The New York Times: At-Risk Patients Gain Attention of Health Insurers


February 27, 2012

Who doesn’t want to be in the top 1 percent of wage earners, political discomfort aside?

No one, though, is especially envious of another group of 1 percenters: the heaviest users of health care.

One percent of patients account for more than 25 percent of health care spending among the privately insured, according to a new study. Their medical bills average nearly $100,000 a year for multiple hospital stays, doctors’ visits, trips to emergency rooms and prescription drugs.

And they are not always the end-of-lifers. They are people who suffer from chronic and increasingly common diseases like diabetes and high blood pressure.

As the new federal health care law aims to expand care and control costs, the people in the medical 1 percent are getting more attention from the nation’s health insurers.

“The huge opportunity is the at-risk people who are chronically ill,” said Dr. Alan Muney, the chief medical officer for Cigna, a large health insurer. “The problem in the health care system today is there is often too little too late or too much too often.”

Studies have already shown that Medicare spending is concentrated on a small group of individuals who are seriously ill. But an analysis by the IMS Institute for Healthcare Informatics, the research arm of IMS Health, a health information company in Danbury, Conn., provides a rare glimpse into the medical problems of people with private health insurance who are under 65. About three-quarters of them suffer from at least one chronic condition that could spiral out of control without proper care.

Health insurers are likely to have little choice other than to monitor these cases more closely, said Daniel Malloy, an executive at IMS Health. Under the federal health care law, which is expected to go into effect in 2014 if it is not struck down by the Supreme Court, insurers will no longer be able to deny coverage to anyone with a potentially expensive medical condition or put limits on how much they will pay in medical bills.

And avoiding these patients altogether will no longer be an option. Insurance companies will be required to enroll millions of new customers without the ability to turn them away or charge them higher premiums if they are sick. They will prosper only if they are able to coordinate care and prevent patients from reaching that top 1 percent, Mr. Malloy said. “The insurance model is fundamentally changing,” he said.

Many insurance executives say they are already developing programs to better address the needs of these patients. The insurers often work with employers that are self-insured to manage their workers’ medical conditions, and companies are already demanding they do what they can to control costs.

“Once we’ve got patients, we’re responsible,” said Dr. Lonny Reisman, the chief medical officer for Aetna, another large insurer. “We’ve always managed them as aggressively and effectively as we can.”

Insurers are becoming increasingly sophisticated in being able to identify those who are high spenders and those who are at risk of developing serious complications. “It’s important to know who they are and manage their conditions,” said Dr. Pat Courneya, the medical director for the health plan offered by HealthPartners, a large health system based in Bloomington, Minn., which is a client of IMS. People with high medical bills often continue to be costly throughout the years, he said.

While diabetes, for example, typically costs about $12,000 a year to cover, a diabetic whose condition rages out of control can become one of the top spenders with expenses that average $102,000 a year, according to the IMS report. Uncontrolled, their diabetes may lead to a heart attack or stroke or they may lose their eyesight or have a limb amputated.

When Wendy Meath, a 59-year-old with diabetes, was hospitalized a year ago, she was identified by HealthPartners as someone who needed help to control her disease. She had been admitted for kidney stones, one of many possible complications of diabetes. Although she had insurance through her husband, she was unemployed.

Since leaving the hospital, where she was admitted for 12 days for a series of complications from the surgery to remove the stones, Ms. Meath has been in regular contact with one of HealthPartners’ nurses, who serves as a case manager. The nurse calls at least once a month and checks in after she goes to the doctor for any developments. The health plan also assigned a social worker to help her with the cost of medications and other obstacles that were preventing her from taking better care of herself. “It makes me feel like I’m not alone,” Ms. Meath said.

“They’re trying to prevent the big things from happening, which is great,” she said.

The next challenge, say insurers, is to figure out how best to work with a person’s doctor. Because many of these patients seem to be seeing many doctors and taking many medications, there may be no one who is accountable for the patients’ overall health. “You’re going to see some gaps in care that led to this kind of progression,” Mr. Malloy said.

Insurers say they are experimenting with different ways to pay doctors so they are more responsible for overseeing these patients. Cigna, for example, says it plans to pay doctors more to coordinate care or develop ways for the doctors to share in the savings generated when someone does not go to the hospital if the visit could have been avoided through better treatment.

But insurers are also still grappling with their understanding of human nature — why some people simply don’t take care of themselves or take their medicine or go to the doctor, even when it is clear that they should.

Aetna, for example, recently eliminated the co-payments in some of its health plans for certain medicines for people who have recently suffered a heart attack. In a recent study, however, many patients who got these medicines free were still not taking them.

“The reality is if we don’t figure out how to get to the patients, we’re not going to get where they need to be,” Dr. Reisman said.

Los Angeles Times: Supreme Court lets providers continue suing to stop Medi-Cal cuts

The high court does not, however, affirm an appellate court’s decision to block the lowering of doctor reimbursement rates. California will keep paying the higher rate for now, an official says.,0,7446743.story

February 23, 2012

By David G. Savage and Chris Megerian

Reporting from Washington and Sacramento

A years-long legal fight over cuts in California’s multibillion-dollar healthcare program for the poor took another twist Wednesday as the U.S. Supreme Court kicked the case back to a lower court.

The high court’s 5-4 decision allows medical providers to continue suing to stop the cuts, which would lower reimbursement rates for doctors who participate in the state’s Medi-Cal program.

