Empowering Employees: Big Talk, Little Action

dg-empoweringTelemedicine offers a lot of potential for everyone – added convenience for busy families and lower costs than a traditional office visit. But as helpful as this service can be, it will only make a difference if it is used.

Low utilization is not unique to telemedicine. It’s a common problem with many new, well designed and well-intended health care services. Encouraging plan members to actually use new offerings is a challenge for employer groups, large and small. And while utilization is often higher in self-funded health plans, all employers need help turning talk into action. Here are a few ideas to consider:

It’s all about them – With health care consuming more of everyone’s income and attention, we all have a vested interest in our benefits. And while wonderful tools like telemedicine keep coming to the table, you need to look at these offerings from your member’s perspective rather than your own. Talk with your employees; ask if a service will help them and listen to their feedback. If it can add real value to your employee’s lives, utilization will follow.

Talk about health, not cost – Research indicates that when it comes to their health and well-being, there are many things members would prefer to hear about than fees and costs. A majority are interested in improving their health. It takes time, but focusing on current health risks and personalizing communications as much as possible will help members want to get more engaged.

Educate to empower – Transparency tools and online portals are no different than other modern advances. If people don’t understand them, they will never catch on. Like telemedicine, unless employees understand how to use it and when they can use it, they will never realize the benefit of having an experienced, board certified physician, with access to their medical records, available to help them 24/7.

While it seems that other new disruptive innovations, such as Alexa, catch fire overnight, they do take time. Since your employee communication budget likely pales in comparison to those driving consumers to Amazon, talk with your TPA about new ways to zero in on the needs of your employees. Doing so can lead to increased utilization and a happier, healthier workforce in 2018 and beyond.

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Unnecessary Medical Care: More Common Than You Might Imagine

This article was published on February 1, 2018 on National Public Radio, Inc, written by Marshall Allen.

Photo Source: NPR, Inc.

It’s one of the intractable financial boondoggles of the U.S. health care system: Lots and lots of patients get lots and lots of tests and procedures that they don’t need.

Women still get annual cervical cancer testing even when it’s recommended every three to five years for most women. Healthy patients are subjected to slates of unnecessary lab work before elective procedures. Doctors routinely order annual electrocardiograms and other heart tests for people who don’t need them.

That all adds up to substantial expense that drives up the cost of care for all of us. Just how much, though, is seldom tallied. So, the Washington Health Alliance, a nonprofit dedicated to making care safer and more affordable, decided to find out.

The group scoured the insurance claims from 1.3 million patients in Washington state who received one of 47 tests or services that medical experts have flagged as overused or unnecessary.

What the group found should cause both doctors, and their patients, to rethink that next referral. In a single year:

  • More than 600,000 patients underwent a treatment they didn’t need, treatments that collectively cost an estimated $282 million.
  • More than a third of the money spent on the 47 tests or services went to unnecessary care.
  • 3 in 4 annual cervical cancer screenings were performed on women who had adequate prior screenings – at a cost of $19 million.
  • About 85 percent of the lab tests to prep healthy patients for low-risk surgery were unnecessary — squandering about $86 million.
  • Needless annual heart tests on low-risk patients consumed $40 million.

Susie Dade, deputy director of the alliance and primary author of the report released Thursday, said almost half the care examined was wasteful. Much of it comprised the sort of low-cost, ubiquitous tests and treatments that don’t garner a second look. But “little things add up,” she said. “It’s easy for a single doctor and patient to say, ‘Why not do this test? What difference does it make?'”

ProPublica has spent the past year examining how the American health care system squanders money, often in ways that are overlooked by providers and patients alike. The waste is widespread – estimated at $765 billion a year by the National Academy of Medicine, about a fourth of all the money spent each year on health care.

The waste contributes to health care costs that have outpaced inflation for decades, making patients and employers desperate for relief. This week Amazon, Berkshire Hathaway and JPMorgan Chase rattled the industry by pledging to create their own venture to lower their health care costs.

Wasted spending isn’t hard to find once researchers — and reporters — look for it. An analysis in Virginia identified $586 million in wasted spending in a single year. Minnesota looked at fewer treatments and found about $55 million in unnecessary spending.

Dr. H. Gilbert Welch, a professor at The Dartmouth Institute who writes books about overuse, said the findings come back to “Economics 101.” The medical system is still dominated by a payment system that pays providers for doing tests and procedures. “Incentives matter,” Welch said. “As long as people are paid more to do more they will tend to do too much.”

