dont debate howto ration cell phones. Thats because ourrelatively free market has driven cellphone prices so low that even many ofthe poorest Americans can affordone.

Of course a coronary arterybypass graft is not the same as a cellphone andneither is an apple the same thing as anorange. Healthcare is a huge and complexindustry with a vast array of both services andproducts. Cellphones and cellular services are

relatively straightforward consumer productsthat are easily subject to such free marketprinciples as standardization, mass production,and economies of scale in order to controlcosts.

Other than food and water, almost allconsumer products and services are notdictated by biological need. Healthcare is noamong them. At some point in their livesalmost everyone will seek out relief fromphysical pain and suffering. Despite what mostteenagers will claim, it is biologically possibleto live without a cellphone regardless of youreconomic station.

And rationing does occur at theconsumer level. Notwithstanding the relativelow cost of a cellular phone, up to 30 millionAmericans do not own one interestinglysimilar to the number who lack healthinsurance likely because of the expense ofthe phone and cellular service. Additionallyand unlike almost all of healthcare, mostconsumer products scale based on quality andcost. Consumers ration their purchases basedon what type and what quality of goods and

services they can afford. Largely this does nothappen with healthcare. Patients do not chosethe cheaper and less effective antibiotic to treaa serious bacterial infection. Patients who areuninsured simply put off seeking out any typemedical services until they cannot survivewithout them.

One cannot simply claim that free markeprinciples should work for healthcare in thesame way they work for cell phones. Unlikealmost all consumer products the vast numbehealth care goods and services are paid for bythird party either the government or privateinsurance through an employer. Both patients

well as medical providers, are unaware of theactual costs associated with health care. This

lack of cost transparency is antitheticto the very principles of a free markeIts like claiming that democracy canexist without direct representation.

Additionally, Dr. Hsieh saidpatients who have the costs of theirbasic medical needs covered will oft

pay out-of-pocket for extraneous and oftenunnecessary medical services. Patients withgovernment health insurance often pay cash fthings like Botox injections and other medicaunnecessary services. To say that the free mark

works in these circumstances and can beapplied to the rest of the healthcare industry iruse. There is no evidence that patients utilizefree market principles when faced with a seveor emergent health condition or therecommendations of their physicians enough lower overall costs through competition whileremaining within a third party payer system. Asuch, it is not logical do expect that theeconomic behavior of individual patients witha third party payer health care system would bthe same as individual consumers of productsa free market system just because they are thesame individual.

To sum up: A cellphone is not the same acoronary artery bypass graft.

OPINION

When Is Healthcare A Cellphone?Our Take On Its Healthcare Is Not Always Applicabl

Chris Rangel is a member of the El Paso

Hospitalist Group and writes at

RangelMD.com, where this post originally

appeared.

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Payers & Providers Midwest Edition – Issue of October 9, 2012

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