But Do People Like It?

I’ve spent a lot of blog space recently talking about the benefits and features of a new type of health care insurance, the HSA-high deductible combination. For those who just came on board, an HSA, or health savings account, enables employees to pay for their share of health care with pretax dollars and is offered in conjunction with a low premium, high deductible healthcare insurance policy. Employees can save money in the HSA tax-free and draw out funds anytime they want to pay for the premium, deductibles, co-pays or other medial costs. Employees don’t have to spend what they put into an HSA by the end of the year.

But do people like the HSA?

Survey says….Yes!!!

A 2009 study by OptumHealth shows that once employees open an HSA they are delighted with the coverage. In the study, 82% of the respondents—all HSA owners—said that they are fully satisfied with the plan, while 78% believe that the HSA option should remain a health care option no matter what happens in future health care reform.

America’s Health Insurance Plans (AHIP), the trade association of health care insurers, surveys how many people are covered by HSA-high deductible plans once a year. Recent AHIP figures demonstrate that in the past two years, the number of people enrolled in HSA plans has grown by 90% and now stands at 6.1 million nationally, broken down as follows:

• Small groups: 1.8 million
• Large groups: 2.8 million
• Individuals: 1.5 million

Among these 6.1 million are large numbers of people who did not have health insurance before establishing an HSA and taking a high deductible plan. A 2007 AHIP study found that 27% of people with HSAs in employer-based plans were previously uninsured. A study by Golden Rule Insurance, a UnitedHealth Group company, found that an even larger percentage of individual-based HSA buyers—a whopping 40%—were previously uninsured. Based on these two studies, OptumHealth Financial Services estimates that nearly 2.5 million previously uninsured people have gained coverage through HSA plans through January of 2008. And a 2009 OptumHealth survey estimates that 3 in 10 holders of HSA plans say that if it weren’t for the HSA option, they wouldn’t have health care insurance at all.

The HSA-high deductible combination has been particularly popular with two groups that insurance carriers and brokers have had difficulty serving in the past: small businesses and employees with relatively low incomes. We find that among UnitedHealthcare participants, 74% of all small businesses now select the HSA-high deductible option, as do 64% of all employees earning less than $25,000 per year.

So yes, people like the HSA, and with reason: it saves money and if it’s structured right, also helps to improve the quality of care people receive.

Not Every HSA is Alike, Part 2

In my last blog entry, I reminded you of the advantages of an HSA-high deductible health care plan that does not include preventive care in the deductible. If preventive care is not included in the deductible, then the employee does not have to pay anything additional (other than a co-pay) for annual exams, pap smears and other preventive care.

Here are some other variations in HSA plans that can make all the difference to the people in the plan:

• The plan should allow the employer to make contributions to the HSA. Employers can facilitate employees opening HSAs by either giving them a one-time or regular contribution. The regulations governing HSAs enable anyone to contribute, but when employers make a contribution, a greater percent of employees are likely to open an account.
• The plan should have those features employers want now. While some employers are interested in bare bones plans that may only pay for long-term hospitalization, we have found that among employers of all sizes, the current widespread attitude towards health care benefits is to provide certain core components of basic health care:
  - Emergency care
  - Preventive care
  - Prescription drugs
  - Long-term hospitalization
• There should be online capabilities to manage HSA expenses. Many people are reluctant to try an HSA because of the increase in paperwork that’s required to figure out when the deductible limit has been reached. Being able to access all these records on-line 24/7 makes it much easier for employees to manage their health care costs.
• The plan should include some access to wellness programs. Because HSA plans tend to make consumers more aware of costs, they also tend to influence consumers to take actions to maintain or improve their health. For example, a 2008 survey of its members by the Blue Cross and Blue Shield Association found that people with HSA plans are one-third to one-half more likely to use health screening, exercise and health coaching services, compared to traditional health plans that also offer these preventive and wellness services for free.
• The insurance should include extensive training and support.

Employers and individuals cannot assume that all plans are alike. For the near future at least, carriers will continue to introduce innovative features to the HSA plans they offer.