Dade said the medical community’s pledge to “do no harm” should also cover saddling patients with medical bills they can’t pay. “Doing things that are unnecessary and then sending patients big bills is financial harm,” she said.

Officials from Washington’s hospital and medical associations didn’t quibble with the alliance’s findings, calling them an important step in reducing the money wasted by the medical system. But they said patients bear some responsibility for wasteful treatment. Patients often insist that a medical provider “do something,” like write a prescription or perform a test. That mindset has contributed to problems like the overuse of antibiotics — one of the items examined in the study.

The report may help change assumptions made by providers and patients that lead to unnecessary care, said Jennifer Graves, vice president for patient safety at the Washington State Hospital Association. Often a prescription or technology isn’t going to provide a simple cure, Graves said. “Watching and waiting” might be a better approach, she said.

To identify waste, the alliance study ran commercial insurance claims through a software tool called the Milliman MedInsight Health Waste Calculator. The services were provided during a one-year period starting in mid-2015. The claims were for tests and treatments identified as frequently overused by the U.S. Preventive Services Task Force and the American Board of Internal Medicine Foundation’s Choosing Wisely campaign. The tool categorized the services one of three ways: necessary, likely wasteful or wasteful.

The report’s “call to action” said overuse must become a focus of “honest discussions” about the value of health care. It also said the system needs to transition from paying for the volume of services to paying for the value of what’s provided.

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Is It Time to Self-Fund Your Benefit Plans?

After reading the article included below, we couldn’t help but agree that the question every employer should be asking this year is…Should I self-fund my employee benefit plan?

As the article discusses, this is a great time of year for companies to review their status, evaluate changes that have been made and consider new items for their 2018 benefit to-do list. The article includes 8 questions benefits managers should be asking themselves this year. But, we’d like to help you address one key question – Is Self-Funding Right for You or Your Client?

Whether you’ve been asking this question for some time or you’re new to the concept of self-funding, we’d be happy to explain the flexibility and potential for savings that a self-insured plan can offer. Gain control over your group health plan, eliminate the high costs of insurance premiums and obtain access to monthly claim reports – all with help from Diversified Group!

8 benefit management items to evaluate in 2018

This article was published on January 24, 2018 on Employee Benefit News, written by Zack Pace

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Even 20 years into the benefits business, I still can’t always immediately remember details about my clients’ benefits plan — a given employer’s standard measurement period, affordability safe harbor or health savings account trustee, for example. That’s why I track all of these details across 32 columns in a simple spreadsheet.

While I use this reference tool most every day, I find that January is a great month to go even further with the employers I work with, carefully reviewing each company, considering how the employer’s circumstances have changed, and proposing items of consideration for our mutual 2018 benefit to-do list.

Employers are wise to have a similar benefit to-do list when it comes to their 2018 planning process. Here are eight common questions that benefits managers may find wise to ask.

1. For calendar year 2018, is your organization a “large employer” subject to ACA employer shared responsibility? Meanwhile, is your organization a “large employer” per your state’s fully insured group health plan market?

Generally, employers that averaged 50 or more full-time employees + full-time equivalents in calendar year 2017 are subject to ACA shared responsibility for all of calendar year 2018. Importantly, penalty risks generally now begin accruing in January, not when the plan year begins (if the date differs).

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However, confusingly, in most states, the threshold to be considered a large employer for group health insurance contracts is an average of 51 or more full-time employee + full-time equivalents in the previous calendar year. How do the rules work in your state?

Now’s the time to finalize your 2017 calculation and determine your 2018 status for both employer shared responsibility and your state’s group health insurance market. And, yes, I’ve seen several employers average exactly 50 and be deemed a large employer regarding ACA employer shared responsibility and a small employer in reference to their fully insured group health plan contract. Talk about bad luck.

2. Is it time to self-fund the group medical plan?

The financial headwinds faced by fully insured plans have never been greater. Fully insured premiums are laden with the roughly 4% ACA premium tax (aka the Health Insurer Annual Fee), state premium taxes, the cost of various state-mandated benefits, and often robust retention and pooling point charges.

Thus, employers sponsoring group fully insured health plans should consider if moving to a self-funded contract (including so-called level-funding contracts) could be advantageous. Given the varying state regulations, state stop-loss minimums, organizational risk tolerance, reserve requirements and other variables, there is no one-size-fits-all answer to this question. Especially good times to perform a comprehensive self-funding evaluation are when your company crosses over from small group to large group and/or when meaningful claims experience becomes available from your fully insured vendor.

