Friday, March 5, 2010

Wellness Program Integration

AMF Risk Management Solutions is pleased to market Primarily Care of RI's new turnkey solution wellness program "HealtheDividends". HealtheDividends will be offered as an option for employers alongside the AMF High Deductible Aggregate Wrap product.

Please contact an AMF representative for more information on how these two products can save employers money, as well as create a healthier population.

(617)770-0917 EXT. 301 or 315

Blue Cross Blue Shield of MA - 2009 Net Loss of $149.2 Million

According to a Blue Cross Blue Shield of Massachusetts recent news release the combined companies of Blue Cross Blue Shield of Massachusetts, Inc. and Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc. have lost a bundle of money on its 2009 calendar year. The combined after-federal tax net loss totaled $149.2 million.

Allen Maltz, Blue Cross Blue Shield of Massachusetts, Inc.’s chief financial officer attributes their losses to: “the result of an adverse employment market which reduced membership; increased utilization of medical services due to the seasonal and H1N1 flu; a rise in elective procedures such as knee, hip and back surgeries, and in behavioral health utilization; as well as higher than anticipated costs associated with merging the individual and small group markets”. As a result, the cost of premiums will sky rocket in the upcoming year with reports from seminars being an average increase of 30%.

Blue Cross Blue Shield of Massachusetts, Inc is the leading private health plan in Massachusetts, with 2,924,133 members; however, it will be interesting in the upcoming months to follow to see if they retain the business with the staggering increases.

Tuesday, February 23, 2010

How To Steady Upcoming Health Cost Increases

According to a study done by Mercer in a national survey of employer-sponsored health plans, "health plan costs rose at the slowest pace in a decade last year". The study was conducted to include 2,914 employers of all sizes. "The average per-employee cost of health benefits rose just 5.5% to $8,945". Mercer anticipates 2010 to prove similar in trend. In additional studies done by Towers Perrin, they predict by studying 300 large employers that the annual cost for active employee-only coverage is $5,124, the annual cost for employee-plus-one-dependent coverage is $10,500, and the annual cost for family coverage is $15,084.

So what does this mean for employers today? Well, studies point to cost saving success by implementing health management strategies as well as making the switch to account-based health plans. One of the big factors in controlling cost was the movement of small employers into low cost consumer-directed health plans. By raising the PPO deductibles, the employers picked up savings in the premiums. In addition, there has been a large focus on workforce health. Many companies have transitioned into wellness programs such as Primarily Care's HealtheDividends program. Many employers are learning that there are real savings to be had by bettering the health of their population. "Nearly three-fourths of employers that have measured the ROI in wellness programs say they are content with the year-over-year savings, lower utilization rate or improved health risks".

Another strategy many large employers are using is using health management incentives. Employers are finding that cost can be further contained with smoking cessation, routine primary care physician visits and scheduled doctors visits with emphasis on follow up care.

Consumer Driven Health Plans have become the focus on a lot of employers over the past year. Many employers are seeing the benefit in offering this type of program. "In 2009, CDHP offerings among employers with 10-499 employees increased from 9% to 15%, Mercer's research shows". There is opportunity to save by purchasing stop loss insurance on a high deductible health plan. It allows the buyer to obtain the most premium savings possible by electing the higher deductible; however, with the insurance, if claims run well, the employer has everything to gain and it will cost no more than the otherwise fully insured renewal premium. Another development in our product line includes the coupling of a mini-med or limited medical plan with our U.S. Health Options product. If the maximum plan expense for each participant is $20,000, the employee will be able to stretch their benefit dollars much greater as we can negotiate nationally many common procedures at a price that would be paid 100% by the plan.

Towers Perrin also offers a number of other strategies to combat the rising cost of health care for employees as well:

- Employers provide employee incentives. The employees must be motivated to join health wellness programs, biometric screenings and health risk assessments in order for a real change in cost.

- Social networking - employers are implementing these campaigns as they realize it can impact employee health and well-being. Blogs are a great way to communicate and create an open forum for discussion on health awareness issues and recommendations for a healthy lifestyle.

- Use of a health advocate - helps to manage a chronic condition or serious illness. By personalizing the experience the employee is provided with lifestyle coaching and integration of disability with medical care management.

- Technology - Always a positive aspect in getting information to patients faster as well as improving health and engaging consumers. New applications play an important role in transferring personal health records and monitoring biometrics.

With these changes as indicated by the Mercer study, we are seeing the benefit of these consumer driven health plans and realizing the potential of a healthy lifestyle. Much of the cost of health care is influenced directly by the way we live our lives and the value we put on our health and wellness. The programs offer structured support when correctly implemented and utilized; however, in the end it is always the ultimate responsibility of the plan participants. Creating education and awareness about these big issues is just as important as the programs created to follow through.

For further information on AMF Risk Management Solutions' products and cost containment ideas please feel free to contact Matt McKelvey, (617)770-0917 EXT 301,

Thursday, February 4, 2010

Health Care Reform - Medical Monopolies

Over the past year, The Obama administration’s push for health insurance reform has used insurance companies as the scapegoat. Insurance companies have been part of the problem for sure. They have stymied competition by “cutting deals with providers” to pay exorbitant charges for services. Collusion between insurance companies and hospitals was highlighted in a Boston Globe investigative article a short time ago. It works like this: The CEO of Blue Cross Blue Shield got together with the CEO of Partners Healthcare and agreed to pay the hospital a lot more money for services if the hospital would agree to provide Blue Cross Blue Shield with its “best discounts” off these inflated charges. This verbal agreement resulted in Blue Cross Blue Shield essentially eliminating, or at least putting at a great disadvantage, its competitors.

It is my belief that this type of arrangement has gone on all around the U.S., resulting in minimal competition and higher prices for medical care. As a result, see the example below of a recent medical claim from a hospital in Lubbock, Texas. Due to HIPPA regulations, I will not disclose the patient’s name or medical condition.

This inpatient stay was for a total of 52 days. The average length of stay nationwide for this condition is 29 days. Total billed charges were $1,016,000. The HealthSmart PPO discount of 40% brought the claim down to $610,000. Sounds like a great deal, right? Not so.

This claim was sent out to a company called NCN for further review. NCN can determine the hospital’s true cost of providing services through the hospital’s own numbers, in reports they provide to Medicare. NCN determined that this stay cost the hospital $134,600. The amount that Medicare would have reimbursed would have been $132,562. The U.S. average cost based on 14,688 studied cases would have been $64,864.

In summary, this Lubbock Texas hospital marked up the cost of care from seven to fifteen times what it should have been. Our Congress should focus on this type of abuse by having hospitals and other providers post their prices for all services in advance to afford consumers and insurers to shop for the best value. The price for services should not be different for consumers or insurers. One competitive price for all patients would greatly reduce the cost of healthcare for all without the government spending one tax dollar. Couple this with malpractice reform and combine with a health savings account and we have a model that works and breaks up the insurance company/medical provider monopoly. This is a solution we cannot afford to go without.

If you believe the above solution will help us all, please forward this e-mail to your Congressional Representative for your state and encourage them to offer true competition based medical reform without spending any more tax dollars. If enough concerned citizens do this, we can make healthcare more affordable for all.

Please click here to find your Congressional Representative’s contact information:

Please click here to find your state Senator’s contact information: