Time to Bend the Health Insurance Cost Curve

There was an interesting health insurance discussion on the social networking site LinkedIn recently.  Participants were talking about the 2011 United Benefits Advisors Health Plan Study.  The study noted that Consumer Directed Health Insurance Plans, at 22.9% of employer-provided health plans, surpassed HMOs, which now represent only 17.8% of employer health plans.  Both still lag far behind PPO plans (48.4%), according to the study.  It went on to cite its finding that the rates of cost increase for CDHPs was not much below the rate increases associated with other plans.

Bill Stafford, UBA Vice President, Member Services commented about Consumer Driven Health Plans (CDHPs), “As these health insurance plans become more prevalent, the percentage of savings has continually declined.”  I disagree with the notion that costs are rising because the less healthy among us discovered CDHPs. Bearing in mind that the most Americans are still covered by employer-sponsored health insurance, it is employers who are increasingly adopting CDHPs to manage their benefit spend. While the population covered by CDHPs may increasingly reflect the population at large, it’s not the more significant driver.

At the end of the day, this one is a comparison of apples and elephants. HMOs and PPOs were arrangements intended to manage care and its related costs. Initially, HMOs used with lower deductibles because capitation and the gatekeeper would keep the larger costs under control. History’s scorecard records that one as a swing and a miss. PPOs largely replaced indemnity plans as insurers negotiated rates with networks of providers. A CDHP with a network use requirement is not sufficiently different, with the exception that the out-of-pocket limit is more heavily shifted up front.  The idea is that consumerism incents people to either shop (which they largely still don’t understand they can do) or rely more on wellness than disease management. Regardless of the approach, the industry has largely been shifting costs around to the extent it’s largely an effort in moving deck chairs on the Titanic to hear the band play.

To make a change, one cannot simply shift costs. They must be changed.  Stafford stated, “We anticipate that in spite of passage of health care reform efforts, health care costs will continue to increase. We still need concerted efforts to change or alter the underlying health care issues that control costs.”  At Soter Healthcare, we agree.

Both directly and with our partners, we are working every day to bend the health care cost curve back in our clients’ favor.  We’ve launched an innovative health benefit plan with our partners that reduces unnecessary costs, takes advantages of early intervention, offers significant cost reductions and greater access to premier surgical and hospital care, and, for most of our clients, important reductions in health insurance rates that put money back into the company.  Importantly, the Soter approach is not just for large employers.  Our innovative approach works for employer groups as small as two people.

The cost curve can be bent downward, and we’re doing it for our clients every day.  Be sure to ask how it can work for your company.

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The Five Silliest Things We’ve Seen in Medical Tourism

Our firm really dislikes the term “medical tourism”.  If you stop to read many of the things written by medical tourism companies, the majority of comments aren’t about medicine.  There is more written about the location, luxury hotels and vacation stops.  It makes no sense.

Destination medical care is a serious discipline.  Even though people do not use the term often, we make destination medical care decisions every day.  Each time we seek care outside our community, make an appointment with a doctor in the next town because we can get in sooner, or travel across state or national borders to seek a level of care not present where we live, we’ve made a destination medical care choice.

Every so often, however, we see something coming from a medical tourism company that makes us scratch our heads.  Here are five of our favorites.

 1.  Recuperation Resorts & 2.  Cancer Cabanas

From the website of a medical tourism agency: “Suppose, for example, your medical trip cost you $14,000, medical tourismincluding treatment, travel, lodging and, of course, a two-week surgeon-recommended stay in a five-star beachfront recuperation resort.” (emphasis added)  Said another, “Imagine being able to rest in your own beachfront cabana while recuperating between (cancer) treatments.”

I love these.  My hospital bed is rolled poolside, the nurses serve tea, cookies and medications promptly at 4:00, and my IV comes with a little umbrella.  After physical therapy, the therapist applies my protective sunscreen.  It is also delightful that the author tossed in “of course” as if everyone would have understood the expectation and would have been disappointed to miss it.

3.  Insurer-paid Vacation

Here’s a nugget from a medical tourism company’s insurance company webpage: “There is no better way to gain the favor of patients than to offer them an all-expense paid trip to an exotic location…Insurers can cut costs while patients receive outstanding care and exciting travel opportunities.”

Which conversation do I want to eavesdrop on more?  Perhaps it is the insurance customer service agent during the hotel concierge’s call to verify benefits:  Agent – “Is what covered?  Two weeks at the Beachside Luxury Resort?  Room service?  Am I on Candid Camera?”

It could be the CFO talking to HR: “Tell me again, how did the Copa get in our top 10 providers?  And, why is our prescription benefit paying for sunscreen and pina coladas?”

It might also be the patient calling before leaving on his trip: “Can you tell me whether the hotel is in-network?  I still don’t understand why the luggage charges aren’t covered.  Is the resort fee covered?  Yes, I am serious.”

On second thought, I’m covered by the insurance carrier with which that medical tourism agency works.  My knee hurts a little.  Now, where is my ID card?  Is there a recuperation resort in Fiji?

4.  Surgical Safari

Forbes magazine coined this beauty (yes, the pun is intended) “where patients travel to South Africa to have cosmetic or orthopedic surgery, and then recuperate while on safari.”

