A new report from the federal government details how a few miles can make a drastic difference on the cost of a simple procedure and CBS2 reveals Los Angeles-area hospitals vary as much as $37,690 for the same treatment.

The Department of Health & Human Services went public with the new data Wednesday. CBS2′S Amy Johnson has uncovered how much health care costs can jump depending on which facility patients seek treatment in Los Angeles County.

Olympia Medical Center in Los Angeles will bill $50,823 after treating a patient suffering from chest pains. However, the same treatment will cost $23,308 at Silver Lake Medical Center and $13,133 at Sherman Oaks Hospital.

A patient going to the hospital for respiratory infections and inflammation will pay $18,456 at Keck Hospital of USC, $14,178 at Good Samaritan Hospital, Los Angeles and $9,047 at St. John’s Health Center in Santa Monica.

Residents say the difference in the cost of procedures within just a few miles is eye-opening and unfair.

“Every hospital has their own different prices. It’s a shame but that’s how it is,” Tarzana resident Lee Ohevzion said.

“If you’re sick and you come in like you need [care] ASAP you’re not gonna, like, start shopping.”

But some residents are doing just that. Another woman admitted she shopped around for a hospital to deliver her baby.

“I knew I needed to with my insurance,” she said. “I think that’s important to know how much you’re paying for things.”

The Department of Health & Human Services released Wednesday details about how much medical bills can vary depending on locale.

The report included cost estimates for Medicare patients at 3,000 health care facilities around the country. It focused on costs for 100 of the most frequently billed hospital discharges, including heart failure, pneumonia, chest pain, diabetes and urinary tract infections.

The government agency said releasing the report is part of an attempt to make the health care system more affordable and accountable.

Los Angeles County Medical Association President Dr. Samuel Fink disagrees.

“I believe that this report is an attempt to demonize hospitals, and they don’t need that. Hospitals are struggling to stay afloat,” he said.

“It really doesn’t matter what the hospital charges unless a patient doesn’t have insurance.”

Dr. Fink said uninsured patients can negotiate their charges and that there are some valid reasons why some hospitals charge more, such as how ill their patients are and whether or not the institution is a teaching hospital.

Still, the Obama Administration said it has made $87 million available to states to bolster efforts for increased transparency in the health care system.

“Currently, consumers don’t know what a hospital is charging them or their insurance company for a given procedure, like a knee replacement, or how much of a price difference there is at different hospitals, even within the same city,” Health and Human Services Secretary Kathleen Sebelius told CBS News.

“This data and new data centers will help fill that gap.”

The Department of Health & Human Services report is available at CMS.gov.

The simmering battle over wellness programs is starting to boil over in California.

Members of the California Senate Health Committee recently voted 5-2 to pass Senate Bill 189, a bill that would put new restrictions on employer-sponsored wellness programs.

The bill, introduced by state Sen. Bill Monning, D-Carmel, would prohibit a wellness program from rewarding participants with a discount or rebate involving a premium, deductible, co-payment or coinsurance amount.

Any wellness program would have to be voluntary and offered to all similarly situated individuals, and a program could not base the receipt of a reward on a health status factor.

A wellness program could provide rewards based on an individual’s membership in a fitness center, an individual’s participation in a diagnostic testing program, or attendance at a periodic health education seminar, as long as the seminar “is not related to a particular health condition or health status factor.”

Monning said RAND Corp. analysts found little evidence on whether wellness programs work or whether they lead to unintended outcomes, such as discrimination against employees “based on their health or health behaviors.”

The bill would apply only to new wellness programs sold after the bill was enacted, not to wellness programs that were already in force.

 The provisions in the bill would expire in 2020.

The drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) sparked a controversy about wellness programs by including a wellness program pricing provision in the rules restricting health carriers’ ability to consider individuals’ health status when setting rates. Under PPACA, carriers cannot consider individuals’ health status when setting rates, but carriers can use incentives related to wellness programs to vary rates by as much as 50 percent.

Managers of the District of Columbia’s PPACA health insurance exchange program recently decided to prohibit carriers from charging enrollees who use tobacco more for coverage.

D.C. exchange program managers noted that the American Cancer Association and the American Lung Association had opposed a tobacco-use surcharge, arguing that poor people are more likely than other people to use tobacco, and that a tobacco surcharge could make health insurance coverage unaffordable for the low-income people who most need health insurance and most need help from doctors with giving up tobacco.

In California, supporters of S.B. 189 have included the American Cancer Society Cancer Action Network and Consumers Union.

Opponents have included the Association of California Life and Health Insurance Companies, the California Association of Health Plans, the California Association of Health Underwriters, and general business groups, including the California Chamber of Commerce.

Dr. Sean Penwell, chief medical officer at SeeChange Health Insurance, a health insurer that promotes “value-based insurance design” (VBID) plans, has lobbied against S.B. 189.

RAND researchers found no evidence that wellness programs lead to discrimination, and they have found evidence that the programs can generate $3 in savings for every $1 invested, Penwell told lawmakers at a hearing, according to a written version of his testimony.

“SeeChange Health launched in California because we viewed the state as hospitable to innovation and committed to improving the health of its citizens,” Penwell said.  “Passage of S.B. 189 would prove we were wrong on both counts.”

The legislation, Senate Bill 189, introduced by State Senator Bill Monning (D-Carmel), passed out of the Senate Health Committee on Wednesday. Proponents of the bill claim financial rewards offered by some wellness and preventive programs discriminate against the poor and shifts costs from healthy to less healthy insureds.

In his testimony before the Senate Health Committee, Dr. Penwell disputed this conclusion citing a RAND Corporation study sponsored by the Obama Administration that found no evidence of such discrimination. “What that study did find is that for every dollar spent on a wellness program, $3.00 in savings was generated for both direct medical costs and productivity,” Dr. Penwell noted.

Even more important, these wellness programs improve the quality of life enjoyed by participants and saves lives. Dr. Penwell reported on the experience of a San Diego man, “a body builder and the picture of perfect health” who participated in a wellness program included in his SeeChange Health Insurance policy. The screening discovered a previously undiagnosed cancer. The early detection allowed for less intrusive treatment than would have otherwise been the case and he is doing well. “If Senate Bill 189 had been law last year,” Dr. Penwell warned, “this individual would likely be dead.”

Describing the legislation as not only misguided, but unnecessary, Dr. Penwell reminded Health Committee members that the Obama Administration was putting forward regulations addressing the same concerns underlying SB 189, “but they’re doing so in a responsible, effective way by implementing well thought-out safeguards.” He urged the lawmakers to study the impact and effectiveness of the federal regulations before going beyond them and forcing the withdrawal of meaningful preventive care programs.

Dr. Penwell stated that wellness programs that provide financial rewards are not only beneficial, they’re popular. He noted that SeeChange Health Insurance is the fastest-growing provider of health insurance for small and mid-size companies in California. “SeeChange Health launched in California because we viewed the state as hospitable to innovation and committed to improving the health of its citizens. Passage of SB 189 would prove we were wrong on both counts.”

About SeeChange Health

SeeChange Health is the leader in value-based benefit design solutions for employers – delivering plans and services to create better health and quality of life for employees, increase workforce productivity and lower their health care costs for employers. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully insured small and mid-size businesses in California and Colorado. SeeChange Health Solutions provides value-based benefit platforms and services to self-insured companies and carriers. Fast Company magazine acknowledged the power of SeeChange Health’s approach to wellness in naming it one of the World’s Top Most Innovative Companies in February 2013.

For more information, please go to www.SeeChangeHealth.com.

Contact: Susan Cotton
 (818) 824-9164 
Email

The water’s fine in the healthcare-and-technology market, and institutional investors should come on in. That’s the message from Psilos Group, a healthcare-focused venture firm based in New York City and Corte Madera, CA, in an outlook report on healthcare economics released today.

It’s the fifth annual edition of the report, and it points to four categories where the firm thinks venture investors and their limited partners should be looking for new opportunities: the rise of private health exchanges, new insurance programs designed to appeal directly to consumers, technologies for making healthcare organizations more efficient, and tools that eliminate error and waste in hospitals.

“When we began this in 2008, a lot of people didn’t really understand what was going on in the healthcare space, or what the opportunities were going to be, or why we have a philsophy of investing in products that reduce costs and improve quality,” says Al Waxman, co-founder and senior managing member at Psilos. “In fact, a number of people looked at me quizzically and said, ‘Yeah, I believe in the Easter Bunny too.’ But today, it’s almost conventional wisdom that this is a great place to invest.”

Psilos was founded in 1998, has $600 million under management, and is investing out of its third fund. It’s one of a small handful of venture firms specifically focused on the healthcare arena, which hasn’t traditionally been seen as a home for fast-growing companies.

But Psilos has had some big exits recently, notably the $435 million acquisition last May of Extend Health, a private Medicare exchange based in Richardson, TX, by professional services company Towers Watson. The firm is also a backer of SeeChange Health, a Studio City, CA-based provider of “value-based” health insurance plans that seek to reduce costs for employers by offering patients preventative services that could reduce the rate of chronic, expensive diseases like diabetes.

In the report, Psilos partners predict that the reforms built into the 2010 Patient Protection and Affordable Care Act, aka Obamacare, will prompt the creation of many more companies like Extend and SeeChange. To help connect the 32 million people who will be eligible for government-subsidized health insurance beginning in 2014 with actual medical services, scores of new insurance exchanges will be set up around the country, brokering deals between health plans and individual patients. Waxman thinks the exchanges will also attract millions of people currently covered by employer-provided insurance, as companies realize it’s more cost-effective to hand employees the money for premiums and let them choose their own plans. (General Motors, for example, said it saved $300 million a year after hiring Extend Health to help retirees handle their own Medicare enrollment.)

“The private exchanges will get commissions for helping somebody to buy insurance in a way that is most suitable to them,” says Waxman. “I think that is a good system. You are going to have a huge number of people in this space.”

But to stay competitive, both the exchanges and the insurance plans will need to invest in the best new information technology, which leads to another of Psilos’s recommended investing categories. The company says insurance companies are struggling with decades-old software that isn’t ready for the changes coming under Obamacare, including pay-for-performance reimbursement.

“If 50,000 people were to show up at United Healthcare tomorrow and say, ‘I want to buy this kind of health plan,’ it would take them 9 months to do the software changes to administer new types of benefits,” Waxman says. “That’s not reasonable. It should take a couple of weeks.”

Burlington, MA-based HealthEdge, a Psilos-backed company founded in 2006 to help big health plans overhaul their claims processing systems and other software, is now one of the fastest-growing healthcare technology firms in the country, Waxman says. “I am sure other people will become interested in the health enterprise software area,” he says.

Waxman says the Psilos report is aimed mainly at institutional investors and other deep-pocketed potential LPs who are trying to figure out whether, when, and how to invest in the healthcare business. Under SEC rules, Psilos isn’t allowed to say whether it’s begun raising a fourth fund, but it wouldn’t be unreasonable to expect that at some point. “Given what we think are the opportunities going forward, we are actively exploring what we might do,” Waxman says.

But why would investors put their money into nascent businesses like insurance exchanges and health enterprise software makers now, rather than just waiting a couple of years to see how the reforms under Obamacare alter the economics of the business?

“I think you would see that the people who invested with us even before the healthcare reforms are prospering, because we were very good prognosticators,” Waxman says. “There is going to be a fundamental transformation of the healthcare industry, and it is going to be dependent on technology. We are very good selectors of that.”

