Retail Healthcare Gains Popularity

The growing number of retail clinics is expected to transform primary healthcare and touch 30 million patients globally by 2022, according to a report by Frost & Sullivan. The global retail care market earned revenue of $1.35 billion in 2015 and is expected to reach $4 billion in 2022. Retail clinics are in pharmacies, grocery chains, supermarkets, and department stores, and address minor health issues. They have longer hours than do traditional clinics.

The retail clinic market is growing due to rising healthcare costs and a lack of access to primary care. In most developing countries, health insurance penetration is low and the out-of-pocket spending pinches patients. Rising premiums and higher deductibles are a concern for those with health insurance. A shortage of primary care physicians is resulting in longer wait times for doctor appointments, even in mature markets like the U.S.

Many patients see retail clinics as the second choice, and use then on weekends or after-hours, which limits patient volume. Opening retail clinics is financially impractical in some states due to regulations. The largest U.S. chain only has retail clinics in 33 states. Siddharth Shah of Frost & Sullivan said, “With increasing experience, retail players will expand their services…and experiment with…product-service bundling, telemedicine, and point-of-care technologies to enhance patient experience.”

Costs, Not Utilization Are Driving Children’s Healthcare Spending

In 2014, rising prices were largely to blame for the growth in children’s health care spending, according to a report from the Health Care Cost Institute (HCCI). Health care spending  for children under employer-sponsored plans grew 5.1% a year from 2010 to 2014, reaching $2,660 in 2014. But the use of health care services declined from 2012 to 2014. HCCI senior researcher Amanda Frost said, “The decline in children’s use of health care services is a relatively new trend…While we know that prices have fueled much of the spending growth in 2014, future research should examine whether these higher expenditures are leading to better health care outcomes for children.” The survey also reveals the following:

  • Out-of-pocket health care spending on children increased 5.5% a year to $472 in 2014. This growth was due partly to higher out-of-pocket spending on ER visits, which increased 11.7% annually.
  • The average price for brand prescriptions went from $7 a day in 2010 to $16 a day in 2014.
  • The rise in the average price of brand prescriptions drove spending increases. In 2014, spending for brand prescriptions rose 6.8%. The average price for generic prescriptions remained stable.
  • In 2010, the average price of a surgical admission for a child was $35,423, and jumped to $53,372 in 2014.
  • ER visits accounted for 8% of health care spending for children in 2014.
  • The average price of an ER visit increased $298 from 2010 to 2014. At the same time, the number of ER visits dropped from 181 visits per 1,000 children in 2010 to 177 visits in 2014.
  • In 2014, there were 3,228 doctor visits per 1,000 children, down slightly from the previous year.
  • Doctor visits accounted for 12% of spending in 2014 ($339 a child), and made up the largest share of health care spending for the average child.

It’s Gotten Harder for Hispanics to Afford Healthcare

An increasing number of Hispanics are finding it harder to afford healthcare. The percentage of those without health insurance is up slightly over a year ago, but a majority still have a favorable view of the Affordable Care Act (ACA). For the first time more women are insured than men, according to a new survey by the Florida Atlantic University Business and Economics Polling Initiative. “The increased healthcare costs compared to last year is probably making it harder for Hispanics to afford health insurance,” says Monica Escaleras, director of the Initiative.

More than 43% of respondents in the April poll say it is harder to afford healthcare, up almost 6% from a similar survey in March 2015. Only 13.7% say it’s easier, down more than 9% from last year. The number of uninsured increased 5%, from 7.8% in March 2015 to 12.8% last month. However, Hispanics have still benefited since the enactment of the ACA, resulting in 4 million adults gaining coverage, according to the Department of Health & Human Services’ March 2016 report. Hispanic women are increasing their access to health insurance through the ACA with 52% saying they have government healthcare coverage compared to only 23.3% of men.

According to an analysis by McKinsey & Company, premiums for the lowest-cost ACA plans are expected to increase 10% to 13% in 2016. More than half of the government-sponsored nonprofit insurance co-ops have failed, leaving more than 750,000 families and individuals scrambling for new health insurance. Fifty-one percent of Hispanics gave Obamacare a favorable rating, compared to 35% unfavorable.