Not Every HSA is a Alike

I forgot to mention an important fact about health savings accounts. They’re not all alike, and the differences between many the plans that are offered may determine if people will actually benefit from this insurance innovation.

Surely the most significant difference in HSA-high deductible plans is whether or not the health care plan includes preventive health care such as annual checkups, pap smears and mammograms as part of the deductible. These routine exams help to find and prevent serious illness, but if they are part of the deductible, employees in the HSA have to pay for them, up to the high deductible limit. If they are not part of the deductible, they are covered 100% by the health plan, meaning that employees are more likely to go to the doctor for these important exams and thus more likely to remain healthy.

Our studies show that participants in HSA-high deductible plans in which preventive care is not part of the deductible receive preventive treatment at rates that are equivalent to or higher than people in traditional plans. In fact, people in HSA plans are:

• 16% more likely to get cervical or prostate cancer screening
• 20% to 40% more likely to get important tests for their condition if they are heart patients
• 15% more likely to have important diabetes tests, if a diabetic.

Another survey, this one by the Wellpoint Institute of Health Care Knowledge, shows that men, who typically lag in the use of preventive care, are more than twice as likely as women to increase their use of preventive care once in an HSA plan.

One More Change, and It’s a Biggie

Last week, in my list of ways in which health care insurance has improved over the past few years, I didn’t mention one major change, because it’s kind of complex.

The change was a piece of health care reform that Congress passed in 2003 that allowed employers to offer a new way to pay for health care expenses using a health savings account.

A health savings account (HSA) enables employees to pay for their share of health care with pretax dollars and is offered in conjunction with a low premium, high deductible health insurance policy. Employees can save money in the HSA tax-free and draw out funds anytime they want to pay for the premium, deductibles, co-pays or other medial costs. Employees don’t have to spend what they put into an HSA by the end of the year.

The benefits of the HSA-high deductible plan to employers are fairly obvious: By switching to the high-deductible plan, the employer lowers the insurance premium and can shift to a more cost-sharing arrangement with employees. The lower cost of the HSA may make it the only plan that some small employers can afford to offer. And if the prediction of many experts is correct, that the HSA-high deductible combination makes people more careful consumers of medical services, then switching promises to yield overall reductions in healthcare cost inflation in the future.

Most high-deductible plans set the deductible at $1,500 or $2,500 per year. Simply by adding a deductible of $1,500-$2,500 to a health care plan but maintaining every benefit and feature in the plan will cut the premium cost by about 25% on average over the same plan but with a zero deductible.

Over the course of a year, adding a high deductible leads to an average decrease in premium costs to employer and employee of $3,836 after switching from a PPO plan to the HSA/high-deductible combination, according to a recent study by the Kaiser Family Foundation. And a multi-year study my company, UnitedHealthcare, recently completed showed that after adjustment for demographic and health status, the HSA-high deductible plans lowered overall health care costs by 7% in 2006 and 9% in 2007. The employer’s share of health care costs was down 12%.

There are many benefits to employees of the HSA-high deductible combination:

• The HSA account is portable, which means employees keep the money in the HSA account if they move to another employer.
• Anyone else can contribute to an employee’s HSA account.
• The employee has easy access to the funds, and with many plans may be able to pay for medical expenses using a debit card tied to the HSA.

A recent OptumHealth study demonstrates that those in HSAs are aware of overall health care costs, and in a sense become more informed consumers. For example, in the last year:

• 64% of HSA holders asked providers about generic options for prescription medications.
• 47% asked providers about the charges for visits or treatments.
• 30% used websites or other resources to research the range of costs for health care services in their area.

Like all of the recent innovations about which I have been talking, the HSA-high deductible combination does not solve all our health care problems. But it does offer a cost-effective option for both employers and employees.

It’s Getting Better, Part 3

In my last few blog entries, I’ve been writing about how health insurance has improved over the past 5 years. I’ve cited examples of technological innovations and of initiatives that have helped consumers take greater control of their own health and health care.

Perhaps the most significant improvement in health insurance over the past few years has been the greater emphasis on prevention. People who don’t get sick not only are healthier, they also spend less on their health care.

