Neil Young just put his entire catalog online, free, at high quality. https://t.co/FmTIpf0sAA
— Eugene V. Clemens (@EugeneVClemens) December 4, 2017
That is all.
Open thread.
I am a student in the doctoral program at the Duke University Department of Population Health Sciences. I am working towards my my doctorate in Health Services Research with a policy focus. I am fundamentally fascinated by insurance markets, consumer choice and the navigation of complex choice environments. I'm currently RA-ing at the Duke Margolis Center for Health Policy.
I used to be Richard Mayhew, a mid-level bureaucrat at UPMC Health Plan. I started writing here and have not found a reason to stop.
Conflicts of interest: Previously employed at UPMC Health Plan until 12/31/16. I also worked full time as a research associate at the Duke University Margolis Center for Health Policy. I have received direct funding from the National Institute for Healthcare Management, and I have been on projects funded by the Rockefeller Foundation, Kate B. Reynolds Charitable Trust, Gordan and Betty Moore Foundation, Duke University Health System, CMMI, and various value based payment consortiums. I serve as a consultant on a grant from the Commonwealth Fund and have acted as a consultant to several ACA insurers.
Research Production is here: https://scholar.google.com/citations?user=zof9b4IAAAAJ&hl=en
David Anderson has been a Balloon Juice writer since 2013.
by David Anderson| 227 Comments
This post is in: Music, Open Threads
Neil Young just put his entire catalog online, free, at high quality. https://t.co/FmTIpf0sAA
— Eugene V. Clemens (@EugeneVClemens) December 4, 2017
That is all.
Open thread.
by David Anderson| 30 Comments
This post is in: Anderson On Health Insurance, Contraception Clusterfuck
CVS has agreed to buy Aetna for a lot of money. This raises a lot of questions including, what is the value proposition?
Aetna already uses CVS as its PBM, so would a merger yield much more effiencies? Maybe, but not obvious. https://t.co/cLmMRugBJC
— (((Martin Gaynor))) (@MartinSGaynor) December 3, 2017
There is the obvious value proposition that CVS has 10,000 physical locations on the same information platform. I am spitballing and harkening back to my days as an insurance data geek and there are three inter-related items that could generate an incredible amount of revenue for the Aetna/insurance side of the deal. This is a risk adjustment data gold mine.
Aetna, CVS and data thoughtsPost + Comments (30)
Every risk adjustment system which drives money that I know needs a claim based event to trigger an action. Previous history of chronic conditions is the easiest to access predictor of current chronic conditions. When I worked at UPMC, I spent three years figuring out how to optimize the risk adjustment revenue for the Medicaid line of business. UPMC Health Plan is a multi-line insurer with products in Medicaid, CHIP, Exchange, Medicare and Employer Groups. It is not at all unusual for people to bounce between Medicaid, CHIP, Exchange and Employer coverage over time. One of my major projects that I was very happy to have completed was building an integrated data model that mined the entire UPMC claims universe instead of just the Medicaid claims universe. That increased the total revenue haul and decreased the number of false positives.
I had it easy. Data geeks working for insurers with either low market share or shallow data had a much harder time optimizing their risk adjustment revenue.
Aetna has a kick-ass data team. They have huge and deep data sets that they control. It is quite likely that a significant chunk of their risk adjusted covered lives in 2018 have shown up in some point in their data bases in the past decade. An individual who is now insured by Aetna Medicare Advantage in Texas may have had an amputation claim from Aetna Medicaid in Pennsylvania that is dated in 2009. That is valuable information to build and curate a risk adjustment optimization list.
However there are always serious holes in the Aetna list. Either someone has never been on Aetna before or there was a major change in health status when that person was covered by someone else. This is where CVS comes in. There is a good chance that CVS has filled some prescriptions for people who do not show up in Aetna’s data banks. Newly covered lives by Aetna can have a risk profile built off of CVS prescription data to minimize the number of surprises and optimize risk adjustment strategies.
This is the most obvious play from my days as a risk adjustment data geek. The other side of the far more complete pre-enrollment data universe for Aetna via the CVS pharmacy data is that Aetna will have far more granular level information on their markets. This will influence plan design, it will influence marketing materials, it will influence whether or not Aetna enters or leaves a market or bids for certain contracts.
Finally, the biggest data bonanza from my point of view is the CVS non-prescription data that is tied to the loyalty card that almost everyone carries on their keychain. This should give a massive predictive edge to the Aetna data geeks. Let me share way too much personal information to illustrate.
Our two children were extremely planned children. My wife used oral contraception until we started trying for our first child. After our daughter’s birth, we switched to condoms as our birth control method as she felt better off the pill and for the most part, we could handle a happy accident or a baby one year premature. I felt that I was tempting fate if I bought condoms from Costco. I walked past a CVS at least twice a day to and from the bus-stop I used for work. If we were running low, I would pick up condoms and a gallon of milk.