Low Income Consumers Give Their Take on Reducing Health Care Costs

The California Healthcare foundation (CHFC) asked consumers what are the most acceptable ways to reduce harmful and wasteful medical care. They interviewed lower- to middle-income health plan members from Covered California and CalPERS and people with Medi-Cal. Participants got background information about the overuse of three common medical services — antibiotics for adult bronchitis, c-sections for first-time normal deliveries, and MRIs for common low back pain. These are their reactions:

  • 57% support oversight of physicians. This approach would change physician behavior through external approval, internal monitoring, or stricter rules about when the intervention will be covered.
  • 21% support patient cost sharing. A minority say that the patients should pay a higher copayment or pay the extra cost of care if they insist on an ineffective medical intervention.
  • 13% support physician payments to encourage appropriate and cost-effective care. A much smaller percentage support penalties or nonpayment to physicians.
  • 9% support taking no action. Fewer than one in 10 agree with leaving the decision entirely to individual doctors and patients.

Many Lose Sleep Over Healthcare/Insurance Bills

Healthcare or insurance bills are making 29% of Americans lose sleep, according to a CreditCards.com report. That’s down 6% from 2009. Paying for healthcare or insurance is the second-biggest financial fear among women. Healthcare or insurance bills keep 33% of women and 24% of men awake at night, at least occasionally. Sixty-eight percent of women and 56% of men lose sleep over at least one money problem. The survey reveals the following:

  • Saving for retirement keeps 39% of Americans awake at least occasionally (44% of women and 35% of men). Saving for retirement is the most common worry among people 30 and older, college graduates, and those with annual household incomes of a least $75,000.
  • Thirty percent of Americans lose sleep over educational expenses for themselves or a family member. Affording educational expenses is the number one concern among Millennials and non-whites. Worries over educational expenses ranks second among men.
  • 22% lose sleep over paying the mortgage or rent.
  • 22% lose sleep over credit-card debt. The fact that credit card debt is the least of people’s worries seems to indicate that most Americans have their card debt well under control.
  • Money anxiety peaks from 50 to 64 and drops sharply after 65.
  • Households making $50,000 to $74,999 a year are 14% less likely to lose sleep over financial matters than they were in 2015.

Drug Spending Growth Reaches 8.5% in 2015

Total spending on drugs in the United States reached $310 billion in 2015, up 8.5% from the previous year, according to a report by the IMS Institute for Healthcare Informatics. The surge of new drugs remained strong last year, and demand for new brands was high. Savings were relatively low from branded drugs facing generic competition. Price increases on brands had a limited effect due to higher rebates and price concessions from manufacturers. Specialty drug spending reached $121 billion on a net price basis, up more than 15% from 2014. (Net-price spending does not relate to a patient’s out-of-pocket costs or the amount health plans pay for drugs. It estimates the amount received by pharmaceutical manufacturers so it reflects rebates, off-invoice discounts, and other price concessions that manufacturers make to distributors, health plans, and intermediaries.)

Manufacturers are accepting lower price increases on existing products. At the same time, spending on new brands continued at near-historic levels. Increasingly, healthcare is being delivered by different types of healthcare professionals and from different facilities while patients face higher out-of-pocket costs and access barriers. The study predicts mid-single digit growth for drug spending through 2020, driven by innovative treatments and offset by brands facing generic or biosimilar competition.

Heightened competition among manufacturers, along with more aggressive efforts by health plans and pharmacy benefit managers to limit price growth, resulted in significantly lower price increases than in prior years. The report also reveals the following:

  • Spending on specialty drugs has nearly doubled in the past five years, contributing more than two-thirds of drug spending growth from 2010 to 2015. Treatments for hepatitis, autoimmune diseases, and oncology drove increased specialty spending. The year 2015 saw a 21.5% spending increase for specialty drugs.
  • Forty-three new active substances were launched in 2015 with a third receiving orphan drug designations from the FDA. An additional 30 brands were launched last year, bringing new combination therapies, alternative dosing, and treatment administration options to patients. The strong momentum of breakthroughs and R&D productivity is reflected in the 2015 cohort of new drugs.
  • Total prescriptions dispensed in 2015 reached 4.4 billion, up 1% year over year. Demand was higher in some therapy areas, such as antidepressants and anti-diabetes, each of which increased about 10% in 2015.
  • Over the past five years, integrated-delivery networks have expanded their affiliations with healthcare professionals to increase negotiating power with insurers, save money, and drive pay-for-performance initiatives. More than 54% of healthcare professionals are affiliated with integrated-delivery networks. In the past five years, there has been a 115% increase in urgent care centers and pharmacy in-store clinics. The number of prescriptions written by nurse practitioners and physician assistants more than doubled over the past five years.
  • While brand price increases are expected to continue in the 10% to 12% range, they will be significantly offset by rebates, discounts, and other price concessions.
  • The are very bright prospects for innovative drugs becoming available through 2020. The late-phase pipeline holds 2,320 novel products, with an average 43 to 49 to be launched annually over the next five years.

