Changing the Conversation: Health vs. Healthcare

The statistics are foreboding: since 1980, growth in healthcare spending has outpaced all other consumer spending by a factor of nearly three, while increasing from 5% to 18% of GDP. Looking just 3 years ahead, this figure is projected to reach at least 22%.  Despite so much of the national conversation focused on managing “healthcare”, employers remain confronted with:

  • Healthcare renewal costs that are unsustainable
  • Plan design changes that have reduced benefits
  • Employee dissatisfaction with reduced benefits and increased costs

To understand why a shift in the national conversation from healthcare to health is necessary, one needs only to consider the implications of the data provided by our medical professionals:

  • Nearly 75% of Americans are overweight, and 33%  qualify as obese
  • Cardiovascular disease and stroke are now the leading cause of death
  • 17.5 million Americans will be afflicted with diabetes, and 25.1 million with cardiovascular disease
  • 1 in 3 children born after 2000 will develop diabetes by age 50
  • 29% of adults with high blood pressure are undiagnosed
  • 70% of all claim costs are the direct results of behavior
  • 74% of all claims are confined to four chronic conditions: cardiovascular disease, diabetes, cancer and obesity

For those business owners seeking real solutions to rising healthcare costs, we propose the need to change the conversation on how to improve the health of those who are employed.

Understanding that the cost of improving health is far lower than the healthcare costs associated with combating increased disease, companies must learn how to build a culture of health improvement and engage employees and families in order to achieve sustainability in healthcare costs. To do so, employers can take a “measures-based approach” to identify risk within the employee population, develop strategies to facilitate positive change among high risk individuals, and strategies to keep the healthy population healthy.

By learning and adopting new strategies that emphasize and reward employees and their families to embrace healthy lifestyle choices, employers can help employees and their families become far more efficient healthcare consumers, and move towards a zero trend health plan (for our next discussion).

Thomson Reuters Health Care Spending Index: Insurance Costs Climb 4.0% for Q3 2011 

Is Obesity an Infectious Disease?

Changing the Conversation: Health vs. Healthcare, is an editorial series designed to advance the health improvement model as a business strategy, supported by medical research, academic and corporate case studies. Scott Bradley is a Sr. Vice President with Cook, Hall & Hyde, Inc., a health and welfare advocate supporting middle market employers to design, implement and manage employee health improvement and insurance programs.     

UnitedHealthcare/Oxford Contract with East End Hospitals in Jeopardy of Cancellation

The East End Health Alliance Hospitals (Southampton, Peconic Bay and Eastern Long Island) and UnitedHealthcare/Oxford are currently in good faith efforts to negotiate a new contract.  If they are unable to reach an agreement the current agreement may terminate on July 15, 2011.

In the event of a contract termination, the State of New York requires insurance carriers and hospitals to observe a two month “cooling off period,” which is simply a period of time after the termination of a contract when fully insured commercial and Medicare members can still access the terminated hospitals on an in-network basis in the hopes that the hospital and the carrier can reach a new agreement.

Since this cooling off period does not apply to commercial self-funded groups and members, in the event of a termination, EEHA would become non-participating for those members on July 15, 2011. For fully insured commercial, Medicare and Medicaid members, EEHA, and physicians without admitting privileges somewhere other than an EEHA hospital, would become non-participating on September 15, 2011

UnitedHealthcare/Oxford will have Transitional Care guidelines in place so members who have scheduled or ongoing medical treatments at EEHA hospitals will continue to get care as appropriate.

Fully insured commercial, Medicare and Medicaid members would continue to have access to EEHA hospitals on an in-network basis through the New York State cooling off period, which would end September 15, 2011. Transitional Care may be available after the cooling off period in accordance with the member’s Certificate of Coverage.

After July 14, 2011, a primary care physician or specialist should not refer members to an EEHA hospital for any treatment or test. Instead, members should be referred to one of the major neighboring hospitals in the network listed below.

Brookhaven Memorial, John T. Mather Hospital, St. Charles Hospital, Stony Brook University Medical Center, St. Catherine of Siena Medical Center and Southside Hospital.

HealthGrades Announces America’s 50 Best Hospitals

HealthGrades America’s 50 Hospitals are located in 28 cities in 19 states. The West Palm Beach, Fla. area leads the nation with six of these top-performing hospitals. Chicago and Cleveland come in next with four recognized hospitals each.  New York had no hospitals make the list this year but NJ had both Hackensack University Medical Center – Hackensack, NJ and Community Medical Center – Toms Rivers, NJ make the list.

To find out if one of these elite hospitals is in your community, click here.

America’s 50 Best hospitals demonstrated superior and sustained clinical quality over an eleven year time period, based on an analysis of more than 140 million Medicare patient records. To be recognized with this elite distinction, hospitals must have had risk-adjusted mortality and complication rates that were in the top 5% in the nation for the most consecutive years.

On average, patients treated at America’s 50 Best Hospitals had a nearly 30% lower risk of death and 3% lower rate of complications. HealthGrades study found that if all U.S. hospitals had performed at this level, more than a half million Medicare deaths could have been prevented between 1999 and 2009.

Health Grades Announcing 2011 Hospital Patient Saftey Excellence Awards

What does it mean to achieve Patient Safety Excellence? It means realizing the lowest comparable risk-adjusted incidence of patient harm. HealthGrades is celebrating National Patient Safety Week by recognizing the nation’s top-performing hospitals with our eighth annual Patient Safety Excellence Award. 