When former California Insurance Commissioner Steve Poizner was reviewing health plan options in 2011for his online education start-up Empowered, he picked a little-known company called SeeChange Health. “We’re being a pioneer, but we’re really excited about this in terms of spiraling health care costs,” says Poizner, who has 50 employees.

More than a decade ago, upstart Definity Health—now part of UnitedHealth Group, came up with the novel idea of giving employees of self-insured companies discretionary accounts for their health care. Money not spent on doctor visits was theirs to keep for future medical expenses.

By giving employees a stake in managing their health care finances, the Definity plan lowered an employer’s costs, but it wasn’t perfect. People might put off seeing a doctor when necessary, and it didn’t do much for those afflicted with diabetes, high blood pressure, or heart disease. Chronic conditions account for a majority of health care costs.

Enter SeeChange. Martin Watson fiddled with health plan designs, more recently at UnitedHealth, before forming the start-up in 2008. “You want people to see a doctor on an annual basis; if you have type 2 diabetes, you need to do a lab test twice a year; if you can identify a cancerous condition a little earlier, you can save [later on],” says Watson. Get the picture.

The Affordable Care Act requires insurance companies to cover preventive exams, such as mammograms, annual physical, and colonoscopies, but Watson says that is not enough to motivate people. So, SeeChange steps up incentives.

A plan works like this: A member fills out every year a health history questionnaire, takes a basic blood test, and goes for preventive check-ups—all voluntary. In return, SeeChange deposits $250 in the member’s account; $250 for a spouse, or up to $500, which go toward paying the deductible. Members who have pre-diabetes, diabetes, asthma can earn additional financial rewards for completing health tasks. (SeeChange tracks seven chronic conditions).

Members—typically companies with 2 to 50 employees, can access Cigna’s national network of doctors. SeeChange has licenses to operate in 25 states, but currently offers its plans in California and Colorado. It targets small and mid-size businesses, a niche often ignored by big insurance companies. To date, it has enrolled 36,000 members, up from 1,500 in 2011.

Watson says his company can afford to offer financial incentives, because it has newer and more efficient information technology systems than established insurance companies, and lower administrative expenses. In fact, it manages two UnitedHealth programs that offer financial rewards to patients who meet personalized health goals.

Last year, venture-backed SeeChange reported revenues of $50 million, a seven-fold increase over 2011. The company attributes the dramatic rise to its full launch in California at the end of 2011, and the addition of Colorado last year. During the same period, the number of brokers who sell its plans jumped from 252 to more than 1,800. SeeChange also clinched the partnership with Cigna.

Prior to 2012, the company’s plans were available only in a handful of cities in California, and it had a limited network of doctors. It is not profitable yet, but expects to be in the first half of next year. “Two years ago, no one cared about us; now everyone knows we’re in town,” says Alan Katz, who’s in charge of sales at SeeChange.

Competitors are taking notice, especially since in 2014 the ACA will allow employers to increase wellness program rewards from 20% of an employee’s health benefit costs to 30%. Last year, Blue Shield of California launched Blue Groove that offers incentives.

SeeChange can’t point to health care savings or better clinical outcomes yet, but customers such as Poizner are not waiting. “Even with health care reform, insurance premiums are spiraling up. Something needs to be done,” he says.

“Smoking poses serious health risks, and we want to ensure our members have the tools they need to quit the habit and live healthier, more productive lives,” said Sean Penwell , Chief Medical Officer of SeeChange Health. “By teaming up with California Smokers’ Helpline we now offer our members a proven solution to overcome a difficult health issue.”

Under this arrangement with the Helpline, SeeChange Health members will receive free counseling sessions with trained and experienced professionals who work with them to design a personalized plan that meets their individual goals.  Additionally, as part of the program, members may receive up to four weeks of free nicotine replacement therapy, shipped directly to their home. “SeeChange Health’s unique approach encourages and rewards members for taking steps to become healthy,” added Dr. Penwell.  “This program adds to our line-up of proactive actions members can take to better manage their health.”

SeeChange Health is the first health plan in California to partner with the Helpline in this innovative public-private partnership.  With the Helpline’s high name recognition and credibility among the medical community and the public, SeeChange Health sees this as an opportunity to leverage an accessible program and provide added value for its members. The Helpline sees similar benefits. “By partnering with SeeChange Health to add NRT to the counseling services already provided by the Helpline, we will increase the effectiveness of our program without adding cost to the state of California,” said Christopher Anderson , Program Director for the Helpline.

About SeeChange Health
SeeChange Health delivers plans, technology and services aimed at creating better health and quality of life for employees, increasing workforce productivity, and lowering health care costs by encouraging individuals to play an active role in managing their health to prevent, detect and treat serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups in California and Colorado. SeeChange Health Solutions provides a completely customizable consumer engagement and health incentive technology platform to employers, health plans and third party administrators delivering the cost-controlling advantages of value-based benefit plans. Fast Company magazine acknowledged the power of SeeChange Health’s approach to wellness in naming it #20 on its list of the “World’s Most Innovative Companies” for 2013. For more information, visit www.SeeChangeHealth.com.

About the California Smokers’ Helpline
The California Smokers’ Helpline ( 1-800-NO-BUTTS ) is a free statewide quit smoking service operated by the University of California San Diego and funded by the California Department of Public Health and First 5 California. The Helpline offers self-help materials, referral to local programs, and one-on-one, telephone counseling to help Californians quit smoking. Helpline services have been proven in clinical trials to double a smoker’s chances of successfully quitting. Services are available in six languages (English, Spanish, Cantonese, Mandarin, Korean, and Vietnamese) and specialized services are also available for teens, pregnant women, and tobacco chewers. The Helpline also provides information to friends and family members of tobacco users.

Contact:
Susan Cotton
818-824-9164

The health-care law could prove to be a boon for temporary-staffing companies as employers outsource jobs to sidestep complex requirements for medical insurance.

But some experts say the Affordable Care Act’s exceptions for temporary employees could undercut the goal of expanding coverage to more American workers.

“That could lead to an increase in part-time workers” who lack insurance, said Susan N. Houseman, an economist at the Upjohn Institute for Employment Research who studies staffing companies. “You regulate something and people will always try to find a way around the regulation.”

Starting in January, employers with at least 50 workers must offer affordable coverage or pay a penalty. To stay under this limit, some are considering outsourcing jobs to specialists such as Kelly Services, Manpower, Robert Half and Randstad, whose stock prices have soared.

“We are already getting inquiries from our client base for companies in and around 50 [employees], asking us to help them understand this legislation, and to inquire as to how we might be helpful,” M. Keith Waddell, Robert Half’s president, told investors on a conference call a few weeks ago. “Our response is that we can legally help them remain under 50.”

The health lawis also prompting larger organizations to use temp agencies. By requiring employer coverage only for those who put in at least 30 hours a week, the act appears to create an incentive for companies to do less with permanent workers and more with part-timers, which are the main focus of staffing agencies.

Manpower is talking to clients about “a more flexible labor model,” where workers “might be working 29 hours a week,” company chief executive Jeffrey A. Joerres told investors in January, adding, “We definitely look at it as a positive.”

School administrators in Dothan, Ala., decided to hire substitute teachers through Kelly Services to avoid possible health-cost obligations if they were to employ them directly.

Dothan subs don’t get medical coverage now, and the district pays about $700 per month for the full-time teachers who do. “You multiply that times 300 [substitutes] and you’ve got a big expense,” said Dell Goodwin, personnel director for Dothan City Schools.

Little-known, complex rules developed by the Internal Revenue Service could also allow some full-time jobs placed through temp agencies to come without health benefits.

Manpower, Robert Half and other staffing specialists are giant companies, with far more than 50 employees. So they are subject to the same health act requirements as other companies to offer coverage to full-timers.

But in regulations issued last year, the IRS left an opening for employers of “variable-hour” labor such as temp agencies. If it’s not clear upon hiring that an employee will consistently work more than 30 hours weekly, companies get up to 12 months to determine whether the person is full time and qualifies for health benefits — even if the employee does end up working full time. Few temps last 12 months.

“The overwhelming majority of temporary help workers, even if they were working full time on a weekly basis for a number of months, wouldn’t be covered because of that 12-month look-back period,” said the Upjohn Institute’s Houseman. The rules, she added, “were written in a very favorable way for the temporary-help industry.”

There are good arguments for exempting new, variable-hour workers from health-coverage obligations, she said: Tracking who worked 30 hours during which weeks for health-plan eligibility would cause confusion for employers and insurers.

The upshot, however, is that most temporary help workers — nearly 3 million on any given day — won’t have employer-sponsored medical coverage even if they are working more than 30 hours, she said.

Under the health law’s mandate that everybody be insured, temp workers without insurance must pay a penalty or seek coverage in state-based marketplaces known as exchanges. Because of the lower wages typically paid by staffing agencies, temps will probably be eligible for tax credits or Medicaid.

Kelly chief executive Carl Camden played down the idea that employers will shed health-coverage liabilities by using temp agencies. He said he sees clients’ adjustment to the health act as “a modest opportunity” for his company.

“There is a portion of the staffing industry who think there will be a large amount of companies trying to avoid obligations under the ACA and trying to shift over to staffing firms,” Camden said in an interview. “I don’t see that as happening.”

Manpower and Robert Half declined to make officials available for interviews.

The bigger business may be helping companies navigate the law through consulting or by taking over temporary jobs they already have, Camden and other industry officials say.

“We expect that clients that have those kinds of workers and who are daunted by the complexity of the Affordable Care Act will look to staffing firms to help them manage those kinds of workers,” said Edward A. Lenz, senior counsel for the American Staffing Association, a temp-company trade group.

Staffing-company share prices have shot up, partly in response to the recovering economy and partly because of hopes for a surge in Affordable Care Act business, industry analysts say.

Manpower has risen by half since November while Kelly, Randstad and Robert Half are all up more than 35 percent, far more than the market as a whole.

A few years ago, when Massachusetts implemented its own requirement that companies provide health coverage to full-time workers, temp jobs increased six times as fast as in the country as a whole, said Jeffrey Silber, who follows staffing company stocks for BMO Capital Markets.

Officials running Dothan schools see a double benefit. By hiring substitutes through Kelly they’ll avoid possible medical costs and also dodge the complexities of how the health act affects subs, personnel director Goodwin said.

Sometimes subs work more than 30 hours and sometimes they don’t, she said, and keeping track of who would be owed health coverage “would just be a continuing accounting nightmare.”

Several other Alabama systems are starting to hire subs through Kelly, which has been offering health-law Web seminars through the state school superintendents association.

And no wonder, Goodwin said. At last year’s meeting of the American Association of School Personnel Administrators, “that was one of the hottest topics,” she said: “How this Affordable Care Act would affect school systems.”

Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health-care-policy organization that is not affiliated with Kaiser Permanente. E-mail: questions@kaiserhealthnews.org.

When visiting the doctor, there may be strength in numbers.

In recent years, a growing number of doctors have begun holding group appointments — seeing up to a dozen patients with similar medical concerns all at once. Advocates of the approach say such visits allow doctors to treat more patients, spend more time with them (even if not one-on-one), increase appointment availability and improve health outcomes.

