The Truven Health Blog

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

Implementing a Successful Consumer-Directed Health Plan

By Emily Kelly/Monday, June 29, 2015

Consumer Directed Health Plans (CDHPs) are quickly becoming a popular benefit option for U.S. employers. These high-deductible plans are one of the fastest-growing benefit options for employees. To explore their effectiveness, we conducted a study using the MarketScan® Commercial Claims Database. The study closely matched members enrolled in a CDHP to members continuously enrolled in a non-CDHP, and evaluated healthcare costs and utilization over three years. We found a direct link between CDHPs and lower healthcare costs. On average, CDHP enrollees incurred $457–$532 less per member per year.

But these savings might come with consequences. Utilization rates were lower among CDHPs for a wide range of services — including professional visits, lab services, non-maternity admissions, and prescription drugs — suggesting that consumers may be reducing utilization across the board as opposed to simply avoiding unnecessary care. Of particular concern, members enrolled in CDHPs were less likely to receive any medical care for their existing chronic conditions than were their non-CDHP counterparts (based on a review of eight common conditions asthma, congestive heart failure, coronary artery disease, depression, diabetes, hypertension, low back disorders, and osteoarthritis).

Although the benefits of CDHPs are substantial, these arrangements need to be entered into carefully. It is important to recognize that a CDHP design could result in members not receiving recommended care — and that could lead to higher costs in the future. If your company currently offers or is contemplating a CDHP, we suggest that you consider the following:

  • Educate enrollees so they fully understand and take advantage of their benefits, specifically benefits of covered preventive services.
  • Engage CDHP members to ensure they are continuing to manage chronic conditions while enrolled in a CDHP. The study suggested CDHP members received less care for current chronic conditions and were less likely to be diagnosed with new chronic conditions.
  • Recognize that each employee is unique, so a CDHP might not be the best choice for all members. Help individuals choose the right plan based on their current health and their healthcare plan history.
  • Provide useful tools, such as cost calculators, to make it easier for members to access information on physician cost and quality. 

For the full study on the impact of CDHPs on cost, utilization and care, click here

Integrated Performance Data Drives Value: A Complete View of Your Market Opportunities

By Truven Staff/Thursday, June 25, 2015

The Affordable Care Act (ACA), value-based care, and new reimbursement programs are forcing hospitals and health systems to look at organizational performance holistically; at the intersection of clinical, operational and financial measures of quality and cost. No longer can we look at various types of data and outcomes separately, in silos of cost and clinical outcome, or by departmental achievements. Rather, we must consider the relationship between performance metrics, and how they change when different levers are pulled to enhance our strategic service lines and deliver value to healthcare consumers. To understand the relationship between these metrics, data must be captured, analyzed, and made useful. It’s only to the extent that we are capable of defining the interdependencies at this intersection, and our ability to adjust our processes, expectations, and practices to achieve balanced performance, that we can reach the pinnacle of value-based care and achieve financial growth and innovation. 

Recent articles in both Modern Healthcare and Health Data Management discuss the need for data analytics in healthcare to forge your place in the market. Understanding both one’s own clinical, operational, and competitive strengths, and those of the competition, enable a hospital or health system to invest where it makes the most sense – in a way that provides the best possible patient care, in the most cost-effective manner, where there’s the most sustainable opportunity to serve your community and to outlast the competition. 

The Integrated Market Assessment, a Truven Health analytic service offering, helps hospitals and health systems take advantage of all strengths – market-specific competitive advantages, clinical, and financial – when investing in capital projects and strategic service lines. The program is designed to help you intelligently respond to increasing competitive pressures, partnering, and market opportunities, by combining market intelligence (traditional volume and market share indicators) with quality and efficiency measures. 

Integrated Market Assessments help Providers address challenges such as:

  • Merger and acquisition optimization (before and after)
  • Competitive market analysis
  • Quality and efficiency metric identification
  • Market trend and target population identification
  • Financial strength, stability, and sustainability metrics comparison (reported to the Centers for Medicare & Medicaid Services)

 For more information about the Integrated Market Assessment, please contact us by phone at 1.800.525.9083, option 4 or by email at ProviderSolutions@truvenhealth.com.


Will Your Benefit Plan(s) Trigger ACA’s “Cadillac” Tax? Start Planning Today.

By Tom Halvorson/Thursday, June 11, 2015
A recent Wall Street Journal blog outlined the efforts some CFOs are taking to prepare for the ACA’s so-called “Cadillac Tax” provision.  But is it enough? A survey from Aon Hewitt found that a quarter of employers have not yet determined the impact of the “Cadillac” tax on their benefit plans, and more than one-third reported that their executive leadership and finance teams have limited or no knowledge of the implications of the tax for their organizations.

It’s critical to effective planning for budgeting, collective bargaining, and benefit strategy that employers understand which plans — current and future — are likely to incur the tax and when each plan’s costs may be likely to cross the excise thresholds. The earlier employers can quantify the impact of the tax, the sooner plans can be put into place to mitigate or defray the expense.

According to Truven Health Analytics latest research,* which analyzed recent MarketScan® claims data* for more than 13 million active employees, non-Medicare retirees, and their families in more than 2,500 self-funded plans to identify real-world healthcare spending trends, 15% of active employee plans are projected to incur the tax upon its activation in 2018, and by 2020, more than 19% of plans are expected to incur the tax. We estimate the tax would result in a cost increase of up to $480 per employee per year (PEPY) for plans expected to incur the tax.

Our study also found that early retiree plans are projected to exceed the statutory thresholds at a much higher rate than active employee plans. Eighty-one percent of early retiree plans for U.S. employers are likely to incur the “Cadillac” tax, and this rate is projected to increase to 84% by 2020. For the plans that we’ve projected will be impacted by the “Cadillac” tax, there will be an annual increase of $1,609 PEPY, or 6.8% of total costs.

