Life sciences companies have always faced challenges communicating the clinical and economic value of their products and services to different groups of stakeholders. These challenges arise from the technical nature of research information, the different perspectives of various groups, (e.g. clinicians, payers and patients), and marketing regulations. However, with costs continuing to rise, political, business and advocacy leaders are all agreeing that health care spending is growing out of control. Therefore, no matter who wins the White House in November, “cost containment” will be the embodiment of “change” for health care in 2009 and beyond – and the current economic downturn and expanding government deficits will only fan those flames.…
3 Months Late – Massachusetts Waiver Extended
Just a quick FYI – Today’s Boston Globe reports that the Federal Government has approved a new 3 year Medicaid demonstration waiver for Massachusetts – with $10.6 billion to enable the continuation and growth of the state’s health insurance coverage expansion program. The original 3 year waiver expired at the end of June, and the state and Federal officials had been discussing a new 3 year waiver for many months before that deadline. Since the end of June, the state’s program has been running on a series of several week extensions to the old waiver granted by the Federal Government.…
More on Employer-Based Health Benefits
A couple of weeks ago in writing about ERISA, I included some data on the stability of health benefits provided by large companies. The Kaiser Family Foundation just released their 2008 Employer Health Benefits Survey. Below is the updated chart from my earlier post.
Large Companies (>199 employees) Offering Health Benefits:
Eligibility, Take-Up and Coverage Rates
The Kaiser Family Foundation’s Report also included an interesting table that provides some insight into what I wrote earlier this week about the differences in employer health benefits between high and low turn-over industries. The relevant information from the Kaiser report’s Exhibit 2.3 is below:
After writing last week about Pitney Bowes’ experience in creating positive financial returns by providing quality health benefits for their employees, I attended a panel of alumni and faculty from the Yale School of Management that discussed the topic “Do Consumers Make Rational Healthcare Decisions?” (I’m told a video podcast will be available soon.) While their consensus on this question was no, their discussion and Q&A included employer provided health benefits. Professor Fiona Scott Morton noted that the value employers get from providing health benefits depends upon their industry – specifically whether the company retains employees or has a high turn-over rate. … I recently heard Michael Critelli, Executive Chairman of Pitney Bowes Inc., talk about what the company has learned about the value of providing quality health benefits and services to their employees. Because they have a workforce that is divided between their offices and customers facilities, Pitney Bowes has been able to conduct a natural experiment and see how providing access to different health and wellness services can effect their employees and the company’s costs. What they found was that providing a good quality health benefits package in conjunction with healthy food and exercise options, etc., has reduced health care costs for their employees that work in their own offices compared to employees who work off-site.… Two interesting and related items recently dropped into my inbox concerning the future availability of primary care clinicians. As most people are aware, primary care services are becoming increasingly scarce – and has been seen here in Massachusetts expanding insurance coverage may only increase this strain. In addition, there is some good evidence that a major reason for our higher health care spending is having too many specialists and not enough primary care clinicians. So increasing the number of primary care clinicians might be part of the solution to controlling health care spending. Incentives to Become a Specialist A recent Boston Globe article about a possible legal challenge to Masschusetts’ health reform initiative indirectly raised one of the most stubborn challenges in health reform: The Federal ERISA law. (See below for more about ERISA.) The contentious issue in Massachusetts is a proposal to require employers to both pay at least 33% of full time employees’ health insurance premiums and ensure that at least 25% of their employees are covered by their health plan. (The current requirement is that they do one or the other.) So why should this difference be the basis for a law suit? Actually, there isn’t really any legal difference. … Cost containment is becoming an increasingly powerful force in shaping the environment for life sciences companies – as well as other parts of the healthcare system. In addition, more sophisticated tools for analyzing and demonstrating the clinical and economic value of medical treatments are making it more challenging for life sciences companies to communicate the value of their new products to all types of audiences, including clinicians, payers, patients and regulators. These new tools and the changing environment are requiring life sciences companies to think about developing more sophisticated messages to reach these audiences. I recently recorded a short 6 minute discussion about these topics with Jeff Sandman, CEO of Hyde Park Communications – where I am also a Senior Counselor. … The August 16th Economist had an interesting article (and commentary) about patients traveling to other countries for medical treatments, a.k.a. “medical tourism.” The article focused on the US healthcare system, and mentioned other parts of healthcare that are being exported, (such as transcription of medical records, reading of imaging studies), and imported, (such as physicians and nurses). But there are two aspects of this issue that the article didn’t touch upon – chronic care and pharmaceuticals: Medical Tourism Doesn’t Work for Chronic Care An article in the July/August Health Affairs about Massachusetts health plans implementing Pay-for-Performance (P4P) incentives for physicians raised more questions than it answered. The study found that P4P programs from 5 private sector payers “wasn’t associated with greater improvement in quality” compared to the overall upward trend in the factors measured. But the study didn’t address some overarching questions and basic realities about P4P, such as: A political insiders poll conducted by the National Journal (and published in their August 2nd issue) shows that Republicans are not counting on health care to help their party in the November elections. Among the 7 choices to the question, “Which two issues will most help your party in November’s election?” none of the 42 Republican insiders picked health care. Compared to that 0%, Energy was chosen by 90%, and National security by 31% The poll results were also interesting for what the Democrats chose. It appears that they are giving up on Immigration and National security as the issues that will help them in the November election – those two issues were picked by none of the Democrats. … I was at a party over the weekend with a number of clinical Fellows from a major academic medical center. They were all very nice, but I had a very strange conversation with a couple of the Fellows. The conversation became strange when one of them asked me about what I thought was the biggest healthcare spending problem. Rather than let me fully explain what I thought, they somehow quickly pronounced that pharmaceuticals were the largest cost in the US healthcare system, implying that this was the biggest spending problem. The strange part of this conversation was that one of them had just taken a health policy class at the public health school affiliated with their Fellowship program.…
The Granularity of Employer Provided Health Benefits
Value of Employer Provided Health Benefits
Incentives for Everything But Primary Care
The first article in my inbox was a Washington Post story stating that only 2% of graduating medical students were contemplating going into primary care. …
ERISA: The Unbridged Chasm of Health Reform – Challenges for Massachusetts and Federal Action
Changing Life Sciences Communications Environment for 2009
Importing and Exporting Health Care
Patients are traveling from the US to other countries for expensive procedures like heart surgery and joint replacements. …
Questions and Answers About Pay-For-Performance (P4P)
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Republicans Give Up on Health Care
National Health Spending – Lots of Confusion