Category: Health plans

What Amazon can’t do

February 13th, 2018 by
Watch out below!

Now that Amazon and its partners JP Morgan Chase and Berkshire Hathaway have decided to tackle healthcare for their employees, everyone  is tossing out ideas for what they might do to solve the system’s myriad problems.  I count myself among those lobbing in suggestions, with my emphasis on making the system more patient-oriented.

Two letter writers in the Wall Street Journal have interesting ideas about what the partnership should do, but ultimately they are misguided.

Fred Hyde, MD, JD, MBA thinks the team should take advantage of association health plan (AHP) rules to beat up providers over pricing, pointing the finger at “monopoly pricing by larger health systems” and prescribing reference pricing or a Dutch auction for the procurement of hospital care. He points to ERISA as a great liberator for larger companies and thinks  AHPs could be the answer for smaller businesses.

Well, all three partners already can take advantage of ERISA and that hasn’t really helped them. There’s also no particular reason to think providers are going to give the companies lower prices just for the heck of it.

Robert E. Mittelstaedt Jr., Emeritus Dean from Arizona State University, thinks full price transparency is going to be the answer, “forcing patients to make economic decisions” and pushing government to allow providers to compete on price. In my experience providers don’t want to compete on price and sick patients and their families are not well positioned to shop for most healthcare, especially the expensive and emergency stuff like cancer treatment and trauma care.

The writer says the partnership is “no different” than the history of Kaiser Permanente. In that case why not have all employees join Kaiser? After all there is already Kaiser Permanente Washington, based near Amazon’s headquarters, the former Group Health Cooperative. These plans are no panacea.

I’ve heard people quip that the best thing this group of companies could do for their employees is advocate for a single payer system in the US. I think they can do better than that, but it’s actually a better idea than a lot of what’s being discussed.

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By healthcare business consultant David E. Williams, president of Health Business Group.

Amazon: Force the healthcare system to become patient-centric

February 6th, 2018 by

The announcement that Amazon will work with JP Morgan Chase and Berkshire Hathaway to create a new healthcare organization for employees has health plans and providers running scared. Initial press coverage has focused on the impact of this group on the market value of CVS, United Healthcare and the like –but how many people really care about that?

CareCentrix CEO John Driscoll has the right idea when he suggests that Amazon should compel provider organizations to put the patient first –for real, not just rhetorically. His three specific suggestions are good ones: mandate self-service scheduling, introduce  a universal patient portal, and improve the quality of provider reviews. As simple and straightforward as those sound, they would require Amazon and its partners to overcome serious resistance. It will be fascinating to watch what happens.

Assuming Amazon can make those basic but challenging changes come to pass, I have two additional, ambitious suggestions to help patients:

  1. Ensure that patients receive clear, consistent, actionable follow-up information when they leave a doctor’s appointment or are discharged from the hospital.
  2. Use the full set of information available about a patient to anticipate their needs and help them navigate the system.

The first idea is a simple one, which should be happening anyway, and occasionally does. The challenge is to get the provider system to care enough about what happens upon discharge and provide the tools, training, information and support to enable more seamless and empowering transitions. I was shocked at how poor the discharge instructions were after my release from the emergency department a few months ago, after I was struck by a car. I received basically nothing and had to count on family and clients in the medical system to help me. I know I’m not the only one who’s had this experience.

The second idea is broader and vaguer, but starts to draw on the expertise of Amazon’s partners who are in the financial services and insurance industries and have a lot of information about their customers. The consortium could help patients chart their financial path through the healthcare system, helping them identify what insurance to select, how much to save in their HSA and FSA, and where and when to get their care. It could be a virtual concierge for patients, relying big data and machine learning to provide insights and continuous improvement.

If these suggestions were implemented they would have a high impact, even though they would not completely transform the system. It seems like about the right level for this group to shoot for. If they try to be bolder they will likely fail.

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By healthcare business consultant David E. Williams, president of Health Business Group.

Getting a handle on health insurance data: Podcast with Vericred CEO Mike Levin

January 3rd, 2018 by
Michael_Levin_Vericred_CEO
Mike Levin, Vericred Founder and CEO

A huge ecosystem of technology companies has sprung up with tools to shop for health insurance, search drug coverage, administer HR and benefit plans, make physician appointments and more. They all need accurate, accessible, and detailed data on topics such as health plan design and rates, provider network participation and drug formularies in order to succeed. It’s remarkably difficult and expensive to obtain and maintain the data, and this has created an opportunity for a specialized company —Vericred— to perform the function as a utility for the whole industry.

