Great article from Jane Sorenson-Kahn pointing out that employers see “cost-sharing among employees as a top #1 cost-control strategy.” and that employers are “less satisfied [with] online comparison tools.” That’s a bad mix. No information on price AND you’re going to have to pay for it. Sounds like going to the auto-repair mechanic who just grins when he sees you walk in the door.

Let’s see if we can wipe that grin off of his face.

First, the Facts: Healthcare costs are out of control trending toward 16% of the GDP today and projected to be 20% by 2017 (that’s just around the corner, folks). So cost-shifting to the employee should come as no surprise. And with an economy like we’ve had and jobs as scarce as they are, employers have their choice of job candidates, so if you don’t like the health plan, there’s the door. So we are going to be paying the bills now. Time to put on the big boy pants and get serious. That damned mechanic’s grin just widened a bit.

Second, the Solutions: Most current online pricing solutions are relative scales where $ is inexpensive and $$$$ is expensive. When the treatment is $55-85 that MIGHT suffice, but when it’s $600-1,300 (like the MRI my daughter had on Friday), the difference between $ and $$$$ is significant. People WANT and NEED specific pricing information. Usually when you DO get pricing info, it’s an average negotiated rate, not the exact price (since doctors do NOT all get paid the same for the same service).  So even the “precise” number lack s precision. And I’m really getting sick of that mechanic’s smirk.

This is where change:healthcare steps in. We provide the tools that employers are telling us they have been looking for. We look at the services and prescription people receive, and then we proactively reach out to employees when they are paying too much for a service or a prescription and tell them exactly where they can go to get it for less. They don’t have to go where we tell them. It’s their money, and they can spend it how they want. But at least they know now. The mechanic has a bit of a surprised look on his face.

Oh, and then we monitor your employees’ spending for them. If prices change, we let them know that there are more cost effective options. Prices for doctors vary by 100% for many specialties. Prescriptions vary 40% between chains. We’ve seen diabetes maintenance medications that are $750/month at one pharmacy and $450/month across the street for the EXACT SAME THING.

We tell your employees.

We provide the online pricing tools employers have been looking for.

And we wipe that damn smile off of the mechanic’s face.

Employers, we hear you. We’re here to help.

Jane’s post is based on a PWC report that you can find here: “What employers want from health insurers in 2010.” Photo from user Neubie on Flickr.

Medicare for Age 55

In an article published by the Wall Street Journal, Janet Adamy writes about a proposed medicare bill saying, “Under the new Medicare plan, consumers ages 55 to 64 would for the first time be allowed to buy into the federal program for the elderly, starting as soon as 2011. Congressional aides estimate that two million to three million people would participate.”

The element of this bill that is most interesting is not the creation of the NFP private insurance company overseen by the federal Office of Personnel Management.

It is the idea of letting folks over 55 years old “buy in” to the Medicare program.

1. It “creates” a public option for the highest healthcare utilizers outside of current Medicare/Medicaid enrollees.
2. It seriously curtails the “high risk” pool for private health insurers today allowing them to keep rates down for the under 55 population.
3. It cuts reimbursements to doctors, hospitals and other providers by giving the 55-65 crowd Medicare rates (typically recognized as the low cost payor in the market).
4. It allows the government to underwrite the failing Medicare program projected to bankrupt in 20XX.

By opening Medicare up to the 55 and up group, the government is essentially extending it’s current “public option” in the form of Medicare down to the 55 and up age bracket. It’s not a full public option, but it is kind of like letting your neighbor move his fenceline onto 20% of your property. Some folks are going to be happy. Some folks are not. So let’s look at all of the players and see how it might shake out.

Insurers should be somewhat happy. But it’s a double edged sword. Gone are some of their high dollar utilizers who are subsidized by younger healthier folks buying into the plan. That’s lower expense, but it’s also less income which may not help the balance sheets of those insurers. And it’s also less buying power and therefore potentially higher rates for the younger healthier folks left on their rolls – but those higher rates could help bring the revenue numbers back up. Obviously, there will be an equilibrium to be achieved.