Some see group appointments as a way to ease looming physician shortages. According to a study published in December, meeting the country’s health-care needs will require nearly 52,000 additional primary-care physicians by 2025. More than 8,000 of that total will be needed for the more than 27 million people newly insured under the Affordable Care Act.

“With Obamacare, we’re going to get a lot of previously uninsured people coming into the system, and the question will be ‘How are we going to service these people well?’ ” says Edward Noffsinger, who has developed group-visit models and consults with providers on their implementation. With that approach, “doctors can be more efficient and patients can have more time with their doctors.”

Some of the most successful shared appointments bring together patients with the same chronic condition, such as diabetes or heart disease. For example, in a diabetes group visit, a doctor might ask everyone to remove their shoes so he can examine their feet for sores or signs of infection, among other things. A typical session lasts up to two hours. In addition to answering questions and examining patients, the doctor often leads a discussion, often assisted by a nurse.

Insurance typically covers a group appointment just as it would an individual appointment; there is no change in the co-pay amount. Insurers generally focus on the level of care provided rather than where it’s provided or how many people are in the room, Noffsinger says.

Some patients say there are advantages to the group setting. “Patients like the diversity of issues discussed,” Noffsinger says. “And they like getting 11 / 2 hours with their doctor.”

Patients sign an agreement promising not to disclose what they discuss at the meeting. Although some patients are initially hesitant about the approach, doctors say their shyness generally evaporates quickly.

“We tell people, ‘You don’t have to say anything,’ ” says Edward Shahady, medical director of the Diabetes Master Clinician Program at the Florida Academy of Family Physicians Foundation in Jacksonville. Shahady trains medical residents and physicians to conduct group visits with diabetes patients. “But give them 10 minutes, and they’re talking about their sex lives.”

Though group appointments may allow doctors to increase the number of patients they see and thereby boost their income, many doctors are uncomfortable with the concept, experts say, because they’re used to taking a more authoritative approach with patients rather than facilitating a discussion with them.

According to the American Academy of Family Physicians, 12.7 percent of family physicians conducted group visits in 2010, up from 5.7 percent in 2005.

Some studies have found that group visits can improve health outcomes. In an Italian trial that randomly assigned more than 800 Type 2 diabetes patients to either group or individual care, the group patients had lower blood glucose, blood pressure, cholesterol and BMI levels after four years than the patients receiving individual care.

Doctors say patients may learn more from each other than they do from physicians. “Patients really want to hear what others patients are experiencing, “ Shahady says.

Jake Padilla of Westminster, Colo., participated in his first group visit more than a decade ago, shortly after he had heart bypass surgery.

Padilla, now 67, continued to attend group appointments geared to primary-care patients’ concerns for years after that at the Kaiser Permanente outpatient clinic near his home. (Kaiser Health News is not affiliated with Kaiser Permanente.) He usually went once a month or so, and the members of the group constantly changed.

One woman who attended the group was 102 years old, he remembers. Fellow patients wanted to know how she managed to live that long. One of her secrets, she said, was deep breathing. Padilla has since used that advice when his blood pressure gets out of control.

But group visits aren’t for everyone. Padilla’s wife, Tedi, went to one meeting with him and never went back.

“She said she didn’t have time to sit there and listen to all those patients,” he says.

This column is produced through a collaboration between The Post and Kaiser Health News. KHN, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health-care-policy organization that is not affiliated with Kaiser Permanente. E-mail: questions@kaiserhealthnews.org.

Financial incentives for losing weight help people shed more pounds than programs that don’t affect dieters’ wallets, a study found.

Participants who received money monthly for losing weight or paid into a pool when they didn’t meet goals, dropped 9.1 pounds on average, compared with 2.3 pounds for those without cash incentives, according to research released today in advance of the American College of Cardiology meeting in San Francisco.

“Just wanting to lose weight isn’t enough,” said Donald Hensrud, chairman of preventive medicine at the Mayo Clinic in Rochester, Minnesota, who helped write the study. “People need creative strategies. Financial incentives can be powerful.”

More than two-thirds of companies are experimenting with programs that encourage healthier behavior in workers, such as higher insurance premiums for smokers or reduced rates for fitness clubs. One common tactic is to withhold incentives or raise fees for obese workers, penalties that can be lifted if they lower their body mass index, according to Michael Wood, a senior benefits consultant in Seattle at Towers Watson & Co. (TW)

“The jury is still out as to whether financial incentives will improve the rate of success of people losing weight on a long-term basis,” Wood said in a telephone interview.

$168 Billion

More than two-thirds of U.S. adults are overweight or obese, according to the Centers for Disease Control and Prevention. Obesity-related health costs are more than $168 billion annually, according to a Feb. 20 study in JAMA-Surgery.

Today’s study followed 100 adults ages 18 to 63 years who were obese based on their body mass index. They were weighed monthly for a year. The study was one of the longest looking at workplace financial incentives for weight loss.

Fifteen people received the maximum $360 over the year by attending every monthly weigh-in and reaching and maintaining their weight loss goal, Hensrud said. The study participants paid $2,200 into the pool in penalties, which was then divided among the eight people who reached the overall weight-loss goal of 10 percent and two other people in a general lottery. The researchers spent $12,000 for the monthly incentives.

Future studies should look at what financial incentives work best and how long the programs need to be in place to help people maintain their weight loss, Hensrud said.

Rising Tide

More than two-thirds of companies offer financial incentives to encourage participation in wellness activities, an increase from about half in 2010, according to the 18th annual Towers Watson survey on employer health care released today.

While incentive programs can cost companies about $100 to $1,200 year for each person and any spouse, healthier employees lower health insurance costs, Wood said. Companies also can build program costs into their health insurance bill, he said.

Thirty-six percent of companies reward employees for participating in a smoking-cessation program and 42 percent charge tobacco users about $50 a month, according to the survey.

About 16 percent of companies reward or penalize employees based on outcomes other than tobacco use, including weight control or cholesterol levels, an increase from 10 percent in 2012. That number is expected to jump to 47 percent in 2014 as more companies say they will enact these programs, according to the Towers Watson survey taken from November 2012 to January 2013 of 583 employers with a total of 11.3 million workers.

Fear Factor

In the Mayo Clinic study, each person was assigned to one of four groups. One group was provided weight-loss education, another received education and financial incentives, a third was provided education plus behavior modification and the last had financial incentives with education and behavior modification.

Those in the financial incentive groups who met their weight-loss goals received $20 a month, while those who didn’t had to pay $20 into a bonus pool. Half of the bonus pool went to people who met their study goals and the other half was put into a lottery for everyone who completed the yearlong study no matter their results, Hensrud said.

“Fear of losing money tends to motivate people about two and a half times more than the prospect of gaining the same amount of money, so we intentionally designed the incentives so that participants would have some of their own skin in the game,” said Steven Driver, a lead study author and a resident physician in internal medicine at the Mayo Clinic.

Sixty-two percent of the people with financial incentives completed the study compared with 26 percent in the non- incentive groups. The researchers estimated that 6.5 pounds of the 9.1 pounds average weight loss was attributable to the incentives.

Hensrud said financial incentives don’t work alone and may need to be combined with other methods to help people lose weight. Also, the incentive program didn’t pay for itself so more work may be needed to find programs that don’t add to company costs, he said.

SAN FRANCISCO, March 5, 2013 /PRNewswire/ –

SeeChange Health, a leader in value-based health benefit solutions, is pleased to announce a strategic partnership with the Colorado Health Insurance Cooperative (the CO-OP). This partnership, a first for SeeChange Health under the Affordable Care Act, gives Colorado residents increased options for benefit access and affordability, and encourages consumers to take a more active role in their health.

“SeeChange Health is committed to empowering consumers in their health decisions, which aligns with the mission of the Colorado CO-OP,” said Martin Watson, CEO of SeeChange Health. “We are pleased to provide Colorado consumers a new, proven approach that encourages and rewards individuals for taking better care of their own health.”

SeeChange Health will provide the CO-OP its administrative services and value-based benefit platform. The CO-OP will offer its small group and individual products through Connect on Health Colorado, the state health benefit exchange, and directly to consumers through brokers. The products will be offered in October 2013 for effective dates in January 2014.

“Through this partnership, we seek to improve the health of our members and reduce health care costs, as well as to provide Coloradoans more choices in their health benefits,” Julia Hutchins, CEO of the CO-OP. “We have a highly-selective review process for potential partners and we are confident that working with SeeChange Health will help connect Colorado communities to better health management options.”

Recently identified as one of the World’s 50 Most Innovative Companies by Fast Company, SeeChange Health expects to continue to expand its proprietary health engagement platform to CO-OPs, health-insurers, third-party administrators and employers. Additionally, SeeChange Health’s Insurance division launched in Colorado in 2012, becoming the first health plan to only offer value-based benefit plans to small and mid-sized employers. This followed a successful statewide launch in California in fall 2011. SeeChange Health is planning to expand into additional states over the next few years.

SeeChange Health’s customer base has increased from 400,000 members in 2011 to greater than 1.1 million in 2012. The membership growth has translated to revenue increases from $7.6 million in 2011 to $50.2 million in 2012.

About SeeChange Health

SeeChange Health delivers plans, technology and services aimed at creating better health and quality of life for employees, increasing workforce productivity, and lowering health care costs by encouraging individuals to play an active role in managing their health to prevent, detect and treat serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups in California and Colorado. SeeChange Health Solutions provides a completely customizable consumer engagement and health incentive technology platform to employers, health plans and third party administrators delivering the cost-controlling advantages of value-based benefit plans. For more information, visit www.SeeChangeHealth.com.

About the Colorado Health Insurance Cooperative (the CO-OP)

The Colorado Health Insurance Cooperative (the CO-OP) is a consumer governed and operated, nonprofit insurance company that aims to offer affordable, high-quality health coverage to individuals and small businesses. Sponsored by the Rocky Mountain Farmers Union Educational and Charitable Foundation, the CO-OP’s health plans will be sold through Connect for Health Colorado (the Exchange) and independent insurance brokers and agents in 2013. Our plans will go into effect in 2014.

The CO-OP was established in 2012 through a $69 million line of credit awarded by the Department of Health and Human Services (HHS) under the federal Patient Protection and Affordable Care Act. What sets the CO-OP apart from existing health insurers is its structure. CO-OP members will ultimately be responsible for its operations and growth. Any surplus dollars the CO-OP earns will be returned to members through reduced premiums, increased benefits, or quality improvements.

Contact:
Susan Cotton
818-824-9164
Email

February 20, 2013 | by Chad Terhune, Los Angeles Times

A proposal to split California into six zones for setting health insurance rates would drive premiums up as much as 23% for some policyholders next year as part of the federal healthcare overhaul, the state insurance commissioner is warning.

These rating boundaries for the individual insurance market are among several items that state lawmakers are debating during a healthcare special session in Sacramento aimed at implementing the federal Affordable Care Act. In January, most Americans will be required to have health coverage or pay a penalty.

Under the proposal for six regions, the lnsurance Department estimates that premiums for similar coverage would increase as much as 22% in Los Angeles and 23% in the Bay Area.

Insurance Commissioner Dave Jones said he’s pushing for an 18-region plan that would cap increases at 8%. That and other alternatives are expected to be discussed at state hearings Wednesday.

Overall, many healthcare experts and consumer advocates have expressed concern about the affordability of premiums next year. Rates are expected to rise because the federal law requires improved benefits, and there will be new limits on how much insurers can vary rates based on age.