I’m excited by the opportunity and recently joined the board of Vericred to help guide the company’s growth. In this podcast, I interview founder and CEO Mike Levin about the market and how Vericred is addressing it.

Overview:

  • (0:15) What are some of the key data challenges in the health insurance market?
  • (1:53) Why are these problems so tough? Don’t other industries have similar issues?
  • (6:23) So what’s the problem? With consumerization you have all these new players springing up and health plans just need to work with them, right?
  • (7:40) What are the typical approaches to addressing these problems? Are the problems being solved?
  • (9:16) You talk about “liberating” the data. Doesn’t that scare health plans?
  • (11:11) What does Vericred do to address these issues? Are you gaining traction?
  • (15:03) Who are your customers?
  • (17:10) Are there analogs in other industries or this is a unique beast for healthcare?
  • (18:13) What changed with the passage of Obamacare and emergence of the marketplaces? And what is the impact of recent actions to undermine Obamacare?
  • (20:23) How did you get involved with founding the company? How did it go from concept to implementation?
  • (22:44) What changes do you expect in 2018? How is the company evolving to keep pace?

By healthcare business consultant David E. Williams, president of Health Business Group.

CHIPping away at the social contract

December 20th, 2017 by
And then there were none

Long before the arrival of the Obama Administration with its explicit goal of expanding health insurance coverage to everyone, the country had achieved consensus on the need to insure all children. The Children’s Health Insurance Program (CHIP), first enacted in 1997, enables relatively low income families who don’t qualify for Medicaid to get low cost, high quality insurance for their kids.

Congress let funding for the program expire at the end of September. CMS and the states have been scrambling to shift other funds around to keep the program going. But time is now running out.

Alabama looks to be the first state that will have to close its CHIP program, according to Kaiser Health News. Seven thousand kids will be tossed off on January 1 (Happy New Year!) and tens of thousands more would exit a month later. Within a few months, all 9 million CHIP-covered kids across the US will be gone.

CHIP has had a dramatic effect in lower income states like Alabama, where the childhood uninsured rate dropped from 20 percent in 1997 to under 3 percent in 2015. Prior political fighting over CHIP funding back in 2004 led to long-lasting damage to the program, and we can expect the same or worse this time.

I cheered the election of Doug Jones in Alabama, and find it notable that his first pronouncement was a plea to Congress to fund CHIP even before he is seated. If everyone looked out for their constituents the way Doug does, this wouldn’t be an issue at all.

CVS + Aetna. Are we sure this adds up?

December 5th, 2017 by
CVS and Aetna. Love at second sight?

Many of the stories I’m reading about CVS’s acquisition of Aetna suggests the deal is a bold move to expand CVS’s retail clinic business.  See for example, CVS-Aetna deal has major implications for retail health, primary care practices in FierceHealthcare.

If the merger goes through, CVS plans to expand health services at its retail pharmacies, according to CVS and Aetna officials. Although it will take several years to accomplish, CVS will increase its number of clinics and add staff and equipment for a wider variety of treatments.

This seems like silly reasoning. If the idea is to get health insurers to offer plans that favor retail clinics, why not just contract with those plans? Aetna is a big company but as a national plan its market share in many geographies is relatively modest. Often –like here in Massachusetts– the local Blue Cross has the biggest market share. If CVS is big and powerful enough to actually buy Aetna, surely it can get that company and others to come to terms on retail clinics.

If there’s strategic logic behind the deal it’s more likely to be in the pharmacy management side of the business, where, for example, the combined CVS/Aetna will be the biggest player –but not a dominant one– in Medicare Part D pharmacy plans. That’s not so compelling.

Possibly, the two companies just wanted to do a big deal that wouldn’t get blocked by the Justice Department. Aetna already got slapped down for its attempt to merge with Humana, and CVS doesn’t have a lot of options for horizontal takeovers of other drug chains or pharmacy benefit managers.

There is some kinship between the companies. Both are New England based and CVS’s Chief Medical Officer, Troy Brennan previously held the same role at Aetna.

It seems just as likely that CVS will offer Aetna “products” through its stores. As @WilliamGerber points out on Twitter, CVS could sell Part D plans at retail. I’m thinking maybe CVS will eventually offer consumer friendly health plans from Aetna that go beyond pharmacy.

Certainly, the shadow of Amazon is hanging over the deal. CVS is extremely nervous about Amazon coming in and eating its lunch in a way that Walgreens never could. So it’s doing something Amazon won’t –getting more into third-party reimbursement.

Stay tuned. I look forward to seeing how this one plays out.