Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

Why is UnitedHealth rebating insurance premiums?

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Tell me something good!

It’s no surprise why auto insurers like State Farm and Geico are sending rebates to customers this spring and summer. No one’s driving, so accident claims are way down and insurers are paying out very little. No one expects drivers to make up for lost time by crashing their cars more often once they return to the roads. That means a dollar saved now on claims is a dollar saved forever. Insurance companies and state insurance commissioners realize this, too and that’s why the rebates are coming.

But you might be surprised that health insurers, starting with UnitedHealth are beginning to do the same thing. United is offering a 5 to 20 percent credit on June billing statements, which is the same order of magnitude as the auto insurers.

So the questions are:

  1. Aren’t insurers spending a fortune on the surge of COVID-19 patients as they overwhelm the medical system?
  2. What about the coming surge of deferred elective surgeries and the ‘train wrecks’ with acute or chronic conditions that have stayed away from the emergency room and doctor’s office? Won’t insurers need the money to pay for those when they return?

And the answers?

Insurers are spending a lot on some COVID-19 patients. Big bills are rolling in for hospitalized patients, especially those that land in the ICU and are on ventilators for weeks. But even though a lot of people are sick, it’s only the hospitalized patients that incur expenses. With no costly outpatient or drug treatments, overall COVID-19 costs are not so high. Also, many of these patients are older (Medicare) or poorer (Medicaid), not in United’s commercial markets, where the rebates are focused.

Other than COVID-19, the medical system is eerily quiet. Essentially the only other bills are for telemedicine, some cancer treatments, and medications for chronic illness.

We do hear about a coming ‘second wave’ of non-COVID-19 patients later this year as hospitals reschedule elective surgeries, people who have been avoiding the emergency room come back in worse shape, and chronic care patients incur more intensive treatments after declining.

These assumptions are driven by a combination of what seems like common sense, clinician desires to help patients, and wishful thinking by hospital financial chiefs.

But UnitedHealth knows something that others don’t: utilization and costs are not going to rise as fast as people assume. So insurers are getting out ahead of it before regulators, the ACA medical loss ratio requirements, and public opinion force their hand.

Here are some thoughts I shared a week ago.

After the surge: Hospitals prep to bring back regular patients while virus cases linger describes how hospitals are gearing up to work through the backlog of canceled appointments and procedures. Hospitals assume that there will be tremendous, pent up demand for their services. They are looking forward to getting back to normal with cases that pay the bills.

 They will be in for a rude surprise, however, because many people will continue to stay away. Instead patients will use telemedicine, pursue less aggressive treatments, or just wait for time to heal what ails them. For years, healthcare experts and insurers have known that hospital care is over-utilized and sometimes dangerous. Now  COVID-19 has done what co-pays, deductibles and hospital safety reports never could –keep patients away.

 It’s no surprise that elective procedures and routine visits have plummeted. After all, hospitals canceled them. Surprisingly, the use of emergency rooms in Boston for strokes, heart attacks and appendicitis has also dropped by half during the emergency.  Many emergency patients will return, but those with common issues like back pain and rashes will think twice or three times before coming in. Patients who are due for colonoscopies or mammograms will put them off even longer than usual.


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

Should meat plants reopen? #CareTalk tackles this meaty topic

In the latest episode of #CareTalk, CareCentrix CEO John Driscoll and I talk about whether it’s right to make meat plants reopen. We also ponder  whether public health after #COVID19 will look like security after 9/11. As if that wasn’t enough for one episode, we tacked on a debate on why emergency room use has plummeted and whether telehealth is here to stay.

If you like what you see, remember to subscribe.

Where did all the emergencies go?

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Do you need me?

When COVID-19 hit, hospitals knew they would see a decline in elective surgeries and routine visits. After all, they canceled them! But the volume of patients visiting the emergency room has also dropped dramatically, and no one can seem to fully explain it. Sure, maybe we could expect fewer car crashes and skiing injuries. But heart attacks and strokes? If anything it seems like those numbers should be going up due to higher stress levels. Yet, the analyses in cardiac care during the pandemic show a sharp decline not only in elective cardiac procedures, but also in cardiac catheterizations for acute heart attacks, specifically, those with ST segment elevations – the most life threatening type.  

Conventional wisdom tells us that the drop in ER visits is a bad thing. Patients must be dying at home, outcomes must be worsening, and the patients that do survive will show up as train wrecks once the pandemic subsides. Those assumptions are probably true to a certain extent, but the open question is how true?   Acute conditions and complications warrant acute care.  But in the routine care of behavioral health and other chronic conditions such as diabetes and hypertension, extensive overuse of the emergency room rather than other ambulatory settings has been a prime area of concern and debate for several years.  