Providers (docs, hospitals, pharmacies, etc.) will be generally annoyed. A sizable portion of their “best” recurring patients could move to the over 55 plan and suddenly start paying reimbursements that are in line with the low cost payor in the market – Medicare. However, they may find that a suitable tradeoff in exchange for more predictable payment. At any rate, they won’t lose any revenue, since they will likely raise rates on the under 55 crowd and the private insurers who lost volume buying power with the exit of the over-55s. Like insurers, providers will be searching for an equilibrium.

Patients 55-65 may be relieved because they have an option for catastrophic incidents. They may be less than thrilled when they discover that it is harder to find a physician willing to see them since they are part of the Medicare payment group now. The devil is in the details, but I’m willing to bet, if you have children still eligible for healthcare, you won’t be taking the 55 year old buy in option. And it will be interesting to see how we take into account the over 55’s still throwing off offspring. It would seem that the 55 buy in option is going to be less widely adopted than one might think.

Patients under 55 may be relived because the older and generally healthcare-needier folks they’ve been underwriting will be out of the mix. That means lower premiums. But remember, there will be some cost shifting to the under 55 crowd as a result of a lack of buying power on their insurer AND because the providers will want to make up the lost income somewhere and it will not be through government controlled Medicare rate.

Patients over 65 – oh you forgot about them didn’t you? They are going to be pissed when they realize the impact. Sure AARP will support it. It will drive more members for them. In fact with increased buying power, Medicare rates could even go down more. But the over 65 crowd is going to find it even more difficult to get in to see a physician because all these 55-65 year olds just got dumped in and want to see the handful of docs that were willing to take the low cost Medicare reimbursement. And people over 65 generally are not real wild about change in any form, so expect them to be pretty angry.

Government should be relived to get this monkey off of their back. But it does mean that the gorilla on their back in the form of a Medicare program projected to bankrupt in 20XX just went from 800 pounds to 1,000 pounds because they just will not get the budgeting right.

Taxpayers should be wary. Very wary. Sure, we’ll breath a sigh of relief if the whole healthcare debate is finally coming to a conclusion and we are getting reforms that disallow pre-existing conditions and provide other basic consumer rights. But be prepared to get the wind knocked out of you, since no one with any historical perspective on the government’s abilities in terms of controlling costs will entertain the notion that this will be budgeted properly – think, more taxes to cover this coming soon.

May you live in interesting times.

In an article today on BusinessInsurance.com states that IBM plans to cover 100% of primary care visits in 2010, going against current trends of pushing a great portion of the health care cost burden onto employees shoulders.

With 80% of their 115,000 employees currently on one of the company’s self-insured health care plans, the cost of covering 100% of primary care visits could be steep.  However, IBM believes (via their director of health benefits Marianne Defazio) “very strongly that employees should have a primary care physician who’s sort of the quarterback to help coordinate all of their care.”

It will be interesting to see what the initial results of this benefit design change look like next year as they begin to track and compare utilization and prevention metrics.  I would imagine in some way or another this new coverage is going to impact employee behavior.  Bottom line – it’s always good to see large employers taking risks and trying new things.  A small part of me still believes companies like IBM and others are really going to pave the way for change in health care, driving and creating sustainable ways to improve the current health care crisis and our approach to wellness.

Co-Founder and COO Robert Hendrick spent a few minutes with the local TV crew to share tips on how to save money on your prescriptions. Easy steps that can add up to huge savings. You’ll be surprised!

Thanks for all of the support, and for trusting us to help you make smarter healthcare decisions and save money in the process.

Folks from coast-to-coast are talking about change:healthcare! The New York Daily News is talking about healthcare cost savings in the east, while the team was in California presenting as part of a panel at the Health 2.0 conference. And here at home in Nashville, the Venture Capitalist arena is buzzing about the company too. We are amazed by the number of people taking interest in saving money on their healthcare, and who trust us to help them out.

Below is a video from the Nashville NBC affiliate WSMV. The clip shows change:healthcare COO and co-founder Robert Hendrick working with the reporter to show people 4 ways to save on their medical costs.

All in all a very good week at change:healthcare! Thanks for all of the support, and for trusting us to teach you how to save money on your doctors visits and prescriptions, and to help you make smarter healthcare decisions.

