Employer stop-loss market considerations for health plans

Over the past decade, submitted financial filings suggest the employer stop-loss (ESL) market has nearly tripled, growing from roughly $7 billion in premium in 2008 to over $21 billion in 2018. As this growth has occurred, a significant share of it has accrued to health plans rather than traditional ESL carriers. While there can be hurdles for a health plan to overcome when trying to enter the ESL market or expand an existing stop-loss block, the market can provide meaningful opportunities.

Since 2006, when health plans represented just over one-third of the ESL marketplace, health plans have grown to represent nearly 60% of the market. A majority of this growth in that time period has been concentrated in large, national health plans, whose market share has more than doubled, from 16% to 33%.

The ESL market is different from the fully insured market that comprises the majority of most health plans’ premiums. As such, it is important that health plans wishing to enter (or grow in) the market understand the ramifications of the decision.

In this paper, Milliman’s Rob Bachler and RGA’s David Sipprell enumerate the considerations health plans should examine before diving into the ESL market.

China’s diagnosis-related group payment reform

The Chinese government has been actively promoting the structural reform of its healthcare system. Healthcare payment reform is expected to move ahead quickly with a pilot implementation of multiple social health insurance payment model types.  The country’s National Healthcare Security Administration (NHSA) indicated that it would develop a diagnosis-related group (DRG) standard suited to China’s healthcare system as well as social health insurance management capabilities.

In this article, Milliman consultants Jiang Guanjun and Qiuwen Peng examine the transition from the currently mainstream fee-for-service model to the DRG payment model, the history of DRG in foreign markets, and the potential challenges of having a DRG payment model in China’s system.

Sustainable payment model analysis for integrated medical-behavioral primary care practice

The state of Colorado has implemented integrated behavioral healthcare in primary care medical settings under a Centers for Medicare and Medicaid Services State Innovation Model Award. This program includes about 325 primary care practices across the state and four community mental health centers where physical healthcare is being integrated into the mental health practice.

A key challenge of this initiative is the financial sustainability of the integrated care practices after the federal support ends.

In this paper, Milliman’s Steve Melek, Katie Matthews, and Ally Weaver present a payment model that they believe would support the sustainability of integrated care practices while also helping payers to control healthcare costs. They look first at commercial payer spending on primary care and outpatient behavioral services and then examine the costs of building and maintaining an integrated primary care practice from the providers’ perspective.

They build their integrated primary care practice using a “teamlet” approach. Their design also addresses the primary care physician shortage by adding a nurse practitioner and physician assistant to the integrated primary care practice. It includes medical assistants and licensed practical nurses to complete the medical team.

Pharmacy Briefing: June 2019

Pharmacy Briefing is a monthly summary of select FDA approvals and launches, treatment guidelines and research updates, and other newsworthy events that have the potential to impact commercial drug utilization or costs. 


  • Congressional Budget Office (CBO) projects that the proposed change to pharmaceutical rebate legislation would increase federal spending by $177 billion over a period of ten years
  • Connecticut Attorney General files multi-state antitrust lawsuit against nation’s largest generic manufacturers and industry executives
  • New York State Senate releases investigative report detailing PBM practices
  • Zolgensma (onasemnogene abeparvovec-xioi) is approved, carries a $2.125 million price tag
  • Eli Lilly launches Insulin Lispro Injection as a cheaper, generic alternative to Humalog (insulin lispro)

FDA Approvals and Launches

  • Zolgensma (onasemnogene abeparvovec-xioi) is approved for the treatment of spinal muscular atrophy.
    • Novartis quotes a list price of $2.125 million for the one-time treatment.
  • Eli Lilly launches Insulin Lispro Injection as a cheaper, generic alternative to Humalog (insulin lispro).
  • Vyndaquel (tafamidis meglumine) and Vyndamax (tafamidis) are approved for the treatment of transthyretin amyloid cardiomyopathy, a rare heart disease.
  • Ruzurgi (amifampridine) is approved for the treatment of Lambert-Eaton myasthenic syndrome (LEMS) in patients between the ages of 6 and 17.
    • Ruzurgi (amifampridine) may compete with Firdapse (amifampridine), an expensive drug with an annual list price of $375,000.
  • Nayzilam (midazolam) nasal spray is approved for the treatment of certain types of seizures.
  • Solirux (calcipotriene) foam is approved for the treatment of plaque psoriasis.
  • Piqray (alpelisib) is approved to treat certain forms of breast cancer.
  • Triple-therapy Qternmet XR (dapagliflozin/saxagliptin/metformin) is approved for use in patients with type 2 diabetes mellitus.
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Underwriting income for MPL continues to decline, with faint signs of a firming market on the horizon

The medical professional liability industry’s long-term trend of declining frequency appears to have ended several years ago. Since then, we have seen the reporting of claim counts stabilize for most companies, with some volatility evidenced for certain writers and both increases and decreases seen. Per annum trends in defense costs remain in the mid-single digits.
Milliman’s Susan Forray and Chad Karls provide more perspective in this article.