Now, state leaders are trying to determine what role geography will play in insurance rates. Health insurers currently set their own rating regions, but the federal law allows states to establish their own map.

“There is a lot of interest in doing this quickly,” Jones said. “It’s important to get it right as well so we can minimize any rate shock.”

A spokeswoman for state Sen. Ed Hernandez (D-West Covina), chairman of the Senate Health Committee, said the proposed legislation seeks to keep California in compliance with federal rules that recommend seven rating regions or fewer.

Two industry trade groups, the California Assn. of Health Plans and the Assn. of California Life & Health Insurance Cos., also oppose the six-region plan. Insurers favor a 19-region map that was adopted by state lawmakers last year for the small-employer health insurance market.

Jones has come out against the 19-region plan as well, saying rates could rise as much as 25% under that system.

chad.terhune@latimes.com

It’s awards season, as anyone who watched the Grammys or Golden Globes and is anticipating the Oscars knows. I can imagine it is very difficult for these award show judges to pick out who is “the best” when looking at music or actors. It is similar to picking out which are America’s best emerging companies, which is what we venture/growth investors fancy as our job descriptions. There are many different industries, many different descriptions of what makes greatness, but to actually be the recipient of one of these awards from industry experts and peers is a pretty big deal, reliant as it is on aligning so many people around what constitutes “the best” in idea, execution and management. In the investment world the “award” is an investment when 99.99% of the other companies you see don’t get one.

I was thinking about this as I was rocking out to the Grammys (albeit in my pajamas and not clad in the hipster clothing that the attendees were wearing to cover the parts that were not meant to be seen). When the show took a break, probably because all of the now over-65 year old rockers had to take their 35th trip to the men’s room, I checked my email and saw the very exciting news last night that SeeChange Health, one of our Psilos portfolio companies, had received a prestigious innovation award, joining several of their Psilos portfolio company brethren on recent walks down the red carpet, as it were. SeeChange was selected by FastCompany as number 20 on their 2013 list of the world’s 50 companies“whose innovations are having the greatest impacts across their industries and our culture as a whole. SeeChange was selected, in part, for “making health — not healthcare costs — its top priority”

SAN FRANCISCO, Feb. 14, 2013 /PRNewswire/ – SeeChange Health (www.SeeChangeHealth.com), the leader in wellness-centric health care coverage known as value-based benefit design, announced revenues grew from $7.6 million in 2011 to $50.2 million 2012.

“We don’t take a traditional approach to health care coverage,” said Martin Watson, SeeChange Health’s CEO. “We help employers improve the health and productivity of their workforce while helping control medical costs by rewarding employees for taking steps to better manage their health. It’s a new, common-sense approach that is rapidly gaining acceptance and our results certainly reflect this.”

In addition to rapid revenue growth, SeeChange Health is experiencing tremendous membership growth. SeeChange Health Solutions offers a Software as a Service (SaaS) platform to self-insured employers and health plans, delivering highly customized benefit designs and incentives aimed at motivating employees to improve their health. In 2012, SeeChange Health Solutions served more than 1.1 million consumers, an increase of 185% over 2011.

Launched statewide in California in 2011 and Colorado in 2012, SeeChange Health Insurance provides value-based benefit plans to fully-insured small and mid-size employers. The carrier grew to over 22,000 insured members in 2012, a 725% increase over 2011. In the first two months of 2013, SeeChange Health Insurance grew 50%.

“What’s been remarkable, and rewarding, about our growth is how quickly thousands of businesses and their brokers have embraced our unique approach that rewards members for improving and managing their health,” said Alan Katz, executive vice president for SeeChange Health Insurance.

The unique value proposition of SeeChange Health is a major reason the company landed at number 20 on Fast Company magazine’s list of the “World’s 50 Most Innovative Companies” for 2013 alongside the likes of Nike, Apple, Google, Yelp and Amazon. The Fast Company list recognizes the businesses “whose innovations are having the greatest impacts across their industries and our culture.”

“Our goal is to bring something new, different and better to the health insurance industry,” remarked Watson. “The marketplace has noticed. Having Fast Company recognize what we’re doing is changing the industry encourages everyone at SeeChange Health. This honor will keep us focused on continuing to innovate and improve in the years ahead.”

About SeeChange Health
SeeChange Health is the leader in value-based benefit design solutions for employers – delivering plans and services to create better health and quality of life for employees, increase workforce productivity and lower their health care costs for employers. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully-insured small and mid-size businesses. SeeChange Health Solutions provides value-based benefit platforms and services to self-insured companies and carriers.

For more information, please go to www.SeeChangeHealth.com.

About Fast Company
Fast Company is the world’s leading progressive business-media brand, with a unique editorial focus on innovation in technology, ethonomics (ethical economics), leadership, and design. In print and through digital and social channels, as well as live events, Fast Company reports on and addresses the most progressive business leaders. Editor Robert Safian was named AdWeek’s Editor of the Year in 2009. Under the leadership of publisher Christine Osekoski, Fast Company made AdWeek’s Hot List for three consecutive years, and FastCompany.com executive editor Noah Robischon has tripled traffic and revenue. Fast Company is owned by Joe Mansueto, founder, chairman, and CEO of Morningstar, a leading provider of independent investment research.

Contact: Susan Cotton
(818) 824-9164
SCotton@SeeChangeHealth.com

©2012 PR Newswire. All Rights Reserved.

For years, we’ve been hearing that health insurance exchanges created by the Affordable Care Act are going to be “online marketplaces, like Travelocity” where people will buy health policies like plane tickets.

But a consumer focus group in Colorado suggests people are going to want something more like TurboTax.

Like paying taxes, buying insurance is a complicated proposition, rife with jargon and high stakes: Errors can cost big money and run afoul of the law.

And like doing taxes, buying a policy on the exchange means interfacing with state and federal government agencies, too.

Jargon is a big issue for consumers, who want to be able to hover a mouse over confusing terms to get a quick explanation of something they need to know, a popular feature of the tax software.

The insight comes from discussion groups convened last summer by three Colorado nonprofits. The groups found 414 people in eight urban and rural locations to help the state’s exchange board understand what people are going to need to shop on the exchange. Participants were volunteers, not scientifically selected, but organizers said their demographics roughly match those of anticipated exchange users.

The feedback tells exchange planners that they have a high mountain to climb. Consumers said they know very little about insurance and will need a lot of customer support to use the exchange.

Few participants said they would be comfortable choosing a policy on their own. Many worry they don’t understand health insurance jargon well enough to buy a policy online or that a website won’t have the information they need to make a good choice. About one in five are concerned the exchange won’t offer enough “human support.”

“That was a significant, issue,” said Elisabeth Arenales, who helped analyze the responses. “Make sure we have enough people available. That includes the call center, assisters and navigators, so that people both are and feel like they’re getting … competent assistance.”

A Colorado exchange call center is already in the works. The exchange board is also considering opening storefronts or other venues where people can get help face to face. The board has to balance demand for customer service with a desire to keep costs down and policies affordable.

Of the 414 people surveyed, 80 said they’d feel comfortable turning to exchange staff for support, and 16 said they would not.

In contrast, 162 said they would specifically not trust an insurance agent or broker, and only 47 said they would.

The trustworthy source of advice named by most people, 138, was doctors, nurses and health facility staff, versus 52 people saying they would not trust them. Colorado’s exchange board includes a physician, who has said he doesn’t think doctors in general know enough about health insurance policies to give good advice to consumers.

More than half in the discussion group were under 30 years old. When asked “who helps you choose a health plan now?” 215 said “parents,” and 105 said a family member. Only 17 said they turned to the Internet for help picking a health plan now, fewer than named brokers/agents (22), employers (45) or “myself/nobody” (44).

Colorado is still studying how many navigators and call center lines it will need.  It sounds like a lot to state Insurance Commissioner Jim Riesberg. He said that for the state to meet its goal of enrolling enough people in its first six months for the exchange to be self-sustaining, “that’s 800 people a day, seven days a week, for six months.”

This story is part of a reporting partnership that includes NPR, Colorado Public Radio and Kaiser Health News.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

January 30, 2013 | by Nina Dunn, Ragan’s Health Care Communication News

Looking back at 2012, I can say with certainty that the year was one of the most uncertain that the health care industry has seen in a long time.

At the heart of the confusion was how and when elements of the Affordable Care Act (ACA) would take effect.

Compounding the indecision was a Supreme Court ruling on the legality of the individual mandate (a decision that both FOX News and CNN initially called incorrectly), a presidential election, a divided Congress, and, if these factors weren’t enough, a slowly rebounding economy that seemed to ebb and flow with the weekly jobs report.

In fact, it wasn’t until President Obama’s reelection on November 6 that we realized that the ACA would remain, with all its good and bad.

Meanwhile, some key provisions of Obama’s crowning legislative achievement took effect, including a hospital value-based purchasing program, applications for bundled payment programs, and accountable care organizations (ACOs). The media landscape was saturated with discussions, predictions and opinions regarding the new health care law and its effect on the costs, quality of care and health care accessibility.

So, what does 2013 hold for health care communications?

Accountability

The fiscal cliff and the importance of reducing sky-high health care costs will drive the conversation, forcing companies to redefine their top-level narratives and key messages. Accountability will be the buzzword of the health care industry in 2013.

As the health care system is shifting from a fee-for-service model to value-based compensation, communications efforts will be spent on showcasing, through data and real-life case studies, how a product or service lowers costs and improves care quality.

Educational campaigns

We can expect that 2013 will be a year of major health care awareness campaigns. The government, insurers and non-profits will be educating patients about changes related to their health care access in time for 2014, when health insurance exchanges go live. Engaging patients on their care will be a key priority for health care PR professionals this year.

Pharmaceuticals

With the expiration of patents on many blockbuster drugs, we will see pharma focusing on disease awareness campaigns. As a result of high product saturation in many sectors, we can expect that pharma will continue developing value-added initiatives, such as disease-specific communities, medication reminders, wellness apps and more.

Elder care

Within this fast growing sector of health care, Alzheimer’s disease—America’s most feared disease— will be a hot issue. Companies working on new Alzheimer’s diagnosis and treatment options, as well as care programs, will be looking to raise their brand profile, fight current stigmas associated with the condition and raise awareness about the value of early diagnosis.

Mobile health

Last year we were introduced to two tablets that fit in a physician’s lab coat—iPad Mini and the Nexus 7. While doctors have been early adopters of smartphones and tablets for medical purposes, patients are catching up. More and more Americans use smartphones to access health-related information and manage their health. In 2013, mHealth will play an increasing role in preventative care, care coordination and post discharge care, making a mobile strategy an integral part of any health care PR planning.

Nina Dunn is a communications and media relations specialist at Spector & Associates.

WASHINGTON — The March 1 deadline for employers to notify workers about health insurance exchanges available under the Affordable Care Act (ACA) is being pushed back, the government said this week.

Under a provision of the ACA, businesses need to provide to each employee a written notice informing them about the existence of exchanges and the employer’s cost-sharing plans.

The original deadline for providing the notice was March 1, 2013. However, the Labor Department delayed the deadline, saying it was “committed to a smooth implementation process including providing employers with sufficient time to comply.”

“The Department of Labor expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges,” the Centers for Medicare and Medicaid Services said in an implementation question-and-answer page posted on its website Thursday.

If the employer plans to pay for less than 60% of the total cost of the health plans it offers to workers, then its employees may be eligible for a premium tax credit to purchase a qualified health plan through an exchange.

