Category: Health plans

Interview with MEDecision’s Dr. Henry DePhillips

published date
September 18th, 2007 by

Dr. Henry DePhillips is EVP and Chief Medical Officer of MEDecision, a “collaborative care management company” that enables payers to share clinical information with physicians to improve care and reduce costs. Dr. DePhillips and I were both speaking at the Disease Management Leadership Forum at Caesars Palace in Las Vegas and found time to catch up between sessions. We spoke about how MEDecision uses payer data, pharmacy data, care management data, lab data, PHRs and EHRs to provide useful information to providers in ways that fit into existing workflows.

I was particularly intrigued by MEDecision’s experience with providing information in the emergency department, a setting where it’s often hard to get physicians interested in accessing outside information. After a couple of false starts with physicians and nurses, MEDecision found a way to integrate into the workflow of the administrative staff. In the end the payer saved money and yet physicians also came out ahead financially. Patients benefited, too.

Medical tourism: What questions should health plans and employers be asking?

published date
August 9th, 2007 by

Until now, medical tourism has mainly been a self-pay phenomenon. But over time the patient base has expanded from the plastic surgery crowd to the uninsured and underinsured. Now health plans and employers have started to ask what role medical tourism can play for them. We’ve been receiving a number of inquiries on the topic at my consulting firm, MedPharma Partners. Soon we’ll be developing a medical tourism white paper. In the meantime, here are some questions health plans and employers should be asking:

  1. Should I include overseas providers in my network at all? If so, which ones?
    • For some payers the time is now. For others waiting to learn from the experience of others will make more sense
    • The providers that are popular with self-pay patients may or may not be the right ones. Proximity, local infrastructure, quality and capacity may be more important considerations for employers and health plans
  2. How should I engage my employees or members? Should I require patients to travel or should I make it optional?
    • The moment health plans and employers start to encourage the use of overseas providers they will be met with suspicion, but there are ways around this. Making overseas care optional will reduce the suspicion but limit the savings
    • It’s important to let prospective traveling patients engage with their peers. That’s one objective of the forums at MedTripInfo
    • It can also make sense to share some of the financial benefits with employees and members or simply to grant them additional vacation time, which they can enjoy overseas
  3. How do I guarantee quality and overcome the challenges of patient safety?
    • You might want to ask this of your local providers, too! But seriously, there are international accreditation bodies like JCI. Also, many overseas hospitals are going over and above those requirements
  4. What about medical malpractice and liability?
    • That’s a tough one to address and we’ll see what evolves. There are promising approaches emerging involving arbitration and insurance for complications
    • This may be a hard argument to make, but patients actually don’t have great recourse in the US when things go wrong. Cases take several years to reach trial and plaintiffs usually lose, unlike in other personal injury cases
  5. How will pre- and post-travel care be coordinated?
    • This issue needs to be addressed differently depending on the procedure and patient population
    • It’s essential to work with your existing provider network rather than handling medical tourism in a vacuum
  6. Should I contract with providers directly or work through an aggregator?
    • It will be difficult to develop and maintain a comprehensive network on your own so working with one of the emerging provider networks is a better idea
  7. What procedures and treatments should be included?
    • This will depend on your patient population but it will generally include orthopedic and cardiac surgery
  8. How much am I likely to save and how can I increase that number?
    • Most of the estimates tossed around, touting “90% savings” and so on are based on a comparison of US charges with the price paid overseas. First of all, only the uninsured get stuck paying charges, plus you’ll need to factor in the costs of travel –maybe also for a companion. I haven’t seen a really good estimate of the true savings potential for an insured population
  9. How will domestic providers react?
    • Depends on how they’re managed, and this is one place where the interests of health plans and employers may diverge. Health plans may want to use the threat of sending patients abroad in order to beat down providers on price. Employers are more interested in maintaining relationships
  10. What is the relationship between medical tourism and consumer directed health plans?
    • In theory patients with consumer directed plans are a great fit for medical tourism. In practice, they may blow through their HSA even at steeply discounted international prices, so it may not make that much of a difference
  11. How well does medical tourism fit with limited benefit/”mini-med” plans?
    • Potentially very well. It offers the opportunity to include a major medical component at an affordable price
    If you’d like to discuss these topics or receive a copy of the white paper when it’s published, send me an email:

How runaway costs can undermine health reform in a hurry

published date
July 13th, 2007 by

From today’s Boston Globe (Blue Cross to scrap policy with low employer contribution):

In an about-face, Blue Cross and Blue Shield of Massachusetts said it is scrapping a new policy that would have allowed owners of small businesses to contribute just one-third of the cost of their employees’ health plan premiums… Prior to the new policy… the insurer required a minimum 50 percent contribution to premiums from employers with 50 or fewer workers…

[Governor] Patrick’s administration believed that if Blue Cross allowed lower employer contributions, other companies might follow suit, sparking a race to the bottom in which employers contributed as little as possible to their employees’ healthcare.