Study Reveals Leading Healthcare Benefit Trends

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The Healthcare Treds Institute issued a massive survey of employee benefit trends. The good news is that employers are looking to insurance brokers and benefit consultants to help them evaluate health benefit designs and distribution models. Forty percent of employers say they will depend on insurance brokers to learn about new health benefit models, such as defined contribution plans and private exchanges, and 31% will depend on benefit consultants. Nearly 40% rely on insurance brokers to learn about health benefit designs and platforms.

“The ACA has created a dynamic marketplace in which brokers have a front row seat navigating in this new era,” according to the study. Human resource professionals have new responsibilities due to the ACA. Thirty percent are looking for help from benefit consultants. However, 30% are researching independently compared to 26% in the previous year. Employers gave the following answers to this question, “What partners would you depend on to help you learn about new health benefit designs and distribution models?”

  • Insurance broker 39.7%
  • Will research independently 30.8%
  • Benefit consultant 30.8%
  • Insurance carrier 24.4%
  • TPA 19.2%
  • None 15.4%
  • Trade Association 11.5%
  • Payroll company 10.3%
  • Other 5.1%

What Benefits Employers Are Offering

About 40% of employers offer three or more health plan options, which are usually a PPO, an HDHP, and an HMO. Employees are choosing HDHPs (39%) over HMOs (35%). The following is a breakdown of benefits that employers offer:

  • PPO 59.5%
  • Flexible spending account (FSA)59.5%
  • Health savings account (HSA) 52.1%
  • High deductible health plan (HDHP) 38.8%
  • HMO 34.7%
  • Self-insured plan 22.3%
  • Health-reimbursement arrangement (HRA) 15.7%
  • Catastrophic insurance 8.3%
  • Dental plan 73.6%
  • Vision plan 67.8%
  • Prescription drug coverage 67.8%
  • Mental health coverage 52.1%

How Healthcare Reform Has Affected Employee Benefit Packages

Forty-nine percent say that healthcare reform will increase employee cost-sharing; 39.6% say it will increase premium contributions, and 3.6% say it will shift their company towards a defined contribution plan. Employee cost-sharing has risen every year for 10 years. Employers and the medical industry have had to deal with other ACA implications, such as the employer mandate and new compliance, which has caused an increase in capital and human resources. Employers have done the following in response to health reform:

  • Increased employee cost sharing 49%
  • Has had no effect 30%
  • Enhanced wellness/preventive health programs 23%
  • Increased employee engagement in their health 19%
  • Increased employee engagement in reducing healthcare costs 18%
  • Adopted new wellness/preventive health programs 17%
  • Reduced covered benefits 15%
  • Added HDHPs/CDHPs 14%
  • Stopped offering healthcare benefits 9%
  • Shifted to a defined-contribution plan

The Cadillac Tax

The impending 2018 Cadillac Tax is a prevalent challenge for employers. The ACA 40% excise tax will be imposed on the portion of group health plan premiums that exceed specified thresholds. The concern may be more regional since it could be triggered in parts of the country where healthcare costs are high and less likely to be triggered in parts of the U.S. with below average healthcare costs. Thirty-five percent of employers are very concerned about the 2018 Cadillac Tax; 25% are somewhat concerned; and 30% are not concerned. Sixty-one percent are making no changes to their benefits in light of the impending Cadillac tax while 18% have changed plans to avoid the Cadillac Tax. Recent news reports along with lobbying efforts may be influencing the 61% of companies who have a wait and see approach about the Cadillac Tax.

Defined Contribution Plans

Employers continue to learn more about defined contribution plans and private exchanges with about 35% saying they are familiar with them. This is an increase of about 5% over last year. Twenty-eight percent say that exchanges help employees understand the value of their benefits. Twenty-five percent say that a defined-contribution plan would help employees understand the value of their benefits and make more cost-conscious benefit decisions.