The Labor Department is considering providing employers with a model of generic language that could be used to satisfy the notice requirement. The department is coordinating its efforts with the Internal Revenue Service and the Department of Health and Human Services.

As the push to manage health care costs and help employees become smarter health care consumers gains traction at companies across the country, California is emerging as a sort of testing ground for a concept known as “value-based insurance design.”

Also known as a VBID, the plans aim to reshuffle how medical dollars are spent by assessing the clinical value of a service to a particular population, such as asthmatics or diabetics, and adjusting out-of-pocket costs to make necessary care more affordable and less beneficial care more expensive. The value-based concept also encourages employees to take charge of their health by offering rewards, such as lower premiums or gift cards, for participating in wellness programs or meeting certain health goals.

“We consider VBID to be the next iteration of benefit design, like consumer-driven health plans,” says Martin Watson, CEO of SeeChange Health. “Over the next few years VBID will be as commonly heard as CDHP.”

SeeChange Health as well as Blue Shield of California are two San Francisco-based insurance companies that are stepping up efforts to market value-based plans to large employers.

Watson says that the Golden State is a great testing ground for new health insurance models in part because of its large population and an apparent resistance among employers and insurance companies to shift more costs to the consumer.

“California is such a massive market, so it’s a nice area to go after,” he says. “If we can get California to embrace this, then we’re confident we can make it elsewhere. Employers and brokers are conservative here. This is the only market in the country where HMOs have really worked.”

SeeChange Health launched its first value-based product in 2011 when it began offering small and midsize employers a plan that provides financial incentives to encourage employees to access preventive care and manage chronic conditions. The program also provides up to $1,000 deposited into a health-incentive account that members can use to reduce their out-of-pocket costs once they get a physical, take a basic lab test and complete a health-risk survey.

The company, which introduced an option for large self-insured employers in the fall, is now “going after the Ciscos, the GEs and the Intels,” Watson says.

Last year, Blue Shield of California unveiled its value-based plan. Known as Blue Groove, the plan offers participants a choice of three benefit tiers, depending on how much they want to participate in improving their health. So far, two companies have signed on, including Blue Shield of California, which rolled out the plan to its nearly 2,000 employees in the Sacramento area this fall.

The basic tier is for people who don’t want to participate in wellness activities and want the broadest selection of providers to choose from. They pay the highest out-of-pocket cost. The middle tier offers lower out-of-pocket costs, including low or no copayments for some services and requires participation in health-risk assessments. The third tier has the lowest out-of-pocket costs and the richest benefits and is designed for those with chronic conditions whose care is overseen by a team of doctors.

The premium for Blue Groove is 10 to 15 percent lower than a standard Blue Shield HMO plan, says Michael O’Neil, director of product innovation at Blue Groove.

While employers and insurers had initially been slow to embrace the concept of value-based design, Suzanne Delbanco, executive director of Catalyst for Payment Reform, a San Francisco-based national coalition of health care purchasers, says that her organization’s goal is to have at least 20 percent of all provider payments be value-based by 2020.

“I think we really are entering a new era where employers are feeling quite confident that they will be able to work with employees to introduce a new level of consumerism,” Delbanco says. “Managed-care backlash has created a chilling effect on anything that remotely smells of restrictions in health care choices. But out of necessity and from the availability of data, the Internet and the ability to create online tools to help people make decisions, all that has led to a moment in time when employers are willing to push their employees to become more savvy consumers of health care.”

January 16, 2013 | by Emily Maltby, The Wall Street Journal

During her two-plus years in business, Elizabeth Turley has steadily recruited new employees for her apparel company, Meesh & Mia Corp., to keep pace with its rapid growth. But this year could be different. Instead of increasing her staff, she plans to hire independent contractors for tasks that can be outsourced, such as marketing and product development.

Her reason? Meesh & Mia is on the cusp of having 50 full-time employees. If the company hits that threshold, it will have to provide health coverage that meets government standards or potentially pay a penalty.

“We are poised this year to more than double or even triple business,” says the 58-year-old Ms. Turley, whose Idaho-based company makes “spiritwear,” or clothes with licensed college and football-team colors and logos. “And then this happened…. We have to find another way to get there.”

Even though the rule doesn’t go into effect until early 2014, a business could be subject to the so-called employer mandate if, during 2013, it averages 50 or more full-time equivalent employees, according to recently released regulations from the Treasury Department and the Internal Revenue Service.

Employers have the choice to calculate their head counts by averaging the full 12 months of 2013 or a consecutive six-month period during the year. (See sidebar on B4.)

Many small-business owners haven’t yet realized that the way they structure their firm in 2013 could determine their status under the law in a year’s time.

The government issued the little-noticed regulatory guidance on Dec. 28. Ms. Turley says she wasn’t aware of the rules until a Journal reporter informed her.

To avoid the health-care law’s penalties, many employers are considering hiring only part-time employees or deliberately curbing growth so that they have no need to hire.

For Ms. Turley, that isn’t an option. Meesh & Mia needs more hired help. The best solution, she believes, is to hire independent contractors, who would be able to take on certain tasks without upping her headcount.

Typically, independent contractors are less expensive for employers, who don’t have to pay taxes on wages or supply benefits, as they would for their employees. Reliance on independent contractors has increased over the years, particularly in the recession, when employers sought less expensive labor.

In December 2012, 6.7% of payroll checks written by small employers went to 1099 workers, or those not considered employees of a company, according to SurePayroll, a Chicago-based payroll firm that caters to 40,000 small employers with an average of seven employees. That’s roughly double the 3.5% of payroll checks that went to 1099 workers in December 2007.

The trend is expected to accelerate this year given the framework of the looming health-care law, employment analysts predict.

Ms. Turley knows that hiring independent contractors isn’t always ideal. “You have less control over hours they work and how much involvement they have in other parts of the business,” she says. “Employees take more pride and ownership [in the company] than contractors.”

In the past, in fact, she has hired contractors but later brought them into the fold as full-time employees.

Using independent contractors has long been a sensitive issue because of how they are classified for tax purposes. In late 2011, the IRS vowed to be more vigilant in finding employers who improperly label workers as independent contractors. At the same time it launched an amnesty program for employers to voluntarily reclassify workers in exchange for a reduced payment to cover back taxes.

“If anything, [audits] will increase more” in light of the health-care law, says Monique Warren, partner at workplace law firm Jackson Lewis LLP in White Plains, N.Y. “Employers have to be real careful about calling someone an independent contractor.”

Government auditors would determine whether a worker misclassification triggers the health-care law’s employer mandate. That means the stakes are higher for employers, particularly those who have close to 50 full-time employees. They could have to pay back taxes in addition to potential penalties associated with the health-care law, should the revised classification push their employee headcount over the threshold.

“Some businesses may be tempted to classify someone as an independent contractor to avoid the headcount that could subject them to the [employer mandate],” says Edward Lenz, senior counsel at the American Staffing Association, an Alexandria, Va., lobbying group for temporary and contract staffing firms. “If anything, the risks of misclassifications are exacerbated by the [health-care law].”

Adding to the confusion for small firms is that an employer’s view of who is an independent contractor may not align with the government’s. The guidelines defining independent contractors “aren’t black and white,” says Ms. Warren. “To some extent, it is deliberately vague. The IRS can’t… account for every different situation.”

Some considerations include an employer’s level of control over a worker, the permanency of the relationship and how the business pays the worker. Because the definition lacks strict parameters, employers can file a form requesting the IRS to make the determination.

“This is on the hot list for the Department of Labor and the IRS,” says Penny C. Wofford, employment law attorney at Ogletree, Deakins, Nash, Smoak & Stewart, P.C. in Greenville, S.C. “It’s not enough to say a worker should be 1099 status just by their work contract. That’s just one factor in a test.”

SACRAMENTO — As California positions itself at the vanguard of the national healthcare overhaul, state officials are unable to say for sure how much their implementation of the federal Affordable Care Act will cost taxpayers.

The program, intended to insure millions of Americans who are now without health coverage, takes states into uncharted territory. California, which plans to expand coverage to hundreds of thousands of people when the law takes effect in 2014, faces myriad unknowns. The Brown administration will try to estimate the cost of vastly more health coverage in the budget plan it unveils next month, but experts warn that its numbers could be way off.

Officials don’t know exactly how many Californians will sign up for Medi-Cal, the public health insurance program for the poor. Computing the cost of care for each of them is also guesswork. And California is waiting for key rulings from federal regulators that could have a major effect on the final price tag, perhaps in the hundreds of millions of dollars.

“No one has ever tried to do anything like this before,” said Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank. “Any numbers attached to this are just a guess.”

The uncertainty comes as the state’s finances are improving but still precarious. Voters approved billions of dollars in new taxes last month, but Sacramento nevertheless faces a shortfall of $1.9 billion that must be bridged in fiscal 2013-14.

Unanticipated costs associated with the healthcare changes could undermine California’s efforts to improve its standing on Wall Street and keep the economy moving. They could force fresh cuts in services if they consume much more of the state budget than Brown is able to approximate.

In addition, some Democrats in the Legislature hope to restore certain health benefits, such as dental coverage for Medi-Cal recipients, that have been eliminated or reduced amid the persistent financial crises of recent years. The cost of any services that are revived could rise as more people become eligible for them.

Gov. Jerry Brown expressed a new concern in an interview last week. He said recent signs from Washington suggest the federal government may not pay as much of the costs associated with the new law as originally promised, sticking states with a larger share of the bill.

“As the guardian of the public purse here, I have to watch very closely what may come out of Washington,” the governor said. “So we’re going to move carefully. We want to make sure the federal government is on board.”

Cost estimates for California have differed widely.

In 2010, the year the Affordable Care Act was signed, state officials said California could be on the hook for $2.7 billion annually. The nonpartisan legislative analyst estimated this fall that initial costs would be in the “low hundreds of millions of dollars” annually for the next several years. A recent study from the nonprofit Kaiser Family Foundation pegged the price at nearly $14 billion over the next decade.

The main cost is expected to come from a sharp increase in the number of Medi-Cal enrollees. Sacramento and Washington split the bill for those Californians, who currently number roughly 8 million. The state’s share was about $14.6 billion this year.

Sacramento will be responsible for half the cost of many new Medi-Cal recipients. That number could be anywhere from 200,000 to 440,000 people in 2014, according to Ken Jacobs, chairman of the Labor Center at UC Berkeley.

Jacobs says early estimates are that these new enrollees will be cheaper to treat than current Medi-Cal recipients because they are expected to be younger and healthier. But experts caution that nobody knows for sure.

“There is a high margin of error when trying to make these estimates,” said Janet Coffman, a professor at the UC San Francisco Institute for Health Policy Studies. “And with the budget, there’s always an element of politics in terms of which sets of numbers you decide to use.”

With so many more Californians about to be insured, administration officials have suggested they would propose reducing the annual $1.4 billion Sacramento pays to counties to help them care for the uninsured. The administration is also contemplating cuts in state-funded programs aimed at the uninsured, such as breast-cancer screening and family-planning services. They say demand for such aid will fall as more people obtain coverage.

The counties, which by law are ultimately responsible for paying to treat the uninsured, would be likely to fight such moves.

“Counties will say there is still a need to keep the safety net intact and that [the state] can’t take the money before people are actually enrolled,” said Chris Perrone, deputy director of health reform and public programs at the California Healthcare Foundation, an Oakland-based nonprofit.

