Archive for August, 2010
Good article about transparency in the medical business. Also provides interesting website to comparison shop for medical procedures: www.healthcarebluebook.com
Editor’s Note: One of our readers sent the following comments –
Bill, This is very interesting. The owner of the Blue Book Health Care indicated in this article that he gave a presentation to the TMA in Fort Worth . I was actually in the room when he gave this to the Socioeconomics Council, of which I am a board member.
I think price transparency will evolve once more providers get comfortable with it. The problem is that none of us knows what our true fee really is since we charge one thing, and get different reimbursements from multiple payors. What this Jefferson group is really doing is simply offering an advertised cash discount price. But then, how do they handle the various levels of care? A provider can’t really quote a specific fee up front because they don’t really know how complex the problem is going to be, whether it needs an X-Ray or lab. And we have a number of people who come in for one thing, and then as the doctor is walking out of the room, they say, “Oh, by the way, doctor, I have this one other thing……..”. So it makes it hard to arrive at a specific fee ahead of time.
But I suppose over time, these things will work their way out and there will be some form of posted pricing. It may have lots of asterisks.
PPO discounts save money. But are the discounts applied to reasonable fees, or unreasonable fees? What is a reasonable fee and what is an unreasonable fee? Are usual and customary fees the same as reasonable fees? How do reasonable and customary fees compare to PPO discounted fees? What is the relationship between provider fees and cost?
Who develops PPO contract fees? Is it the provider in partnership with the PPO or is it the provider in partnership with the payer? If the payer who pays the bills is not a party to the PPO contract, why? After all, the payer pays.
Consultants are relied upon to advise clients. Consultants are experts and are unbiased, at least that is what they tell us. Many employers take the advice of their consultants, and often move their insurance to the company that provides the lowest cost. Was the move the right move, based on the consultant’s advice?
Employer: How do we know we are doing much better this year than last year?
Consultant: What was this year is last year plus or minus this year’s change.
Editor’s Note: Change is the only constant, so why do we need to measure it? You don’t know if something is better if you didn’t know how to measure what it was before.
|Final sentencing date set for PSJA ISD scandal by Sergio Chapa|
A ‘final’ sentencing date has been set for all six people remaining in the PSJA Independent School District bribery scandal.
Rogelio “Roy” Rodriguez, Arturo Guajardo, Raul “Roy” Navarro, Evaneglina “Vangie” De Leon, George Alonzo Hernandez and Arnulfo Cuahtemoc Olivarez are all scheduled to appear in federal court together.
The case was originally filed back in May 2007 but one-by-one, each of the six pleaded guilty to their roles in the case between December 2007 and December 2009.
Their sentencing have been postponed numerous times with prosecutors dismissing charges against a seventh suspect Ricardo De Leon back in January 2008.
Rodriguez and the other five remaining suspects are now set to appear for sentencing before U.S. District Court Judge Ricardo Hinojosa in McAllen at 9:30 a.m. on Friday, August 27th.
Each of them faces different prison terms ranging from five to 20 years in prison.
Editor’s Note: Scamming taxpayers for millions of dollars deserves public retribution. Flogging in the Town Square seems appropriate, or a Tar & Feather Party at the McAllen Convention Center would be a good start. Maybe even losing one’s insurance license would be something to consider. Regarding the later, why are insurance carriers still recognizing and paying an admitted felon?………….. are his patented sales tactic of bribing public officials for lucrative insurance contracts contained in a subchapter in the carrier’s Ethics Manual?
MyHealthGuide Source: Hewitt, 8/2010, Hewitt Survey Report
Grandfathered health plans are only required to comply with certain provisions of the recently enacted health care reform law. In July 2010, Hewitt Associates conducted a brief survey of more than 450 U.S. companies representing 6.9 million employees to determine how these provisions will affect companies health plans and their grandfathered status.
- 73% of surveyed companies have
- determined whether their group health plans will be grandfathered in 2011, and
- the recently released guidance on preventive care did not impact their decision to maintain grandfathered status.
- 90% anticipate losing grandfathered status by 2014, with the majority expecting to do so in the next Iwo years.