3. Is it time to self-fund the dental and short-term disability plans?

For most employers of size sponsoring plans that are not 100% employee paid (aka not voluntary), the answer to this question is simply “yes.” Run the math and make your decision.

4. Does benefit eligibility for life and disability vary by class?

For start-up companies, it’s not uncommon to offer better group life and disability benefits to certain classes, including management and executives. However, as employers grow, the budgetary and cultural reasons for doing so can quickly diminish or go away. A quick litmus test is simply asking yourself if the continuing benefit discrimination still makes sense.

Regardless if these benefits vary by class, is your group life plan compliant with the Section 79 nondiscrimination rules? Double-check with your attorney, accountant and benefits consultant.

5. Who is the health savings account trustee (i.e., the bank)? Is it linked to the health insurer?

If your organization sponsors a qualified high-deductible health plan, you likely allow employees to contribute to an HSA pre-tax through your Section 125 plan. Is the bank you selected still the best fit? Is the bank tied to your fully insured group health vendor? If yes, if you change your group health vendor, are your employees allowed to maintain the HSAs with this trustee with no fee changes? Should you consider moving to a quality stand-alone HSA vendor?

6. Does your firm employ anyone in California, Hawaii, New Jersey, New York, Rhode Island or Puerto Rico?

Most employers headquartered in these states (and territory) are acutely aware of the state disability requirements. However, given the advent of liberal telecommuting policies, it’s becoming more common for employers without physical locations in these states to employ individuals in these states. If you answered yes to this question, double-check your compliance with the state disability requirements. Your disability insurer or administrator can assist.

And, please note that, just this month (January 2018), New York became the latest state/jurisdiction to require paid family leave.

7. For firms offering retiree health plan benefits, are benefits for Medicare-eligible retirees and spouses self-funded?

While retiree health benefits have generally gone the way of the American chestnut tree, these benefits remain fairly common among certain sectors, such as higher education, government and certain nonprofits. Historically, most employers simply allowed Medicare-eligible retirees to remain on the employer’s active health plan, with the employer’s plan paying secondary to Medicare for Part A and Part B expenses and primary for prescription drug costs.

This arrangement was just fine when a really high annual prescription claim was $15,000. Now, $90,000 claims are not uncommon and $225,000 claims are possible. Does it still make sense to self-fund this retiree risk? In states where it is permissible, would it be prudent to transfer the risk by adopting a fully insured group Medicare Advantage plan or supplement program?

Regardless, all employers self-funding retiree health benefits should double-check that their individual stop-loss policy includes retirees.

And, regardless if retiree benefits are offered, all employers sponsoring self-funded health benefits should double-check that their individual stop-loss policy covers prescription drugs.

8. Is your firm required to file health and welfare Form 5550s? If so, who is handling the filings?

Generally, employers subject to ERISA that sponsor benefit plans that, at the beginning of the plan year, cover 100 or more participants, are required to file health and welfare 5500s and the related schedules. Some smaller employers must also file. Most multiple employer welfare arrangements (MEWAs) must file.

It’s very easy for health and welfare Form 5500 filing requirements to fall through the cracks. While U.S. Treasury’s penalties for non-filers are substantial, Treasury doesn’t keep track of who is required to file and thus doesn’t individually remind employers of this requirement. Further, this requirement doesn’t seem to be on the checklist of most auditors and accountants.

Employers should review all enrollment counts of all plans at the beginning of each year and consult with their accountant, attorney, and benefits consultant on the filing requirement and next steps.

I recommend avoiding the shortcut of saying “5500” in these discussions. Always say “the health and welfare 5500.” This practice will mitigate the risk that someone hears “5500” and thinks retirement plan 5500.

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What are your clients’ most-pressing issues?

The article below was published on October 17, 2017 by BenefitsPRO, written by Alan Goforth.

Benefits professionals have been on a roller-coaster ride since the 2016 presidential election. That ride includes the highs of lofty rhetoric, the lows of as-yet unfulfilled promises, and uncertainty about what may lie around the next curve.

Every now and then, it helps to step off the ride, catch your breath and collect your thoughts. That’s why BenefitsPRO takes time each year to ask employers to share their insights on the most important issues they face. Their responses provide a valuable roadmap for brokers as they plan ahead for this fall’s abbreviated open enrollment period.