This article was published in the Second Quarter 2019 issue of Inside Medical Liability.

Small healthcare providers: The challenge of quality measure reporting

How is your hospital, healthcare system, or clinic measuring up to national standards? Are your patients receiving proper and timely care? For many small and rural systems, these are difficult questions to answer without proper (and often third-party) support.

In late 2017, the Centers for Medicare and Medicaid Services (CMS) introduced the Meaningful Measures initiative, with a goal to improve the delivery of care while also reducing costs for both patients and providers through the culling and prioritizing of existing quality measures. Part of this initiative aimed to reduce the burden of reporting for providers. For large hospitals in urban settings, it is likely there are employees whose roles are dedicated to the encumbrance of quality reporting. When new quality initiatives come down the pike, adjusting priorities may take some time, but these teams are largely equipped to handle it. For smaller clinics, measuring success—let alone demonstrating it—under complex and shifting quality standards is a huge challenge. Small clinics are also less likely to have adequate health information technology, which adds another layer of difficulty. There are several options that should be considered as small providers look to improve their quality performance.

Health information exchanges

As healthcare has moved more toward patient-centered care, health information exchanges (HIEs) have increased in popularity. If a patient had an emergent event at Big Hospital A but a follow-up appointment at Small Clinic B, does Small Clinic B have access to the medical records completed at Big Hospital A? HIEs help to improve the timely sharing of medical information among providers, aiding in record completeness and informing better decision making at the point of care. Many HIEs are free to join and work with a wide variety of electronic health record (EHR) vendors. Additionally, these HIEs will often provide analytics tools designed to help providers keep tabs on their quality metric performance.

Upgraded EHR systems

The American Recovery and Reinvestment Act of 2009 saw the call for nationwide adoption of EHR systems by all eligible providers. With additional funding and incentives made available, a veritable swarm of EHR vendors suddenly appeared, and today we’re left with hundreds of EHR platforms. As time has passed, several large players have emerged, and these vendors, though expensive, can offer up enhanced quality measure reporting at the click of a button. Unfortunately, some of the price tags of the bigger EHR platforms make them unfeasible for practices with small budgets. Still, grants may be available for those who are in desperate need of an upgrade, and benefits beyond quality measures are frequently seen.

EHR vendor support

It could be that a small clinic’s EHR vendor already has quality measure capabilities, but the clinic lacks the staff or knowledge to successfully retrieve and analyze the data. This is where an EHR vendor contact can come in handy. Check your EHR vendor’s website or manual for contact information, and fire away. They should be happy to show you the more advanced features of your EHR, including quality measure reporting. It is also worth reaching out to other clinics and practices that utilize the same EHR. Sharing challenges and accomplishments in using an EHR vendor is a good way to learn.

Third-party contractors and software

Many smaller organizations choose to “outsource” their quality measure tracking to third-party vendors who specialize in such calculations. This is a wise choice for many, given that these third parties can provide the technology and manpower that is lacking within the organization. However, it’s prudent to thoroughly vet these types of vendors, as the options are extensive within the healthcare industry. Some questions to keep in mind include:

  • How will quality measures be reported?
    • On an aggregate level, or on the patient level? Will individual physicians or clinics be able to see their overall performance?
  • How are quality measure reports delivered?
    • Is it a web-based dashboard? Is it interactive? Will we need separate software to view results? Can I easily share the results with others?
  • How often will results be updated?
    • Monthly? Daily?
  • How often is the measure logic updated to conform to specifications?
    • Is there an extra annual fee for these updates?
    • Is the vendor certified by the National Committee for Quality Assurance?
  • What other health plans use this technology?
  • Is the vendor compliant with HIPAA regulations?
    • How will data be transferred to you?
    • How will data be stored?

It’s important to find a vendor that will help your organization reach and exceed its own unique goals. Do your research and you will see benefits.

Start small

Keeping track of the myriad quality measures can be overwhelming. Many small practices have found success in focusing their efforts on a few measures, which can be a great way to build confidence and momentum among staff. For clinical quality measures, diabetes, high blood pressure, and tobacco use are popular for beginners to focus on, as well as high-impact for patients. Using internet searches to find examples of workflows and processes other small clinics have been successful with can help to ease the initial burden.

While small providers and clinics face challenges unseen by larger organizations when it comes to tracking their quality performance, these challenges are not insurmountable. Small providers and clinics will be able to succeed by utilizing the options above and several more support options available to them.

This blog post was first published by Katherine on LinkedIn.