Day: October 19, 2011

SAN FRANCISCO—A California company has introduced a value-based insurance design product for fully insured small and midsize employers that provides financial incentives to encourage employees to access preventive care and manage chronic conditions.The program, developed by San Francisco-based SeeChange Health Insurance Co., provides up to $1,000 deposited into a health incentive account that plan members can tap to reduce their out-of-pocket medical costs if they take three steps: see their doctor for a checkup, take a basic lab test and complete a health-risk questionnaire.

If the screening process determines that the plan member has a chronic condition, the insurer will deposit another $200 in their health incentive account to help cover maintenance costs, provided they meet a further set of conditions based on treatment guidelines established by such organizations as the U.S. Preventive Services Task Force.

Other perks

The plan also offers other wellness-oriented perks such as admission to state parks to encourage outdoor activity, and access to a physician house-call service to deter use of hospital emergency rooms.

The insurer also is in talks with Cupertino, Calif.-based Apple Inc. to create personal computer, iPhone and iPad applications to monitor blood pressure and infant care.

The product, available only to employers in California with two to 300 employees, is among the first VBID products to be offered to the fully insured group health market. The primary objective of a VBID is to remove the financial barriers to purchasing “high-value” drugs or services with the hope of raising compliance and avoiding more expensive future medical costs, such as hospitalization.

Plans to expand

Though VBIDs have been widely adopted by large, self-insured employers, access to fully insured employershas been limited for a variety of reasons. Among other things, health insurers have blamed the need to seek regulatory approval, restrictive community rating laws, and the fact that small and midsize employers often shop their health coverage annually, either inviting adverse selection or not allowing sufficient time for the benefit changes to positively affect plan members’ health.

Having gone statewide Aug. 1 after launching the product on a limited basis in Fresno, Calif., SeeChange plans to expand nationally once it receives regulatory approval for its product in the 24 other states where it has insurance licenses, according to SeeChange CEO Martin Watson.

Editor’s Note: SeeChange Health’s application to the Texas Department of Insurance is pending at this time.

Accountable care organizations (ACOs) could prove a popular option with employer groups looking to keep their workers insured while controlling costs, concludes a new study by consulting firms Aon Hewitt and Polakoff Boland. This ultimately could prove beneficial to hospitals, which have been moving toward forming ACOs but are still unsure of what market demand for such arrangements would be.

According to the study, more than three-quarters of employers are likely to keep providing their workers health insurance coverage rather than moving them to state health exchanges.

“This finding indicates that employers intend to remain ‘in the game’ of offering healthcare benefits for the foreseeable future. Sixty-five percent of respondents have expressed interest in exploring the use of ACOs as an option for providing healthcare benefits to their workforce,” the report said.

However, limiting employee care only to ACO provider networks may have a stifling effect on uptake, the report warned.

“It’s clear that ACO proponents need to educate the public about the trade-offs between networks,” Polakoff Boland Managing Partner Phil Polakoff said in a statement. “ACO models help organizations reduce healthcare cost, waste and inefficiencies, as well as support the movement from volume to value-based approaches.”

Many Iowa hospitals spend far less than 1 percent of their revenues on care for poor patients while reaping tax exemptions on nearly $2 billion worth of property, reports the Des Moines Register.

According to the newspaper, 46 not-for-profit hospitals reported $295 million in earnings in 2009. Less than half of that amount was earmarked toward care for the poor and uninsured. Fifteen facilities applied less than 1 percent of their profits toward charity care, while 11 hospitals spent more than 2 percent.

The nonprofit exemptions allow the state’s hospitals to not pay $58 million a year in property taxes.

“Nonprofits, because of the tax benefits they have, ought to be doing more charitable care than for-profit hospitals,” said Sen. Charles Grassley, an Iowa Republican who has been critical of the way not-for-profit hospitals operate. “Hospitals that aren’t doing the proper amount of charitable care should lose their nonprofit status.”

However, the Iowa Hospital Association contended that the numbers hide the true story. “If you’re just looking at charity care numbers, you’re not looking at care that gets provided and never gets paid for,” said IHA President Kirk Norris.

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