A wonderful article from Jane Sarasohn-Kahn (at Health Populi) on how making strides in healthcare is all about data liquidity. So many folks who are interested in healthcare reform have “talked” about this very thing, but it’s only now that it is actually becoming a realistic goal.

As we head off for Health 2.0 in SF next week, I begin to have visions of history repeating itself. Too many of us remember those business plans of the dot-com era that were brilliant yet the market for them had not reached critical mass.  They became the casualties of the dot-com bust. Now, a decade later, many of those business plans are being dusted off and successfully rolled out.

I remember the dot-com days when we talked about live radio broadcasts and streaming video. Today we have YouTube and Mevio. It happened, just not when we envisioned it. At Health 2.0, I will look around for some old friends, and they will not be there any longer. Why? Bad economy. Bad business model. Bad management. Bad timing. Or simply bad luck.

Casualties.

It’s ugly, this war to achieve healthcare data liquidity. And, like any war, it’s so senseless.

The LPN to RN Blog offers some great tips on how to lower your healthcare expenses.  100 tips to be exact, and some of them are really good advice.  Here are some of my highlights with my notes in italics.  For a complete list of 100 Ways You Can Lower Your Healthcare Costs visit their blog.

3. Change your coinsurance ratio: Raise your ratio to cut your monthly premium.

Find more information on co-insurance here. Increasing your co-insurance ratio will help to spread out the payment responsibility between you and your insurer, in turn reducing your monthly premium.

6. Don’t take no for an answer: Go through appeals processes with your insurance company if they deny your medical claims.

change:healthcare offers a field guide on “How to handle a denied medical claim.” You can access it here. This guides walks you through the necessary steps associated with appealing a denied medical claim.

30. Go to federally funded clinics: You can get immunizations, checkups, and dental care, while paying what you can afford through special clinics.

Often community health centers, and now even retail based clinics, offer vaccinations for a flat fee such as $10 to $30 depending on the type.  Going to see your doctor for this type of care can cost as much as $120.

36. Pay today: Offer to pay immediately with cash or credit card to get a discount.

It’s true!  If you are a cash-pay patient you can often get a 10-20% discount on your care. If you are uninsured and have never offered to pay up front, give it a shot – and if they do not offer you a discount, ask for one! Sometimes, even providers that accept your insurance, but do not offer a negotiated rate, will provide a discount off charges. You just simply need to ask!

54. Use in-network providers: Avoid using providers that are outside of your network.

This is a no-brainer! When you use an in-network provider not only will your insurance company cover a greater portion of the expense, but you will most likely also receive a discount on your care through the contractual agreement between your insurer and provider. To learn more about in vs. out-of-network providers check out our field guide (located near the bottom of the page).

97.  Lose weight: Fight obesity, and you’ll save on your insurance premiums, as well as prevent weight related conditions.

Though this is often easier said than done, losing weight will not only help to decrease your risk level for weight related conditions such as diabetes, heart disease, and hypertension, but it can also improve your mental health and wellness.  Find a friend to help you set a goal and stick to it.  Losing weight is easier when you have support from family and friends.  Remember to start small too!  Take it one pound at a time, and reward yourself for milestones such as 10, 20 and 30 lbs.

To find out more information on change:healthcare’s help tools such as our field guides and health term glossary visit help.changehealthcare.com.

“Have you heard of tiny Melinda Mae,
Who ate a monstrous whale?
She thought she could,
She said she would,
So she started in right at the tail…”

- Excerpt from Melinda Mae by Shel Silverstein

Healthcare reform is a “monstrous whale.” The federal government could learn a little something from the childrens’ tale about Melinda Mae. Instead of trying to cram ALL of healthcare reform into one big bill and get everyone to swallow it all at once, smaller bites would be more manageable.

Smaller bites might actually pass.

What Do Small Bites Look Like?

Let’s start with some easy small bites that most Americans are eager to agree on. How about a bill with just these points in it to garner support and get something/anything passed.

1. No more pre-existing conditions
2. No more pulling of policies for large claims
3. Same premium rates for all with premium adjustments only on the basis of tobacco use, age, family size and geographic location
4. Banish all attorneys to…erm…I mean…malpractice suit limitations

Those are things most all of us can get behind. Once we get that, let’s go for the next bite. Eventually we will finish the whole whale, or at least we’ll eat what we’re able to stomach.

