Although the health system overhaul itself continues to divide the public, a major poll last year found that 84 percent of Americans support these benefit summaries. The general compliance effective date for both carriers and health plans is September 23, 2012, which is a change from the March 23, 2012 date in the proposed rule. Many carriers were concerned that the earlier date would not give enough time to implement the requirements, which likely includes extensive changes to current IT systems. The September date gives carriers more time for system updates, while giving consumers the new information in time for the popular fall annual open enrollment periods.

Another change from the proposed rule is that enrollee-specific premium amounts are not required as part of the benefit summaries. This is due in part to the large administrative burden required to provide such information that may change throughout the enrollment process.

The final rule continues to require large employer plans, including self-funded plans, to be subject to the requirements, despite heavy push-back from large employers insisting that their plans already supply employees with the benefit summaries they need. The law also requires the forms to give examples of specific coverage explaining how much a plan pays on average for common medical conditions. The initial two medical conditions chosen by HHS are pregnancy and type 2 diabetes. Over time, HHS plans to require four additional coverage examples be included in the forms.

HHS Press Release

Template for the Summary of Benefits and Coverage and Glossary

Final Rule Text

With a U.S. debt crisis and a presidential election looming—and with Group Health paying continually rising prices for care purchased outside our own group practice—the cost-containment drumbeat can seem deafening. But here are 10 reasons why rising costs matter now more than ever:

1. Dollars spent on health care could go to education and other needs.
As former White House Advisor Ezekiel Emanuel, MD, PhD, recently wrote, “The more we spend on health care, the less we can spend on other things we value…middle-class salaries, public education, and other state-funded services.” Money spent on any of those things may promote health more than spending the same on medicine. Also, health care-related debts are weakening American businesses’ ability to compete globally.

2. Lower costs will let more Americans gain access to care.
When insurance premiums rise with the cost of care, fewer people can afford coverage. Emanuel predicted that even after the Affordable Care Act starts providing coverage for the uninsured through Medicaid and subsidies in 2014, some people will still find coverage unaffordable. But bending the curve of cost increases should allow more Americans into the system.

3. Lower costs can be compatible with better care.
Group Health proved this true in our patient-centered medical home evaluation. Results included lower costs, higher quality, fewer hospitalizations and emergency visits, and better patient and provider experiences. Ongoing research seeks to identify more innovations that cut costs while maintaining or improving quality.

4. We know where the money is.
Studies show that the greatest potential for health care savings comes from reducing avoidable hospitalization and improving care for chronic conditions. In the Journal of the American Medical Association, Emanuel recently outlined needed changes, including many under development and/or evaluation at Group Health:

• tracking patients’ health status and physician performance with electronic health records
• more intensive interactions between patients, caregivers, and clinic staff, including using care coordinators, 24/7 access, interventions to increase medication adherence, and specialized clinical services for patients with recurrent problems from chronic disease
• providing services not traditionally covered by fee-for-service reimbursement, such as e-mail, wireless monitoring to increase medication adherence, home evaluations to minimize falls, and lifestyle interventions to improve nutrition and exercise

5. We’re uniquely positioned to help solve the problem.
As a learning health care system conducting non-proprietary research within an integrated health plan, we can study the processes and costs of care and coverage for a large population getting care in real-world clinical settings. This lets us continually refine our ability to design, implement, evaluate, and disseminate innovations that may reduce care costs for Group Health members and others across the United States.

6. We’ve got the connections.
Through Group Health Research Institute’s links to other organizations in the HMO Research Network and other consortia—and our collaborations with universities and medical centers nationwide—we can extend the diversity, power, and reach of our research on costs.

7. It’s the future.
The new Center for Medicare and Medicaid Innovation shows increasing interest in funding research to make care more efficient. Also, the establishment of accountable care organizations (ACOs)—as outlined in the Affordable Care Act—provides new incentives for cost-conscious health care.