- Employers indicated that they would most likely lose grandfathered status because of
- 72% – plan design changes
- 39% – changes to company subsidy levels
- 16% – consolidation of health plans
- 16% – changes to insurance carriers
- 15% – union negotiations
- Loss of Grandfathered Status Among Self-Insured Medical Plans
- 51% grandfather status loss in 2011
- 21% loss in 2012
- 8% loss in 2013
- 8% loss in 2014
- 12% do not expect to lose grandfather status
- Addressing additional cost associated with the new health care reform coverage and benefits requirements starting in 2011,
- 46% said they will pass the additional costs to employees.
- 45% of companies have not determined how to handle these costs yet.
- 9% said they will absorb additional costs.
Most employers would rather have the flexibility to change their benefit programs than be restricted to the limited modifications allowed under the new law.
Editor’s Note: Beware of insurance agents and consultants using scare tactics – losing grandfather status by implementing needed benefit / carrier changes.
Editor’s Note: This appears to be a classic case of decision making based on PPO discounts with little or no regard to fixed costs. As our three readers know, we have developed extensive information on PPO discounts and have written numerous articles on the subject. Few “expert” insurance consultants understand the matter completely, and often base their analysis using faulty premises. A challenge to the board’s decision may prove fruitful to the incumbent, however in the past that has not been the case. An incumbent must always “sell” themselves continuously to keep their clients informed and knowledgeable throughout the course of the contract. An ignorant and ill-informed customer often falls prey to vendor machinations.
The BISD long awaited health insurance audit is apparently in the hands of the members of the School Board. In a recent board meeting, the audit was discussed behind closed doors (Executive Session) with a note regarding possible litigation.
We are hopeful that the BISD will release the findings to the public expeditiously.
Employers are confused. The Patient Protection and Affordable Care Act, all 2000+ pages of it, makes for difficult reading. Even attorneys, it seems, have a hard time understanding the bill.
Anxious employers are turning to their brokers or independent consultants to calculate how the new health care reform law will impact their plans.
The most talked about provision of the bill revolves around maintaining “Grandfathered” status. The accepted consensus seems to be “it’s better to maintain a grandfather status than to lose it.”
What we believe is that in most cases, employers will choose to forgo grandfathered status for their plans in order to maintain more control over the design of their plan.
While Plans that qualify for grandfathered status are exempt from certain requirements, such as providing full coverage for preventive services, grandfather status prevents employers from increasing coinsurance requirements or increasing the percentage of the premium paid by the employees by more than 5% per year.
So, what is the cost impact to the employer? Do non-grandfather status mandates cost more than the ability of a grandfathered plan to avoid them…………..and retain the ability to cost shift to the employees? The pratical implications are that being grandfathered is a very expensive proposition for most employers, and the trade-off may be nominal.
Mcallen ISD may be the next South Texas school district to contract with Blue Cross Blue Shield of Texas at the expense of the current provider, HealthSmart.
The Blue Cross onslaught in South Texas appears to be gaining momentum. Touted superior PPO discounts are cited by some as the determining factor for success in gaining business with independent consultants predicting significant claim savings with the move.
We’re learning a lot from Massachusett’s experiment in universal coverage – and some of the lessons are rather enlightening.
According to Bestwire, Lora Pellegrini, president of the Massachusetts Association of, said something along the lines of “That’s the problem with the new U.S. … it offers millions of access to but doesn’t address underlying medical costs, which are contributing to costly premiums.” [not a direct quote]
Isn’t that your job? In return for getting millions of new members, aren’t health plans supposed to figure out how to manage care and control costs?
If health plans rely on the government to help control costs, exactly what value do they deliver?
In fairness, Ms Pelligrini noted the market share of some provider groups is a significant factor in insurers’ inability to negotiate favorable rates. There’s no question negotiating power has shifted back towards providers, and that shift is contributing to higher costs for health plans.
Doesn’t seem to be hurting profits, though; the industry is enjoying a stellar 17.4% return on equity after seven publicly traded health plans reported earnings above expectations.
Try as I might to sympathize with insurers, their complaints are besides the point.
