The Truven Health Blog

The latest healthcare topics from a trusted, proven, and unbiased source.

CDHP plans (It pays to shop around)

By Michael L. Taylor/Wednesday, May 29, 2013
Mike Taylor imageMost commercial insurance plans have at least 3 options:
  • Varying deductible—the amount the employee has to pay, before any insurance starts to pay
  • Varying co-pay or co-insurance –-a fixed amount (co-pay) or percentage (co-insurance) the employee has to pay for each service incurred
  • Maximum out of pocket expense—a pre-determined amount the employee has to pay until the maximum is reached; after the maximum is reached, the employer pays 100% of the bill
High deductible health plans, sometimes called Consumer Directed Health Plans (CDHPs) are becoming more popular among employers who offer health insurance to its employees. Most CDHPs have two features:  (1) an initial deductible often exceeding $1000 (High deductible) and (2) financial support from the company in the form of a Health Savings Account (HSA) or a Health Reimbursement Account (HRA) to partially offset the high deductible.

Employees appreciate the lower premiums associated with CDHP, but can be surprised when an expensive medical procedure is purchased and the employee has to pay 100% up to the deductible. As an example, in a CDHP with a $5000 deductible, the employee pays the first $5000 in medical expenses every year before the insurance pays anything.
A CHDP is designed to motivate employees to be more judicious in selecting medical services, considering they are responsible for a higher portion of the bill. The expected outcome is the employee will choose higher quality or cheaper services.
Employees often make these coverage decisions annually, with little guidance from the employer as to which plan might work best. Fortunately, tools are now available to help employees examine their prior year’s medical costs to determine costs for each plan option.  The new information allows employees to make more informed decisions. This tool should ideally take into account the actual medical charges incurred and provide options for varying coverage levels.

Another helpful tool is a cost calculator; employees using this tool can compare the cost of a procedure at different locations. The medical literature shows significant price variation for radiology, lab and diagnostic tests, even within the same community, so a cost calculator can be a great help. MRIs, for instance, might vary three to four fold in price with no difference in quality.
Truven Health Analytics has developed these tools to help consumers better understand the coverage level of insurance plans and the costs of services by plan. Users of our tools have experienced better plan decision-making and a decrease in medical costs. This is part of our mission--to use data to help consumers make more informed decisions.

Michael L. Taylor, MD FACP
Chief Medical Officer

Controlling Costs to Avoid the Cadillac Tax

By Marie Bowker/Tuesday, May 28, 2013
Marie Bowker imageThe International Foundation of Employee Benefit Plans (IFEBP) recently released its 2013 Employer-Sponsored Health Care:  ACA’s Impact—Survey Results report, examining how the Affordable Care Act (ACA) is affecting single-employer plans.  Consistent with the results of other similar surveys, the major

Not surprisingly, with that “play” strategy in mind, employers are now considering ways to avoid the 2018 excise tax (i.e., the “Cadillac tax”) by lowering the cost/spend of their plans.  According to the IFEBP survey, 27% of employers have conducted or plan to conduct in the next 12 months healthcare claims utilization analysis.  With regard to auditing, 25% have conducted or plan to conduct a dependent eligibility audit and 17% have conducted or plan to conduct healthcare claims audits to identify and eliminate unnecessary spending.

There is a limit to the amount of cost employers can shift to employees without jeopardizing their ability to attract and retain talented employees.  Therefore, it makes sense to focus instead on cutting waste and ineffective spending from the healthcare system to reduce overall costs—for both employers and employees.  And there is plenty of low-hanging fruit with which to start.  For example, our research estimates that the U.S. healthcare system wastes $125-175 billion annually on claims associated with fraud and abuse.

While there is a perception that fraudulent claims are confined to Medicare and Medicaid, our analysis shows it is widespread in employer-sponsored healthcare plans as well.  We recently analyzed the healthcare claims in our Truven Health MarketScan® Commercial Database and identified $122.6 million in overpayments in a single year—nearly $820,000 for each of the 150 organizations in the study—from just 6 of our fraud detection algorithms.  When looking at diabetic supplies for patients without diabetes, for example, we found claims totaling $450,000 for a single patient/provider combination for the year.  Did you know there is a “black market” for diabetic test supplies?

The key to avoiding fraud, waste, and abuse in your plan is meticulous attention to payment integrity issues.  That is, making sure that the correct payment is made for the correct member for the correct service to the correct provider.  Eliminating unnecessary spending from your plan is the first step to reducing your overall costs.

For more information on improving payment accuracy and reducing cost trends, download the Payment Integrity Analysis Research Brief.