8. Improvements are possible.
Other developed nations prove it’s possible to provide higher-quality care at lower cost. Among further glimmers of hope: the Centers for Disease Control and Prevention published a study last month showing a dramatic decrease in amputations among people with diabetes over the past decade, presumably because of better disease control. Such improvements should result in lower costs too.

9. We’re poised to address the problem.
At the Group Health Research Advisory Board Annual Meeting on January 25, leaders from Group Health and our collaborating institutions affirmed GHRI’s recently completed strategic plan. They encouraged the Institute to be more ambitious about solving cost control challenges—for both Group Health and the nation. So a small working group of Group Health leaders will meet soon to plan how GHRI will intensify efforts in cost-related research.

10. It’s our job.
GHRI’s mission is “to improve health and health care for everyone through leading-edge research, innovation, and evaluation.” Reducing costs of care is a pillar of this effort.

The two primary goals of the Task Force were: 1) Identify real-world examples and best practices that facilitate coordinated, accountable, patient-centered care; and, 2) Make recommendations for ensuring that current health information technology efforts support delivery system and payment models shown to improve quality and reduce costs in health care, in ways that best utilize scarce public and private resources.

The report discusses the common attributes of high-performing organizations that align with emerging delivery system reforms and health IT capabilities needed to support them. Group Health is considered to be a high-performing organization by the Task Force, and our successes are captured throughout the report. The report also addresses gaps in health IT capabilities, the barriers to their achievement, and recommendations for accelerating the creation of a health IT foundation that will drive improvements in the quality, safety and cost-effectiveness of care in the U.S.

Health IT plays a critical and foundational role in these new models of care. When well designed and effectively used, health IT saves lives, improves quality, and reduces costs. This report takes a very necessary step in the right direction to help meet the triple aim of improving health, improving the experience of care for patients and families, and reducing the cost of care.

However, much more future work is needed in this field to further drive innovation in health IT, and we hope this report will help encourage policy makers to promote health organizations who are investing and innovating through health IT. Amidst the national and state discussion on furthering health IT capabilities, Group Health continues to forge the way for other organizations in the use and development of health IT for the benefit of our members.

Press release

Report

I believe the support for committed couples is part of respecting our staff and our patients. Respect for all people is a core value of Group Health. Inclusion and equality help build a workforce that reflects and can support the diverse needs of the patients we serve.

“We support our people, both our staff and our patients, and we also support human rights as guaranteed to all citizens of this country,” said Michael Soman, MD, Chief Medical Executive Officer, and President of Group Health Physicians. “Close collaboration and respect, with our colleagues and our patients, are critical to creating better health for individuals and communities.”

Group Health’s position builds on its history of supporting corporate and public policies that promote inclusion and equality. Group Health was recently recognized in the Healthcare Equality Index for its leadership in meeting high-quality standards in serving the LGBT community in its 25 statewide medical centers. The standards include some basic services such as visitation rights and patient non-discrimination policies

States to determine benchmark EHB plan
Under HHS’ intended approach, states would have the flexibility to select an existing health plan to set the “benchmark” for the items and services included in the EHB package. This gives states the option to select a plan that would be equal in scope to the services covered by a typical employer plan in their state, with additional flexibility to adjust with the market as innovative plan designs are developed and advancements in care become available. States will base their package on the benefits offered by: one of the three largest state employee health plans (by enrollment); one of the three largest federal employee health plans; the largest HMO plan offered in the state; or one of the three largest small-group plans in the state. The benefits and services included in the selected health plan would then be considered the EHB package for the state.

Consistent with the Affordable Care Act (ACA), states must ensure the EHB package covers items and services in at least ten categories of care, including preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs. The bulletin addresses only the services and items covered by a health plan, not the cost sharing—such as deductibles, copayments, and coinsurance—that will be required by a qualified health plan. The cost-sharing features and rules will be addressed in future bulletins.

