Health Reform Should Require Claim Data Transparency

The Senate health reform bill  sponsored by Senator Max Baucus contains provisions harmful to  claims data transparency and self-insurance. Currently self-insured health plans have access to  their own health plan RX and medical claims data –transparency that provides valuable insight for employers into what is happening inside their plan. With few exceptions, generally employers whose health plans  are insured do not have access to their own plan claims data.

Using available soft ware tools, self-insured employers who have access to their plan claims data today  can employ powerful data and predictive modeling analytics and metrics  to measure, manage and drive down health costs. This technology is already saving self-insured employers millons of dollars

Self-insured employers who opt to purchase coverage through the proposed health insurance exchanges  in the reform legislation would lose access to this claims data and would not be able to  underake actionable  corporate strategies  to curb rising health plan costs.  The claims data which is now transparent to self-insured employers would be controlled by insurance cariers , who have been reluctant to hand over the data to employers, except in Texas where a state law mandates the transparency of claims data by insurance carriers.

Health reform legislation truly designed to achieve significant cost-savings should include a provision requiring the transparency of all claims data so that employers can utilize available technology to analyze plan trends and adopt actionable strategies to contain health costs.

Why Employers Sponsor Health Plans

 There is a compelling business imperative for employers to provide health benefits to employees and their families. Surveys document that employees rate employment-based health benefits as their most important benefit, and find significant value for employers in terms of employee retention, motivation and satisfaction.

 

Companies with huge financial investments in human capital–their workforce–understand the value of their health benefit programs. I subscribe to the view that  employers can improve the ROI in human capital by helping improve the overall health of employees.

 

While I agree that more regulations–I fought ill-conceived, costly employee  benefit regulations over a 25-year career as an ERISA attorney– are counterproductive, the answer is not to throw the baby out with the bath water.

 

 Unfortunately, pending health reform bills create new incentives for employers to discontinue their health plans and just pay a fee to the federal government. I don’t believe government-backed insurance exchanges with essential benefit packages, state mandated benefits and new federal rules  are going to mean less regulation and lower costs, Getting the employer out of health care, in my view, means getting the government (taxpayer) into healthcare.  While this brand of health reform may be  a favorable outcome  for about  25 million  Americans without coverage  (there may be better ways), it could  come at the expense of nearly 165 people covered under the current system.

Is this  a reasonable reply to those who favor quitting employer plans and just paying a fee to the government.

 

 

Health Reform Supersedes ERISA

By superseding ERISA, H.R. 3200 poses a real threat to the current flexibility of employer sponsored health plans to provide uniform benefit plans across state lines as well as to tailor  plans that meet specific needs of the  employer’s workforce.

Because ERISA preempts state insurance laws but does not preempt other federal laws, the new health reform provisions would apply to self-insured as well as insured group mhealth plans.

Under a new federal framework, proposed federal standards designed primarily to  curb certain undesirable practices and provisions in insured plans would apply to self-insured plans as well.  This will erode the current  important distinction between insurance a nd self-insurance as funding methods for health benefits — a distinction long recognized by the courts..

Among insurance reforms under discussion are pre-existing  condition  coverage limitatons, prompt pay, claims external review procedures and subrogation.

By superseding ERISA preemption, H.R. 3200 opens the door to costly federal mandates that will impact negatively on self-insurance.

Response to Washington Post

George Pantos: Charles Krauthammer’s article on The Great ‘Prevention’ Myth
Does Not Tell the Whole Story
MyHealthGuide Source:

*    Charles Krauthammer, Washington Post – 8/14/09 Washington Post
*    George Pantos, Esq., Former Washington General Counsel to
Self-Insurance Institute of America (SIIA), 8/16/09

The Great ‘Prevention’ Myth Article
Charles Krauthammer wrote the article, The Great ‘Prevention’ Myth, that was
published on August 14, 2009 in the Washington Post.  The article states
that “President Obama has lost the health-care debate… Accordingly,
Democrats have trotted out various tax proposals to close the gap” such as
prevention as saving heath care costs.

    “This inconvenient truth comes, once again, from the CBO. In an Aug.
7 letter to Rep. Nathan Deal, CBO Director Doug Elmendorf writes:
‘Researchers who have examined the effects of preventive care generally find
that the added costs of widespread use of preventive services tend to exceed
the savings from averted illness.'”
    “The fallacy here is confusing the individual with society. For the
individual, catching something early generally reduces later spending for t
hat condition. But, explains Elmendorf, we don’t know in advance which
patients are going to develop costly illnesses. To avert one case, “it is
usually necessary to provide preventive care to many patients, most of whom
would not have suffered that illness anyway.” And this costs society money
that would not have been spent otherwise.
    “…a rigorous study in the journal Circulation found that for
cardiovascular diseases and diabetes, ‘if all the recommended prevention
activities were applied with 100% success,’ the prevention would cost almost
10 times as much as the savings, increasing the country’s total medical bill
by 162%. That’s because prevention applied to large populations is very
expensive, as shown by another report Elmendorf cites, a definitive review
in the New England Journal of Medicine of hundreds of studies that found
that more than 80% of preventive measures added to medical costs.
    “… prevention is not, as so widely advertised, healing on the
cheap. It is not the magic bullet for health-care costs. You will hear some
variation of that claim a hundred times in the coming health-care debate.
Whenever you do, remember: It’s nonsense — empirically demonstrable and
CBO-certified.”

George Pantos Responds
Mr. Krauthammer’s premise is that preventive health care increases medical
cost. He concludes that the added costs of preventive services such as
clinical screenings exceed the savings from averted illnesses. However, his
analysis is incomplete because he fails to note that prevention also can
occur thru inexpensive (often free) individual risk profiles such as Health
Risk Assessments (HSAs) that can detect a propensity for future problems
before illness occurs. Based on completion of simple yet in-depth
questionnaires , such non-laboratory related screenings can serve as a
harbinger of problems related to cost drivers such as obesity and smoking
which add nearly 80 billion dollars in cost to the nation’s health bill.

Employer sponsored wellness programs are successful market-based examples of
prevention (intervention) that is working without adding to medical costs.
Predictive modeling and data analytics also show early promise in preventing
illness and reducing health costs–without the expenditure of a single dime
in government spending. Predictive technology ( the ACG System) developed by
Johns Hopkins University, one of the world’s most respected academic and
medical research institutions, permits early identification of health risk
based on analysis of already available claims data.

While clinical screening is valuable in detecting disease and can be costly,
prevention that detects disease before it occurs is a “priceless” way to
avoid expensive treatment while lowering costs and improving individual
health .A 2009 Report from the Health Research Center refers to a Miliken
Institute Report noting that savings from modest improvements in risk
factors such as unhealthy behaviors could bring about 40 million fewer cases
of chronic disease and reduce economic costs by $1.1 trillion annually in
treatment costs and productivity by 2023. So much for the “myth”.
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