But it did not affirm the lower court’s decision to block the reductions, leaving the state another opportunity to argue for the right to implement them to help balance its depleted budget. For now, the state will continue paying the higher reimbursement rate as it evaluates the justices’ action, according to officials in Gov. Jerry Brown’s Department of Finance.

Without a ruling for one side or the other, both sides claimed victory.

“This is an important decision, recognizing the authority of states to better manage their health services programs,” said Jim Humes, Brown’s executive secretary for legal affairs, in a statement.

James Hay, president of the California Medical Assn., called the court’s decision a “win for physicians and their patients.”

“The state cannot continue to propose sweeping cuts to programs for California’s poorest and most vulnerable patients,” he said in a statement.

Medi-Cal is one of California’s biggest expenses. The state is spending $15.4 billion this year to provide healthcare to 7.6 million needy residents.

As state officials have struggled to pare spending, they have cut Medi-Cal repeatedly. But because it is part of the federal Medicaid program, those actions have led to drawn-out fights with the federal government and the court system.

When the state reduced rates for Medi-Cal doctors in 2008, advocates sued, saying the rates were so low they would drive away providers and violate the Medicaid Act’s promise that poor patients would have access to quality care.

The 9th Circuit Court of Appeals, based in San Francisco, blocked the cuts. But the Obama administration ultimately approved them, leading to contradicting messages from the two branches of government.

Citing the administration’s decision, the Supreme Court held off on a final ruling in the pending case and sent it back to the 9th Circuit. The justices said it is still an open question whether advocates can claim that the cuts violate federal law if a federal agency has approved them.

The decision split the court’s liberal and conservative wings.

The four conservatives, led by Chief Justice John G. Roberts Jr., wanted to close the door to all lawsuits protesting cuts in Medicaid.

Roberts said Congress created the Medicaid Act as a cooperative agreement between Washington and the states, meaning decisions on spending should be decided by federal and state officials, not through lawsuits brought by others.

Associated Press/San Francisco Chronicle: Feds require consumer-friendly health plan briefs


Thursday, February 9, 2012

(02-09) 15:16 PST WASHINGTON (AP) —

Don’t have the slightest clue what your health insurance covers?

The Obama administration says that’s going to change. Officials announced Thursday that starting later this year private health plans will have to provide consumers with a user-friendly summary of what’s covered, along with key cost details such as copays and deductibles.

Just six pages long. No fine print.

And because the summaries will use a single standard format, it will allow “apples to apples” comparisons among health plans that aren’t possible now. That will help working spouses trying to pick between employer plans, as well as people who buy coverage directly from an insurance company.

“If an insurance plan offers substandard coverage in some area, they won’t be able to hide it in dozens of pages of text,” said Medicare chief Marilyn Tavenner, who also oversees implementation of President Barack Obama’s health care law.

Insurers and business groups were unhappy, calling it another costly new regulation under the overhaul. Consumer groups said the new summaries won’t be perfect, but called them a strong start. Employees should start seeing them during open enrollment season this fall.

One shortcoming is that the summaries won’t include premiums. Administration officials said they ran into logistical problems trying to do that, and that premiums should be easily available anyway, either from their employer or directly from a health plan. Part of the problem with listing premiums is that insurers can currently charge more for the exact coverage to people in poor health.

Although the health system overhaul itself continues to divide the public, a major poll last year found that 84 percent of Americans support insurance summaries. The requirement takes effect Sept. 23 and applies to all private insurance, including employer coverage and plans purchased individually, affecting about 150 million to 180 million Americans.

Many big employers currently provide such information to workers during open enrollment. But the federal summary goes further. It requires something new — so-called coverage examples that give a ballpark estimate of the cost of treatment for a typical individual for two common health conditions: normal childbirth and managing diabetes.

A preliminary version of the regulations also called for an example focusing on breast cancer. But Health and Human Services officials said that proved too complicated, since there are different approaches to treatment.

“We didn’t take this off because (treatment) happens to be more expensive,” said Steve Larsen, head of the Center for Consumer Information and Insurance Oversight. “It just needed more work.”

In the future, up to six such coverage examples may be required, he said.

Advocates for cancer patients were disappointed.

“I’m a little surprised by that,” said Stephen Finan, senior policy director at the American Cancer Society Cancer Action Network. “The example was based on a standardized regimen of treatment, and it’s my understanding it was vetted by the National Cancer Institute. I don’t understand why they decided to leave it out.”

The administration appears to have taken arguments from both sides into consideration.

Insurers and employers had complained that providing paper copies of the summaries would be a huge new cost. The administration will allow them to comply by providing an online version, but consumers must be told that they can receive a paper copy promptly upon request.

Large employers had asked that the summaries be phased in over a longer period for them. But instead, they will have to comply this fall, for coverage that starts Jan. 1, 2013.

Business groups were not satisfied. “We don’t like it, even though they have taken steps to make it a little more palatable,” said Neil Trautwein, vice president of the National Retail Federation.

The insurance industry said it already provides user-friendly materials to consumers and having to adopt the new requirements will lead to duplication and increase costs.

Some wondered why the government doesn’t practice what it preaches by providing a similar user-friendly summary for Medicare, the health care program for seniors and disabled people. Indeed, the “Medicare & You” booklet runs to nearly 150 pages. Larsen said Congress didn’t think of that in the health care law.