We conducted similar research for industry groups such as health systems, universities, and public employers, and these analyses revealed that nearly 40% of active employee plans for health systems and more than 25% of active employee plans for universities in this study are projected to incur the “Cadillac” tax by 2020.

By implementing a combination of benefit design changes, premium contribution alterations, and health risk interventions, you can mitigate the impact of this new tax in 2018 and beyond. Early awareness is key. For more information on the effects of the Cadillac Tax, read our research brief. And contact us to learn how our modeling tools can help. 

Tom Halvorson
Director, Practice Leadership

*The study was executed using data from the Truven Health MarketScan® Commercial Claims and Encounters Research Databases, which consists of medical and drug data from employers and health plans. It contains data for more than 59.9 million individuals annually, encompassing employees, their spouses, and dependents who are covered by employer-sponsored private health insurance.

Understanding Your Exchange Population: Answering the Questions

By Kimberly Bradbury/Tuesday, June 9, 2015

According to a recent article in the Wall Street Journal, health plans are now seeking substantial rate boosts and citing higher than expected medical costs incurred by people newly enrolled under the Affordable Care Act, making exchanges a viable part of the healthcare blueprint. To better understand exchange populations, Truven Health Analytics teamed up with a large health plan to investigate the demographics, risks, finances, and utilization patterns of the exchange population in the health plan’s state.  As discussed at AHIP Institute last week and covered in a Modern Healthcare article, we found:

  • Exchange enrollees are significant consumers – with 64% more emergency room visits and 39% more admissions than non-exchange members
  • Exchange enrollees may be older than expected
  • Exchange enrollees have a higher prevalence of heart failure and diabetes
  • Exchange enrollees specialty drug costs are higher

Although we found a lot of data that contradicted the pre-exchange enrollment forecasts, one conclusion can be drawn from our analysis: It’s more important than ever to understand the details about your unique populations to create appropriate product strategies and plan designs for the future.

In addition to the questions we highlighted in our previous blog, Understanding Your Exchange Population: Are You Asking the Right Questions?, there are also specific actions you can take to ensure your care management programs, member services and outreach are tailored to your exchange members’ unique needs:

  • Leverage clinical data from your first-year ACA plan members’ cost, utilization and demographics, and couple it with advanced analytic tools
  • Understand your population to determine the behaviors that guide their healthcare consumption
  • Risk stratify members to identify opportunities for intervention
  • Include accurate coding initiatives to optimize members’ risk scores that will drive risk fund transfers and plan profitability

Taking these actions is vital to the success of your plan, but it’s a task that requires advanced analytic skills and methodologies. With more than 30 years experience, Truven Health can use your exchange data to help you perform the actions necessary for implementing product strategies and plan designs that are tailored for your members. 

To learn more, download the research brief and register for our upcoming AHIP webinar, Understanding Your Exchange Population: Lessons from Real-Life Data

Kimberly Bradbury, Senior Analytic Consultant
Kevin Ruane, Director of Client Services

Helping People Make Better Healthcare Decisions with Advanced Analytics

By Mike Boswood/Wednesday, June 3, 2015

(Previously posted on IBM’s asmarterplanet.com) 

Sparked by a need to reduce costs and fueled by the Affordable Care Act, the healthcare industry is moving to a retail-based, consumer-oriented model. 

As a result, individuals are taking on greater responsibility for their care – including choosing which treatment option is best for them, which provider they’d like to use, and how they want to spend their healthcare dollars. This is a challenge for many people who don’t have the information they need to make smart, well-informed healthcare decisions. 

It’s also a struggle for health plans. Meeting consumer demands for tools to support decision making is just part of their challenge. In addition, health insurers are undergoing rapid internal change as they shift to an individual business model in response to health insurance exchanges and Medicaid expansion. 

In order to effectively manage the care of a growing population, including the newly insured, health insurers need tools that can provide granular detail on individual healthcare experiences, identify patterns of behavior, and quickly spot outliers for intervention. 

Advanced analytics can help. But only if the analytics are combined with “good” data and a deep understanding of the healthcare landscape.

By integrating proven analytic methods and industry expertise from Truven Health with IBM’s Enterprise Health Analytics platform, we can help health insurers leverage technology and analytics in new ways to improve the quality and value of care. With this combined solution, health insurers and their associated health systems can bring together structured and unstructured data sources from payers, providers, and consumers to identify gaps in care, handle financial reporting and manage cost requirements. They can also use the insights gleaned to assess program and provider performance, ensure payment integrity, and monitor compliance and prevalence over time. 

For example, health insurers will be able to identify patterns of disease management for enrollees with chronic conditions like diabetes, segment those by region, provider, and cost, and then measure any changes over time or even chart changes in the impact of different preventive measures on the conditions. All of these inputs can be used to evaluate quality of care and – ultimately – to drive value-based reimbursement models that will reward providers that deliver the best care at the best price. 

In addition, IBM’s Consumer Price Transparency solution, which streamlines the process of shopping for a procedure or facility, will now incorporate healthcare pricing estimates from Truven Health. The retail shopping solution will leverage IBM’s robust commerce platform and Truven’s proven methodologies to calculate real-time, personalized, out-of-pocket costs for a wide variety of medical procedures and treatments, making the promise of data analytics a reality for everyday consumers who can now comparison-shop for the best quality care based on targeted, empirical evidence, not a gut decision. 

We are entering into an era where data and technology are aligning to make amazing things happen. Properly used, the most promising analytics will help health insurers respond to today’s rapidly changing healthcare environment and empower people to become educated consumers of healthcare.

Mike Boswood 
President and CEO