Even after the federal law is enacted, millions of Californians are expected to be without coverage. There are currently about 8.2 million uninsured, according to the UCLA Center for Health Policy Research. Models from UC Berkeley assume the number will be about half that by 2019.

Those who remain uninsured would still show up at hospital emergency rooms, and counties would still be responsible for their care.

Already, local officials are bracing for the worst. In a letter to Brown this month, the L.A. County Board of Supervisors expressed concern about any impending cuts.

Reducing payments to counties “prior to a full assessment and understanding” of the effects of the healthcare changes, the supervisors wrote, “is not reasonable.”

“Employers are looking for ways to make their benefit dollars go further,” said Martin Watson, Chief Executive Officer of SeeChange Health. “By teaming with Liazon we can bring our unique approach to health insurance to more groups in a more affordable fashion.”

Alan Cohen, Chief Strategy Officer and Co-Founder of Liazon, said, “Working with an insurance industry innovator like SeeChange Health strengthens our ability to deliver our exchange model to employers and provide greater choice and benefits options to employees.”

About SeeChange Health

SeeChange Health delivers plans, technology and services aimed at creating better health for employees, increasing workforce productivity, and lowering overall health care costs by encouraging individuals to play an active role in managing their health to prevent, detect and treat serious health conditions. Its SeeChange Health Insurance division provides value-based benefit plans to fully insured employer groups in California and Colorado. For more information please visit www.SeeChangeHealth.com

About Liazon

Founded in 2007, Liazon Corporation operates the market-leading private benefits exchange for businesses across the U.S. Its flagship product, the Bright Choices® Exchange, is an online benefits store that is changing the way employers and employees buy benefits. Bright Choices helps employers save money on their health care costs by setting predictable budgets while guiding employees to purchase better coverage of health, dental, vision, life and disability benefits. Liazon works with top national and regional insurance providers and supports more than 2,000 businesses nationwide. Liazon has offices in Buffalo, N.Y., New York City and Waltham, MA. To learn more about Liazon and the Bright Choices Exchange, go to www.liazon.com.

Contact:
Paulo da Costa
415.229.4642
pdacosta@SeeChangeHealth.com

UnitedHealthcare’s innovative United Personal Rewards program, and Diabetes Health Plan are fueled by SeeChange Health Solutions’ value-based benefit technology platform, that captures an individual’s health history, lab results and claims and uses sophisticated algorithms to identify potential health risks and appropriate actions to take to better manage their health.  The platform delivers personalized, online health scorecards to track progress toward completing health actions with incentives tied to actions and results. Both programs report significant success in increasing consumer engagement, improving health and reducing health care costs.

“SeeChange Health is pleased to extend our partnership with UnitedHealthcare, and looks forward to further working together to support, encourage and inspire consumers to take control of their health,” said Martin Watson, CEO of SeeChange Health. “Our SeeChange Health Solutions platform provides a strong foundation for UnitedHealthcare’s programs, enabling consumers to actively manage their personal health and providing them with engaging tools and roadmaps to encourage success.”

About UnitedHealthcare
UnitedHealthcare is dedicated to helping people nationwide live healthier lives by simplifying the health care experience, meeting consumer health and wellness needs, and sustaining trusted relationships with care providers. The company offers the full spectrum of health benefit programs for individuals, employers and Medicare and Medicaid beneficiaries, and contracts directly with more than 650,000 physicians and care professionals and 5,000 hospitals nationwide. UnitedHealthcare serves more than 38 million people and is one of the businesses of UnitedHealth Group (NYSE: UNH), a diversified Fortune 50 health and well-being company.

About SeeChange Health
SeeChange Health delivers plans, technology and services aimed at creating better health and quality of life for employees, increasing workforce productivity, and lowering health care costs by encouraging individuals to play an active role in managing their health to prevent, detect and treat serious health conditions. Its SeeChange Health Insurance division provides value-based benefit plans to fully insured employer groups in California and Colorado. The SeeChange Health Solutions division provides value-based benefit technology platforms to employers, health plans and third party administrators delivering the health improvement and cost-controlling advantages of value-based benefit plans. For more information, visit www.SeeChangeHealth.com.

For SeeChange Health:
Susan Cotton
818-824-9164
scotton@seechangehealth.com

SeeChange Health offers innovative benefit design solutions that reward members with health incentive dollars for taking simple preventive health actions. Through this collaboration, health incentive funds can be used to pay for annual membership to One Medical Group — providing members with access to comprehensive, accessible, and affordable primary care services.

“Our health insurance products are designed to encourage utilization of high-value medical services,” said Martin Watson, CEO of SeeChange Health. “One Medical Group offers accessible, best-in-class service to patients and aligns exceptionally well with our model where preventive and primary care are paramount.” As a health plan, SeeChange Health rewards individuals who proactively manage their health. Health incentive dollars are given to plan participants when they complete a personalized Health Action Plan, consisting of an annual wellness exam, a health questionnaire, and a biometric screening (basic lab tests). Now, Bay Area members have the opportunity to complete health actions with the help of One Medical practitioners.

One Medical Group has built a successful primary care model around the needs of patients – including same-day appointments that start on time, more time with physicians, and mobile and online tools that help support health needs. One Medical doctors offer a comprehensive, integrative approach that starts with getting to know the patient, their concerns and helping them achieve their goals for good health.

“Like SeeChange, One Medical believes that a proactive approach to health care starts with doctors and patients having an open and honest discussion about their goals,” said Dr. Jeff Levin-Scherz, Chief Medical Officer for One Medical Group. “SeeChange members already understand the financial value of taking steps to maximize their health. Now members in the Bay Area have better access to primary care that is built around their schedules and designed to tackle their health questions and get them back to enjoying life.”

About SeeChange Health
SeeChange Health is the leader in value-based benefit design solutions for employers – delivering the plans and services they are looking for to create better health and quality of life for employees, increase workforce productivity and lower their health care costs. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups – and is among the first to bring this unique approach to small and midsize companies. SeeChange Health Solutions provides flexible, efficient administrative services with the proven cost-control advantages of value-based benefit designs to self-insured employers. SeeChange Health Solutions also provides the leading consumer engagement and health incentive platform to employers, health plans and third party administrators. For more information, go to www.seechangehealth.com.

About One Medical
One Medical Group is revolutionizing health care by building a next-generation primary care system second to none. Through superior design, innovative technology, and a personal approach, One Medical is able to offer patients higher quality care and service at lower cost.  And physicians are able to practice medicine the way it was intended – with personal relationships, open communication, and thoughtful decision-making.

Rapidly growing, One Medical has multiple locations nationwide, including San Francisco, New York City, Washington DC and Chicago. To learn more or join a One Medical practice, visit the website, or follow One Medical on Twitter and Facebook.

Media Contacts

For One Medical Group
Justin O’Kelly
jokelly@onemedical.com
415.529.4571

For SeeChange Health
Susan Cotton
scotton@seechangehealth.com
818.824.9164

STUDIO CITY, Calif., Nov. 16, 2012 — /PRNewswire/ – SeeChange Health Insurance, www.SeeChangeHealth.com, one of the nation’s newest and most innovative health plans and a leader in providing value-based benefit plans to small and mid-sized employers, announced a partnership with United Heritage Life Insurance Company, which has offered a strong portfolio of life and other products to businesses since 1934, to make group term life insurance policies available alongside its group medical plans in California and Colorado beginning November 16.

“This collaboration enables employers using SeeChange Health’s medical plans to improve the health and wellbeing of their workforce to also deliver the added protection of life coverage through a single bill,” said Alan Katz, Executive Vice President of SeeChange Health. “We’re delighted to team up with a market leader like United Heritage.”

Shane Nelson, Vice President, Group at United Heritage Life, noted, “We’re delighted to be partnering with SeeChange Health Insurance. Their unique approach to medical coverage promotes health and wellness. Our group term life coverage promotes peace of mind. It’s a natural combination.”

SeeChange Health Insurance will begin offering the United Heritage group term life product to new and existing clients on November 16, 2012.  All life policies will be guaranteed issued for up to $50,000 of coverage so long as the group is enrolled in one of SeeChange Health’s medical plans. The group policies include accidental death and dismemberment (AD&D) coverage, waiver of premium, and may be converted to an individual policy. More information, including exclusions and limitations, are available from appointed brokers or at www.SeeChangeHealth.com.

About SeeChange Health SeeChange Health delivers plans, technology and services aimed at creating better health for employees, increasing workforce productivity, and lowering overall health care costs by encouraging individuals to play an active role in managing their health to prevent, detect and treat serious health conditions. Its SeeChange Health Insurance division provides value-based benefit plans to fully insured employer groups in California and Colorado. For more information please visit www.SeeChangeHealth.com.

About United Heritage Insurance United Heritage Life Insurance Company (A.M Best rated A-, Excellent) offers a strong portfolio of products in 38 states and the District of Columbia. For more information please visit http://www.unitedheritage.com

Contact: Paulo da Costa 415.229.4642 pdacosta@SeeChangeHealth.com

Released earlier this month, the NCHC plan was written after a year of intensive discussions with health experts and others involved in health care delivery. The plan recommends a policy framework for curbing costs without sacrificing quality and explicitly cites V-BID for its ability to give consumers “incentives to seek out the highest value care.”

The report references V-BID Center Director Dr. Mark Fendrick’s testimony before the Senate Committee on Health, Education, Labor, and Pensions, and suggests that Congress “implement MedPAC’s recommendation to empower the Secretary of Health and Human Services (HHS) to vary cost-sharing based on evidence” as well as “lift curbs on tiered cost-sharing in Medicare Advantage.”

The NCHC also identifies three other concepts with the potential to achieve improvements in health care while remaining cost neutral or reducing costs including the permanent repeal of the Sustainable Growth Rate formula for physician payment, an increase in team-based primary care training, and innovative medical liability reforms.

The Center for Value-Based Insurance Design did not lobby for or engage in discussions with the NCHC about its report.

About University of Michigan, Center for Value-Based Insurance Design
For more information about V-BID, please visit our website.

About National Coalition on Health Care – To learn more about NCHC, please visit their website.

While relationships between employee health risks and subsequent total health costs have shifted somewhat over time, depression still accounts for employers’ highest per capita medical spending, a recent study showed.

Depressed employees — making up roughly 11% of the work force — spent on average $2,184, or about 48% more on healthcare than their nondepressed coworkers, a study published in the November issue of Health Affairs found.

Ron Goetzel, PhD, director of Emory University’s Institute for Health and Productivity Studies, and colleagues examined the correlation between modifiable health risks and increased healthcare costs at seven organizations over 3 years.

They found that 22.4% of the annual health spending was linked to the 10 risk factors they studied. In addition to the higher costs for those with depression, employees with high blood sugar had health expenditures that were an average of 31.8% higher than those without it, while those with high blood pressure had 31.6% higher costs, and those with obesity had costs that were an average 27.4% higher, Goetzel and colleagues wrote.

On a federal level, provisions of the Affordable Care Act encourage employers to adopt health promotion and risk reduction programs, the authors noted. “An underlying premise of these provisions is that modifiable health risks, such as obesity and high blood pressure, are associated with increased health care costs in the employed population. Therefore, employers that undertake risk-reduction programs may save on healthcare expenditures.”