Not surprisingly, the economy is top of mind for the 125 decision-makers who participated this year (see box on last slide). Overall, employers give the Trump administration low marks for its economic policies. Thirty-seven percent said these policies have had a moderately or extremely negative effect on their business outlook, with 20 percent reporting a moderately or extremely positive impact.

Perhaps the most important takeaway message for brokers is that most employers adjust their benefits spending to economic conditions. Sixty-four percent said their benefits spending is influenced by the economy.

Coping with costs

The rising cost of health care benefits tops the list of concerns, with most citing increased expenses over the previous year:

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However, there is good news for brokers among the economic concerns. The overwhelming majority of employers (85 percent) use a benefits broker or agent. Compensation is divided somewhat evenly between commission-based (54 percent) and fee-based (46 percent). Seventy percent of employers said their broker either conducts enrollment or helps them conduct it.

The even better news is that more than 91 percent of respondents have no thoughts of dropping their broker and going it alone. Still, it would be smart to pay attention to the factors that they say would cause them to consider such a bold move:

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Communication is critical

Timely, actionable communication is more important than ever in today’s fast-changing benefits environment. Nine employers in 10 said they are satisfied with the frequency of communication with their broker. How often do they connect?

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One potential topic of conversation is the new Department of Labor fiduciary rule and its potential impact. Eighty-three percent of employers said they understand it extremely or moderately well, and the rest said not very well or not at all.

Although many conversations take place about benefits products, technology is an increasingly hot topic. Thirty-six percent of employers consult with their broker multiple times each year about such topics as enrollment, administration and compliance platforms. Another 25 percent do so once a month or more frequently. More than 80 percent of employers are satisfied with the frequency of technology communications with their broker.

Speaking of technology, nearly every employer said it is essential to his or her business:

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Employers seek out a variety of print and online sources for information about health-care reform, led by electronic newsletters from an insurance magazine (66 percent). Not to blow our own horn, but BenefitsPRO.com is the most popular information site, mentioned by 81 percent of employers.

Expanded product offerings

Although many employers are expanding the menu of voluntary benefits, health insurance (including HMOs and PPOs) remains the overwhelming favorite. Eighty percent said their employees consider health insurance their most important benefit. Sixteen percent cited consumer-driven health care options, such as HSAs and HRAs. A majority—60 percent—now offer health savings accounts. About half of employers surveyed said they are used by between 1 percent and 25 percent of their employees.

Not many employers are open to the idea of health insurance exchanges. Forty-four percent have consulted with their broker about an exchange. However, only 13 percent have considered moving their employees onto a public exchange, while 21 percent have considered a private exchange option.

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Positive outlook

The bottom line for this year’s survey is that the vast majority of employers look to their broker as a valued business partner. Brokers who listen to what they have to say, communicate clearly, and deliver practical solutions will be well positioned to build strong relationships during enrollment and look forward to a mutually prosperous 2018.

Meet the respondents

The 125 survey respondents represent a broad cross-section of the benefits industry (although not every participant answered every question). Three-fourths of them are involved in making benefits decisions for their company.

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BenefitsPRO takes time each year to ask employers to share their insights on the most important issues they face. Their responses provide a valuable roadmap for brokers as they plan ahead for this fall’s abbreviated open enrollment period.

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Price Transparency In Medicine Faces Stiff Opposition — From Hospitals And Doctors

The article below was published on July 25, 2017 by Kaiser Health News, written by Rachel Bluth.

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Photo Source: Kaiser Health News

COLUMBUS, Ohio — Two years after it passed unanimously in Ohio’s state Legislature, a law meant to inform patients what health care procedures will cost is in a state of suspended animation.

One of the most stringent in a group of similar state laws being proposed across the country, Ohio’s Healthcare Price Transparency Law stipulated that providers had to give patients a “good faith” estimate of what non-emergency services would cost individuals after insurance before they commenced treatment.

But the law didn’t go into force on Jan. 1 as scheduled. And its troubled odyssey illustrates the political and business forces opposing a common-sense but controversial solution to rein in high health care costs for patients: Let patients see prices.

Many patient advocates say such transparency would be helpful for patients, allowing them to shop around for some services to hold down out-of-pocket costs, as well as adjust their household budgets for upcoming health-related outlays at a time of high-deductible plans.

