Day: January 3, 2009

Modern Healthcare – December 22/29, 2008

A new study says the boom in convenient-care clinics appears to be slowing, and this could have a negative implications for the people most likely to use them; the uninsured and Hispanics.  The study indicated that only 1.2% of U.S. families reported visiting a convenient-care clinic in the past 12 months, while only 2.3% reported ever visiting one. Uninsured families accounted for 27% of convenient-care clinic users. Also 1.9% of Hispanic families surveyed had used such a clinic in the past year, compared with 1% of non-Hispanic whites.

According to the Convenient Care Association trade group, there are now roughly 1,150 retail clinics operating in some 38 states.

The most common services obtained at convenient-care clinics were diagnosis of a new illness or symptom, 48%,  prescription drug renewal, 47%,  vaccination, 23%, and care for an ongoing condition, 18%.

Editor’s Note: While we don’t question the accuracy of this study,  we find that convenient-care clinics are in a growth mode in Texas. Texas Med Clinics in Bexar County (San Antonio) is one example of the economic success potential of this business model. Just recently a group of deep pocketed investors in Amarillo started a company that will be building clinics throughout the Panhandle to gear towards walk-in traffic as well as employer based health plans. We expect the convenient-care clinic business model will grow significantly in Texas.

Cover Story – Modern Healthcare – December 22/29, 2008

The Congressional Budget Office (CBO) laid out scores of ideas last week as a way to help federal lawmakers craft what could become the most sweeping legislation seen in a generation. Healthcare policy experts praised the CBO analysis as a handy reference tool for reform that they believe will serve as a prelude to the main event when lawmakers release an actual bill in 2009.

In one report the CBO addresses our healthcare system that spends with abandon more than $2 trillion a year and showing how it threatens the U.S. The CBO report stresses that a solution would require a variety of approaches, not just a “one size fits all” scheme, such as mandating universal coverage.

A second report lays out more than 115 different options for reform, encompassing a wide swath of issues related to how healthcare is delivered and paid for. Among the options are some that would reduce spending and others that would increase it.

Some of the options that would reduce spending include trimming billions of dollars in Medicare and Medicaid payments from the provider community. The CBO proposal looks at a proposal to bundle payments for hospital care, a move it found would save $18.6 billion over 10 years. Separately, an option to reduce Medicare payments to hospital with high readmission rates would shed another $9.7 billion.

Editor’s Note:  2009 may bring significant changes to the U.S. healthcare delivery system. Powerful lobbying entities will spend millions to sway 435 people to vote on proposals that benefit special interests.

December 29, 2008 – Business Insurance

It isn’t often that the captive insurance industry scores a victory of the Internal Revenue Service, but in 2008 it did just that.

That victory came in February, when the IRS withdrew a proposed 2007 rule affecting sponsors that use captives to fund risks of various corporate entities and that file a consolidated tax return covering the affiliates and the captive.

The rule would have barred captives from taking an immediate tax deduction at the time reserves were established. Instead, tax deductions would have been allowed only at the time claims are paid – a change that wold have made captive programs much less attractive financially, especially for captives used to write long-tail business.

Editor’s Note: Employers are beginning to realize that funding a health benefit program through a captive makes sense for some. Those employers utilizing existing captives for other lines may be wise to consider the scheme. Auto dealers have used captives successfully for years on their credit life business, for example. Large retail chains such as furniture outlets have done so as well. A large national TPA is marketing a product utilizing a Rent-A-Captive scheme for employer groups of 50-250 employee lives.