Medical advocacy

HHS Issues Regs on Insurance Rate Increase Disclosure and Review

J Roberts

Read about the regulations concerning the new Affordable Care Act. Insurers will now have to justify any large or significant rate increases.


New proposed Affordable Care Act (ACA) regulations announced today by the U.S. Department of Health and Human Services (HHS) are intended to bring new transparency and scrutiny to proposed health insurance rate increases. These proposed rules allow HHS to work with states to require insurers to publicly disclose and justify unreasonable rate increases.

The ACA has already begun to help states strengthen or create rate review processes, HHS said. On August 16, HHS awarded $46 million to 45 states and the District of Columbia to help them improve their oversight of proposed health insurance rate increases. This is part of $250 million that the healthcare reform law makes available to states to take action against insurers


Today’s proposed regulations will build on these efforts by requiring insurers in all states to publicly justify any unreasonable rate increases beginning in 2011, as described in an HHS fact sheet. In 2011, proposed rate increases of 10 percent or higher will be publicly disclosed and thoroughly reviewed to determine if the rate increase is unreasonable. After 2011, state-specific thresholds would be set using data and trends that better reflect cost trends particular to each state. An insurance company’s justifications for unreasonable increases will be posted on HealthCare.gov and the insurance plan’s website.

Under the proposed regulation, states with effective rate review systems would conduct the reviews. If a state lacks the resources or authority to do thorough actuarial reviews, HHS would conduct them. Meanwhile, HHS will continue to make resources available to states to strengthen their rate review processes.

In 2014, the ACA empowers states to exclude health plans that show a pattern of excessive or unjustified premium increases from the new health insurance exchanges.


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Medical Costs Rise 7.8 Percent in 2010 for Family of Four: Milliman

J Roberts

Healthcare Financial News

Medical costs are on the rise again in 2010. Read the article and then go to the report from Milliman that details the rise in costs for the third straight year in a row.

The medical costs paid by and on behalf of a typical U.S. family of four reached $18,074 in 2010, up 7.8 percent over the 2009 amount of $16,771, according to the 2010 Milliman Medical Index. For the third consecutive year, the annual rate of increase has been less than 8 percent, but the dollar increase is the highest in the past 10 years. Inpatient and outpatient facility services combined represent 48 percent of the total annual medical costs, up from 47 percent last year, according to the index. Physician services represent 33 percent, prescription drugs represent 15 percent, and miscellaneous services represent 4 percent.

Over the past five years, pharmacy care and facility costs, especially outpatient facility costs, increased at a higher average annual rate than physician services, the report states. The largest dollar increase in 2010 was for inpatient facility care, which rose by $498 annually. The increase includes change in both utilization and average unit cost. Average unit cost reflects the negotiated charge for each service and the service mix, according to Milliman.

Most of the hospital and physician cost increases noted in the 2010 index have been driven by average unit cost, not utilization, which frames the future cost-control effort, according to the report. Hospital and physician services contributed $820 and $301, respectively, to the increase in total annual medical costs between 2009 and 2010, while pharmacy services contributed $151.

As in 2009, medical costs in three cities (Miami, New York, and Chicago) continue to surpass the national average by at least 10 percent. Costs in all three cities now exceed $20,000 for a typical family of four, with Miami at $22,089. Phoenix and Seattle continue to have costs much lower than the national average.

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Majority of Americans confused about health care

J Roberts

More than a month after the passing of landmark healthcare reform, Americans are confused more than ever over the legislation; some are down right angry. A recent poll by Kaiser Health illustrates the sentiments felt by Americans across the country. Read on to learn more.

Kaiser Health

The majority of Americans are confused about how the newly enacted health care law will impact them, according to a new Kaiser Health Tracking Poll released Thursday.

“People are struggling to understand how the law will affect them and their families and to separate fact from political spin,” said Kaiser President and CEO Drew Altman.

Nearly a month after its passage, the public remains deeply split over the legislation: 46 percent view it favorably and 40 percent don’t, with another 14 percent undecided. Further demonstrating the division: 31 percent expect the bill to help them, 32 percent expect the bill to hurt them and 30 percent don’t expect it to affect them at all.

The partisan divide is stark: 77 percent of Democrats support the law, while 79 percent of Republicans oppose it. Independents tend to side with Republicans, with 46 percent opposing the law while 37 percent support it.

The poll showed, however, that a clear majority of Americans support many specific provisions that go into effect this year. For example: 86 percent are in favor of tax breaks for small businesses that offer coverage to their employees. Also, 81 percent are in favor of stopping insurance companies from dropping someone who has a major health problem. Even the provision that allows children to stay on their parents’ health plans until age 26, which drew fire from some on the right, was supported by 74 percent of those surveyed.

Americans experience a wide variety of emotions when reacting to the new law – but, according to the poll, confusion wins out over anger and relief. On the whole, 55 percent of the public said they’re “confused” – with 45 percent “disappointed” and an equal number “pleased.” Forty-two percent said they were “anxious,” and 40 percent said they’re “relieved.”

There’s anger, too.

Thirty percent of Americans say they’re “angry” about the law – and 16 percent of that group describe themselves as “very angry.” According to Kaiser, the specific grievances of that 30 percent broke down this way: “9 percent did not like the way the policymaking process worked, 7 percent did not like the final content, and 12 percent did not approve of either.”