Suppliers in any business seek to maximize profits. Smart buyers will figure out how to find more cost-effective suppliers, develop alternative vertical integration, setting up their own suppliers., or in very tight supply markets even resort to
I see no reason health plans can’t do the same. There’s far too much ‘old thinking’ among health plans; they remain overly concerned with the size of their network directory, believing large provider networks are essential to success.
Clearly, nothing could be further from the case. Some health plans are beginning to experiment with smaller, more exclusive networks, and I have no doubt the lower costs will make them much more attractive than the ‘old school’ huge networks with high costs due to broad access. No, success will come to those payers who creatively figure out how to work closely with selected providers, establishing partnerships, paying fairly, sharing information, and providing feedback.
Otherwise they’re just administrators, and not very efficient ones at that. If health plans are going to rely on the government to control costs, what, precisely, are health plans for?
Editor’s Note: This commentary is right on target. Health insurance companies, Third Party Administrators and Managed Care Companies have failed to provide consumers (their customers) with cost effective health care. Rather, they have simply acted as middlemen, skimming profits from cash flow and passing increasing costs on to the consumer. And, they have continued to fabricate lies as to the root causes of increased medical care in the United States. Greed, secretive provider contracts, and payer indifference are to blame.
Preventive Care Mandates Could Lead to Out-of-Control Costs and Unaffordable Health Insurance Premiums
FHCE Warns Consumers Against “Free Lunch” Expectations
SAN JOSE, CA, Aug 11, 2010 (MARKETWIRE via COMTEX) — Beginning on September 23rd, the Patient Protection and Affordable Care Act will allow consumers who purchase new or revised insurance plans or policies to receive an array of preventive care services with no out-of-pocket cost. The Foundation for Health Coverage Education (FHCE), www.CoverageForAll.org, while applauding any efforts to keep overall health care costs down, cautions that this provision could instead lead to out-of-control medical costs which will escalate insurance premiums.
“While mammograms and colonoscopies clearly provide preventive services that are cost-effective and can save lives, one has to question the government’s waiving the total cost to the consumer for smoking cessation, and weight loss and alcohol treatment, which are included in these mandated services. A line must be drawn by the government as to where its funding ends and where personal responsibility begins,” said Phil Lebherz, FHCE Founder and Executive Director.
“Behavior modification programs represent a billion dollar industry with high recidivism rates. As a result, because they will be available at no cost, enrollments in programs to combat the effects of lifestyle diseases from smoking, obesity and alcoholism will ratchet up costs with little expectation that the consumer be responsible for making healthy lifestyle choices,” said Lebherz.
The new law will require that individual policies and employer-based health plans offer certain mandated preventive health care services with no out-of-pocket costs to Americans when they enroll in either new individual health policies or new group health plans. Going forward, the consumers with the new policies or plans will not be charged a co-payment, coinsurance or deductible for certain preventive services performed by a network provider, doctor or testing service, covered under their policy. Consumers who keep their grandfathered plans and do not change their existing individual coverage or whose employer-based group plans are not changed considerably, won’t be eligible for mandated services that have no cost out-of-pocket expenses.
“The government cannot legislate personal responsibility,” Lebherz said. “If it’s free, it will increase costs and accomplish little because people in counseling for obesity, alcohol, and or smoking sensation tend to backslide and readmit to programs. In fact, new policies will cost more than the grandfathered policies.”
Mandates can provide a greater range of care, but they also mean increased premiums as insurers must cover out-of-pocket costs that were originally paid by consumers. The accumulation of mandates plays an important role in raising costs. According to the Council for Affordable Health Insurance (CAHI), there are over 2,000 mandated benefits. CAHI’s studies show that mandated benefits could increase the cost of basic coverage from approximately 20% to as much as 50%, depending on the number and design of the benefits, as well as the initial cost of the premium.
“It’s important for everyone to have adequate health coverage, but we have to draw the line somewhere,” said Lebherz. “Making healthy personal lifestyle choices are within the reach of all of us,” said Lebherz.
Launched in 2004, CoverageForAll.org is America’s first public health insurance search engine, helping over two million Americans discover their public and low-cost private health insurance options. Every month 70,000 people visit the website or call the free 24/7 multilingual U.S. Uninsured Help Line (800-234-1317) to take the simple 5-question Health Coverage Eligibility Quiz and speak with a live health insurance specialist who can walk them through the process, connect them with the programs and applications and provide them with a sign-up checklist needed to successfully apply.