Using Data: Turning Information into Action

By Michael L. Taylor/Friday, May 17, 2013
Mike Taylor imageProfessionals within the health care system are ‘awash’ in data, but that does not necessarily translate into actionable information.  As chief medical officer at Truven Health Analytics, I see this disconnect at all levels. Doctors using electronic medical records (EMRs) still have difficulty understanding the complete risk profile of their patients. Seemingly easy questions like: which of my patients need help to quit smoking? , or which of my patients with diabetes are not at goal for blood pressure? EMRs are good data collection tools, but may not always be effective in turning data into actionable information.
Employers are facing similar difficulties in their role of paying for health care for their employees. Health reform is a reality, and 2014 will be a year of major change and disruption. Employers are struggling to understand how they should use their health cost data to make good decisions about offering exchanges in place of traditional insurance for their employees. They need to know how employees can make better decisions about the best medical coverage plan for their families.
EMRs and databases seem to offer the hope of data-driven solutions, but having the data is not enough.  EMRs are useful tools, and are helpful in tracking a patient’s medical care. However, EMRs are not the best solution to understand the population for which a physician is caring.  Cost reports will not be up to the task in helping an employer understand which insurance products to offer their employees. Hospitals and health systems need help in determining how to succeed with new payment models that completely change their business strategy.

Answering these important healthcare questions requires more than having the data; answers require a deep understanding of content and context of the data, and thoughtful and complete analysis of the data. At Truven Health Analytics, this is the role we play as we help our clients make important decisions. With new models of health care payment such as Accountable Care Organizations (ACOs), bundled payment and risk contracting, employers, hospitals and health systems have a greater need than ever to understand what the data are telling them.  “Big Data” is not just a new buzzword—it is a necessary source of new data needed throughout all parts of the health system.

Michael L Taylor, MD FACP
Chief Medical Officer

ED Visits and Mental Health: Understanding Underlying Causes

By Brian Griffin/Monday, May 6, 2013
Brian Griffin imageA recent article in HealthLeaders about usage for emergency departments, as well as research we've done recently at Truven Health Analytics, highlight a number of issues around health care utilization. The article touches on the diversity of problems represented by repeat emergency room users, but the role of mental illness may be underrepresented in the figures. Emergency room records focus on acute treatment – for example, trauma, respiratory, or cardiac issues – and may ignore underlying factors that contribute to the acute condition.

In a sample from our MarketScan® database of commercially insured patients with ER visits in 2011, 45% of the patients with an ER visit had at least one more ER visit in 6 months of less. Overall, 13% of the ER visits were associated with patients having a diagnosis of psychosis some time during the year; but patients with a diagnosis of psychoses made up 29% of those patients having 5 or more ER visits within 6 months. 

I happened to look at Medicaid ER visits with an eye toward understanding whether mental health might play a role here too, and found that this pattern holds true and also there seems to be a gender-based utilization difference. Fifty-six percent of Medicaid ER visits in the sample were female; but ‘frequent flyers’ - patients with 5 or more visits to an ER in 6 months - who also have a diagnosis of psychoses, are 73% female.

If we consider some percentage of trips to the ER as being a failure to effectively treat and manage psychoses, then this indicates female psychoses patients appear to be associated with a higher number of acute failure episodes.

Brian Griffin
Director of Market Analytics 

ED Visits – Sometimes, It’s Difficult to Know Where to Find the ‘Right’ Care

By Michael L. Taylor/Monday, May 6, 2013
Michael L. Taylor imageTruven Health Analytics recently reported a study showing the majority of US Emergency Department (ED) visits were actually non-emergent. In this report, only 29% of patients required immediate medical attention in the ED.

Of the remainder:

  • 24% did not require immediate attention
  • 42% required care that could have safely been delivered in a primary care setting
  • 6% received care that could have been preventable with prior proper care.
Importantly, in discussing these data, the report is NOT saying that 72% of ED visits should not have occurred, but given the current health system in the US and the lack of primary care, these visits are occurring. The paper further clarifies the issue by noting it is impossible to say with clarity that a visit was not necessary, only that for given percent of the time, it has been shown to be unnecessary.

These are important distinctions. To clarify this point, in a 2012 New England Journal of Medicine article by Kellerman and Weinick1, the authors correctly pointed out there are many reasons these visits do occur. They cited work done by John Billings, a professor of Public Health Policy at New York University, describing why many of these visits occur. They stated:

The fact that many ED visits could be managed in primary care settings does not mean that such care is available. In fact, Billings himself asserted that high rates of ED use for ambulatory care–sensitive conditions are a strong indicator of poor access to care — not poor judgment on the part of patients.”
Factors to consider:
  • By necessity, this study looks at discharge diagnoses, which may not reflect the concern raised by the symptoms. Chest pain at midnight that turns out to be gastroesophageal reflux would be listed as a diagnosis that could be provided as an outpatient, but the patient could not be expected to know it was safe to wait.
  • Most primary care physicians do not have extended office hours; patients with problems arising from 5 PM to 9 AM may have no other option.
  • Many patients do not have access to primary care.
  • Urgent care is not an option in many parts of the country.
You get the point—this is a complicated, multi-factorial challenge for society, and the solution is also complicated.  The answer is not to add an “ER co-pay”. These results are another call for a major overall of how healthcare is delivered and paid for in the US.

Michael L Taylor, MD FACP
Chief Medical Officer