State mandates
The Institute of Medicine (IOM) issued guidance a few months ago that stressed the importance of affordability in an EHB package, along with stressing that only state mandates that are evidence-based should be included in the EHB package. The HHS bulletin has somewhat deviated from the IOM’s guidance, in that it does not specifically address cost and offers a different solution for state mandates. To prevent federal dollars paying for state benefit mandates, the ACA requires states to pay the cost of state mandated benefits (in excess of the EHB package) for individuals enrolled in any plan offered through an Exchange. However, the bulletin provides that as a transition in 2014 and 2015, state mandates included in the benchmark plans would be included in the EHB package for that state, without requiring the state to pay for the cost.

What we are hearing
Patient advocates previously called for a broad national EHB standard that would cover a wide range of treatments, while business groups have said affordability must be a top consideration, even if it means a more limited package. Both segments appear to have concern with the bulletin. It does not address cost as a consideration for the establishment of the EHB package to satisfy the business groups, nor does it address consumer advocate concerns by creating a national standard that will “beef up” plans in states with minimal state mandated coverage. Furthermore, the bulletin continues the uncertainty faced by insurers, consumers and employers over exactly what will be covered in the EHB package.

To add confusion, the issuance of a bulletin by HHS was an unexpected twist, as the issuance of a Proposed Rule and/or Request for Information is the normal protocol for regulations of this kind. It has been speculated that the administration specifically chose to issue a bulletin as it does not have to provide definitive economic estimates of the proposal or determine regulatory impact on small business. Additionally, allowing states to make the decision on the EHB package that works the best for them saves the administration the potential political backlash from not including specific benefits in the package.

Next steps
All eyes are on Washington state as to which option it will choose as its benchmark plan. As a mandate-heavy state, it will be particularly interesting to see how Washington will impose restrictions on the EHB package in an effort to keep coverage affordable in the post-2014 market. Will there be a continued push for additional mandates at the state level, or will the legislature begin to review the current mandates on the books? Either way, HHS has given the state some time to transition current mandates and develop an EHB package that will offer Washingtonians access to affordable adequate coverage.

Essential Health Benefits Bulletin
Fact Sheet on the Informational Bulletin on Essential Health Benefits

Your consumer Board of Trustees has been busy reflecting on 2011 and planning for the future. As part of that reflection process, we’ve considered the Cooperative’s journey from its creation in the great cooperative movement of the post-war years, and coming of age in the turbulent second half of the twentieth century. Our annual membership meetings were lively and exuberant affairs where many important discussions took place.

We’ve been looking at ways to recapture that spirit of engagement in our Group Health as we celebrate the International Year of the Cooperative. Things have changed since 1947, but our members still care deeply about their health and that of their families and communities. Our job for 2012 is to find ways for our members to engage with their Cooperative in ways that work for today’s lifestyles.  As I said at the Annual Meeting, you’ll be hearing more about that in months to come.

In the meantime, with thanks for your continued enthusiasm for Group Health Cooperative, I wish you a holiday season filled with good health.

Here’s a proposal that could lead to positive change, not just for politics, but for patients, providers, purchasers, and policymakers: Uncover and share information on the true costs of care. Coupled with knowledge of health outcomes, this information can provide common ground for understanding the value of various approaches to care—something that’s missing in today’s debates.

In September’s Harvard Business Review, Harvard Business School professors Robert S. Kaplan and Michael E. Porter explained why facts about health care costs are so elusive: Most health care organizations focus only on how much the government and insurers spend, not on the costs health care providers actually incur. Why? The health care system is so complex and uncoordinated that accurate cost information is difficult to find. And costs are often shifted from one type of service or provider to another, or to the payer or patient. The result proves a management axiom: What isn’t measured can’t be improved—or even managed.

“Poor costing systems have disastrous consequences,” Kaplan and Porter write. Providers and payers don’t link cost to process improvements or outcomes, so instead of choosing systemic and sustainable cuts, they make simplistic across-the-board cuts in areas like pricey services, compensation, and staffing. The consequences? Marginal savings, higher total system costs, and poorer outcomes. Introduce high copayments on expensive drugs, for instance, and clinic costs may soar as patients stop drug treatment and get sicker.