If an insurer could see the non-prescription purchases tied to the customer loyalty card, they had an excellent idea of when my wife and I started trying for Kid #2. If this was an insurer that sought to be socially productive and useful, we could expect to get mailings and outreach calls on pre-natal and perhaps pre-conception health enhancers. If the insurer was run by cynical bastards and the time of the year was right, they might try to be enough of a pain in the ass to get us to switch insurers so that someone else could pay for labor and delivery.
That is the most obvious data play that I can think of based on personal experience. I can think of using the CVS retail data as population health monitoring service, I can think of using the over the counter sales data tied to individuals to fuel predictive models for future opioid issues, or arthritis flares, or pulmonary hospital admissions or one hundred other things.
So from my former point of view as an insurance data geek, this merger offers an incredibly rich vein of data that can be mined and minted. This makes a lot of sense to me without even thinking about how the entire pharmacy benefit management function is a messed up situation.
by David Anderson| 130 Comments
This post is in: Because of wow., Election 2018, All we want is life beyond the thunderdome
Now that the tax looting bill passed last night, let’s think about the ads that can be run:
Senator X just voted to increase your taxes on your home while allowing rich assholes to write off their private jets that bring them to the Caribbean ….
Senator X just voted to make it harder for your kids to finish their education but the rich assholes who go to Shadyside Academy get cheaper tuition… is that fair?
My first thought this morning is a simple one. How difficult is it to write an enforceable tax on net personal assets over a fairly large threshold ($100 million was my first spitball figure)? I would split this into two elements. The first would be confiscatory inheritance taxes over that threshold and the second would be a tax roughly equal to the rate of the 30 year Treasury. Concentrated wealth is killing the US democratic experiment.
by David Anderson| 111 Comments
This post is in: Election 2016, Open Threads, "Lock Her Up!!", Are these Nazis Walter?, Assholes, Blatant Liars and the Lies They Tell, Fucked-up-edness, Good News For Conservatives, Nobody could have predicted, Not Normal
BREAKING FROM SPECIAL COUNSEL: The court has scheduled a plea hearing for Lieutenant General Michael T. Flynn (Ret.), 58, of Alexandria, Va., at 10:30 a.m.
— Steve Kopack (@SteveKopack) December 1, 2017
Open thread
Go long popcorn
This post is in: Anderson On Health Insurance
Andrew Sprung has a good point on the value of $0 Bronze premiums that I want to explore some more:
The prevalence of free bronze plans for enrollees with incomes under 200% FPL (and for a fair number of older buyers over that threshold) is head-turning. But for those who know they need healthcare and have little or no savings or spare income, a bronze plan — free or otherwise — can be close to useless….
Take the case of a family of four, parents aged 46 and 44, with an income of $49,000, just under 200% FPL in Durham, NC (zip 27702), where the state BCBS has a monopoly. The kids are in CHIP, and that’s good. Strong CSR raises the actuarial value of a silver plan — the percentage of the average enrollee’s costs the plan is designed to provide — to 87%, and that’s pretty good by current standards — better than the average employer sponsored plan, in fact. It’s also better than Medicare….
The bronze plan is free — but if the family has no assets or surplus cash flow, it’s largely worth what they pay for it, or may feel that way. No benefits except the mandated free preventive kick in before the enormous deductible. In many markets, bronze plans that do not subject doctor visits or generic drugs to the deductible are available. That’s helpful, but not does mitigate the risk inherent in enormous bronze out-of-pocket maximums.
The silver plan offers more attractive coverage. But $242 per month is a big bite on $49k for a family of four.
The fundamental question is how valuable is additional option space?
In previous years, the same family in the same situation would have had an option to buy the least expensive Bronze for some premium value that was equal to or greater than zero and less than the Benchmark Silver post-subsidy premium price of $257/month. That has always been the case in counties where a Silver and Bronze plan is offered. For this particular family, the least expensive Bronze premium, after subsidy in 2017 would cost slightly more than $100 a month. Now there is a $2,900 difference in annual premiums between CSR Silver and Bronze.
CSR Silver only has incremental value to the family if there are individual medical expenses between $800 and $6,650 without considering the difference in premiums. The additional 6% in family income that is not being spent on premiums pushes the breakeven point of the the CSR Silver $3,700 in medical expenses for one individual or up to $4,500 in expenses for the couple. In 2017, that same set of calculations has Silver CSR having incremental value at $2,000 in medical expenses for an individual.
Most people don’t have $3,700 in medical expenses in a year. Most people don’t have $2,000 in medical expenses in a year. It is a gamble that 2018 will be a decent year of health for a couple in their mid-40s. If they know that they are on multiple medications and are anticipating a minor surgery next year, Silver makes a lot of financial sense. If they think that they are relatively healthy and they are insuring against a cancer diagnosis then Bronze can make sense.
The difference in 2018 versus previous years is that the Silver vs. Bronze trade-off point changed. The option space got bigger.
by David Anderson| 10 Comments
This post is in: Anderson On Health Insurance
Given that it is extremely likely that the individual mandate will be repealed in the next couple of weeks and the rule making for limited duration plan extensions is slowly grinding forward, what will the individual market look like on January 1, 2019?