The study aimed to provide an update to the 1998 Health Enhancement Research Organization study published in the Journal of Occupational and Environmental Medicine. Those data were collected from 1990 to 1995, and employer habits on worker wellness, as well as employee habits, have changed since then.

The Health Affairs study surveyed more than 92,400 employees. The employers administered health assessments through the MarketScan database from 2005 to 2009. Researchers adjusted for age, sex, health plan, location, industry type, and other factors.

Despite its high per-capita increased cost, depression accounted for nearly a third less spending ($11.9 million versus $32.1 million) than obesity. Overall, the 10 risk factors accounted for $82 million of the $366 million spent annually on healthcare by the seven employers.

Workers with high stress were found to have expenditures 8.6%, or $413, higher than nonstressed employees.

Tobacco users were 16.3% more costly ($587 in additional costs) than nontobacco users. Physically inactive employees were 15.3% more expensive ($606 in additional costs) than physically active workers. These workers comprised 21.5% and 36.4% of the surveyed employees, respectively.

However, not all of the studied risk factors correlated with higher health costs. High alcohol users were found to have 9.5% lower spending. “For alcohol, the findings suggest that the nationally recognized threshold for high risk (three drinks a day for men and two for women) may need to be revisited, because drinking at these levels would not constitute alcohol abuse,” Goetzel and colleagues wrote. “There is also accumulating evidence that moderate alcohol consumption may be protective.”

High cholesterol was linked to 2.5% lower health costs, and those with poor nutrition and eating habits had 5.2% less health spending. “This [latter] finding is likely because of the difficulty of determining the healthfulness of a person’s diet, especially when nutrition habits are self-reported,” the authors wrote.

Results of the current study were similar in many ways to the one from the 1990s. The spending impact was similar for 7 of the 10 risk factors. However, depression fell from accounting for 70.2% of higher health costs to 47.8%. High stress was the second highest risk factor in 1998 (46.4% more costly) and was seventh now.

“Carefully crafted, and effectively implemented, follow-up health promotion programs are needed if there is hope of achieving long-lasting behavior change and risk reduction among workers,” Goetzel and others wrote.

I’ve been geeking out all week over one of the best discoveries I’ve found all year: new technologies to make your own animated video.

I’m not talking about having Scooby Doo represent your company (although Manga characters are an option). Animated video represents a unique opportunity to present complex issues in a fun way. Everyone loves cartoons, and even the grandpas who would never surf YouTube are highly like to push play on a cartoon video featured on your website.

Not convinced? Check out this video on the home page of SeeChange Insurance. SeeChange offers a unique approach to health insurance that’s complicated but refreshing. Yet the topic of health insurance is B-O-R-I-N-G. Rather than use a lot of text to describe their approach, they use a cartoon sequence to demonstrate the frustrations people have with health insurance and how SeeChange rewards employees and companies for maintaining good health. The tagline is “Health insurance – not sick insurance,” but the full effect is in the video.

And speaking visually, the video is the first thing you want to play with on their site. So by using the video strategy, SeeChange has gotten you to listen to their entire complicated message and made you happier for doing so. You walk away feeling very good about the company.

So how much does a fabulous animated video cost? It may be free, or close enough. Companies such as GoAnimate and Xtranormal allow you to build a basic video for free and then charge more for upgrades or enhanced monthly service. The highest fee I saw was $59 per month, but you could cut off service after three months. Compare that to the cost of a professional video with actors or, even cheesier, you and your employees. I’ve never seen a decent video cost less than $5,000.

Which leads to another point. Many business owners effectively serve as their company face or mascot, which is great if you have a good personality. But even the most charismatic leaders can get painfully cheesy when they are featured too much. Just think of all the car dealership ads or, more recently, that horrible vanity ad for Papa Johns Pizza. I’m embarrassed for that guy!

Unless he were a cartoon. There’s a certain humility in presenting yourself as a cartoon, and people will pay greater attention to your message than the pancake makeup on your face.

Animated videos have other benefits. Funny ones go viral on YouTube and Facebook where they are seen by thousands. You can also use them in image advertisements, replacing the standard JPEG and flash ads with something people actually enjoy.

How easy are these to create? I encourage you to just play with the technology. It’s fun, and it’s bonding time with your teenager. In fact, it’s so easy I created my own which you can see on our home page. Check it out and let me know what you think. And send me samples of what you create – I’ll post them. The world would be a better place with more cartoons.

STUDIO CITY, Calif., Oct. 4, 2012 – Consumers insured by SeeChange Health Insurance (www.SeeChangeHealth.com), the leader in value-based benefit design solutions for small and mid-sized employers, will gain access to cutting-edge health management and treatment decision support tools through a new partnership with Emmi Solutions (www.emmisolutions.com). Emmi Solutions, a pioneer in patient engagement technology, provides interactive online programs that empower patients to take action around a health care event or condition.

Both SeeChange Health and Emmi Solutions encourage members to be more involved with their health and wellness in order to make smarter health care decisions. “This partnership with Emmi Solutions gives our members powerful educational tools to manage health conditions outside of the clinical setting,” said Martin Watson, CEO of SeeChange Health. “It’s another step in our efforts to make it easy for members to engage in and better manage their health, ultimately improving their health and reducing medical costs over the long-term.”

Emmi Solutions’ multimedia programs give members the knowledge, skills, and confidence they need to take a central role in the management of a chronic condition such as asthma, diabetes, or heart disease. They are also given the tools needed to participate in important treatment decisions in partnership with their physician, a process known as shared decision-making. ”Healthcare providers, employers and insurers are focused on finding solutions that improve quality while also reducing costs but they have historically struggled with member engagement,” said Bob Tavares, Vice President of Care Management at Emmi Solutions. “SeeChange Health is changing the game by making it easy and enjoyable for members to become involved in their health while also incentivizing them to do so. We are pleased to be partnering with a company that shares our values around empowering patients.”

About SeeChange Health, LLC

SeeChange Health delivers plans, technology and services aimed at creating better health and quality of life for employees, increasing workforce productivity, and lowering health care costs by encouraging individuals to play an active role in managing their health to prevent, detect and treat serious health conditions. Its SeeChange Health Insurance division provides value-based benefit plans to fully insured employer groups in California and Colorado. The SeeChange Health Solutions division provides consumer engagement and health incentive technology platforms to employers, health plans and third party administrators delivering the cost-controlling advantages of value-based benefit plans.

For more information, visit www.SeeChangeHealth.com.

About Emmi Solutions, LLC

Emmi’s proprietary interactive communication methodology delivers actionable health information to members via multiple modalities – including computers, mobile phones and tablets – at key moments across the continuum of care. Emmi’s ability to connect with people in language they understand at a time they are ready to learn and through the devices they already own has been demonstrated to help reduce costs, increase revenue and improve outcomes. The patented platform tracks the delivery and consumption of information to measure the clinical and financial impact of member engagement and meet regulatory guidelines. The web-based platform requires no installation or maintenance and can be used in stand-alone mode or fully integrated into existing systems.

For more information, visit www.emmisolutions.com.

Contact: Susan Cotton 818.824.9164 | scotton@SeeChangeHealth.com

Employers face new federal requirements when they renew coverage or enroll new people into plans this fall, but there’s a resource to help wade through the rules.

Effective on Sunday, employers and health insurers must provide employees or consumers a uniform glossary and easy-to-understand summary of benefits and coverage.

What employers need to think about and do to comply is explained by the Health Law Guide for Business, an online site created by top California business leaders and funded by The California Endowment.

Business backers include the Pacific Business Group on Health, Small Business Majority, Small Business California, the Bay Area Council, California Hispanic Chambers of Commerce, California Small Business Development Centers, Silicon Valley Leadership Group and the Los Angeles Area Chamber of Commerce.

The California Endowment, a private foundation that seeks to improve access to affordable, quality care for underserved individuals and communities, invested $180,000 to get the website up and running.

The goal is to provide unbiased information on how the new health care law will affect small business, said Daniel Zingale, senior vice president at the foundation.

The website is billed as “2,409 pages. One simple website.”

The pages refer to the Affordable Care Act — and the website seeks to cut through political rhetoric to provide employers with accurate information about the federal health reform law.

The project is part of a health reform education and enrollment effort launched by the California Endowment in 2011 to combat misinformation going out to business owners and consumers.

The open enrollment information is only a portion of what’s available on the website. It also addresses small business health care tax credits, wellness and prevention programs — and the entire text of the health reform law.

See www.healthlawguideforbusiness.org for more information.

The session will be webcast live and can be accessed from the news section of www.SeeChangeHealth.com. Slides for this session will be posted for viewing shortly before the event begins and will be archived. The webcast will be available for replay on SeeChange Health’s website for 90 days after the event.

Value-based benefit plans go beyond traditional medical coverage by offering financial rewards to members taking steps to improve and manage their health. This approach has been shown to reduce the rate of growth of health care costs through early detection of previously undiagnosed chronic conditions. SeeChange Health Insurance provides fully-insured value-based medical plans in California and Colorado including Consumer-Directed Health Plans. SeeChange Health Solutions delivers consumer engagement and health incentive technology platforms to employers, health plans and third party administrators delivering the cost-controlling advantages of value-based benefit plans. Currently SeeChange Health Solutions’ platform delivers these services to over one million consumers.

SeeChange Health was launched in 2008 and has been capitalized with investments from Psilos Group Managers, LLC and Maverick Capital Ltd.

For more information on SeeChange Health, please visit www.SeeChangeHealth.com.

Contact: Susan Cotton
(818) 824-9164
SCotton@SeeChangeHealth.com

DENVER, Aug. 28, 2012 /PRNewswire

The Colorado Department of Insurance has authorized SeeChange Health Insurance (www.SeeChangeHealth.com) to offer medical plans to the state’s small businesses. SeeChange Health is already the fastest growing health plan in California.

“Our health insurance is new, different, and we believe, better,” said Alan Katz, SeeChange Health’s EVP for Sales & Marketing. “Like traditional plans we’re there for our members when they’re sick or injured. But we go further, offering financial rewards to those taking steps to improve and manage their health.”

This approach, referred to as value-based benefit design, has been shown to reduce the rate of growth of health care costs by revealing undiagnosed chronic conditions. “Early detection and intervention of serious health problems means a better quality of life for members, a more productive workforce for employers and lower health care costs for everyone,” Katz said. “SeeChange Health’s technology platform has long helped larger employer groups enjoy the advantages of value-based benefit plans. We’re now bringing this innovation to the small group market.”

SeeChange Health Insurance will offer 14 preferred provider (PPO) plans throughout Colorado including three compatible with Health Savings Accounts (HSAs). These policies are available only to small businesses of 50 or fewer employees through licensed, independent brokers. SeeChange Health anticipates being able to offer coverage to larger groups in the near future.

“Colorado is a state that appreciates the importance of health and fitness. SeeChange Health’s focus on wellness, prevention and early detection is a great fit with the people and culture of the state,” noted Katz.

About SeeChange Health

SeeChange Health delivers plans, technology and services aimed at creating better health and quality of life for employees, increasing workforce productivity, and lowering health care costs by encouraging individuals to play an active role in managing their health to prevent, detect and treat serious health conditions. Its SeeChange Health Insurance division provides value-based benefit plans to fully insured employer groups in California and Colorado. The SeeChange Health Solutions division provides consumer engagement and health incentive technology platforms to employers, health plans and third party administrators delivering the cost-controlling advantages of value-based benefit plans. For more information, visit www.SeeChangeHealth.com.