Five percent of employers offer defined-contribution plans (not on a private exchange) while same offer defined-contribution plans on a private exchange. Also, 7% are considering offering a defined contribution plans on a private exchange while 53% have not explored defined contribution plans.

Fifty-five percent of employers who are considering a defined-contribution plan, say they would explore the option for 2017 or 2018. This suggests that near-term adoption will be gradual. But the adoption curve may steepen as the benefits of defined-contribution plans become better known.

Private Exchanges

Employers want private exchanges to provide many solutions including health spending accounts (62%), carrier integration (58%), COBRA compliance (56%), automation of premium payments (51%), and payroll integration (50%). Employers choose private exchanges to control costs and increase employee choices, which is why employers say, most often, that they are looking for health spending accounts. Incorporating consumer directed healthcare coverage, such as HDHPs, HSAs and HRAs, helps private exchanges create a competitive marketplace that promotes cost-savings for employees and employers.

To succeed a private exchange needs to provide broad choices and help participants in the selection process. Sixty-two percent of employers say that it is somewhat important to very important to have health-spending accounts in an insurance exchange. Also considered somewhat important to very important are carrier integration (59%), COBRA compliance (56.4%), and premium payment automation (53%). Employers say they would choose the following offerings in an exchange:

  • Plan and cost comparison tools 80%
  • Online capabilities 69%
  • Combined benefit enrollment 47%
  • A help line 47%
  • Transparency solutions for treatment cost comparisons 45%
  • Mobile applications 45%
  • Progressive cost tracking tools 35%
  • Consolidated employer billing 35%
  • Integrated consumer healthcare accounts 30%
  • Financial account options 28%

Employers rank several exchange features as important, such as being a private exchange instead of a public exchange (83%), having a large selection of plan choices at targeted benefit levels (58%), and being provided by their broker or benefit consultant (55%). These findings indicate that broad choice is more important than who runs the exchange (broker versus carrier).

Wellness

Wellness programs continue to gain interest as 35% of employers have initiatives in place compared to 30% last year. Another 22% are considering implementing a program. Sixty-five percent are considering adopting a wellness program in 2017, and 16% are considering adopting one by the end of 2016.

Fifty-five percent of those offering wellness programs, offer an employee-assistance program (EAP); 53% offer flu shots or vaccinations; and 37% offer a smoking cessation program. The disease management tools that most employers offer are for diabetes (30%) and depression or other mental health (30%). Fifty-four percent of employees are not offering disease management tools. But 30% are providing services for diabetes and mental health conditions. To promote positive health outcomes, 44% of employers offer at least one wellness program; 31% offer biometric screening; and 20% offer a disease management program.

Forty-four percent have at least one wellness initiative in their workplace. Employers that are interested in offering wellness plans should consider how it would affect productivity, absenteeism, turnover, retention, and recruitment, according to the survey authors. Including these factors in the ROI discussion can help demonstrate additional savings a company could achieve.

When it comes to wellness incentives, HSA and HRA contributions (18%) and premium reductions (16%) are most popular. Companies are split on whether to offer wellness incentives with 58% not providing rewards to employees and 42% offering some type of incentive in varying monetary amounts to participate. The value of the incentives remains relatively modest. Companies interested in wellness incentives can use the ACA as a guide. Eighteen percent offer $250 or more of incentives to employees for health-related tasks. Common values of incentives are $101 to 250 and $1 to $50. For more information, visit www.HealthcareTrendsInstitute.

Advocates Say that Medi-Cal Violates Latinos’ Civil Rights

Medi-Cal’s low provider reimbursements violate the civil rights of millions of Latinos, according to a complaint filed with the federal government. “California has created a separate and unequal system of healthcare: one for all other insurance plans and an inferior one for the insurance program with the largest proportion of Latinos,” said attorney Bill Lann Lee, senior counsel for the Civil Rights Education and Enforcement Center. California’s Medicaid (Medi-Cal) reimbursement rates to health providers are 48th in the nation. The reimbursement is often lower than a physician’s cost of providing care. From 2001 to 2014, Medi-Cal payments to health providers fell 20% as a percentage of what Medicare pays for the same services. The state’s Medi-Cal reimbursements are so much lower than Medicare and private insurance rates that many providers routinely decline to treat Medi-Cal enrollees, two-thirds of whom are Latino. In a complaint filed with HHS, advocates say this denies health care access to Latinos and other Medi-Cal recipients.