We know that ERs are overused in normal times. And we think they’re underused now during the pandemic, but to what extent should be analyzed and debated as we inform the necessary adaptation of our systems of care.  We expect to see an incredible amount of variation in ER utilization as the situation unfolds, by specific patient populations, urban vs rural settings, and geography-specific COVID-19 case burden. 

We are encouraged that Datavant has convened a wide variety of industry players to construct a COVID-19 Research Database, a set of de-identified data sets made freely available to enable rapid studies at scale.  The new initiative fills an important gap between quick observations that are available from small sets of real world data and clinical trials, which are robust but slow.

The ER phenomenon we’re discussing is not completely unprecedented. Researchers (and ER staff) have long observed the ‘big game effect’ – where ER visits decline as people defer them to watch their favorite team. (The Health Business Blog first reported on it in 2005: Red Sox’ success eases health care crisis.) Some, but not all, of those visits are avoided entirely without negative consequences. The COVID-19 pandemic provides an opportunity for a much longer time series. Let’s use it as a chance to study what’s going on so we can apply the lessons learned as we emerge.

What could explain sustained, lower utilization of the ER? There are a few possibilities:

  1. Many seemingly serious problems resolve on their own when people just wait. If people avoid the ER out of fear, the ‘tincture of time’ will often do the job.
  2. Less aggressive ambulatory settings are proving effective: the physician’s office, a telehealth visit, or home remedies.
  3. The momentum and logic of the ER setting makes matters seem more serious than they really are. Once someone appears there’s always something to find. (As a doctor colleague once told me, “Show me someone who’s perfectly healthy and I’ll give him a full workup to demonstrate otherwise.”)
  4. The ER is the entry point for admission to the hospital. Under fee for service, hospitals need to admit patients to make money. Depending on the proportion of available beds during these uncertain times, hospitals may be even more economically motivated than usual to fill open beds. So, once a patient arrives, they may be staying.
  5. A significant portion of ER traffic is composed of so-called ‘frequent fliers.’ Usually, they are tolerated, but in the current environment, ER staff are motivated to triage non-COVID-19 patients away from the hospital as efficiently as possible. Once this becomes evident, the ‘frequent fliers’ ground themselves.
  6. How many times have you called your doctor’s office or pharmacy and heard the recording say, “If this is a medical emergency, hang up and dial 9-1-1”? That definitely got people used to the idea that the ER is a good place for care. Clearly people are ignoring that messaging now!

So what should we do with this unexpected information?

  1. More finely tune financial incentives to discourage unneeded utilization while not discouraging needed care. We know from experience that bluntly requiring large patient financial contributions drive down both good and bad utilization.
  2. Educate people about the downside of ER visits (infection risk, treatment that’s too aggressive, likelihood of admission to hospital, provider that doesn’t know you) to balance out the current bias for ER care. People will be more receptive now and won’t immediately think that health plans are only trying to ration their care. 
  3. Consider other changes in benefit design to help the decreased utilization persist, including increased access and reimbursement for home services, telehealth, and remote management tools.
  4. Encourage physician offices and others to make better efforts to intervene quickly and prevent people from going to the ER just for convenience. This could include on-demand availability of telehealth consultations and other digital/remote management for which they would be reimbursed.

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By healthcare business consultant David E. Williams, president of Health Business Group and Surya Singh MD, president of Singh Healthcare Advisors.

Stand up! How I’m incorporating a balance board into my home office routine

A few years back I heard that sitting is the new smoking. That concerned me, since I’m the type that tends to stay glued to my seat throughout the workday, especially when working from home. Some colleagues and clients have standing desks –or even treadmill desks!– but they never appealed to me.

The Apple Watch has been helpful in encouraging me to stand up. While I ignore most of its other prompts (like the suggestion to Breathe) I am quite responsive to the notification I get 10 minutes before the top of the hour, imploring me to stand up at least once before the clock strikes.

Recently, FluidStance offered to let me test out its Plane balance board, billed as a product that brings “movement and happiness to your workplace.” Bottom line: I like it and  you might, too.

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The board itself. (Blue part is the bottom but it’s attractive enough that I thought it might be the top!)

With #COVID19 in the air, I don’t get a lot of excitement. So it’s always a highlight to receive a package on the doorstep. The balance board came in a long, thin box; when I opened it up I was impressed with the cloth backpack. I felt pretty cool carrying it up to my home office past my teenagers!

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Dad is so cool!

It took me a couple minutes to figure out which end was up. (I got it wrong at first.) And my initial joy was tempered when I read the label on the board.

WARNING, USE AT YOUR OWN RISK! This product creates an unstable surface. Use of this product may result in injury or death. Use at your own risk.

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Till death do us part!

Injury I can live with. But death? Even if sitting is the new smoking (and that’s actually controversial) death is still the old death!

Although my balance is good, I’ve never had much luck with skateboards, wakeboards, surfboards of anything kind of board. I was particularly good with the pogo stick as a kid, however.

