Bloomberg recently reported on one of the less-discussed elements of the Patient Protection and Affordable Care Act (PPACA): the way the law increases the ceiling on incentives and penalties employers can use to encourage participation in wellness programs. The incentives and penalties come in the form of premium increases or discounts. Formerly limited by HIPAA to 20% of premium, the PPACA raises the limit to 30% and leaves the door open to 50% in the future. Financial incentives and penalties can be used in both participation-based (join the gym) and outcomes-based (meet a BMI target) programs.
In the article, a pair of researchers from Georgetown University claim that these incentives, if poorly designed, could end up costing less-healthy workers more and potentially even driving them out of employer-sponsored plans. On the other hand, wellness plan administrators say they make sense as they reduce risk to employers. In any case, employers will want to weigh the implementation of these incentives carefully against the return on investment (ROI) from wellness programs. If less-healthy employees are discouraged from using their health benefits because of high deductibles or a switch to less benefit-rich plans because of high premiums, they may be more likely to let health issues linger until they become more critical and costly.
Milliman consultants have examined the issue of wellness programs from a number of perspectives. Kathryn Fitch and Bruce Pennyson published an article in Benefits Quarterly that covers the breadth of wellness programs, the evidence base for them, how employers should target candidates, and reasonable success criteria. In an interview, Fitch also talked about lessons learned from wellness programs in the private sector. And, Scott Weltz discussed how companies can use evidence-based measures to look at wellness program effectiveness in the early years of implementation when ROI data are very hard to come by.
Under the provisions of the Patient Protection and Affordable Care Act (PPACA), all health plans (other than those that choose to remain grandfathered) will be required to provide preventive services without copays, coinsurance, or other cost sharing. Although there is no way to tell exactly how the PPACA requirements will affect preventive care trends, it is safe to say that use of preventive services overall is likely to increase. This paper discusses existing preventive care utilization rates and compares them to a calculation of the recommended utilization rates.
A new study released today by the Society of Actuaries estimates $300 billion in economic costs associated with obesity in the United States and Canada. Here is an excerpt from the release:
According to a new study released today by the Society of Actuaries (SOA), the total economic cost of overweight (BMI between 25.0–29.9) and obesity (BMI of more than 30) in the U.S. and Canada reaches $3001 billion per year, with 90 percent of the total–$270 billion–attributed to the U.S. While much research has been conducted on obesity, the SOA study looked at the economic costs of overweight and obesity caused by increased need for medical care, and loss of economic productivity resulting from excess mortality and disability.
We have talked before about diabetes. Today, the Task Force for the National Conference on Diabetes issued a diabetes-related call to action:
The Call to Action seeks to address diabetes prevention, diagnosis, treatment and management, as well as to identify the practices and resources required to meet the needs of people with, and at risk for, diabetes,” said Steve Edelman, M.D., a practicing endocrinologist and Founder and Director of Taking Control of Your Diabetes, one of the members of the Task Force.
Diabetes currently affects nearly 24 million people in the U.S.(1) and is expected to reach 32 million by 2031.(2) (p.2,l.81-2) Modeling by Milliman, an actuarial firm, indicates that diabetes-related costs could increase from 10 percent of U.S. health expenditures in 2011 ($340 billion) to 15 percent by 2031 ($1.6 trillion).(2) (p.2,l.90-2)
Read more here.
The Disease Management Care Blog looks at the question of hypertension, blood-pressure treatment, and the medical home model:
Long ago, the Disease Management Care Blog was a co-investigator in a multi-center high blood pressure (hypertension) research program. Everyone was treated with a precisely defined script and, compared to it’s regular patients, the blood pressure of all the DMCB’s research participants dropped. The DMCB concluded that that was thanks to two features of the research trial: 1) free drugs, and 2) a nurse devoted to making sure people took their free drugs.
That nurse helped convince the physician-DMCB that disease management could work.