That’s how Melinda Mae would do it.

Let us know your thoughts on healthcare reform in the comments! Your voice matters.

Photo by Kevin Dietsch for Time

Details on the health care reform plan being pushed by the gang of six and headed up by Senator Baucus are coming out.

The BIG Question: Will it Add to the Deficit?

The stock answer is NO, it will not add to the federal deficit. Note the qualifier – the FEDERAL deficit…FEDERAL. Now your personal deficit and that of your employer, well, that’s a different story. The government won’t speak for business. Government only addresses the federal cost issue.  Hmmmm.

The Next Question: How will it impact Your Pocketbook?

Funny you should ask. The plan calls for 50% reduction in Medicare Part D prescriptions at a cost of $8B to the pharmaceutical industry. If you are naive enough to think pharma is simply going to cut $8B in profit to cover this expense out of the goodness of their heart – think again. The price of prescriptions to the private insurance portion of the population will rise to compensate. It’s called cost-shifting. It happens every time the government lowers Medicare rates on what it pays for medical services and products – the lost revenue has to be made up somewhere, and it is made up in increased rates to the private health insurance industry. This is also known as the healthcare policy your employer pays for and that has been eating your cost of living increase for the past few decades.

In addition, there is a law that prevents exclusion on pre-existing conditions. That HAS TO COST MORE for the insurance company to cover. Rates HAVE TO GO UP to cover services that, well, they were not covering before. And plans now HAVE TO OFFER WELLNESS PROGRAMS. Those incur costs that have to be covered as well, so that will increase insurance plan costs.

But the good news is all rates HAVE TO BE THE SAME for all groups. Insurers can only discriminate based on tobacco usage, age, family size and geographic location – all fairly legitimate adjustments to cost. More good news is that the rates for the oldest people can only be as much as 5x (five times) what they are for the youngest members on a plan. That’s a good way to keep costs within an artificially controlled range. But what does that mean will happen to costs? The cost for the youngest in the population (the very folks who put Obama in office) are going to go up – just so the insurance companies can get the 5x rate to cover the exponentially higher utilization of the older population. In other words, the most expensive portion of the population to cover will increase the cost of the lowest portion as they “drag the bracket upward.”

Sounds expensive for those of us on private insurance.

Is this the plan perfect? No way. Is it a step in the right direction? In some ways. Many ways. Is it going to cost more? No. Well, at least it won’t cost the government any more.

If your company is trying to find out how they could save their employees and themselves money now, and after the reform, check out some of the change:healthcare tools for employers. We have some interesting programs that help everyone save money on healthcare.

Image Courtesy of SqueakyMarmot on Flickr

“If you knew what the price of items were at Wal-Mart before you went into the store to buy them, it would put Wal-Mart out of business.”

That has to be one of the single most insane statements ever written.Yet that’s exactly what many doctors and hospitals would have you believe about healthcare. If you knew the price before you went into the doctors office or hospital, it would put the healthcare provider out of business.

Excuse me?

No. It would not. In fact, it might make the patient consider whether they needed that service or not. It might make them question if they really need all 8 prescriptions.It might make the provider find ways to offer the procedure more cost effectively as John Stossel so elegantly pointed out about Lasik eye surgery.

When someone hesitates to tell you the price of an item, why do they do it?

4 Reasons Why People Hesitate to Tell you the Price:

• They are ashamed at having to charge that much
• They do not believe the product is worth the cost
• They prefer you make an emotional commitment to purchase before knowing the price
• They simply do not know the price (the fallback reason in healthcare)

Fortunately, rational thought does occasionally prevail. The recent post from KevinMD.com points out (from the physician’s perspective – no less) that price transparency won’t effect health care costs.

It won’t adversely impact the cost of healthcare. It will force providers to be more cost effective and up front about their costs. It will force consumers to be more selective and engaged in the purchasing decision.

But will knowing the price put healthcare providers out of business? Not likely. In fact, knowing the price seems to be working wonders for Wal-Mart and…oh…just about every other business model in the U.S.