IN THIS ISSUE:
- Consumer Choice Community to Meet May 19-20
- More Docs Going Cash-Only
- Financial Service Companies to Displace HMOs?
- Fresh Thinking on Health Care from Banks
- HSAs May be "Benefit Star" This Year
- Employers Filling Information Needs
- VENDORS CORNER
Consumer Choice Community to Meet May 19-20
I'm gradually recovering from the pneumonia I had. I still don't have my voice back, but most of the other systems seem to be working okay. Thanks to all who sent me notes last week hoping for a speedy recovery. It is nice to know that this work is appreciated. I'm especially grateful to those who were willing to fill in for me on short notice at some speaking engagements. Ken Linde, former president of Destiny Health, agreed to take over a gig I had scheduled in Washington with Delta Dental and Linda Gorman of the Independence Institute filled in for an engagement I had in Denver with the Academy of Managed Care Pharmacy.
The experience reminded me of what an incredible resource we have in the Consumer Choice Community (CCC). CCC members are scattered all over the country, and are among the savviest health care activists in the United States. We are holding the first annual meeting of the CCC on May 19-20 in Washington, D.C. Registration is free, but only open to CCC members. There is still plenty of time to join the Community and attend this conference. The conference will give Community members the opportunity to meet and share ideas with fellow members and to hear from top policy makers. For information about joining the Community, go to www.galen.org/cccintro.asp.
More Docs Going Cash-Only
Meanwhile, this is not a good time to be out of commission. There is too much going on. The Business Journal of the Triad Area (Greensboro, North Carolina) reports on another physician who is dropping all insurance contracts in favor of a cash-only practice. Dr. Nimish Gosrani has set up a blend between concierge medicine and a cash-only practice. The article says, "Patients can pay $600 a year, plus $10 per visit, to see him as many times in a year as they want. He offers a financing plan through a financing company for those unable to plop down $600 all at once." Patients may also see him on a simple fee-for-service basis, with fees ranging from $70 for a simple office visit to $300 for a comprehensive physical. Dr. Gosrani reports that he saves 2 hours per day that he used to spend dealing with insurance company paperwork. The article also mentions Dr. Elizabeth Vaughan, another Greensboro physician who has developed some fame for not accepting any insurance payments, including Medicare and Medicaid. She simply charges by the hour like other professionals do.
Dr. Vaughan's web site is at www.VaughanMedical.com
Financial Service Companies to Displace HMOs?
Writing in Forbes, Scott Gottlieb predicts a robust future for financial services companies in financing health care. He focuses especially on two features of the 2003 Medicare Modernization Act – HSAs and the prescription drug benefit for people on Medicare. He argues the latter benefit is a natural for "companies that have already mastered the business of providing retirement benefits to seniors." He adds that "there is only a small financial risk from doing drug business with Medicare – owing to the risk-sharing scheme the legislation allows." He also argues that success in this business will come less from managing drug spending and more from marketing and financial integration.
Fresh Thinking on Health Care from Banks
A similar theme is struck by William Short of UMB Bank in Kansas City. He says in an article in the Kansas City Business Journal, "As financial institutions enter a market dominated by insurance companies, we can expect their fresh perspective to have significant impact on consumer-directed health care." He adds, "What makes the HSA so special is that it brings the banking industry into the medical/health insurance arena. Banking core competencies revolve around payment processing, and there is not an industry in more need of efficient payment processing than the health insurance business." He also notes,"With the introduction of point-of-sale payment, overhead costs can be lowered, and an end to long lags between service provision and compensation will be at hand."
HSAs May be "Benefit Star" This Year
Employee Benefit News reports that HSAs may be a "benefits star" this year. It says HSAs are lagging a couple of years behind HRAs in market penetration, but that some employers are using the HRA as a way to transition to a more consumer-friendly HSA. It cites a Mercer study that reports many employers who offered only an HRA in 2004 will either convert to an HSA (7%) or offer both approaches (28%) next year. Mercer also reports that larger employers are more likely than smaller employers to offer some version of consumer driven health, though Larry Akey of AHIP says the opposite is true for HSAs, with smaller employers better able to make a quick transition. The question of long-term savings is still open, but Steven Parente of the University of Minnesota is closely tracking the experience. So far, he says, whether CD health saves money all depends on the design of the program. He has studied one large employer with a pretty rich package whose employees saved on prescription drugs, but not on hospital expenses, but "we have other results that we are still working on that show HRAs can lower cost." He does not yet have information on HSA experience, but expects that by 2007 there will be enough data to know whether consumer-driven health plans are cost effective.
SOURCE: The article was in the April 1, 2005 edition of Employee Benefit News, but it does not appear to be on-line yet.
Employers Filling Information Needs
Employers are stepping up to fill the information needs of their newly-empowered workers, according to a survey done by Watson Wyatt for the National Business Group on Health. The survey finds that the number of employers offering information on "specific health issues" has risen from 38% in 2003 to 71% in 2005, on "provider and/or hospital quality" from 16% to 35%, and on "health care service unit price" from 4% to 20%. Not only are more employers offering the information, but they are doing it in more effective ways, especially through company intranet portals. Cathy Tripp of Watson Wyatt is quoted as saying, "The shift to consumer-directed health care won't be easy, but it is a process that can be managed. In the end, consumer-directed health care is all about personalization of information, and the Web can deliver that efficiently, affordably, and successfully."
- American Community Mutual started offering HSAs in Illinois on March 1, 2005. The company's product includes a unique accident benefit that waives the deductible for an injury that is treated within 30 days of an accident. (From Health Insurance Week, April 3, 2005)
- First Tennessee Bank, owned by First Horizon, has acquired Kansas City-based MSAver. A company spokesman said, "Having MSAver join us is another sign of our commitment to be All Things Financial for our customers." E. Craig Keohan was named president of First Horizon MSAver Resources, Inc. (From a PrimeZone Media Network press release, dated April 4, 2005)
- Cigna is expanding its highly-regarded HSA product, Choice Fund HSA, to the 51-200 employee market in four New England states, Connecticut, Maine, Vermont and New Hampshire, effective May 1, 2005. The program has already been available to employers with 200 employees or more. (From Obesity, Fitness & Wellness Week, April 9, 2005)
- Blue Cross Blue Shield of Illinois has announced it will be offering two new HSA products in the individual market in Illinois, according to a company press release. The products will also offer optional coverage for maternity, prescription drugs, well-child care and adult wellness benefits. Interestingly, the company says it is targeting the 14% of Illinois residents who are currently uninsured with these new products. (From PR Newswire, dated March 29, 2005)
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