What’s the fix? Focus on patients and their conditions—not departmental units, procedures, or services—as the fundamental unit of analysis for measuring cost and outcomes, say Kaplan and Porter: “Account for the total costs of all the resources” that individual patients use as they traverse the system.

We must understand the cost of the patient’s full care experience—from the first sign of a health problem to recovery or death. We need cost data related to all of the patient’s providers (primary care doctors, specialists, nurses, therapists, etc.), all tests, drugs, equipment used—and any home health care or phone or e-mail consultation. How much is needed for administration and other overhead including facility costs, plus the cost of managing insurance coverage?

Where in our nation’s fragmented health care system can we gather such patient-focused information? Right here: For Group Health members who get their care within our own medical centers, we have a comprehensive view of nearly all activities linked to the cost, outcomes, and value of services provided. Still, there have been challenges. Before the 1980s, Group Health collected very little data on cost. Because purchasers paid a flat fee for coverage and services per person, without fees per service, the cost of discrete services may have seemed irrelevant.

But over time, Group Health has become increasingly interested in understanding the cost and outcomes—and therefore the value—of care provided within the system. That understanding, coupled with Lean management, aids our mission to provide “affordable excellence.”

Some cost information is still hard to come by, though—especially for Group Health members who get care outside of our integrated group practice and facilities. Rates set for other insurers and Medicare largely determine these services’ prices.

Still, Group Health and other integrated systems provide a terrific environment for achieving better awareness of the cost and outcomes of care. Collaborating with Group Health managers, researchers can compare the relative value of various approaches, both inside and outside Group Health. We can also partner with institutions across the nation to conduct even larger studies to provide facts needed to design a less expensive, higher-quality health care system.

Our aim is to build a better foundation of knowledge about costs. We must accept the challenge to measure and manage cost and outcomes, creating better value for Group Health members. In so doing, we can take better care of our patients and contribute to a U.S. health care system based more on the light of evidence—and less on the heat of politics.

Read Harvard Business Review article, “The Big Idea: How to Solve the Cost Crisis in Health Care” by Robert S. Kaplan and Michael E. Porter.

The Seattle Times

The trend is a stunning example of the way market forces continue to cause cost inflation in our nation’s health care system. This expansion comes at a time when our economy desperately needs to bring government and private health care spending under control.

As Ostrom’s sources explained, these appealing, conveniently located new facilities attract new, well insured customers into the hospitals’ health care systems. But emergency facilities are not an ideal place for patients with non-urgent, non-emergent problems to get care. It would be much better for such patients to be seen in primary-care environments that are based on the fundamental concepts of the “patient-centered medical home”: care is continuous, comprehensive, and coordinated. As Group Health showed in its evaluation of the medical home, such care improves quality of care and patient experience, while reducing costs and emergency department utilization. By contrast, providing care for non-urgent problems in an emergency facility drives up costs by charging fees that are several time higher to cover overhead. Also, emergency facilities can rarely assure that patients get connected to a primary care-based system for follow-up or ongoing care. Without such connection, costs and quality can be adversely affected. A continuous healing relationship with a physician or other provider is the best way to avoid unnecessary emergency care.

Another potential problem with free-standing emergency clinics is overuse of expensive, high-end imaging—the so-called “cash cows” of such facilities. While imaging technology is valuable for diagnosis in many situations, research has shown that its unwarranted use is growing, driving up costs and, of perhaps greater concern, unnecessarily exposing patients to increasingly higher doses of radiation.

Public officials and others are justified in their complaints over the proliferation of new emergency medical facilities in our region. While such growth may serve hospitals’ immediate business interests, ultimately, citizens will pay for unnecessary facilities through higher taxes and health premiums, without benefitting from improvement in community health. A better approach would be to reduce the need for emergency care by building a system characterized by effective and available primary care.  As a nation facing an economic crisis driven largely by our inability to control health care costs, the boom in high-end emergency facilities is taking us down the wrong path.

