Why Do Large Employers Want to Control Their Employees’ Health Benefits?

 

There is no doubt that large employers want to offer health benefits to their employees. It does not seem to bother them that each employee is not free to spend his own money on health insurance that suits his and his family’s needs.

The effect of Obamacare on these benefits has yet to be determined. At one extreme, an analyst at S&P Capital IQ concluded earlier this year that 90 percent of employees working at companies in the S&P 500 stock index would lose their employer-based health benefits by 2020. These are the largest companies in the United States.

Nevertheless, these employers continue to commit themselves resolutely to employer-based benefits. In the next few weeks, I will be a guest at two events where large employers will promote how important health benefits are to them. Tomorrow, the Bipartisan Policy Center will host a conference titled Building Better Health: Innovative Strategies from America’s Business Leaders – A Report from the CEO Council on Health and Innovation. Present will be the CEOs of Coca-Cola (Muhtar Kent), Verizon Communications (Lowell C. McAdam), and Bank of America (Brian T. Moynihan), among others.

In October, the Business Roundtable will host a conference which will promote its recent report, Driving Innovation in the Health Care Market Place. This 108-page report discusses evidence that large employers are successful at managing health costs. Much of the evidence promoted comes from so-called “wellness programs.” For example:

Through an innovative program called “Your Health Matters,” AT&T provides the resources and education to help participants grow from health awareness to health improvement. We strive to reduce the risk of chronic illness by increasing engagement with and adherence to clinical protocols.

Employer Health Costs Rising Slowly? Some May Not Be Offering Obamacare’s Minimum Benefits

 

Yesterday, we discussed the slow rate of growth of premiums in employer-based plans. Today, Kaiser Health News reported a surprising discovery: Some employers who assert they are offering benefits may not be. Indeed, their plans may not even offer hospitalization benefits.

How do they get away with it? As often the case with Obamacare, it is a glitch in information technology:

A flaw in the federal calculator for certifying that insurance meets the health law’s toughest standard is leading dozens of large employers to offer plans that lack basic benefits such as hospitalization coverage, according to brokers and consultants.

For Sale Cheap: Your Private Medical Information

 

Have you ever gone to a party and had the urge to peek inside your host’s medicine cabinet? (Neither have I!) Imagine what could be of interest in there. For those nosy souls who are tempted, you don’t even have to attend a party! It’s all for sale online. Bloomberg published an article about how Big Data is snooping in your medicine cabinet and selling the information to marketers. Here’s the gory details:

Dan Abate doesn’t have diabetes nor is he aware of any obvious link to the disease. Try telling that to data miners.

The 42-year-old information technology worker’s name recently showed up in a database of millions of people with “diabetes interest” sold by Acxiom Corp. (ACXM), one of the world’s biggest data brokers. One buyer, data reseller Exact Data, posted Abate’s name and address online, along with 100 others, under the header Sample Diabetes Mailing List. It’s just one of hundreds of medical databases up for sale to marketers.

You’re Being Observed in the Hospital? Patients with Private Insurance Better Off Than Seniors

 

This headline comes from that notorious member of the right-wing conspiracy, Kaiser Health News. Here’s the story:

Senior Man ThinkingAn increasing number of seniors who spend time in the hospital are surprised to learn that they were not “admitted” patients — even though they may have stayed overnight in a hospital bed and received treatment, diagnostic tests and drugs.

The distinction between inpatient status and outpatient status matters: Seniors must have three consecutive days as admitted patients to qualify for Medicare coverage for follow-up nursing home care, and no amount of observation time counts for that three-day tally. That leaves some observation patients with a tough choice: Pay the nursing home bill themselves — often tens of thousands of dollars — or go home without the care their doctor prescribed and recover as best they can.

Employer-Based Health Insurance Costs Up 3 Percent, Share of Covered Workers in High-Deductible Health Plans Steady

 

The annual Kaiser Family Foundation/Health Research Education Trust Employer Health Benefits Survey has been released. As many expected, the increase in employer-based health costs from 2013 to 2014 was moderate:

In 2014, the average annual premiums for employer-sponsored health insurance are $6,025 for single coverage and $16,834 for family coverage. The average family premium rose 3% over the 2013 average premium. Single coverage premiums rose 2% in 2014 but are not statistically different than the 2013 premium amounts. During the same period, workers’ wages increased 2.3% and inflation increased 2%. Over the last ten years, the average premium for family coverage has increased 69% (Exhibit A).  Premiums have increased less quickly over the last five years (2009 to 2014), than the preceding five year period (2004 to 2009) (26% vs. 34%).