At the Ohio Statehouse, the law’s greatest champion in state government has been Rep. Jim Butler, a Republican and former Navy fighter pilot whose wife is a physician. He authored the legislation and has beat the drum for it since he got the idea in 2013, as he waited for a garage mechanic to repair his car and absorbed the shop’s posted rates for brake jobs, oil changes and tuneups.

Opposition has been formidable, led by the goliath Ohio Hospital Association. It has filed a court injunction that is currently delaying enactment, peppered local news media with editorials, and lobbied Republican Gov. John Kasich, who has eliminated funding that would allow implementation from the latest state budget.

Joining the hospital association in its legal action are a wide range of provider groups including the Ohio State Medical Association, the Ohio Psychological Association, the Ohio Physical Therapy Association, and the Ohio chapters of the American Academy of Pediatrics, the American College of Surgeons, and the American Osteopathic Association.

These groups say that the law, which applies only to elective procedures, is too broad and that forcing providers to create estimates before procedures would slow down patient care. “The only way to even try to comply with the law is to delay care to patients in order to track down information from insurance companies, who may or may not provide the requested information,” wrote Mike Abrams, the president and CEO of the Ohio Hospital Association, in an op-ed in The Columbus Dispatch in January.

But Jerry Friedman, a retired health policy adviser for the Ohio State University Wexner Medical Center, said the opposition doesn’t stem from genuine concern about patients but from a desire to keep the secret rates that providers have negotiated with insurers under wraps. Transparency would mean explaining to consumers why the hospital charged them $1,000 for a test, he said, adding that providers “don’t want to expose this house of cards they’ve built between hospital physician industry and the insurance industry.”

Said Butler on his quest to see the law enacted: “The health care industry has a lot of political power and lots of money. It’s hard to fight on behalf of people against this kind of force.”

The law’s next test will come in August, when the first court hearing on the association’s lawsuit is scheduled. The Kasich administration said it couldn’t comment on the law because of the pending litigation.

Greater price transparency has been a popular policy prescription for America’s high health costs, especially at a time when many patients have high-deductible insurance plans and face larger copayments. Upfront estimates exist in other countries, such as Australia and, for patients facing out-of-pocket expenses, in France.

In Massachusetts, patients can get an estimate within two days of admission if they ask for it. Nebraska requires hospitals and surgical centers to provide a list of the average charges for services. New Hampshire has a website where consumers can compare costs.

Hospitals and doctors often oppose such measures. The American Hospital Association’s position is that health plans — not hospitals — are responsible for telling insured patients about their out-of-pocket costs, according to its website.

Aimee Winteregg, 35, of Troy, Ohio, said she would have liked such information before five miscarriages in four years left her buried in unexpected medical bills. She and her husband became first-time parents in November. Though they are well insured, tests and treatment cost the couple $4,000 out-of-pocket, demanded in bills that were sometimes no more descriptive than for “medical service.”

“We don’t want to deal with this, especially when the doctor tells you stress is bad for the pregnancy,” her husband, J.D., said. But imposing greater transparency has been controversial in both the medical industry and among some health care researchers, who say it puts patients in an untenable position.

The transparency law “was written by someone thinking about health care as a TV, and not as health care,” said Sandra Tanenbaum, a professor of health services management and policy at The Ohio State University College of Public Health.

She said people could not shop for procedures as they would for a TV or car repairs, since they often lack information on the quality of doctors and hospitals, and make health care decisions based on much more than cost.

Consumers are more likely to base their decisions on their doctors’ advice, not on cost alone, according to a report from the Health Policy Institute of Ohio.

Only around 10 percent of health care costs are even “shoppable” expenses — procedures that can be scheduled in advance, like an MRI or elective surgery — according to the HPIO.

Regardless, Butler maintains, the health care industry can give consumers better information upfront. “If you really want patients to be empowered, they really need the information,” he said.

In support of such access, Butler has written letters to the Ohio Hospital Association, the Ohio attorney general and the Dayton Daily News, all in defense of the transparency law.

The Ohio Hospital Association, along with seven other Ohio health organizations, went to court last December to block the law, a month before it was supposed to take effect.

Butler said Gov. Kasich’s administration is helping the hospital association stall by not writing regulations, eliminating funding for the law in the state budget, and declining to meet with Butler to discuss it.

State Rep. Michael Henne, also a Republican, has worked with Butler in the Ohio General Assembly on the transparency law. He called Butler a “driver” on the law, noting: “It’s frustrating. You don’t realize how much [influence] special interests have in the process.”