Here are some of the most important recent improvements in health insurance that involve prevention of disease:

• Wellness programs. From smoke cessation to exercise, from weight loss to managing diabetes, consumers now have a wealth of wellness programs available through their health insurance plan and/or their employer.
• Health care advice over the phone. A number of insurance plans now offer health care advice over the phone. In the typical service such as NurseLine or one of UnitedHealthcare’s disease management programs, a nurse with experience can help the consumer find a doctor or hospital, understand treatment options and get medical questions answered.
• Health care coupons. Some health care plans have begun offering discount programs that enable covered employees to get discounts of up to 50 percent on health care products and services, including lasik surgery, smoking-cessation programs, gym memberships and even fitness apparel.

I’ve mentioned 9 improvements, all of which share some common themes. For one thing, they all tend to save money while improving care. But beyond that holy grail of raising quality while lowering costs, we can see these other trends I’ve mentioned:

• Many innovations such as real-time adjudication and swipe cards reflect the opportunity that new technology presents for streamlining and thereby cutting the cost of administering health care.
• Some innovations such as personal health records and physician rankings tend to educate consumers and get them more involved in making health care decisions.
• Running through many of these innovations, such as wellness programs and health care coupons, is a strong element of preventive medicine.

No matter what shape health care reform takes, I think we can take it for granted that these themes-technology, personal responsibility and prevention-will lead to a completely new list of innovations in just a few years.

It's Getting Better, Part 2

In my last blog entry, I made the controversial statement that health care insurance has improved in many ways over the past 5 years. I started to prove my point by listing a few technology advances that have improved health insurance.

Here are some innovations that tend to educate patients and get them more involved in making health care decisions:

• Physician rankings. Physician ratings can help consumers select the most appropriate doctor, but if and only if qualified medical professionals do the rating based on clinical standards and quality is rated first, with only those doctors who make the quality standard getting rated for efficiency as well.
• Personal health records. A personal health record (PHR) provides a complete and accurate summary of the health and medical history of an individual using data gathered from many sources. The PHR is accessible online to the individual and anyone who has the necessary electronic credentials to view the information.
• Generic drugs in formularies. Health insurance plans now routinely include generic drugs in their drug formularies resulting in a lower copay for consumers who use generics in place of higher-priced brand names that do the same thing. Consumers who get involved can cut their costs by selecting the generic version.

So far I’ve come up with six ways that health insurance is better than it used to be. And I’m not done yet.

It's Getting Better

In my last blog, I pointed out that my industry —health insurers—takes a lot of heat for what’s wrong with our health care system. I admit that health care insurers have to change, like everyone else. That’s why my industry’s proposal for health reform brings everyone into the system, guarantees coverage for all Americans, does away with pre-existing condition limitations and ends ratings based on health status and gender.

But I also want to point out something that most people don’t realize: Quietly over the last 5 or so years, most health insurance plans have added features and programs that improve health, make it easier to deal with our complicated health care system or cut overall health care costs. These new features don’t solve all our health care woes, but they have made inroads into addressing some of our most complex challenges.

Many of the improvements to health insurance over the past few years result from the application of advanced data processing and other technologies. Here are some examples:

• Real-time claims adjudication. Doctor’s offices can now submit their claims online and know within 10 seconds if a procedure is covered by the patient’s health plan, instead of having to wait days or weeks.
• Medical data synchronization. New data processing software such as the eSync platform collects and synchronizes medical data from a variety of sources, analyzes it and converts it into individual health care recommendations for specific patients.
• The medical swipe card. Patients swipe the medical swipe card through a device similar to a credit card swipe to give caregivers access to all appropriate patient eligibility information and to the patient’s health records. With the card, the physician is able to submit claim forms online and receive approvals from the insurance company in a matter of seconds.

All of these innovations have made maneuvering the health care system easier while reducing administrative costs.

But those aren’t the only changes that have improved health insurance. When I get more time, I’ll list a few more.

Everyone is to Blame

One constant theme in the debate over health care reform has been the laying of blame for all of our health care problems at the door of insurance companies. Now that's just wrong and it's also inaccurate.