“Could work,” with the emphasis on could, is also the context of this report by the expert health insurance actuaries over at Milliman, who examine the same potential of the patient centered medical home (PCMH) in the management of hypertension. In this handy and thoroughly researched review (63 references), authors Kathryn Fitch, Kosuke Iwasaki and Bruce Pyenson discuss how the PCMH could improve the treatment of hypertension thanks to its a) ongoing patient monitoring and treatment plans, b) use of telephonic and email outreach, c) concurrent co-morbidity management, d) efficient medication adjustments, e) liberal use of non-physicians for low-risk patients, f) increased patient-provider communication, g) coordination of specialist access and g) an ability to measure population-based outcomes.
All well and good, says the DMCB, but the reason why policymakers and other stakeholders may want to download the report is because it contains some key caveats…
Newsweek has released a new article looking at the coming Hepatitis C epidemic. Here is an excerpt:
Hepatitis C is a serious challenge for both doctors and public health officials, largely because of its long incubation period. An individual infected with hepatitis C can live the majority of their life not knowing they were infected. In fact, the new IOM report suggests this is usually the case: 75 percent of those with hepatitis C don’t even know they have it. And unlike other forms of the hepatitis virus, like A and B, there is no known vaccine. So the virus continues to be transmitted through exposure to infected blood, often injection drug use. Boomers may have also become infected by a blood transfusion or organ transplant before 1992, when officials began screening the blood supply for the disease.
Of those infected with the virus, about 60-70 percent will develop chronic liver disease. For about 40 percent, a months-long regimen of shots and pills will eradicate the virus. But many will continue to live with the disease as a chronic condition; 1 to 5 percent will die of the consequences of liver disease. Some expect to see these conditions become significantly more prevalent as Boomers’ cases move from virus to disease. One study, a Milliman Report published in May 2009, predicted that the number of patients with advanced liver disease will be four times greater than it is today by 2029. Cases of cirrhosis, scaring of the liver, will also quadruple.
Read the Milliman study here.
A new study looks at critical illness rates and provides further insight into the risks of smoking. As reported in National Underwriter:
A 25-year-old male non-smoker has a 24% chance of having a critical illness before reaching age 65 — and a 25-year-old male smoker has a 49% chance of incurring such an illness, according to the American Association for Critical Illness Insurance.
Analysts at Milliman Inc., Seattle, included those figures in a national critical illness risk assessment study prepared for the AALTCI, Westlake Village, Calif.
The Milliman analysts used a definition of critical illness that includes heart attacks, strokes, and life-threatening occurrences of cancer.
See the full NU article here and read other coverage here.
A Medicaid program in Massachusetts has spurred a 26% reduction in smoking rates, and has prevented various hospitalizations and care associated with asthma, heart attacks, and other conditions. See more here.
Smoking cessation programs are an example of a wellness benefit that demonstrably works.
A $.62 Federal tax on cigarettes is getting some ink this week, just as a House vote to give the FDA regulatory power over the tobacco industry attracted attention last week.
Some are framing these developments as part of the larger healthcare reform debate and even suggesting the tax could help reduce other healthcare costs. Do the cost claims hold up? Hard to say, though employer-sponsored smoking cessation programs pay for themselves, one of the few examples of wellness initiatives with a clear return on investment.
Government, Prevention, Wellness
As we mentioned on Monday, the cost-savings potential of prevention and wellness is still uncertain. Milliman Principal Kate Fitch provides some perspective on this.
Wellness is often mentioned as a key component of healthcare reform yet the success of these programs is mixed.
We asked Kate Fitch for perspective based on lessons learned from the private sector.
Q: What wellness programs are most effective? Do some programs work better than others?
Kate Fitch: Program effectiveness goes beyond whether or not it “works.” Wellness programs should be evaluated in terms of both efficacy and value. Providing everyone with a personal trainer, personal nutritionist, and exercise equipment in the home might result in a few great outcomes. But if the cost becomes astronomical, or if the population affected by the program is insignificant, the value of the program comes into question.
Comparative Effectiveness, Evidence-based Requirements, Prevention, Value, Wellness