In the aftermath of the Supercommittee’s unsuccessful discussions, many are asking “what next?” (particularly those in the health care industry). Because the Supercommittee was unable to come to agreement, a process called “sequestration” will now take place in January 2013. Sequestration will include $1.2 trillion of across- the-board cuts over 10 years to both defense and domestic discretionary spending. This includes $600 billion in cuts to the Department of Defense and a 2 percent reduction in Medicare spending totaling $123 billion. The majority of the cuts will affect in-patient hospital care, group plans (including Medicare Advantage) and physician payment. In addition, another $133 billion will come from mandatory and discretionary reductions outside of the defense and Medicare realm. This includes a portion of the cost-sharing subsidies offered through exchanges in 2014.

The automatic reductions in Medicare provider payments are not methodical, and do not offer a long term solution to the continuation of entitlement programs. In this regard, it was speculated that the Supercommittee would reform Medicaid and Medicare and perhaps alter the Federal Employees Health Benefit (FEHB) plan as part of the deficit reduction recommendation. However, without a Supercommittee recommendation only Medicare is touched through sequestration; Medicaid is off the table, along with the FEHB plan and Social Security.

There is frustration on both sides of the aisle in Washington D.C. that the Supercommittee could not come to agreement. The blind cuts that will trigger in 2013 impact important programs to each party—programs that have been difficult to touch in the past. However, all is not lost, and there is still time for Congress to develop and pass alternative deficit reduction bills prior to the beginning of the across-the-board cuts. Though the looming 2012 election will likely make any deficit reduction discussion continue to be highly polarized and very political.

This presents opportunities to organizations like Group Health to play an important role in developing and evaluating proposals outside the political sphere, and to show what actually works to contain health care costs.

In a surprising move, the Court said it will hear oral arguments on multiple aspects of ACA, not just the individual mandate. The oral arguments will likely take place in spring and are scheduled for more than 5 hours, which is lengthy compared with past oral arguments before the Court. Some legal scholars believe this decision is a sign of the Court’s deep interest in the law and recognition of its significance. The Court has requested the oral arguments cover the issues of whether Congress exceeded its power in developing the: individual mandate; Medicaid expansion to cover all citizens under 133 percent of the Federal Poverty Level; severability of parts of ACA; and, Anti-Injunction Act as it may apply to ACA. The Anti-Injunction Act essentially states that if the penalty for not purchasing insurance in 2014 is considered a “tax,” then the Court cannot hear the case until 2014, when a person will actually be “harmed” by the new law.

The Court’s decision to hear the constitutionality argument of the Medicaid expansion is of particular interest since the Court rarely addresses issues that have not split lower courts. The district court and the appeals court in the 26-state suit both said the Medicaid expansion is constitutional, but both found the individual mandate to be unconstitutional.

The Court’s decision will likely be rendered in June. The timing is significant, because the decision will be made in the heat of the 2012 presidential campaign, and could affect the course of the presidential campaigns in the final, critical months leading up to the 2012 elections. Striking down the individual mandate—one of the hallmarks of the Obama presidency—could reenergize the opposition in what is expected to be an extremely close presidential race. However, if the Court determines the penalty to be a tax, the Court’s decision could be put off until 2014 pursuant to the Anti-Injunction Act. This undoubtedly would add to the existing uncertainty around implementation for all concerned—employers, individuals, healthcare providers and payors. For this reason, the Court is feeling pressure by both sides to issue a ruling on the individual mandate as quickly as possible.

Another thing to note is that despite mounting pressure regarding conflicts of interest in the ACA case, Justice Kagan and Justice Thomas did not recuse themselves from the decision (information customarily included in the message from the Court when it grants review).

Group Health has long been a proponent of access to quality, patient-centered, and affordable care for every person. We believe that the individual mandate is an important part of balancing risk in the market, and a fundamental element of ensuring access to affordable coverage. As Washington state experienced first-hand in the 1990s, the elements of health care reform that many will benefit from—like guaranteed issue and no pre-existing conditions exclusions—will work most effectively if everyone participates.

New York Times story

Washington Post story