For information regarding health insurance and health care reform changes, please visit www.CoverageForAll.org or call the toll-free 24/7 U.S. Uninsured Help Line 800-234-1317. The Foundation for Health Coverage Education is a 501 (c) 3 national non-profit organization with a mission to provide simplified public and private health insurance eligibility information in order for more people to access coverage.
Media Contacts: Marilyn Haese/Bobbi Rubinstein Haese & Wood Marketing (310) 556-9612 firstname.lastname@example.org
SOURCE: Foundation for Health Coverage Education
> CARSON CITY, Nev. (AP) – A state panel voted Thursday to slash benefits for
> tens of thousands of retired and current state employees, including
> eliminating <http://www.kolotv.com/home/headlines/100116539.html> insurance
> for some family members and drastically reducing other coverage.
> The Public Employees’ Benefit Program Board approved measures that
> eliminated insurance for spouses or domestic partners of employees or
> <http://www.kolotv.com/home/headlines/100116539.html> retirees who have
> other available coverage through an employer. The cuts, which take effect
> next July, affect 70,000 participants.
> 90-180/60;0/0/0;;~sscs=%3f> Click here to find out more!
> The board also eliminated dental benefits, except for preventive procedures
> like cleanings, an annual exam and X-rays. More costly procedures, like
> fillings, crowns or root canals, are no longer covered.
> “Our decisions here today are going to be significant and have a long-term
> impact,” Randall Kirner, board chairman, said near the end of the eight-hour
> The board also voted to end supplemental coverage for retirees on Medicare,
> and move them to a market-exchange system in which they would choose from
> various private plans and providers for Medigap and prescription drug
> James Wells, program executive officer, said without program cuts, premiums
> for current employees alone would skyrocket as much as 500 percent, from $40
> to about $200 monthly.
> Jim Richardson of the Nevada Faculty Alliance, which represents
> higher-education faculty, said he had concerns about the market exchange for
> Medicare recipients, saying it “sounds too good to be true.”
> Perhaps the biggest change was doing away with the existing
> preferred-provider system in favor of a high-deductible program
> Deductibles for individuals will jump from $800 annually to $2,000
> and up to $4,000 for family coverage.
> Co-payments that currently limit out-of-pocket costs for prescriptions and
> doctor visits will be eliminated. Participants will pay 25 percent of the
> total cost, with a cap of $3,900 for individuals and $7,800 for families.
> The board also reduced life insurance payouts and long-term disability
> benefits. It slashed the payouts by half, to $10,000 for active workers and
> $5,000 for retirees.
> The disability benefits were pared down from 60 percent to 40 percent of
> employee base pay, with a worker option to purchase the extra 20 percent.
> Representatives of retirees and employee groups said the changes were
> drastic and could have unintended consequences.
> “Obviously these plans cut utilization,” Richardson said. “What that means
> is people don’t go to the doctor.”
> The cuts Thursday trimmed $80.7 million in subsidized services, which is
> about two-thirds of a $111 million shortfall faced by the program for the
> two-year budget cycle that begins July 1, 2011.
> The remaining $30 million will be made up in higher premiums paid by workers
> and retirees. The board will tackle those options when it meets next month.
> Marty Bibb, executive director of Retired Public Employees of
> Nevada, said the program has given up roughly $80 million in budget
> cuts over the past two years.
> “We recognize that there are serious budget cuts that have to be made,” he
> said, adding the board’s proposals are a “dramatic departure” from current
> To offset the burden to workers and retirees, the board agreed to help set
> up health <http://www.kolotv.com/home/headlines/100116539.html> savings
> accounts and health reimbursement accounts that could be used for
> out-of-pocket costs or non-covered expenses.
> Some of the changes must be approved by the Nevada Legislature.
> Copyright 2010 Associated Press. All rights reserved. This material may not
> be published, broadcast, rewritten, or redistributed
With the district in a financial crisis and hundreds of its members facing layoffs, the Milwaukee teachers union is taking a peculiar stand: fighting to get their taxpayer-funded Viagra back.