In this annual study of patient safety, HealthGrades evaluates the impact of 13 types of patient safety events that occur in American hospitals. Preventable medical errors are so pervasive and costly to the government that the proposed rule for the hospital value-based purchasing program for Medicare inpatient services released in January 2011 contains four measures of patient safety utilizing the AHRQ Patient Safety indicators.

New York had seven hospital receive this honor, go to page 18 to see the recepients. Southampton Hospital didnt receive this honor this year but they received a 5-star rating for the quality of its Hip Fracture Repair, Treatment of Pneumonia and GI Surgeries and Procedures. Eastern long Island Hospital also received a 5-Star rating for the quality of its Hip Fracture Repair.

Beginning in 2014, these indicators will be weighted and contribute to each hospital’s total performance score and will drive the value-based incentive payment for the facility. Which ones will directly impact your hospital’s compensation in the near future? Find out!

New Law Protects Consumers From Discriminatory RX Copayments

Senator Kenneth P. LaValle announced that legislation which prevents health insurance plans from creating new “specialty tiers” to dramatically increase the copayments that consumers pay has been signed into law.  The law becomes effective October 31, 2010 and will protect people suffering from chronic or life threatening illnesses from discriminatory copayments.

According to Senator LaValle, several states across the country have begun adding to their prescription copayment structure to include additional tiers, or “specialty tiers,” for the most expensive medications.  These “specialty tiers” assign a percentage of the cost of a medication as a copayment instead of the traditional set dollar amounts used for “generic,” brand-name preferred,” and “brand name non-preferred” drugs.    In states where this has happened, the copayments have typically been 20% to 35% of the cost of the medication.

“The creation of ‘specialty tiers’ for prescription copayments could have a debilitating financial impact on people who take medications on a daily basis, particularly those who are suffering from serious illnesses,” said Senator LaValle.  “I am pleased to have supported this new law to protect people in need of prescription medications from suffering the possibility of financial ruin on top of coping with their illness.”

New York and New Jersey Establish “High Risk Health Insurance Pools”

The federal Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act, which together comprise the new federal health care reform law, were signed into law by President Obama on March 23, 2010, and March 30, 2010, respectively. The health care reform law contains a provision for the establishment of a temporary statewide insurance pool for high risk individuals.  Coverage through this program will be available until January 2014 when more health insurance coverage options become available through a Health Insurance Exchange.

New York

This new program is called the Pre-Existing Condition Insurance Plan (PCIP) and will be available throughout the country. In New York State, the PCIP plan is called the NY Bridge Plan, and is administered by Group Health Incorporated (GHI), an EmblemHealth company.

The NY Bridge Plan provides health coverage to individuals who have a pre-existing medical condition, have not had insurance for six months, and who are legal residents.

The NY Bridge Plan covers a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs.  Eligibility is not based on income and the Plan does not charge a higher premium because of a pre-existing condition.  Coverage for a pre-existing condition begins right away, with no waiting period.

Applications are available now with coverage effective October 1, 2010. for more information go to NY Bridge Plan

New Jersey

NJ Protect is a new health insurance option for uninsured New Jerseyans with pre-existing medical conditions. Coverage through NJ Protect will generally cost less than comparable individual health insurance and offer superior benefits. Because the program is federally subsidized, treatment for pre-existing medical conditions will be covered as of the day a policy goes into effect, and preventive care will be covered at no out-of-pocket cost to the policyholder.

Applications for NJ Protect are now available.  Contact Horizon Blue Cross and Blue Shield of NJ to request the application.  Please be sure to explain you are asking about NJ Protect so the customer service representative can quickly provide information for the NJ Protect options.  More more information go to www.HorizonBlue.com/NJProtect

IRS Issues New guidance on OTC Medicines and Drugs

Last week, the IRS issued additional guidance related to the new health care reform law and its impact on over-the-counter (OTC) medicines and drugs.

Summary of the new OTC law: The Patient Protection and Affordable Care Act (PPACA), mandates that expenses incurred for OTC medicines and drugs (with the exception of insulin) will not be eligible for reimbursement under a health FSA or HRA unless you have a prescription.

The new OTC law will apply to all purchases made on or after January 1, 2011. The new law will apply to the tax year, not the plan year. This means that even if your plan year starts in November 2010, the rule will still apply to you (and everyone else) beginning January 1 2011. 

Effective January 1, you will no longer be able to use your FSA/HRA debit card to pay for over-the-counter medicines and drugs, and you will need to obtain a prescription in order to receive reimbursement from your HSA/HRA for these items. That means that you will have to pay for these items out-of-pocket, and then file a manual claim along with a prescription in order to be reimbursed from your FSA or HRA.

What is considered an OTC “medicine or drug”? 

The IRS did not provide specific guidance regarding what is to be considered a medicine or drug under this new law. Nevertheless, at this time we can be reasonably certain that certain categories of items will be considered medicines/drugs and therefore will require a prescription effective January 1, 2011 in order to receive reimbursement from an FSA or HRA. These include: allergy and sinus medications; cough, cold and flu medications; digestive aids; pain relievers; sleep aids; and stomach remedies. Please contact your FSA/HRA administrator for a more detailed list. 

The good news is, you will still be able to use your FSA/HRA debit card for many common health care expenses that are not considered OTC medicines and drugs under the new law. These include: Band Aids; diabetic testing and aids; eye care and contact lens supplies; first aid supplies; insulin and diabetic supplies; reading glasses; and thermometers. And remember, regular prescriptions will not be subject to this rule, so you will still be able to pay for your prescription drugs with your FSA/HRA debit card just as you have in the past. You will also be able to use your FSA/HRA debit card for doctor and hospital visits, as well as dental and vision care, provided such items are covered under your plan(s).

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