2015 Health Insurance Rates Vary by State

As health insurance companies begin establishing premium rates for the 2015 enrollment year, some insurers are pursuing substantial hikes while others are proposing modest increases and even some reductions.

Increases proposed by CareFirst in Washington, D.C. range from as little as four percent for higher-tier plans to more than 24 percent for a catastrophic plan. Other providers are also proposing mixed updates to increase certain plan premiums and reduce others. At the same time, UnitedHealthcare is proposing a reduction in all of their rates. Meanwhile, the average increase in New York is around 13 percent according to the state’s Financial Services Department.

Rate proposals in these and other states appear to be heavily tied to a number of factors, including the number of buyers who chose plans on different tiers during this year’s open enrollment period and the rising cost of medical care. Many insurers are attempting to compensate for larger populations of sick patients who use more care and for differences in health care markets.

However, some states’ proposals are more encouraging for consumers. Georgia, for example, has one statewide provider on their healthcare exchange but will welcome two more for the 2015 enrollment period. In addition, the current provider – Blue Cross and Blue Shield – has proposed statewide rate decreases.

Initial rate proposals are typically revised downward during pre-approval reviews by state regulators, so it is unlikely that the highest rates among those reported will go through as proposed. Also, patients who qualify for federal insurance subsidies through the healthcare marketplace will likely see those subsidies rise to match any rate increases.

Small business owners are likely to see at least modest increases in healthcare rates for 2015, among other rising costs of care. If you need a boost in working capital to meet these expanded operating costs, healthcare factoring with PRN Funding can close the gap. Explore the many healthcare factoring options for your company and contact us today to get started.

ACA: Enrollment Passes 8 Million, Uninsured Rate Lowest Since 2008

The Obama administration announced last month that enrollments in the ACA exchanges topped eight million.

As of April 19, 8.019 million people had signed up for Obamacare plans – an impressive national average despite a large disparity between individual state enrollments. Some states missed their enrollment targets by a wide margin, while others more than doubled their goal.

In addition to marketplace policies, 4.8 million consumers enrolled in Medicaid plans in their states between October 1 and April 19, and nearly five million consumers purchased policies outside the exchanges. Altogether, the administration estimates that up to 18 million consumers have purchased new healthcare policies during the six-month enrollment period measured.

While some consumers may have been previously insured, a majority of marketplace users who requested subsidies self-reported that they did not have insurance when they applied. Further evidence is in the numbers: a Gallup poll reports that the uninsured rate by the end of the first quarter is down to 13.4 percent, the lowest level since the recession began in 2008 and down from 17.3 percent in January.

Health care executives presented preliminary payment information to the House Energy and Commerce oversight subcommittee last week that shows between 80 and 90 percent of new premiums are paid, well above the 67 percent reported by members of the same committee the week prior.

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Study Finds Healthcare Sector among Most Obese

In a seemingly ironic twist of circumstance, the American Journal of Preventive Medicine reported that the healthcare industry is among the top 10 most obese industries.

The data analyzed came from the 2010 National Health Interview Survey as well as self-reported personal statistics from employees. All healthcare workers are included in the overall “healthcare” sector, but a breakdown of health service employees versus practitioners indicates that the former are more at risk for obesity than the latter.

Researchers correlate risk for obesity in the job sectors listed to job factors such as stress, long hours, and working conditions that minimize movement and activity. In that respect, healthcare practitioners such as doctors and nurses benefit from time spent on their feet going between patients.

Long hours and shift work can make it difficult for workers to fit exercise into their schedule or to prepare and eat healthy, balanced meals – after all, a trip through the drive-thru is faster and less labor-intensive, thus more appealing to an employee coming off of (or heading into) a 12-hour shift. Also at issue are differences in pay that can prevent some workers from choosing healthier options.

One possible contributor to obesity in the healthcare setting that is not discussed, but that has interesting implications, is a shift toward banning smoking by healthcare employees. Healthcare employees who quit smoking may compensate by eating more, either to fill the time or because of the lack of cigarettes’ appetite suppressant effect.

Obesity can be a significant contributor to health care costs. With that in mind, understanding the prevalence of obesity in the healthcare industry – as well as its causes – can help healthcare employers adapt their working conditions and employee benefits to promote healthier lifestyles. For example, a hospital may offer free or subsidized memberships to gyms or weight-loss programs, or tie the achievement of health goals to lower premiums.