Analilia Jimenez Perea and her son Saul are two of the complainants in the civil rights charge. Saul is a semi-paraplegic Medi-Cal patient with cerebral palsy. His severe seizures require frequent hospitalizations, but he has had an extremely difficult time finding doctors who will see him, including a year-and-half wait to see a neurologist.

Lee says that the state is violating Title VI of the Civil Rights Act as well as HHS regulations, and Section 1557 of the Affordable Care Act.

More is at stake than the human suffering caused by inferior access, Lee added. A recent cancer study shows that Medi-Cal cancer patients get not only less and later treatment, but die sooner than cancer patients covered by other insurance programs. “Medi-Cal should raise its reimbursement rates so doctors will treat Medi-Cal patients and monitor and [ensure] that access to medical care is not just an empty promise,” said Abbi Coursolle of the National Health Law Program (NHeLP). The SEIU-United Healthcare Workers West (SEIU-UHW) has been working to improve Medi-Cal reimbursements for several years. For more information, visitwww.MediCalCivilRights.com.

Employee Benefits’ Preferences Vary by Generation and Gender

Which employee benefits do employees want? It depends on their generation and gender, according to a study by MassMutual. Forty-seven percent of American workers age 18 and older want more vacation time, and 44% want better 401(k) matches. Upon closer inspection, Baby Boomers (ages 50-70) and Millennials or Generation Y (ages 15-35) want more time off from work while Generation X (ages 36-49) want richer retirement benefits, according to the study. Men tend to prefer more time off while women tend to prefer health-related benefits.

“Given the varied preferences for employee benefits, the takeaway for employers is to offer as broad a menu of benefits as possible and consider offering new or expanded benefits on a voluntary or employee-paid basis. We’ve found that connecting to workers based on their age, gender, and life stage drives greater satisfaction with benefits. Offering guidance tools helps employees make the most of their benefits,” said Elaine Sarsynski of MassMutual. The study includes the following highlights:

• 50% of Boomers and 48% of Millennials would choose more vacation days if they could.
• 47% of Gen Xers prefer better 401(k) matches, with more vacation days coming in a close second (44%).
• After choosing more time off, Boomers expressed preferences for financial benefits. Forty-three percent of Boomers want better 401(k) matches, 38% want free healthcare coverage, and 24% want more investment choices for their retirement savings. Forty-three percent want expanded healthcare benefits.
• Millennials want flexible work schedules (43%) and reimbursements for education and tuition (30%). But many Xers want better 401(k) matches. Few Xers have access to pensions, and many Boomers have not saved enough for retirement, according to Sarsynski.
• Men want more vacation time (50%), better 401(k) matches (43%), and flexible work schedules (39%). Women want more vacation (44%), better 401(k) matches and flexible work schedules (40%), expanded healthcare premiums (37%), and free gym memberships (31%).
• In addition, there are bigger disparities between men and women when it comes to benefits, such as free gym memberships (men: 20%; women: 31%), education/tuition reimbursement (men: 18%, women: 27%), and more investment choices for retirement (men: 18%, women: 11%).

Coverage Makes a Difference When It Comes to Surviving Cancer

Coverage Makes a Difference When It Comes to Surviving Cancer


Medi-Cal patients with breast, colon, and rectal cancer are more likely to be diagnosed at an advanced stage of disease and have lower five-year survival rates compared to those with other sources of health insurance, according to a survey by the UC Davis Health System. Medicare-Medi-Cal dual eligible patients are the least likely to get recommended treatment for breast and colon cancer.

VA patients have the longest intervals between diagnosis and treatment for breast, colon, rectal, lung, and prostate cancers, but their treatment outcomes compare favorably to patients with other types of health insurance, and they are generally more likely to get recommended treatment.

Researchers were not surprised that Medi-Cal and Medicare-Medi-Cal dual eligible, and uninsured patients were getting diagnosed at a later stage of cancer and had lower survival rates since adverse social factors affect these populations. But the lower quality of care cannot be as readily explained. In light of the rapid growth of Medi-Cal, the findings highlight the need to investigate the disparities in cancer care, according to the study

Last Updated 10/09/2019

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