The union has asked a judge to order the school board to again include Pfizer Inc.’s erectile dysfunction drug and similar pills in its health insurance plans.
The filing is the latest in a two-year legal campaign in which the union has argued, so far unsuccessfully, that the board’s policy of excluding erectile dysfunction drugs discriminates against male employees. The union says Viagra, Cialis, Levitra and others are necessary treatment for “an exclusively gender-related condition.”
But lawyers for the school board say the drugs were excluded in 2005 to save money, and there is no discrimination because they are used primarily for recreational sex and not out of medical necessity.
The filing last month comes as the union, the Milwaukee Teachers’ Education Association, is also protesting hundreds of layoff notices issued to teachers for the coming school year. Citing a “financial crisis” caused by exploding benefit costs and revenue shortfalls, the district’s outgoing superintendent proposed laying off 682 employees in April.
The district gave layoff notices to 482 teachers in June, but recalled 89 of them last month. Additional teachers may be called back, but these are still the first layoffs of Milwaukee teachers in decades.
At least one lawmaker questioned why the union is fighting for Viagra while teachers are losing their jobs. A consultant for the school board has estimated that reinstating the drug benefit would cost $786,000 per year – the cost to keep perhaps a dozen first-year teachers employed.
State Rep. Jason Fields argues that the money could be better spent any number of ways – including saving jobs.
“You’ve got to be kidding me,” said Fields, a Milwaukee Democrat. “The fact that is the point of contention is kind of frightening. What are our priorities? I’m all for love and peace. But almost 1 million dollars? And you go to court over this issue?”
Union spokeswoman Kris Collett declined comment. But its lawyer Barbara Quindel said the case was worth fighting despite the district’s grim finances. Quindel said erectile dysfunction is associated with heart disease, prostate cancer and other conditions, and the drugs are approved by the Food and Drug Administration and recommended by the American Urological Association.
“MTEA believes that men should not be discriminated against in receiving treatment for their medical conditions,” she said.
The union has argued the costs are tiny compared to the $1.3 billion annual budget. But the school board says they are “particularly burdensome” when it is under pressure to reduce benefit costs.
That the pills – which can cost $20 apiece without insurance – were included in the first place is somewhat unusual. Health insurer Aetna Inc., which provides one of the district’s two plans, says its standard pharmacy plans exclude Viagra and other “drugs for lifestyle enhancement or performance.”
Basic state employee health plans also generally don’t cover those drugs, but more expensive premium plans might, said Dick Cauchi, who tracks health benefits at the National Conference of State Legislatures. Lisa Soronen, National School Boards Association senior staff attorney, also said she had never heard of a similar case or an example of a union negotiating coverage for erectile dysfunction drugs.
“If you are getting down to what drugs are covered, you are really getting in the weeds,” she said, explaining most negotiations are over premiums and co-payments.
Board and union negotiators reached a deal in 2002 to cover six tablets per month for erectile dysfunction drugs in health plans that insure 10,000 employees, dependents and retirees. They quickly became popular.
By 2004, the number of claimants receiving prescriptions skyrocketed to more than 1,000 per year, costing the district $207,000. During negotiations in 2005, the board proposed eliminating the benefit and an arbitrator adopted the plan.
The union in 2008 filed a sex discrimination complaint with the state. In June, the Labor and Industry Review Commission ruled the union couldn’t pursue the case without identifying employees who have been injured by the policy and the complaint was filed after the statute of limitations expired.
The union is asking a Milwaukee County Circuit Court judge to overturn that decision and declare the policy violates the Wisconsin Fair Employment Act. A ruling isn’t expected for months.
Viagra is usually on the other side in discrimination cases. In recent years, several lawsuits have claimed that employer health plans discriminate against women when they cover Viagra but not contraceptives or infertility treatment.
But the Milwaukee union says males are treated unfairly here. In one brief, its lawyers argued that vaginal cream, anti-bacterial medicine and estrogen replacement medication for female sexual dysfunction are covered. Other options such as penile pumps and implants included in the plans “are far less desirable than oral medication,” the filing said.
District spokesman Philip Harris said school officials won’t comment because “we just want to leave it alone.” But Miriam Horwitz, an attorney representing the board, argued in court filings the drugs weren’t necessary to treat life-threatening disease or have children.