Everyone is to blame!

By everyone, I mean everyone! Individuals, physicians and hospitals, drug companies, the government and yes, insurance companies, all are partially to blame for the problems in our health care system, and everyone will have to change in some way to fix what’s broken.

All of us have played a role in making our health care system more expensive and less efficient than it should be, and it will take all of us to fix it.

• Consumers have an important part to play. Many preventable diseases are caused by unhealthy lifestyles, poor diets and little or no exercise. Everyone who pays health care premiums is shouldering the burden of paying for the health care of those with preventable diseases.
• Employers have fallen into the trap of shedding and shifting health care costs instead of thinking about helping employees stay healthy. But if more employers joined the growing ranks of those that create incentives for employees to live healthier lifestyles, health care costs would moderate.
• Health insurance companies should develop reimbursement strategies that facilitate cooperation, such as increasing reimbursements to higher-quality and higher-efficiency physicians and hospitals. Insurers must also become more user-friendly. Transparency about reimbursement practices and benefit levels would help manage the expectations of both consumers and medical professionals.
• Doctors and hospitals also play a critical role in improving the efficiency and affordability of our health care system. Market-based reforms such as physician ratings and reward systems for quality and efficiency could, over time, lead to a system that would improve care and increase efficiency making health care more affordable for everyone.
• Pharmaceutical companies could lower health care costs with one simple step: stop giving consumers misinformation about generics. In many instances the generic is identical to the brand name drug and costs 60-80 percent less. Yet heavy advertising by drug companies influences consumers to view brand name drugs as better. Once convinced, employees pressure their employer to cover the higher-priced brand name drug – driving up the cost of the health care plan.
• The federal government, the largest payer of health care benefits in the country, has perhaps the largest role to play in fixing our healthcare problems. In recent years, the government has engaged in cost shifting by capping or reducing physician and hospital reimbursements and reducing subsidies to the states. This cost shifting has ended up hurting smaller hospitals and people without insurance.

We all hold keys to open new doors to a better and more affordable health care delivery system. But it means that we will all have to give a little more of ourselves so that everyone benefits.

Can We Cover the Uninsured and Drive Down Costs?

A few weeks back I participated in a panel discussion about health care reform sponsored by the Greater Philadelphia Association of Health Underwriters. A few of the questions we were asked I thought were important enough to ask myself again and then answer in my blog.

1. Ignoring the political viability of your solution, what do you think is the best solution to simultaneously cover the uninsured and drive down health insurance costs?
First to covering the uninsured: UnitedHealthcare supports the concept of universal coverage and thinks we can best achieve this goal by building on our current system of commercial insurers. We support reform proposals that guarantee coverage for all Americans and would require all individuals to have coverage. We are also in favor of expanding Medicaid to reach low-income adults.

Now to costs: To some degree covering everyone will help drive down costs, that is, if universal coverage leads to more preventive medicine, which as we know leads to healthier people, which in turn drives down future health care costs.

But we also believe that there are a lot of unnecessary costs in the system that can be eliminated by implementing advanced technologies and modernizing procedures and policies. In fact, UnitedHealthcare has contributed two well-researched studies based on real world case studies that clearly demonstrate how the government and private sector could save hundreds of billions of dollars while improving the quality of care. For example, over the next 10 years, an estimated $540 billion in federal savings can come from implementing changes in four main areas:

1. Incentives to patients for use of high-quality physicians
2. Improved Care Management
3. Physician Incentives & Information to help drive quality care
4. Evidence-Based standards applied to reimbursement

2. Are there any negative implications associated with mandating that all U.S. citizens be covered by at least some standardized level of coverage? There is a deep and profound interconnectedness between the various aspects of health care reform and nothing illustrates this interconnectedness more than mandating universal coverage. As long as we remember this interconnectedness and pass a global program that addresses both accessibility and cost, we should be able to address any negative implications. A personal mandate also requires targeted funding for lower income consumers, which in turn requires new revenues and cost containment. If we address these issues in an integrated manner, we will be able to deal with any potential negative implications. But if we address these issues in isolation, we could run into difficulties.