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CVS Announces an End to Tobacco Sales

CVS Caremark announced today that they will end all tobacco product sales in their stores by October 1, 2014, making them the first and only national pharmacy chain so far to do so.

CEO Larry Merlo explains the decision as one to “[position] CVS Caremark for future growth as a health care company.” The move, while projected to cost the business $2 billion in annual revenue, is meant to align their product selection with their commitment to health care and information.

In addition, beginning this spring CVS will offer a stop smoking program nationwide in an effort to encourage their customers to cut out tobacco use. Chief Medical Officer Troy Brennan pointed out that health care through the Affordable Care Act is expensive to provide, therefore promoting good health is important.

The company has already received messages of support from President Obama, First Lady Michelle Obama, and former NYC mayor Michael Bloomberg, and follows the path of retailers Target Corp and Wegmans which ended tobacco sales in 1996 and 2008 respectively. In addition, they have good company at the city level: San Francisco banned the sale of tobacco products in pharmacies in 2008 and Boston did so in 2009.

Anti-tobacco activists are hopeful that CVS’ announcement will set an example that other pharmacy chains and retailers will follow, though when interviewed spokespeople for both Walgreens and Rite Aid said that they would continue selling cigarettes while they weigh consumer demand.

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Dropping Spouses from Healthcare May Increase Employer Costs

The Employee Benefit Research Institute published a study in this month’s issue of their Notes that suggests that the employer trend of excluding spouses from health care coverage may cost them more in the long run.

As many as 15 percent of employers nationwide have already eliminated spousal coverage in cases where the previously-covered spouse has access to health care through his or her own employer. NPR reports that a continuing trend of such cuts may offset any short-term savings as their own employees lose spousal coverage picked up by other companies.

A simple example: Company A and Company B both offer spousal health care coverage. Company A currently covers Employee A and Spouse A, who works for Company B. Company B covers Employee B and Spouse B, who works for Company A. If both companies eliminate spousal coverage, Spouse A and Spouse B will return to their own company’s health care plan, which means that at the very least the companies have not saved any money.

Further, if the companies have traditionally subsidized a lower amount for spouses then each will face higher health care costs by covering two of their own employees.

Situation: Each Company Covers Spouses (cost to company)

Company A

Company B

Employee A: $5,000/year

Employee B: $5,000/year

Spouse A: $3,500/year

Spouse B: $3,500/year

Situation: Neither Company Covers Spouses (cost to company)

Company A

Company B

Employee A: $5,000/year

Employee B: $5,000/year

Spouse B: $5,000/year

Spouse A: $5,000/year

*The figures above are purely hypothetical and are only meant for illustrative purposes.

According to a weekend report in Forbes, meanwhile, more full-time employees are enrolling in employer-provided health care to take advantage of better coverage at lower costs than the plans provided on the health care exchanges. These new enrollees may also contribute to rising employer costs, even without an influx of employees who have lost coverage under their spouses’ plans.

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Hospital Fee Models Make Pay-for-Performance Problematic

Attempts by healthcare payers to incentivize quality care by providers are nothing new. However, a study on pay-for-performance programs, as they are called, indicates that the practice may not improve the quality of patient care to the intended extent.

Most hospitals currently operate pay-for-service models, in which providers receive a set amount for each service provided. This model tends to encourage quantity over quality and time-intensity over efficiency. Pay-for-performance, which Medicare has already implemented through its Hospital Readmissions Reduction Program, flips the traditional fee model on its head and reimburses facilities for “quality” treatment – or, in the case of the HRRP, penalizes hospitals that fail to meet established benchmarks for patient care.

There are several issues with pay-for-performance, from what to measure to the size of the incentive offered, and the model’s impact on hospitals’ performance is mixed.

What “performance” is measured?

Many payers in this model focus on measuring adherence to processes rather than patient outcomes. A facility may qualify for incentives because they follow procedure accurately, but that does not necessarily reflect added value. Providers will prioritize the care for which they will be rewarded, while showing no change or a negative change in other measures.

Measuring outcomes, meanwhile, can lead to an artificially inflated or deflated result because the care provided is only one element of patient outcomes. In addition, facilities working for certain outcomes may be risk averse to treating patients unlikely to see a positive outcome.

How should incentives work?

Andrew Ryan from Weill Cornell Medical School claims that in most pay-for-performance models, the incentives offered are insufficient to compel providers to improve their practices. On the other hand, increasing incentives may be cost-prohibitive to many facilities.

Either way, even the best pay-for-performance program may not motivate caregivers to improve their practices. One suggestion to overcome this obstacle is to leverage providers’ risk aversion by paying incentives up front, and requiring providers to pay back money for standards they fail to meet.

Is there a better way?

System-wide change to the payer-provider relationship may be a better path to higher quality care than tweaks to payer methods. Individual providers may lack the resources or motivation to attack systemic issues, but payers and providers can collaborate and cooperate with one another to address those problems together and build a system that provides the quality care that patients deserve without relying on financial incentives to do so.

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5 Ways the Healthcare Industry Benefits from Social Media Marketing

Social media marketing is not just for businesses looking to expand their reach and reputation – the healthcare industry can also benefit from utilizing social media. Here are 5 ways that healthcare providers and service organizations can benefit from social media marketing:

1. Patient education and outreach
Posting information about seasonal sicknesses, ways to stay healthy, and other pertinent health information is a great way to stay connected to patients or connect with potential ones. Chicago’s Sherman Health, a multi-hospital system, even worked with Demi & Cooper Advertising in Illinois to tweet a live surgery. “Twitter is an amazing platform if you look at it as we do. We see Twitter as a multi-device real-time messaging system. Sharing information from an OR is not a new idea. Twitter is a perfect medium for distributing information from an OR because it allows time for messages to be worded correctly. We were looking for new ways to help Sherman connect with their community, to provide information, and help people become more familiar with the hospital. We found that Tweeting the surgery was an excellent way to help potential surgical candidates become more comfortable with Sherman,” said associate creative director Marc Battaglia.

2. Patients participate in their own care
A recent study found that patients who are regularly online are more likely to accept patient-centered care and take part in their own care.
“When medical professionals attempt to gauge how much information to provide patients or try to decide how much they should involve patients in medical decision-making, they may be better off if they base their decisions on patients’ Internet use frequency rather than age, per se,” said the researchers from the University of Texas, the University of Florida and the University of Maryland.

3. Feedback and improvement
Social media allows your hospital to monitor what its patients are saying, which will let you identify issues and problems and give it the opportunity to improve. Facebook and Twitter have also become outlets for people to vent, so a hospital can identify patient frustrations and determine how to best solve patients’ problems with their care or service.

4. Patient interaction
With social media sites, patients are able to post questions for doctors and staff to get answers or advice quickly. This interactive method makes more sense than the patient scheduling an appointment to ask a question or wait on the phone for someone to be able to answer.

5. Building your healthcare organization’s reputation
Potential patients looking up your facility will look online to see what others are saying about your institution and services. It’s imperative to take control over your online presence. Responding to both negative and positive concerns proves that your organization is dedicated to serving the needs of patients. It’s better to proactively manage your online reputation than let it run rampant across social web.

“Social media isn’t going to go away, and ignoring it isn’t really a viable option. The best way to manage your reputation online is to participate,” said Battaglia. “Ignoring it is a short-lived strategy. Hospitals and healthcare facilities need to become involved and present helpful, safe, and accurate information.”

Home Health Care Reform

Changes in healthcare are taking place all throughout the country, including the home. According to Healthcare Finance News, The Alliance for Quality Home Care (AQHC) recently outlined its new policy on post-acute healthcare reform. Post-acute healthcare refers to home care that people receive when they are not sick enough to be in the hospital, but need medical attention and help with daily activities. The AQHC outlined three main objectives of their plan:

Patient Needs First: The needs of patients must be the driver of reform. The reform is intended to integrate systems and put all people involved in home care on the same page with aligned incentives, rather than mixed incentives, in order to match each patient individually with their needs.

Payment Tied to Quality: Performance metrics must be developed that better apply across all care sectors, and also keep the “big picture” of total care in mind to see how each caregiver is performing in context. High performers get compensated for their work, which will encourage only the best care.

Adequate Payment: While not easy to accomplish in times of budget cuts, with the proper structure in place adequate compensation can be given. This requires looking at situations that providers face and making cuts accordingly, not across the board.

For the full article, see Nursing Home Alliance Offers Post-Acute System Reform