August 5, 2010 | By Amanda J. Reinecker
Full speed ahead on repeal
The quest to repeal Obamacare is not over. In fact, recent events in Virginia and Missouri indicate the battle has just begun.
On Monday, Virginia Attorney General Ken Cuccinelli’s challenge to the constitutionality of Obamacare’s individual mandate overcame its first legal hurdle. His lawsuit protests the federal government’s claimed authority to regulate a person’s decision not to purchase a product such as insurance.
“I don’t think in my lifetime we’ve seen one statute that so erodes liberty than this health care bill,” Cuccinelli said in a recent interview with The Heritage Foundation’s Rob Bluey. Be sure to watch Bluey’s exclusive interview on YouTube.
In rejecting the administration’s request to dismiss Virginia’s case, U.S. District Court Judge Henry Hudson wrote about the dubious logic of the mandate:
Unquestionably, this regulation radically changes the landscape of health insurance coverage in America. … No reported case from any federal appellate court has extended the Commerce Clause or the Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce.
Just one day after the Virginia decision, the people of Missouri, a bellwether state in 2008, brought their opposition to Obamacare to the ballot box. The results: by a margin of almost 3 to 1, Missourians don’t approve of the mandate and they want out.
Missouri Lt. Gov. Peter Kinder, who also sat down for an interview with Bluey, explained the results:
We had the first vote in the nation in the Show-Me State. And we’re showing the nation the way to repeal and replace this big government, big bureaucracy, one-size-fits-all law… We need other states to put it on the ballot like we did. Or pass it through their state legislatures. And continue the grassroots uprising that’s spreading like a prairie fire all across America.
Kinder may get his wish. Three other states — Arizona, Florida and Oklahoma — plan to place measures similar to Missouri’s Proposition C on their ballots this November. And still more states are adopting statutes to protect patients’ rights to pay directly for medical services and to withdraw from the individual mandate. To date, five states have already enacted statutory measures: Arizona, Georgia, Idaho, Louisiana and Virginia. Legislation has been introduced in 38 states. And three more states are planning to do so soon.
Additionally, 20 states have filed lawsuits similar to Virginia’s against Obamacare.
Heritage Foundation experts will continue to work at the state level to advance principled health care solutions and battle back against Obamacare. “I have learned to pay attention when I get something from Heritage,” says one state lawmaker. “[Heritage] has consistently sent things that are very helpful to me in keeping the scope of this issue in mind. I am grateful.”
These grassroots efforts across the country illustrate the great political divide in America. As Heritage fellow Ernest Istook writes, it’s a divide between “those who see Washington’s power as limited only by the ability to sway voters and we who see it as limited by design in the U.S. Constitution.”
At least in states like Virginia and Missouri, the Constitution appears to be winning.
07:49 AM CDT on Wednesday, August 4, 2010
By JASON ROBERSON / The Dallas Morning News
Tenet Healthcare Corp. said Tuesday it earned money and increased revenue in the second quarter despite a weak economy and fewer patient admissions.
CEO Trevor Fetter said the results demonstrate the company’s strength in addressing challenges of “a continuing soft macroeconomic environment.”
For the three months that ended June 30, the Dallas-based hospital system reported net income of $25 million, or 5 cents per share, up from a loss of $15 million, or 3 cents a share, during the same period a year earlier.
Tenet’s adjusted earnings before interest, taxes, depreciation and amortization were $268 million in the quarter, an increase of $22 million, or 8.9 percent, from $246 million. Operating revenue increased 3 percent to $2.3 billion.
But private insurance admissions and outpatient visits declined 7.2 percent and 5.4 percent, respectively. Hospitals emphasize commercial admissions because they’re more likely to get paid by patients with insurance, usually offered through their jobs.
“While commercial volumes are a part of our story, they’re not the whole story,” Fetter said on a conference call with investors and reporters.
He said that even though private insurance or commercial admissions fell, Tenet had a better mix of commercial business. Lower paying health plans were replaced with higher paying health plans, leading to a 2 percent commercial revenue growth.
Tenet’s shares closed Tuesday at $4.39, down 20 cents.
