iLoveBenefits: Industry News Blog

The health care business model is changing

According to a recent report, 18% of physicians have changed their business models to provide certain services. Within that group, those services include the following:

  • Virtual technology: 51%
  • One-stop shopping: 41%
  • Behaviorial health services: 24%
  • Pharmacist services: 19%
  • House calls: 17%
  • Group visits: 9%
  • Other: 11%

Source: “Kaiser Health Tracking Poll: February 2016,” The Henry J. Kaiser Family Foundation, February 25, 2016, http://kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-february-2016/

There is a reason why hospitals are ill prepared to take on financial risk . . .

Perhaps if hospitals actually understood their real cost of production. Perhaps if health care providers truly understood their cost structures. Maybe then they might be able to reconstruct their business models and take on a higher quality lower cost model where they could actually manage risk they understood.

Survey: Hospitals ill-prepared for financial risk

Few hospitals interested in becoming ACOs are ready to take on financial risk, according to a Commonwealth Fund survey of nearly 1,700 hospitals. ACOs are pursuing models that let them share in any savings they achieve, without losing money if they fail to cut costs. This is likely to continue: Only one in five indicated they were using data to predict which patients are most likely to be in poor health and need more services–a significant gap in their ability to manage risk, lead author Anne-Marie Audet tells Kaiser Health News. (Kaiser Health NewsCommonwealth Fund issue brief)

Prices Are Driving Health Spending Growth – Overall Costs are Growing Slower

So, health care costs are growing slower – see the data in the next paragraph. It is now the prices that are driving the growth. Not too long ago it was the utilization rate that was driving the cost. That leaves one to wonder whether there is a natural flow of increases to health care that will occur. If not by utilization, then by unit cost. I wonder what the economists would say?

Per capita spending on inpatient and outpatient facilities, professional procedures, and prescriptions drugs for people under age 65 with private, employer-sponsored health insurance rose 3.3% in 2010, following increases in 2008 (6.0%) and 2009 (5.8%), according to a new report.

Source: “First-Ever Report Using Health Plans’ Claims Data from Nation’s Largest Private Insurers Shows Prices Are Driving Health Spending Growth,” Health Care Cost Institute Press Release, May 21, 2012, http://www.healthcostinstitute.org/news-and-events/press-release-2010-health-care-cost-and-utilization-report

Economic impact on health status perception

Self-Percieved Health Status by Income

Income Range

Excellent

Very Good

Good

Fair

Poor

<$25k

11.1%

18.8%

29.7%

25.8%

14.3%

$25K-$49.9K

17.4%

29.0%

33.1%

15.7%

4.7%

$50-99.9K

24.0%

38.7%

27.2%

7.9%

2.1%

$100k+

35.5%

38.4%

19.8%

5.1%

1.1%

Total

20.9%

30.9%

28.3%

14.0%

5.8%

Publication Source: HealthLeaders Media, December 2011
Data Source: Thomson Reuters 2010 Pulse Healthcare Survey

January 13, 2012 | Categories: healthcare | Tags: , , | Comments (0)

The economics and human behavior implications of Exchanges explored

Alain Enthoven, Stanford professor and Kaiser Permanente Institute for Health Policy Fellow, weighs in on the design of exchanges under the Patient Protection and Affordable Care Act

In this essay, just posted on the Kaiser Permanente Institute for Health Policy website, Professor Alain Enthoven outlines a number of cautions for the federal and state governments as they pursue exchange implementation.  Enthoven is widely known for developing the concept of “managed competition,” which has as one of its central tenets the use of exchange-like entities that structure health plan choices for individuals and employees.  Among other issues, Enthoven focuses on ensuring sufficient consumer participation in exchanges to impact the competitive environment for health plans.  He also addresses the need to structure financial incentives and individual choice of delivery systems to maximize competition based on value.