Governor Patrick is concerned because the state’s health care reform law, which requires almost everyone to have insurance, depends heavily on employer coverage. If employers don’t keep paying up, the law won’t work.

But framing the discussion in terms of percent contribution is highly misleading. The “race to the bottom” comment is a case in point. Here’s what I mean:

  • As I mentioned yesterday, Blue Cross plans to raise my company’s premium by 26.3 percent next year. Let’s imagine they do the same thing again next year
  • Using approximate numbers, that means the family premium will go from $1000 to $1263 to $1595 over that time
  • If the company paid 50% now, that would be $500. If the company continued to pay $500 in two years, it would only be paying 31 percent of the much higher premium!
  • That’s not a race to the bottom, folks. It’s more like holding steady

I’m assuming our rate increase is unusually large, but we can’t be alone. If it happens like this to us in two years it will happen to everyone within five.

Cost issues have to be addressed, and quick.

Massachusetts health reform hits home

published date
June 12th, 2007 by

Got a reminder of the Massachusetts health insurance mandate today, courtesy of a postcard delivered in the mail. In addition to the Commonwealth Connector seal, it has one from the Massachusetts Department of Revenue (the tax collectors) just to make sure you take it seriously.

Dear Massachusetts Taxpayer, [note it doesn’t say “Resident”]

Beginning July 1, 2007, a new Massachusetts law says that residents age 18 and over must have health insurance. With few exceptions, adults must be able to show they have health insurance by Dec. 31, 2007. Those who cannot will lose the tax benefit of their personal exemption on their 2007 Massachusetts income tax return, worth $219 for an individual. Penalties will increase for 2008.

Most adults already have health insurance, perhaps [why perhaps?] through an employer or a government program. If you do not, the Commonwealth Health Connector can help you or your employer find the right health plan. The Health Connector has new health insurance choices for you and your family. These plans carry the state’s seal of Approval for quality and affordability. You can also purchase plans through approved Massachusetts health insurance carriers. To learn more or to purchase a plan, visit

It’s not signed by anyone.

Mini-meds mandated in Massachusetts?

published date
May 29th, 2007 by

Massachusetts’ Commonwealth Health Insurance Connector is doing its best to ensure the availability of affordable, high-quality health plans. For young adults, they’ve opted for an enhanced version of the existing student health plans, which have been mandated for almost 20 years. The plans are cheap: as low as $119 per month without drug coverage.

There’s a catch, though. The plans have annual coverage caps of $50,000 or $100,000. That’s higher than the $25,000 to $50,000 caps of the student plans, but it won’t take a seriously ill young adult (or their premature baby) to run up a bigger bill than that in Beantown.

Patricia Walrath, co-chair of the Legislature’s Health Care Financing Committee told the Boston Globe:

We thought this was one place where we could be a little experimental, because they are a very low-risk population.

But the Access Project thinks differently and issued a report critical of the plans. Plan co-author Stephen D’Amato says:

[T]he main purpose of insurance is to protect people in those rare instances when you have huge costs. Allowing these caps is duplicating a mistake that was made nearly 20 years ago. It’s going to destroy some lives

In a perfect world –or actually in any other OECD country– $119 per month would be enough to pay for comprehensive coverage for a young adult. Here, though, it isn’t. As a result, there’s a tradeoff between an affordable premium, coverage for routine services, and coverage for catastrophic costs.

I’ve written before about Mini-Meds –policies that offer limited coveraged, with caps much like these new Massachusetts plans. In some ways they are odious –almost the opposite of insurance– but they do provide access to the health care system and take away the worry of being saddled with $10,000 or $20,000 in medical debts. A debt like that can seem almost as catastrophic as a $1 million debt to people of limited income.

I don’t object to the capped plans for young adults. First, keeping the premiums somewhat reasonable will increase compliance with the mandate and increase the attractiveness of living in this state. Second, if debts get too high there’s always bankruptcy protection. Young adults have time to start over and since the hospitals will have such a high percentage of insured patients they should be able to suck up some of the losses without whining too much.