Hospitals’ Dallas-Fort Worth ad spending in good shape
08:19 AM CDT on Wednesday, August 4, 2010
By JASON ROBERSON / The Dallas Morning News
The weak economy has siphoned money from advertising budgets in most major industries, but local hospital advertising has remained steady, thanks to one company.
Texas Health Resources, the largest hospital system in North Texas, accounted for about half of not-for-profit advertising spending last year.
Texas Health declined to discuss its specific figures, citing competitive reasons. But the Arlington-based hospital system tripled its advertising spending from 2008 to 2009 with the launch of its rebranding campaign, said Steve Hanson, senior vice president for growth and development at Texas Health.
Last year, local hospitals spent $20.4 million on advertising in Dallas-Fort Worth, up 5 percent from $19.3 million in 2008, according to VMS, a New York-based media intelligence company.
In the hospital sector, not-for-profit hospitals have been the big spenders, accounting for 58 percent of locally placed media dollars in the hospital category last year, according to VMS.
Texas Health sought a brand overhaul because the hospital system is a decade-old byproduct of mergers and acquisitions of several independent hospitals.
Their research found that some in the community thought the name “Texas Health Resources” sounded like a branch of state government, Hanson said.
“The general public didn’t know that name,” Hanson said. “We wanted it known as much to the person on the street as it was to the news media and business community.”
Texas Health spent $1.3 million to prepare for the change, on things such as updating its website, paying legal fees and changing graphic designs on business materials. Through 2011, Texas Health will have spent an additional $17 million to change the signs as well as to add more signs on several campuses.
From 2008 to 2009, Texas Health’s media spending grew by about 145 percent, causing its share-of-voice, a measurement of advertising activity in a fixed time period, to jump from 12 percent to 29 percent.
Baylor Health Care System, the second-largest system in North Texas, saw a 24 percent drop in spending between 2008 and 2009, causing its share-of-voice to drop from 24 percent to 18 percent, according to VMS data.
“I get a flat budget every year,” said Jennifer Coleman, who has been responsible for Baylor’s advertising since 1997. “If I want to go over it, then it’s a negotiation with the chiefs of other [Baylor business] services.”
Measuring advertising and marketing across the board for various hospital systems is tricky because each company breaks out numbers differently. However the numbers are sliced, two advertising market research groups show Texas Health as the biggest spender.
Competition for patients is a driving force behind the advertising.
As Dallas-Fort Worth gains ground on Chicago to become the nation’s third-largest region by population, hospitals are positioning their brands to capitalize on the growth.
It’s a challenge to drive more than a mile on North Central Expressway without seeing a billboard of a content-looking patient who just underwent a successful heart surgery or cancer treatment.
“Their spending has buoyed us for the past couple of years,” said Mike Collins, vice president and general manager of the Dallas office at Titan Outdoor, which handles bus advertisements for Dallas Area Rapid Transit.
Consumer-driven health care also is a trend forcing hospitals to be more transparent with their prices and quality. The federal government and some private research outfits have begun ranking hospitals on price and quality, intensifying the hospitals’ competition.
The data also shows how popular the Dallas market has become to hospitals based elsewhere. Over the past three years, 126 hospitals have advertised in the Dallas market, up from 92 hospitals in 2005.
“Unless there were more than 30 new hospitals built since then, it shows that hospitals outside of the market are spending media dollars in Dallas,” said Pat Harrington, director of client services for the VoiceTrak report from VMS.
Employer sponsored clinics will be a new growth industry spurred by the advent of Health Care Reform. As the onerous requirements of Obama Care kick in over the next three years, physician shortages will bring longer waits for appointments for primary care and even longer waits for specialty care. Seeking medical care will be like going to the post office to mail a letter – fifteen counter windows but only two open manned by disinterested and slow moving primary care post office employees.
Employers wont put up with this. They want their employees to be productive and active, not unproductive and spending an inordinate amount of time seeking needed medical attention.
Thus will be the boom in Employer Sponsored Clinics. Medical cost will not be the motivating factor in setting one up, although savings achieved will become apparent. ESC’s will include a designated referral system to partner specialists for fast access to health care for employees. PPO networks will become obsolete quickly.
