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February 11, 2009

Could it be a Typo?

I recently came across a letter from a Vice President of the National Association of Manufacturers (NAM) to Speaker Nancy Pelosi and Chairman David Obey (Committee on Appropriations).  The subject of the letter was "comparative clinical effectiveness of medical treatments and services."  I quote, "While we support funding in the economic recovery package to conduct comparative clinical effectiveness research, we believe the current proposal can be improved.  We request that Congress clarify its intent by including clear language that the government will not use comparative effectiveness information to influence coverage or payment recommendations." (emphasis added) 

Is this possible?  Is this really the view of NAM's membership?  Or is it the view of pharmaceutical manufacturers? 

We view clinical effectiveness research to hold great promise and to be an important "public interest" function for the government.  It is certainly superior to the FDA's almost unbelievable use of a "lesser harm" standard in drug approval. This standard allows less effective drugs to be approved for market use as long as they aren't too much lesser.  Does that sound like the kind of drugs you want to buy?  Well, combine it with slick advertising, and that is what people do every day. 

We can't expect the average consumer to follow clinical effectiveness research.  They need the help of coverage sponsors to influence their purchase decisions through plan design and provider payment schedules.  The better, more independent data we have to do so, the better off we will all be.

Posted by Rick Chelko at 09:45 AM | | Comments (0) | TrackBacks (0)

February 05, 2009

What's Really Usual or Customary?

United Healthcare, Aetna and Health Net have all been on the New York AG's hot seat as of late.  It is about their administration of "usual and customary" fee limits for out-of-network health services.  One of United's subsidiaries, Ingenix, is also in the mix and was accused of manipulating the claims data and/or formula to intentionally cause underpayments to out-of-network providers and plan members who use them.  There was a legal settlement without any admission of guilt and an agreement to set up a new "independent" entity (probably a university) to calculate usual and customary.  Now, providers and plan members are lining up to obtain settlements for past underpayments. Today's Wall Street Journal described the problem from the perspective of the typical plan member: "insurers" reimbursements to out-of-network medical providers at the usual-and-customary rate are often lower than the actual fees providers charge.  Sounds a bit unfair doesn't it?  For some reason, neither the New York Attorney General nor the Wall Street Journal addresses the reasonableness of provider billing amounts. 

Why is it that providers are regularly willing to accept half or less of their billed charge amounts as payment in full for their services?  In our experience, negotiated discounts are sometimes as much as 85% off of billed charges.  Do PPO networks really have so much negotiating clout that physicians are willing to provide their services at half price or less?  Or, is it that physicians have inflated their billed charge levels so much since the advent of PPOs that now there is no realistic relationship between billed and negotiated charge levels?  Isn't this really just a billing war between providers, PPO networks and health plan sponsors - and the plan members who go out of network are subject to collateral damage?  Providers get to say "we gave in to negotiations and deeply discounted our fees." Networks get to say, "We are great negotiators and are delivering discount value to our customers." Employers are able to say, "We are smart buyers and are saving our company and employees lots of money off of provider charges."  In the meantime, employees who venture out-of-network (intentionally or un-intentionally) are often left with big bills to pay.

Unfortunately, unless we want governmental price controls, there isn't a lot we can do about this.  Employers can change the payment level for out-of-network services to a percent of Medicare's fee level (i.e. 120% of Medicare).  This avoids the whole debate about what is usual and customary.  However, this will still leave employees exposed to large balance due amounts for billed charges less the Medicare-pegged allowable amounts.  As always, and easier said than done, consumers need to first ask providers if they will accept the plans eligible charge amount as payment in full.

 

 

Posted by Rick Chelko at 12:16 PM | | Comments (2) | TrackBacks (0)

November 20, 2008

Great Resources

For more feedback regarding the accuracy, balance and completeness of news stories of medical treatments, tests, products and procedures, I encourage you to check out this great resource:  www.healthnewsreview.org.  This service is provided via funding from the Foundation for Informed Medical Decision Making which has its own valuable website:  www.informedmedicaldecisions.org.  Both of these sites are valuable staples for health care consumers.  Can you lead your horses to the water?

Posted by Rick Chelko at 09:38 AM | | Comments (0) | TrackBacks (0)

November 03, 2008

Time for a Bailout for Big Pharma?

The Wall Street Journal (“of Medicine” as a colleague once coined it) has recently published a number of articles regarding mixed and declining profit reports by the big pharmaceutical manufacturers.  Pfizer and Schering-Plough further reported weakness in the market for cholesterol drugs.