Right now for someone who has to either buy their insurance on the individual market or go uninsured, there are a couple of broad pathways. They can buy a subsidized or unsubsidized ACA plan, they can participate in a Health Sharing Ministry, get on a three month short term plan or go uninsured.
The individual health insurance market in 2019 will look very different. The Office of Management and Budget (OMB) are processing rules for association health plans and 364 day limited duration plan expansions. Those are plans that can underwrite people out of coverage and limit benefits. The lack of the individual mandate will also increase the price of the ACA community rated, guaranteed issue policies. So what happens?
Individual insurance market possibilities for 2019Post + Comments (10)
People who qualify for significant Advanced Premium Tax Credits (APTC) and CSR assistance will most likely stay in the ACA market. There will be some leakage of healthier individuals who can pass medical underwriting and who receive some but not large APTC credits move to the non-regulated individual market. Insurers will have strong incentives to aggressively strategize their product offerings to maximize Silver Gaps and potential CSR based Silver-Loads to lower the absolute post-subsidy prices; this will minimize the loss of healthy subsidized buyers to lightly regulated plans.
Healthy people who make too much for APTC or otherwise don’t qualify for it can buy much cheaper coverage. Some of the coverage is good coverage, some is appropriate for the hit by a meteor/congrats you have cancer situations and some is junk. These individuals have had this choice to some degree already today as there are the Health Sharing Ministries but the options will be much broader and more aggressively sold.
So far we’ve talked about either subsidized individuals or healthy individuals. They’ll be okay or better off. The big problem are people who aren’t healthy and who make too much to qualify for the ACA subsidy pool. They are in trouble.
The average ACA premium will increase because the lack of an individual mandate will draw out some of the healthier and cheaper individuals from paying premiums. The average ACA premium will also increase as the underwritten plans can offer cheaper/better deals to the healthiest/youngest people who would still want to be insured even without the mandate. For subsidized buyers, they don’t feel the incremental rate increases. Non-subsidized buyers are not protected.
For non-subsidy eligible people with moderate risk, they might be able to get an underwritten plan at an up-rated premium that may be cheaper than an ACA plan without any subsidies. But for people with low risk but high guaranteed expenses such as individuals with metastatic cancers, hemophilia and cystic fibrosis, no underwritten plan will touch them with a thirty foot pole. Their application would be burned on the spot and the ashes placed on a rocket that will crash into the sun.
These individuals are being left out of what will be effectively a well subsidized and well funded high risk ACA pool and they are underwritten out of the market for healthy, non-subsidized individuals. These are the people who are at the most long run risk as the off-Exchange market segment will get proportionally far sicker and thus the entire ACA risk pool will get sicker, holding everything else constant, and thus more expensive.
I again am not too worried about entire states not having insurers for the ACA market. Insurers know how to price sick risk pools as long as they can expect sick risk pools. Single insurer regions and states are probably more likely to increase as the risk of getting a disproportionally sick risk pool declines when there is no competition that can cherry pick the comparatively healthy.
Smart insurers with years of claims data will be able to aggressively self-cherry pick low cost members who are likely to drop coverage and push them into lower premium underwritten plans. The outcome is a four section system of the individual market: the uninsured, the underwritten, the subsidized high cost risk pool for 100-400% FPL ACA plans and the truly SOL.
This post is in: Anderson On Health Insurance
My former employer is bragging about research recently published by a Pitt Med School professor. She is looking at the changes in cost of care for Veterans Administration patients because of a new integrated care model.
The VHA launched its Patient Aligned Care Teams (PACT) initiative in 2010, the largest program in the country to implement patient-centered medical home care. The VHA assigned each of the network’s 5 million primary care patients to a “teamlet” designed to provide multidisciplinary health care support focused on patients’ individual needs…..
a team of researchers… analyzed medical records from all 808 participating clinics
The 77 clinics that most fully executed the PACT model by 2012 had significantly larger improvements in five of seven chronic disease outcome measures and two of eight clinical process measures compared to the 69 clinics with the fewest PACT elements implemented. Researchers found that clinics with the most advanced PACT implementation saw 1 to 5 percent more of their patients meeting established levels for diabetes, blood pressure and cholesterol control.
1% to 5% improvements are not nothing. That is valuable. It makes the lives of those patients much better and it could conceivably lead to lower costs. It is also not a home run. It is not even a hard hit double that bounced around the wall near the power alleys. Instead it is a bloop single that landed in the grass halfway between the slap hitting second basemen and the no defense right fielder and the ball just died there.
Consistently being able to generate seeing eye singles can be an element of a long career as long as that player is able to add value somewhere else. It is not a hall of fame or system changing skill set though. In the same way, coordinating care helps on outcomes, it helps on process, it might help on costs and it may make the lives of patients better and easier at the same time. It probably won’t meaningfully bend the cost curve.