Open Enrollment Season is Here

The next few months will be a busy time for everyone at UnitedHealthcare because it’s “open enrollment season,” which in the health care profession is as exciting as ski season is to my friends who ski.

The open-enrollment period gives employees the opportunity to re-evaluate the health care benefit plans that are available through their employers. For most companies, open enrollment occurs annually, usually at the end of the year for plan benefits effective the following calendar year.

Employers should look at open enrollment as an opportunity for both the company and its employees to make sure available health care plan options meet health and financial needs.

The first step that employers should make in preparation for open enrollment is to review the past record of health insurance claims. A claims review will identify treatments that employees rarely use and clusters of benefits that employees use frequently. This information can help the employer make adjustments to the health care plans they offer so that the plans truly address the needs of its workforce.

Claims review information may also suggest when it makes sense to bring in speakers for wellness seminars. For example, if there are a growing number of diabetes claims, the employer may want to hold classes in diabetes prevention and management. Employers can also help employees in open enrollment by having their benefits consultants make group presentations about the differences among the various plan designs.

Control the Cost of Drugs

Perhaps the fastest growing factor in health care costs is the cost of filling prescriptions. Many health insurance policies have a prescription drug benefit, but both those with and without health insurance can save money if they:

• Select generic over brand-name drugs. Beside many brand name drugs on the shelf are equally effective and equivalent generic versions. Equal in everything but name recognition, these drugs offer the same level of quality, purity and strength as their brand-name counterparts and cost 30- to 60-percent less. Ask the pharmacist for a generic version and we can save substantially on our prescription medications.
• Mail it in and split it. Prescriptions delivered via the postal mail vs. buying them at retail locations may help reduce drug co-pays and even offer a 90-day instead of 30-day supply. Or consider pill splitting. By following the doctor’s instructions and using a special device to split and take only half of a pill prescribed at double the dose each time, we can save hundreds of dollars a year on medications.

Armed with the 10 suggestions I’ve listed over the last week or so, it’s now time to lace up the running shoes, go for an annual check-ups and, most importantly, know the options you have for reducing health care costs.

Work Your Health Care Plan

It’s amazing how much money you can save on health care once you start to think about it. One thing I notice is that many people spend more money on their health care than they should because they don’t take the time to review their health care plan documents. Here are some suggestions:

• Understand our health benefit plan. Read the fine print, or log on to the health insurance company’s Web site. Know what is covered and what is not, and learn about any available wellness programs that can help improve health, reduce overall costs or even provide monetary incentives.
• Use in-network providers. Seeing a doctor outside of the health care plans network costs more than seeing one in-network. Most health plans have thousands of doctors in their networks. A quick visit to the insurance company’s Web site can help avoid a more costly visit to the doctor.
• Review the doctor’s bill. Making sure we have been billed correctly after an office visit or procedure is a simple routine that can save money and reduce stress.
  

Keep it locked…I’ll give still more cost-savings tips next time post a blog entry!

Prevention, Prevention, Prevention

Lately I’ve been thinking of ways that people can save on health care. In my last entry, I mentioned two ways to lead a healthier life, to stop smoking and lose weight. By living healthier, you need the health care system less and therefore spend less on health care.

Other ways to save money by living healthier have to do with keeping tabs on your medical condition:

• Make primary prevention a priority. Primary prevention is a proactive approach that helps cut costs by helping maintain good health in the first place. By keeping up with immunizations and going for regular check-ups you can take preventive measures to stop health problems before they have the chance to start and have a major impact on the price you pay for health care in the long run.
• Take control with secondary prevention. If you can’t keep a health condition from arising, you can still fight the cost of its effects. Secondary prevention aims for early detection and interventions that slow the progression and onset of chronic diseases such as diabetes and heart disease. Keeping up with screenings, never missing doctor visits and taking medications correctly will help minimize the cost of needing additional care.
• Know your conditions. When you make the effort to listen to your doctors, take notes and fully understand your medical conditions, you are working together with your physicians to manage your illnesses more effectively and therefore cut costs.

More in a few days!