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Boom! Hospital Revenue Up 5 Percent in Twelve Months

 

This morning’s Quarterly Services Survey (QSS) released by the Census Bureau reported that hospitals’ revenue rose 4.9 percent from the end of the second quarter in 2013 to the end of the second quarter in 2014. From the first quarter to the second quarter of 2014, it jumped 2.8 percent, overcoming a first quarter drop of minus 0.8 percent. Revenue for ambulatory services rose only 2.4 percent in the same twelve months. It jumped 3.0 percent from the first quarter of 2014, but had dropped 2 percent in the first quarter from the end of 2013.

The QSS surveys a sample of service businesses, and is assuming increasing importance in economic research. It is important because it reveals complementary — and in this case contradictory — data about health spending. As I’ve discussed frequently at this blog, healthcare employment is growing steadily, but not in hospitals. Growth is in the outpatient setting. I had hoped that this indicated that health services were moving out of the high fixed-cost hospital setting and into lower fixed-cost outpatient settings, especially convenient retail clinics.

The State of Telemedicine — State by State

 

doctor-technologyThe American Telemedicine Association (ATA) has released two thorough and valuable reports on the state of telemedicine in all fifty states.

The first ranks states by policies on physician practice and licensure. This covers informed consent, standards for the physician-patient encounter, and permission for out-of-state practice. (The latter is the special concern of the proposed interstate compact proposed by the Federation of State Medical Boards).

If telemedicine is to be exploited to its maximum potential, it is critical that the highest professional standards be recognized and adhered to. That means out-of-state practitioners need to be able to treat patients via telemedicine.

Who Should Regulate Telemedicine, and How?

 

Readers of this blog know that NCPA has long been a supporter of telemedicine. The question of who should regulate telemedicine, and how, is now coming to a head.

The practice of medicine is regulated by the states. For many years, advocates of telemedicine have pointed to inconsistencies in how medical licensing boards recognize out-of-state physicians as a limit to telemedicine. In 2012, health economist Jason Shafrin reviewed literature, which indicates that requiring a doctor to be physically present with a patient to prescribe reduces access and harms patients.

State-based medical licensing boards’ inability to overcome this problem, despite many years of effort, has led to frustration and the rise of a movement that has not quite come out for a federal takeover of telemedical licensing — but certainly looks like it might tip that way.

Visits to Emergency Departments Increased Three Times Faster in States that Expanded Medicaid than Those that Did Not

 

The Colorado Hospital Association has issued a report comparing certain trends in states that expanded Medicaid under Obamacare with states that did not. The most important take-away is how much Emergency Department visits increased in expansion states versus non-expansion states:

The average number of emergency department (ED) visits to hospitals in expansion states increased 5.6 percent from second-quarter 2013 to second-quarter 2014. This change was greater than expected from the variation over the last two years, and resulted in the highest number of average visits over that time. In comparison, hospitals in non-expansion states reported a 1.8 percent increase in Emergency Department visits between the second quarters of 2013 and 2014.

Indian Patients Suffer from India’s Weak Pharmaceutical Patents

 

A version of this Health Alert appeared at Forbes.

India’s recently elected Prime Minister, Narendra Modi, will visit the United States later this month. One of the sticking points in the U.S.-India relationship is weakness in India’s laws governing intellectual property (IP). The Global Intellectual Property Center of the U.S. Chamber of Commerce ranks 25 countries in its Global IP Index, and India comes in last place. Indian growth will continue to lag as long as this persists, as researchers have demonstrated the positive relationship between IP protection and a country’s prosperity.

One of India’s weak spots is patent protection for new prescription drugs. New research also shows, counterintuitively, that this limits patients’ access to new medicines. Professors Ernst R. Berndt and Ian M. Cockburn analyzed the 184 new medicines approved by the U.S. Food and Drug Administration between 2000 and 2009. Shockingly, it took more than five years for half of those drugs to become available in India.

Ten years after being launched in the United States or elsewhere, almost one quarter of the new medicines were still not available in India. The authors also compared when the drugs were available in other developed countries. For example, in 2010, 160 of the new medicines were available in Germany, but only 111 were available in India.

Berndt and Cockburn conclude that India’s patent law is to blame for this long lag in access versus the United States and other countries. The authors found that half of the new medicines faced copycats within one year of launching in India, and 85 percent faced copycats within three years. In Germany, by contrast, none of the drugs faced copycats within five years.