Yep, shortly after hip replacement I’m riding an elephant through the jungle.  I suppose the nurse will be delivering my pain meds with a dart from a blowgun.

 5.  Activity Planning

A company specializing in cosmetic procedures offered this guidance, “Please be advised, depending on your surgery, you may not be able to enjoy certain activities, like bungy (sic) jumping, para sailing and the likes.”  Then there is the follow on advice to limit scuba diving, surfing or snorkeling.

I won’t question the wisdom of the advice.  That said, who are these people who plan on bungee jumping after a nose job or parasailing after lipo?  Is there really someone who thinks that implants double as a flotation device?  If surgery is involved, one of the last things I want to think about is anything that involves violent movement, being towed by ropes or going into salt water.  On the other hand, if my incision leaks, I could be on Shark Week.

When we read these comments and others, we see two distinct groups emerging.  One group sees medical travel as tourism, a luxury trip including discount medical treatment.  The second understands destination medical care is foremost about great hospitals and doctors focused on you.  When you consider this choice, ask yourself this question:  Am I traveling for pleasure or to regain the health I deserve?

If your in the group looking for serious medical care, contact us at Soter Healthcare.

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OnNovember 18, 2011, posted in: Uncategorized by

Five Destination Medical Care Myths

In recent years, destination medical care using international hospitals and doctors emerged as a serious alternative for men and women around the globe.  Unfortunately, destination medical care is often grouped with its less serious relative, which the media and many companies refer to as medical tourism.  As a result, there has not been a great deal of well written information about destination medical care as a serious discipline.  It’s time to dispel a few of the myths.

 Myth 1:  Destination medical care is a new development.

Reality:  Americans make destination medical care decisions regularly.  In fact, it has become so commonplace in today’s society we do not even think of traveling for care when we need it as an issue.  What is new is that travel today makes it easy to reach international hospitals that once seemed too far away.

Myth 2:  Destination medical care is only for the uninsured.

Reality:  Both insured and uninsured people stand to benefit from the access, affordability and quality of medical care associated with destination medical care.  Patients with high deductible health plans can realize significant savings.  Others with limited medical plans, sometimes called mini-meds, can stretch the amount of care that can be secured.  Patients can access care without extended wait times at hospitals delivering medical outcomes among the best in the world, regardless of whether they have insurance or not.

Myth 3:  Destination medical care’s lower cost means low quality.

Reality:  The comparison is almost unfair, in large part, because US medical costs are among the most expensive anywhere in the world.  In contrast, where costs of living are much lower, hospital costs are subsidized by governments, and national insurance arrangements reduce the impact of unpaid medical bills, expenses for medical care are also much lower.  Premier hospitals spanning the globe offer exceptional medical care and attention. Michael. D. Horowitz, MD, MBA, a cardiothoracic surgeon who studies international medical care states, “It is naïve to think that just because someone practices elsewhere they are not as well-trained, qualified, or artistic as a physician in the United States.”  In fact, some international hospitals deliver long-term medical outcomes that meet and exceed those of America’s best hospitals.  The key is being able to find and access those providers.

Myth 4:  Destination medical care is a recreation or desperation choice.

Reality:  Both the American Medical Association and American College of Surgeons recognize the benefits of destination medical care.  It is not a medical vacation or a last resort effort.  The American College of Surgeons described it by writing “Residents of the US may choose to pursue medical care abroad for a variety of reasons, including..lack of services available at home; limits imposed..on access to certain specialists, treatment protocols, equipment or services; prolonged waiting periods, lower costs of care and personal reasons.”

Myth 5:  My doctor at home won’t provide follow-up care.

Reality:  We hear this myth repeated a lot, most of the time by people who understand very little about destination medical care.  Doctors treat patients who received care at other hospitals, including vacationers who received treatment abroad, on a regular basis.  Dr. Kevin Huffman, a bariatric surgeon, commented, “As doctors, we really don’t recognize or care that a patient received treatment from a qualified surgeon.  Our worries come when we have to clean up a surgery performed badly by a poor doctor.”  In our own research, we have not found a single physician who indicated he or she would refuse to treat a patient after learning about our proprietary credentialing process and arrangements to keep the home and destination doctors connected throughout a patient’s international care.

It’s hard in any new field to sort out the reality from the hype.  We’ll be glad to answer questions you have about whether destination medical care can benefit you.

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OnNovember 18, 2011, posted in: Accreditation, Destination Medical Care by

Is Health Insurance Reform Making Your Health Plan Sick?

health insurance reform, obamacareWill health insurance reform help or hurt your business health insurance plan?  For the last couple years, we’ve watched and heard a lot about health insurance reform.  Since the Affordable Care Act  is supposed to make things better, let’s think of it in terms of a medication for a bit.