What is up with this?  Is it possible that the recent turmoil in our financial market has trickled down to Main Street in such a way that maintenance drug spend is being affected? Does it mean that prescription drug copays are now at a level that is impacting plan member decisions regarding the value of their medications?  Are plan members switching to generic drugs?  Have they responded to health promotion programs and changed their diet and exercise routines - no longer needing cholesterol lowering drugs?  Regarding declining Lipitor sales, Pfizer reported, “The drug’s sales have been under pressure from the availability of cheaper, generic options for cholesterol treatment.” (WSJ October 22, 2008)

This sounds like a good trend to me. Usually when economic times get tough, plan members load up on discretionary treatment before they lose coverage.  Now that cost sharing levels in most PPO and CDH plans are significant, plan members may be foregoing care altogether.  Is this good?  Are we avoiding unnecessary plan costs?  Or, are we simply deferring appropriate preventive treatments? Only time will tell.

 

Posted by Rick Chelko at 09:40 AM | | Comments (0) | TrackBacks (0)

June 16, 2008

Government Trimming Waistlines

Health and productivity management (HPM) is becoming a big priority for many employers.  This has been prompted by a tremendous increase in preventable conditions such as obesity, diabetes, high blood pressure, and asthma.  As the boomers age, their lack of physical activity and poor nutritional habits are catching up and costing employers money.

Health clinics, fitness centers, wellness programs, preventive screenings, food service, and health plan design changes are being reshaped (no pun intended) to encourage healthy employees, great productivity and lower health plan costs.  Some employers are adopting aggressive measures to impact employee health.  Most are more gradually encouraging health risk appraisals and screenings, adding preventive benefits to their plans and hosting wellness fairs, lunch and learns, etc.

So, how do our efforts compare to others across the globe?  The New York Times reported last week on one country that is taking a particularly aggressive stance – Japan. With nationalized healthcare, the Japanese government is on the hook instead of employers, and it has decided to get aggressive.  A new Japanese law took effect two months ago that requires employers and local governments to measure the waistlines of people between the ages of 40 and 74 as part of their annual checkups. Those who fail to meet the applicable standard, are required to participate in education and behavior change programs. 

“To reach its goals of shrinking the overweight population by 10 percent over the next four years and 25 percent over the next seven years, the government will impose financial penalties on companies and local governments that fail to meet specific targets.”  http://www.nytimes.com/2008/06/13/world/asia/13fat.html?pagewanted=1&ei=5070&en=7ba4c425e5d62707&ex=1214020800&emc=eta1

The Japanese have even renamed “overweight” as “metabo” which is short for metabolic syndrome, the condition of heightened risk of developing vascular disease and diabetes (abdominal obesity, high blood pressure, and high levels of blood glucose and cholesterol).

Do we need government to take aggressive action to improve the health of our workforce?  Would our government and society ever be willing to take such action?  Why is a country not known for its overweight people willing to undertake such action and be out front on this issue?

Posted by Rick Chelko at 12:53 PM | | Comments (0) | TrackBacks (0)

June 02, 2008

Genetic Testing

A couple weeks ago, the president signed legislation to reduce the potential for gene-testing results to be used against people. The new law forbids employers and insurance companies from denying employment, promotions, or health coverage to people when genetic tests show they have a predisposition to cancer, heart disease or other ailments.  This is all good.

My question is “who is going to protect people from unnecessary treatment once a genetic test shows any level of predisposition?” The healthcare delivery system has demonstrated a great ability to not only treat medical conditions, but also to treat the potential for medical conditions. Americans have also shown a predisposition to try to reduce risks through diagnostic testing and medication. Hopefully, some day they will also have a predisposition to improve their diets and exercise levels to reduce these same risks.  

So, will genetic testing lead to a growth in treatment of potential conditions? And, what “prophylactic treatments” will benefit plans be responsible for? I expect genetic testing will lead to more medical treatment – including a rise in the use of bioengineered drugs.  This will undoubtedly be good for some, but bad for many others.  I expect it will go too far, because our culture (and third-party payment model) generally looks at “more” as “better.”

In the meantime, there is one tool available for employers to use – A Purchaser's Guide to Clinical Preventive Services: Moving Science into Coverage which is currently available through the National Business Group on Health at this site: http://www.businessgrouphealth.org/benefitstopics/topics/purchasers/index.cfm.  This guide was developed in conjunction with the Centers for Disease Control and Prevention (CDC) and it leverages the work of the U.S. Preventive Services Task Force.

Posted by Rick Chelko at 07:39 AM | | Comments (0) | TrackBacks (0)