Humana raises forecast as profit rises 21%
LOUISVILLE, Ky. (Reuters)—Humana Inc. posted a 21% increase in quarterly profit on Monday, helped by growth in its Medicare plans for seniors, and the health insurer raised its full-year forecast.
One of the largest Medicare players, Humana also reported stronger performance in its commercial plans for employers, and its shares rose more than 4%.
Health insurers have raised their outlooks after posting higher-than-expected profits during this reporting season, helped by generally lower use of medical services.
But the market’s reaction has been tempered by uncertainty over the fallout from the new U.S. health care reform law. Humana’s second-quarter results included a $147.5 million writedown related to the expected value of its individual business in the wake of the law.
“There are many moving pieces here, but this was a solid quarter, and underlying guidance is moving much higher,” Citigroup analyst Carl McDonald said in a research note.
Quarterly net income rose to $340.1 million, or $2.00 per share, compared with $281.8 million, or $1.67 per share, a year earlier.
The company wrote down $147.5 million, or 55 cents per share, related to its assessment of its individual policy business in the wake of the new U.S. health care reform law, which is expected to bring substantial change to that business.
Humana reported earnings of $2.11 per share excluding the write-down and excluding benefits from releasing claims reserves from prior periods.
Analysts on average expected $1.67 per share, but it was not immediately clear if that figure was directly comparable to the results, according to Thomson Reuters I/B/E/S. Analysts at Sanford Bernstein and Collins Stewart said the results amounted to a significant beat.
Revenue rose 9.5% to $8.65 billion. Analysts had looked for about $8.61 billion.
Humana’s Medicare Advantage membership grew 17% to 1.76 million as of the end of June. Humana is one of the two biggest Medicare players, along with UnitedHealth Group Inc.
Profit in Humana’s commercial segment, excluding items, more than tripled to $115.2 million, as the company cited lower use of medical services, administrative cost savings and disciplined pricing for its plans.
Humana projected a full-year profit of $5.65 to $5.75 per share, up from its prior range of $5.55 to $5.65. Analysts have been looking for $5.71.
Excluding the writedown and other charges, Humana’s operating earnings forecast is about $6.40 per share, Mr. McDonald said.
\Humana shares rose 4.5% to $49.12 in premarket trading. Through Friday, Humana shares had risen about 7% this year, against a roughly 7% decline for the S&P Managed Health care index.
Mesquite school district employees to get 1.5 percent raise
10:57 PM CDT on Monday, July 26, 2010
By KAREL HOLLOWAY / The Dallas Morning News
The financial news for the Mesquite school district wasn’t as bad as expected.
Employees will get at least a 1.5 percent raise, and the district won’t have to dip into the district’s reserve funds.
The tax rate will remain at $1.42 per $100 valuation.
“Property values have gone down so the average homeowner will see a $24 decrease in taxes,” said Richard Koonce, assistant superintendent for finance.
District officials had expected they would have to use reserve funds to balance the budget.
“This to me is outstanding,” board member Robert Seward said. It is particularly impressive, he said, because of the budget problems so many school districts are having.
The board approved the salary schedule and gave preliminary approval to the budget and the proposed tax rate at Monday’s regular meeting. Final approval will came later in the summer after public hearings.
Expenditures this school year are expected to be about $268.23 million up from $266.27 million last school year.
The salary for starting teachers will increase from $45,900 to $46,300.
Teachers are pleased to be getting a raise, said Carl Garner, Mesquite Education Association president.
“It’s better than some districts. Some school districts are staying the same. They are having a freeze,” he said.
The district will switch to the state insurance plan because of increasing costs for the current self-insured plan, said Lanny Frasier, assistant superintendent for personnel services.
Premiums will go up, but less than they would if the district continued its current plan, Frasier said.
The premium for an employee will rise from $75 to $99 a month. Family coverage will increase from $544 a month to $694 a month.
But benefits will improve. The deductibles will be lower, and the maximum out-of-pocket expense will go down, Frasier said.
The district will keep the employee clinic and pharmacy, Frasier said.
“Teachers love that clinic,” Garner said.
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August 2, 2010
RE: Actuarial/Employee Benefits and Risk Management Consultant
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