I need not have worried, because the FluidStance board is really easy to balance on. If you do fall off, it’s about 3 inches so no biggie! It does provide a nice stimulus –better than just standing on the floor, and it’s easy to swivel around, too, should the temptation strike you.

I didn’t want to risk messing up my hardwood floor, so I put a mat under my chair. It protects the floor but does make it a little harder to swivel. When I’m not standing (which is still most of the time) I put my feet on it and use it as a footrest.

I’ve always done audio conference calls, but the pandemic seems to be pushing what would have been in-person meetings and even many phone calls into the video realm. Since I’m not even walking from one conference room to another, I’m sitting even more and am making an effort to stand.

The balance board is good to stand on during conference calls, but it presents a couple of challenges. For audio, I’m a bit far from the speaker phone –but I’ve checked with others and my sound seems good. But for video calls my head ends up out of camera range, even if I tilt the monitor up. I could probably do something about that with a webcam or mounting my laptop on a shelf, but I haven’t. These are minor annoyances but it means I don’t use the board as much as I might like to.

I’m not sure whether there are measurable benefits from using the balance board, but in any event I do like it and plan to keep using it. The literature that came with the deck said, “We aim to blur the lines between work and play, making work a more fluid and natural part of our whole lives.” I can feel that.

The FluidStance product is very well built. It’s solid, attractive and durable. Built in California, it’s well positioned to ride the de-globalization that seems likely post-COVID.

I recommend it.

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

Prediction 5: The end of immigration

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Barred

In the final version of yesterday’s post (4 predictions for the next phase of the COVID-19 pandemic) I decided to omit prediction 5 “the end of immigration.” The piece was already too long, I was running out of steam, and didn’t want to be too political. Also, it seemed kind of obvious.

And yet, I’m now kicking myself after the President’s tweet last night announcing his plan to suspend all immigration. It didn’t surprise me because it was something the President wanted to do anyway and the timing gave him two superficially plausible rationalizations: keep the virus out and reduce competition for American jobs at a time of huge unemployment.

But it’s a bad policy, especially now. Consider how immigrants are helping the healthcare system and the broader economy respond to the crisis.

  1. Hospitals and health systems are overwhelmed, and we are counting on our physicians and nurses to save patients from death. Immigrants make up 28 percent of doctors and 16 percent of nurses. We don’t really want to tell them they’re unwelcome, do we?
  2. Immigrants also comprise 20 percent of healthcare support roles, including nursing, psychiatric and home health aides.
  3.  More than half of farm laborers, graders and sorters were born outside the US as are many of the people working in grocery stores, delivery, etc. They are needed to ensure a reliable food supply.

Immigrants have been a major source of innovation and job growth in the US economy throughout our history. We will need immigration going forward to create new jobs, help pay down the massive debt we are accumulating and to support the healthcare system. I’ve written plenty on this topic over the last 15 years.

If you think the Health Business Blog is the wrong place to discuss  politics or you’re a fan of the current Administration, stop reading now.

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Remember, you were warned…

I’m going to peer a little farther down the road to speculate about where this latest action could lead. These aren’t really predictions about what will happen, but I am pointing to where things could lead. These aren’t about healthcare.

On immigration itself, the administration will be happy with the debate, which will further pit the base against the urban elites. American universities will be further weakened by this policy (a follow on from my prediction 4 yesterday: “The federal government will grow even more powerful relative to everything else”). Others can come begging for temporary relief, e.g., farmers looking for migrant laborers.

The next logical steps on immigration are deportation of people with green cards and the stripping of citizenship of Americans who were born elsewhere. The threats and hints will come first, and that may be enough to achieve the objectives. Remember, in late February the Justice Department created a Denaturalization Section to do this very thing.  Whether it goes further depends on how people react to the upcoming Executive Order and whether officials think it will help politically.

It’s quite possible that this latest, bold step will embolden the President to take further actions, including:

  • Postponing the November election –in the name of protecting the safety of the population
  • Ruling by decree — since it’s an emergency and Congress is too slow
  • Closing down newspapers and others critical of him –since they are interfering with his message and the ‘enemy of the people’

Yes, all of these are outlandish. But, how can you argue convincingly that they won’t happen?

  • We’ve already seen elections canceled, postponed or reinstated this year. At a minimum, expect strategic suppression of voting
  • Congress has put itself on the sidelines by not meeting and by not changing the rules that require it to meet in person. Rule by decree has already come to Hungary
  • The disdain for newspapers and desire for tougher libel laws has been made abundantly. Don’t the ‘enemy of the people’ deserve some kind of punishment, especially during a crisis they’ve whipped up by writing ‘fake news’?
  • The President says his “authority is total.”

I’ll leave it there for now, except to note that what I’ve listed above is not all that could happen and not even the most extreme. The President wants to control the news cycle. That means doing something bigger than the pandemic to make it happen.

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