The poll, which surveyed 1,208 adults in mid-April, produced one fascinating nugget sure to raise eyebrows in newsrooms around the country: Regardless of how they felt about health care reform, more Americans turned to cable news shows for their updates than any other news source. Asked to choose their “most important” source of news when following the legislation, 36 percent said cable news channels and their Web sites – easily topping the competition of network news (16 percent), newspapers (12 percent), family and friends (10 percent) and radio (9 percent).

Republicans were more likely to watch cable news, while Democrats preferred network news programs.


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Preventive care key to slowing health costs

J Roberts

Dr. James Proodian

Read the latest about health care reform. Wellness and its effects on reducing chronic illness needs to be addressed if we want to start reducing the ever growing cost of health care.

The effort put into the landmark legislation on the delivery of health care has been about everything but health care. The focus has been on manipulating the process rather than fixing the problem of rising health care costs and making Americans healthier.

The answer is preventive care, which has proven to reduce costs and improve wellness with disease prevention.

Today, the United States ranks 27th in the world in health, characterized by epidemics in obesity, depression, and type 2 diabetes. The bottom line is that 78 percent of all doctor visits are for chronic conditions, such as heart disease, obesity, type 2 diabetes, hypertension and other lifestyle-caused illnesses.

These are highly preventable, but there is no layer in our health care system that is defined, credentialed and committed to treating chronic illness.

Creating this new layer of health care is what legislators should be discussing. With all the focus on the cost of health care reform, no one is talking about the cost of chronic illness which accounts for 78 percent of all health care expenditures.

This means that three out of four patients are visiting their doctor because of chronic illness. Behavioral and lifestyle health changes are the best way to lower health care costs — and, more importantly, improve the health and wellness of individuals of all ages.

While there are health care professionals who are dedicated to chronic disease prevention and wellness, it is an individual’s responsibility to find them in their community. Real health care reform would be establishing a new layer in our health care system that is defined, credentialed and committed to treating chronic illness.

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Caterpillar predicts $100M health care reform cost

J Roberts

It’s a fact that the new healthcare reform will create additional tax burdons for most US companies, including insurance companies. The net result could mean increased premiums or less benefits with greater out-of-pocket expense or both.  Read the expert from the Associated Press about Caterpillar.

(AP) — PEORIA, Ill. – Heavy-equipment maker Caterpillar says the new health care reform law will create a $100 million drag on its first-quarter earnings because of tax law changes. The Peoria company said Wednesday that the health care overhaul President Barack Obama signed this week will reduce the tax deduction it receives for its retiree health care program.

Caterpillar says even though the change won’t take effect until 2011, its liabilities for retiree health care are already reflected in its financial statements.

So Caterpillar expects to record an after-tax charge of $100 million in the first quarter.
And the company says the tax-law change is not reflected in its already cautious 2010 profit outlook of about $2.50 per share.

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How to Curb Health Care Costs

J Roberts

 Proposed legislation to measure the effectiveness of treatment for diseases and certain injuries is drawing criticism from conservative circles. The following article provides opinion on why standard treatment and protocols may be too costly. The need for increased clinical trials and evidence based medicine could lead to best practices and a decline in health care costs.

Boston Globe – Globe Editorial

 

In a stimulus package of $787 billion, it is a mere $1.1 billion item that is facing particular vitriol from conservative ideologues. The money would fund a ramped-up effort to compare the effectiveness of different treatments for injuries and diseases. As inoffensive as this sounds, critics of any government role in healthcare see it as the slippery slope to rationing or Washington-mandated protocols for treatment.

One can imagine reruns of the Harry and Louise ads used by insurers to such good effect against the Clinton health plan in 1993. Except this time Harry and Louise would work for the pharmaceutical companies and medical-device makers. Both industries worry that studies on effectiveness will find that some of their prize – and most profitable – products are no better, or even worse, than cheaper alternatives.

Currently, new drugs can gain approval of the US Food and Drug Administration just by proving they are safe and better than sugar-pill placebos. They need not be better than existing – and often less expensive – drugs. Comparative effectiveness studies could help patients and doctors make better-informed decisions about care.

To allay concerns that clinical studies often include too few women or minority-group patients, the stimulus law calls for including those groups in studies. A report filed with the legislation also says the money should not be used to “mandate coverage, reimbursement or other policies for any public or private payer.” But the law itself is not as clear-cut on uses of the research. AdvaMed, the trade association for medical-device makers, says it supports the program but worries about it leading to cost comparisons, which it views as a way to ration care.

If this research can provide credible evidence of the superiority of one treatment over another, professional organizations, hospitals, and insurers will have to take notice. And if that leads to broad adoption of best practices, patients will get better faster – and healthcare costs will decline. Push will come to shove if, in the face of solid research, physicians persist in recommending drugs, devices, or surgeries that get low marks. Insurers, including Medicare, could then require doctors to explain their decisions.

This isn’t rationing – it’s rational. Research of this kind and the stimulus package’s $19 billion for electronic medical records are two ways to curb costs in the $2.2 trillion healthcare industry. Without such measures, the public is unlikely to support President Obama’s plan to provide nearly universal insurance. Both initiatives offer the promise of improved – and less expensive – healthcare for all.

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