IN THIS ISSUE:
- CDHCC Conference, May 4-6 in Chicago
- HMOs Dead or Dying?
- HMOs Dead or on Life Support?
- Banks Looking at New Market
- Pregnant Women Leading the Way in Consumerism
- As HSA Balances Grow, so do Investment Options
CDHCC Conference, May 4-6 in Chicago
If you haven't already, you may want to make plans to attend the Spring, 2005 "Consumer Directed Health Care Conference" (CDHCC) May 4 – 6 at the Hyatt McCormick in Chicago. These semi-annual meetings have become landmark events in the growth of CD health. The last one, held in Washington last Fall, illustrated how much energy and capital is going into the development of information systems and patient support services, prompted by the obvious need for empowered consumers to become well-informed consumers. This one will feature two pre-conference tracks, one dedicated to agents and brokers and the other to small and mid-sized employers. I will be chairing a track focused on the effects of CD health on the provider community, Neil Trautwein of NAM will chair a track focused on the employer community, and Janet Trautwein of NAHU will be focusing on the health plan, broker and agent communities. There are always plenty of opportunities for entrepreneurs to meet venture capital firms and the exhibit hall is always a fascinating look at how this movement is evolving. There are too many star-quality speakers to list here, but go to the CDHCC web site to get more details.
HMOs Dead or Dying?
A couple of recent articles have asserted (wrongly, in my opinion) that HMOs are dead or dying. I say wrongly because I believe there will always be a significant portion of the population that prefers the ?one-stop shopping? aspect of an HMO and that isn't particularly interested in becoming smart shoppers for health care services. An article in the LA Times hyperventilates over the fact that HMO enrollment has slipped from 31% of the market in 1996 to 25% last year, while PPO enrollment has grown. The article says that "it's easier [for employers] to shift rising healthcare costs to workers enrolled in PPOs." It features a new approach by California Blue Cross called "Tonik." Tonik's marketing campaign is targeted at "the young invincibles" and offers premiums as low as $64/month and deductibles as high as $5,000. It also excludes maternity coverage, which troubles some people. Also of concern to the HMO industry is the rapid acceptance of HSAs in the marketplace. In response, even Kaiser has introduced deductibles that qualify for federal HSA rules in two states and is waiting for state approval to market the program in California. Meanwhile, Kaiser has offered an HMO product in California with a $1,500 individual and $3,000 family deductible that has already attracted 10,000 enrollees.
HMOs Dead or on Life Support?
Writing in AMNews, Robert Kazel takes a similar theme in an article headlined, "Are HMOs dead? Or just on life support?" The article covers the recent National Managed Health Care Congress (NMHCC) in Washington which featured a number of speakers delivering gloomy forecasts for what the article terms a "'mother-may-I' mentality to regulating how doctors could practice medicine." The article features a presentation by Dr. Robert S. London who has worked for Anthem, Kaiser Permanente, and UnitedHealth Group, and now declares that "HMOs had left a legacy of 'broken promises'." He was one of "numerous speakers at the conference [who] agreed that the industry is seeing a general abandonment of the principles on which the HMO model was built." The article goes on to say, "No one talked about gatekeeping, prior authorizations… or any coercive technique" at this year's conference. Instead, "the obsession with information technology was everywhere," along with "advanced quality measurement, disease management, and pay-for-performance." It adds, "Consumer-directed plans…were talked about…not as a panacea…but as a product everyone would have to offer to keep up with the competition."
Banks Looking at New Market
Keeping up with the competition is no longer a matter of worrying about what other health plans may be doing. In a consumer driven world, the relevant industry is no longer health insurance, but health care financing. All the more reason to watch what the financial services organizations are doing. One interesting development is a collaboration between PricewaterhouseCoopers and the Medical Banking Project. The two organizations are developing an HSA Workgroup "to assess and/or develop best practices for administering deductibles and also to recommend safeguards that protect healthcare providers from excessive write-offs," according to a press release. PwC's Dave Harris, leader of this effort, is quoted as saying, "Consumers will judge HSA and high deductible health plan combinations by how convenient they are to use, including managing deposits, withdrawals, payments and reimbursement of qualified medical expenses." The release goes on to say, "One objective of the HSA Workgroup is to develop the necessary groundwork that will enable patients to have the ability to one day walk up to an ATM style kiosk at a hospital, swipe their insurance ID with debit card functionality and never have to worry about complex paperwork commonly associated with HDHPs." PwC's Peter Savalli adds, "HSAs provide opportunities for banks and other financial service institutions to expand services into a relatively new market. The discipline and technology used by banks…to process financial transactions can decrease time and costs in today's environment."
Pregnant Women Leading the Way in Consumerism
The Wall Street Journal reports that, "Pregnant women are by necessity and ingenuity paving the way in what is called 'consumer driven' health care…they are pushing doctors and hospitals to negotiate with them and challenging conventional billing and treatment practices." The article by Vanessa Fuhrmans says there are about 4 million births each year in the United States, costing from $7,000 to $12,000 each. At the same time, "about 25% of working-age women don't have employer health benefits or aren't eligible for Medicaid." Add to that the growth of consumer directed health care, and many women "often must ask themselves hard questions about how much care they can or should pay for." It adds, "maternity care is seen as an apt area for [consumer driven] approach because families have months to explore their options, which can include maternity discount cards, prepackaged birth plans or less-expensive nurse midwives." The article goes on to cite several examples of women who have successfully negotiated better prices or chosen alternative methods of delivery to avoid wasting money on unnecessary care.
SOURCE (subscription required): online.wsj.com
As HSA Balances Grow, so do Investment Options
Kiplinger's Personal Finance Magazine also has several examples of families who have successfully navigated this new world. One is a Tallahassee, FL family who signed up for a Golden Rule HSA with a $5,250 deductible and is saving over $7,000 per year in premiums (Their premiums dropped from $900/month to $312/month). They put $4,700 into their HSA last year and will contribute $5,000 this year. The article goes on to say that HSA administrators, faced with rising account balances, are beginning to make better long-term investment options available. It cites the experience of several companies, including Health Savings Administrators, which offers 15 Vanguard funds, First HSA, which "offers a range of funds and individual stocks," and Mellon Financial which has its Dreyfus fund options. Other companies mentioned include JP Morgan Chase, Wells Fargo, and Fidelity.
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