One of our early clues that we needed to watch early came during health insurance reform’s clinical trials phase.  This is where researchers make sure the pill does what it should to do, make sure it’s safe, and make sure it does not have adverse consequences.  This is the phase where then-Speaker Nancy Pelosi declared in a speech to the National Association of Counties, “we have to pass the bill, so you can find out what’s in it.”  The clinical trial should have determined what was in it before Congress prescribed health insurance reform for the nation.  Unfortunately, we’ve new learned that the 1099 reporting requirement was not right for the country and both Houses of Congress have enacted bills to repeal it.  We’re also learning that the research controls used by the non-partisan Congressional Budget Office have already changed with the Medicare Doc-fix in December 2010.  That’s poor science and poor lawmaking.

We’ve become accustomed to hearing the symptoms that are treated well by medications prescribed for us.  We agree the PPACA pill offers some benefits.  For example, removing pre-existing conditions exclusions for people who are continuously insured was long overdue.  Congress did that for group insurance plans in 1996.  Problem is, the bill didn’t require continuous coverage.  Making it harder to exclude children was another positive, except that it led to insurance companies not writing policies for children-only.  Creating fairness regarding cancellation of health insurance while someone is seriously ill is another positive step.  To be fair, there are other positives contained in the thousand of pages of the law and associated regulations.

However, we also learn about the side effects, some of which are as bad or worse than the condition being treated.  (I was on a medication once for mild nausea for which one of the side effects was severe nausea.)  That analogy fits health insurance reform and the ACA well.  Here’s a quick look at some of the side effects making your health plan sick.

Budget cramps  The ACA caps FSA medical contributions at $2500 per employee, and many over-the-counter items are no longer eligible for reimbursement.  For many families using FSA plans, this results in an increased tax burden and greater personal expenses.

Bottom line indigestion:  A recent study by Lockton Benefit Group found that the ACA added 2.5% of to the cost of  employer-provided health insurance for 2011.  Using an average premium of $11,176, this results in an added $280 per employee per year.  In 2014, the ACA adds another 7.7% to the costs, even before inflation.  More recently, United Healthcare reported small business rates would rise 25-50% in 2014 and individual plans would see increases of roughly 110%.

Health plan fluMany companies are achy and nauseous when they look at long-term costs of  health insurance benefits.  Lockton’s research found employers believe it will be less expensive to pay the ACA penalties than keep group health insurance benefits.

Financial fitsUnfortunately, the only treatment is a personal walletectomy.  Studies show that families will see an increase in cost ranging between 101 and 155% over their current payroll deduction if they have to rely on ACA’s state insurance exchanges.  A premium of $400 a month before taxes becomes $812 after taxes.

Twisted arm painCompanies are feeling arm pain as government twists it behind them with new rules about minimum essential benefits and taxes on expensive plans, even when an employer really wants to offer its employees great health insurance.  Do we really need government to protect us from being well taken care of?

Ruptured BenefitsMany will surgically remove benefit plans to stop the pain.  As one executive commented, “We won’t be the first to eliminate health benefits, but we won’t wait around to be third either.”  Many small businesses won’t have a choice.

The more we look into health insurance reform, the more painful it looks.

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OnNovember 18, 2011, posted in: Affordable Care Act, Employee benefits, Health insurance by

Destination Medical Care: Right New Take on an Age-old Practice

Many people look at a destination medical care as a new idea.  In fact, nothing could be farther from true.  From antiquity, people around the world have traveled to distant locations to reach the best medical care possible.  The earliest references date from about 2650 BC, when people traveled to see the Egyptian physician Imhotep who was renowned for medicines for wound care and for relief of intestinal, muscular and skin disorders.  Definitive records show significant medical travel by the Greeks as early as the 6th Century BC.   The asclepieion at Epidaurus was the most celebrated healing center of the Classical world, the place where ill people went in hope of being cured.  The Pool of Bethesda, recorded in the Gospel of John, surrounded an asclepieion where the ill and infirmed traveled for healing.  Roman records from around 75BC describe the healing centers in Bath, England.

Destination medical care in the United States became important in the mid-1800′s as Americans suffering from tuberculosis traveled to places like Colorado Springs; Battle Creek, Michigan; Louisville, Kentucky; and Saranac Lake, New York, among others.  In the second half of the 19th century, patients began traveling cross-country to leading specialty hospitals including the Mayo Clinic, the Cleveland Clinic, Johns Hopkins, the MD Anderson Cancer Center, and St. Jude Children’s Research Hospital.  More recently, international hospitals have become the destinations of choice with high quality hospitals emerging in China, Turkey, Singapore, Thailand, Taiwan and other nations.

Destination medical care decisions are common.  A family may prefer a particular hospital or doctor because the provider is in their health insurance company network, or a specialist may be chosen based on expertise, surgical outcomes and how quickly an appointment can be scheduled. In many of these cases, geography is not the primary consideration.

In 2009, the American Medical Association and the American College of Surgeons each adopted positions supporting destination medical care.  The American Society of Anesthesiologists joined them in 2010.   The American College of Surgeons recommends patients “seek care of the highest quality” and encourages its members to “assist all patients in reaching informed decisions concerning medical care, whether at home or abroad.”

Whether it’s an international center of excellence or one nearer home, destination medical care provides access to treatment not available at home and the first real opportunity in decades to bend the cost curve on health insurance down without sacrificing medical quality.

Isn’t it time to learn how you can spend less and recover your health?  Call us now for more information.

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