Contact:

Susan Cotton
(818) 824-9164
SCotton@SeeChangeHealth.com

U.S. employers are increasingly utilizing monetary and other incentives to encourage employees and their families to become active in health and fitness programs and take better care of themselves, according to new survey findings from Aon Hewitt.

Aon Hewitt’s survey of nearly 2,000 U.S. employers representing over 20 million U.S. employees and their dependents found that 84 percent now offer employees incentives for participating in a health risk questionnaire (HRQ) and almost two-thirds (64 percent) offer an incentive for participation in biometric screenings. Just over half (51 percent) provide incentives to employees who participate in health improvement and wellness programs.

The use of monetary incentives, in particular, has increased over the past year. In 2012, 59 percent of employers used monetary incentives to promote participation in wellness and health improvement programs, up from 37 percent in 2011. The use of monetary incentives for participating in disease/condition management programs almost tripled in 2012, from 17 percent in 2011 to 54 percent

A growing number of employers are beginning to link incentives to a result, as opposed to simply participating in a program. Of companies that offer incentives, 58 percent offer some form of incentive for completing lifestyle modification programs, such as quitting smoking or losing weight. About one-quarter offer incentives for progress or attainment made towards meeting acceptable ranges for biometric measures such as blood pressure, body mass index, blood sugar and cholesterol.

“Programs and tools like HRQs and biometric screenings can make employees more aware of their health status and of the opportunities to improve their health, but alone they won’t move the needle when it comes to health improvement and mitigating cost,” said Jim Winkler, chief innovation officer for Health & Benefits at Aon Hewitt. “Incentives solely tied to participation tend to become entitlement programs, with employees expecting to be rewarded without any sense of accountability for better health. To truly impact employee behavior change, more and more organizations realize they need to closely tie rewards to outcomes and better results rather than just enrollment.”

Employers also are requiring more of participants in order for them to be eligible for enhanced benefits, such as value-based insurance designs (VBID). Of the 46 percent of organizations that incorporate some type of VBID approach in their health plans, almost one in three require completion of a HRQ or require participation in a program such as disease management or smoking cessation programs to receive the enhanced benefits. This is a 33 percentage point increase from 2011, where nine out of 10 employers did not impose any requirements.

Despite the evidence of increased employer interest in tying incentives to results, Winkler said Aon Hewitt’s survey shows room for improvement. More than 80 percent of employers provide an incentive to complete a health questionnaire, yet less than 10 percent provide an incentive to address the results of the questionnaire. Additionally, more than 60 percent of employers provide an incentive to complete biometric screening, but less than 10 percent provide an incentive to take any action.

“Employers know that eight health behaviors, including risks such as lack of physical activity and failure to complete recommended preventive screenings, drive 15 chronic conditions that lead to higher medical costs and increased absence from work. An effective incentive strategy rewarding those who take action to improve their health is fundamental for improving health and reducing cost,” said Stephanie Pronk, clinical health improvement leader for Health & Benefits at Aon Hewitt.

HERNDON, Va.–During a presentation at the 2012 Healthcare IT Connect Summit on June 20, panelists discussing social media and patient engagement drove home a mantra that CMIOs should make a note of: Know. Your. Audience.

Moderated by founder/author of “The Healthcare Blog,” Matthew Holt, via Skype, panelists Mark Johnson, vice president of sales at SeeChange Health Solutions and John Whyte, MD, MPH, chief medical expert at the Discovery Channel, discussed the need to engage the patient meaningfully in healthcare reform and population health initiatives.

Holt began the panel stating that, over the past number of years, there has been an explosion of health data where a sea change is working itself out going from a content-driven environment where consumers take in general information towards a personalized information environment that drills down to individual needs. This change includes being able to check up on diagnoses, track physicians’ practice patterns and access information to follow up on care.

This results in the physician-patient relationship moving away from a point intervention (i.e., a patient visiting an office) foundation towards continued interaction between the patient and physician using tools like cloud computing, email and live video interaction.

Holt stated that patients using social media can engage themselves within a community of similarly diagnosed patients, whether they are within their physical region or not, thereby creating effective sources of illness information through fellow patients.

Yet, in terms of social media patient engagement, as Whyte asserted, just because you build a ballpark doesn’t mean anyone will come to play ball. Rather, there needs to be a concerted effort to engage patients. Previously working with the Centers for Medicare & Medicaid Services (CMS), Whyte mentioned that TV data helped him learn a lot on how to target a message to an audience.

He shared data positing more people watch TV than use the internet for consuming video outside of work on a monthly average (287 million for 158 hours versus 191 million for 26 hours, respectively). Therefore, this information allows him to know TV is a better method to generally get a message to people through videos.

There’s a perception that everything has to be on mobile devices, said Whyte, before sharing data that most people don’t watch long videos on mobile phones and the average time on a mobile phone is two to three minutes for a video. He said if he wanted to get a message across via a mobile platform, he couldn’t make a video longer than two to three minutes. “You can’t watching dancing cats for more than 30 seconds.”

He also stated that audiences can be broken down by race, ethnicity and age. For example, he stated 18- to 34-year-old females are the most active social networkers and are moms who blog actively use social media. Men are more likely to use LinkedIn and bloggers on average make $75,000 a year, he stated.

On the device side, Whyte noted that more people are using devices like smartphones for games, not health apps. This information helps in knowing how to get a piece of information out to a targeted audience, he said. If he wants to target information about human papillomavirus, or HPV, to moms, a major push of information on the subject wouldn’t be rolled out to a smartphone app but rather people would get the information on the blogosphere where moms will actively interact with each other.

That’s not to say that information shouldn’t be pushed out to a smartphone app. Whyte reminded audience members that the information is vital to share in various mediums but organizations should not think of them as ends themselves but rather focus concerted efforts on where the targeted audience will interact with the information.

So how can one engage with patients meaningfully? Whyte said people don’t want to be preached to. Johnson reminded the audience early in his presentation that as organizations think through what they are trying to deliver and achieve in the face of healthcare reform, it’s important to remember the consumer. He said engagement needs to be clear, simple and easy to use for a patient. “You have to keep the action simple,” Johnson said. “Make it easy for the consumer. If an action is too complicated, there’s more room for confusion.”

The panel concluded by agreeing that organizations need to know the audience they are targeting when rolling out patient engagement strategies.

“The basic premise behind value-based health care is to create a culture of health that enables plan participants to stay well, helps sick people improve and provides the best care for each dollar spent,” said IFEPB CEO Michael Wilson.

VBHC emphasizes the importance of organizations partnering with plan participants to create a culture of health in the workplace to manage costs and improve the quality of care. It strives to remove barriers to care and align both financial and non-financial incentives and rewards for living healthy and productive lifestyles, by using high-value prevention, health enhancement and health care services.

“Although value-based health care is beginning to find wider acceptance, overall participation remains low,” said Wilson. “Our data shows an increase of employers using value-based health care strategies, from 16% to 37% between 2010 and 2011, so there is movement in the right direction.”

According to the International Foundation’s white paper, multiemployer and public employee plans engaged in VBHC activities are finding early successes in all areas of the initiative. This includes participation in health fairs, working with effective providers and encouraging participants to take prescribed medications. Plans that have been engaged in VBHC initiatives over several years are finding evidence that employees’ health improves and workers take fewer sick days.

“We’re finding that organizations are beginning to get better data on their participants’ health care issues ranging from the type of conditions that necessitated a visit to the doctor to whether participants are opting for generic drugs to fill their prescriptions,” said Paul Hackleman, a health care and public employer analyst with the International Foundation. “With this data, organizations are able to make educated value-based decisions about providers and wellness initiatives.”

Added Wilson: “Regardless of how VBHC is initiated within organizations, it is the single best strategy to achieve healthy, energetic, and high-performing employees while managing health care costs.”

The white paper is part of an ongoing initiative to provide practical ways for multiemployer and public employer plans to integrate VBHC strategies. The initiative is funded in part by a grant from Pfizer Inc.

While some changes have taken effect already, others haven’t—and won’t kick in for years. “For many people, the most important provisions are yet to come,” says Mark Luscombe, a tax specialist at publisher CCH, a WoltersKluwer business, which closely tracks changes in federal laws.

Here’s a guide to the status of some of the most notable changes affecting individuals—and their wallets. (Note: Some provisions affect older plans or policies on a different schedule, or not at all.)

In Effect Now

Group health plans are required to cover the children of enrolled parents until age 26. “Child” includes stepsons and stepdaughters, adopted children and eligible foster children.

A small-business health-insurance tax credit is available to employers with fewer than 25 employees, or the equivalent.

According to the Government Accountability Office, only about 170,000 employers claimed this credit in 2010 out of an estimated pool of up to 4 million eligible firms, perhaps because of the complexity of calculating the credit. Terms of the credit change in 2014.

New plans and policies are required to cover certain preventive services without copayments, including immunizations, routine mammograms for women age 40 and older, and colorectal cancer screening beginning at age 50. For a partial list, see HealthCare.gov.

Flexible-spending-account funds may no longer be used to pay for nonprescription drugs except insulin, but they may still be used for supplies such as bandages, contact lenses and blood-sugar test kits. According to Mr. Luscombe, some health-care providers are writing prescriptions for over-the-counter medicines for their patients to get around the new requirements.

Indoor tanning parlors must pay a 10% excise tax on amounts charged to clients.

Beginning this year, most employers filing 250 or more W-2 forms must list the cost of health coverage on each form. The reporting is for informational purposes only.

Effective in 2013

A 3.8% tax on net investment income takes effect for most joint filers with adjusted gross income above $250,000 ($200,000 for singles). It applies to gross income from interest, dividends, annuities, royalties and rents—unless the income is from a business the taxpayer actively engages in—and to net gains from investments. It might also apply to large net gains on the sale of a home. (For more details, see “Get Ready for the New Investment Tax,” June 30.)

A 0.9% Medicare surtax will apply to most joint filers’ wages and self-employment income above $250,000 ($200,000 for singles).

The threshold for taxpayers claiming an itemized deduction for medical expenses rises to 10% from 7.5% of adjusted gross income. For taxpayers (and spouses) 65 or older, however, the AGI threshold continues to be 7.5% until 2017. For those subject to the alternative minimum tax, the threshold remains 10% of AGI.

Contributions to flexible spending accounts are capped at $2,500 per employee, down from $5,000 or more per employee. The new cap is adjusted for inflation beginning in 2013.

A medical-device excise tax of 2.3% of the sale price applies to certain products. The tax doesn’t apply to eyeglasses, contact lenses and hearing aids, but will apply to items such as pacemakers, stents and artificial hips. The House has repealed this provision, but it’s unclear if the Senate will act.

Effective in 2014

The first penalties will be levied on individuals without insurance. The penalty is a flat amount or a percentage of income, whichever is greater, and it phases in over three years.

For 2014, the dollar penalty is $95, rising to $695 as of 2016. The 2014 income percentage is 1%, rising to 2.5% as of 2016. This amount is uncapped, says Mr. Luscombe—a fact relevant to the wealthy who self-insure.

In general, individuals with employer-provided coverage meeting minimum standards will be exempt from the penalty, as will people covered by Medicaid and Medicare and members of a religion opposed to accepting benefits.

Large employers (more than 50 full-time workers or the equivalent) must pay an assessment if they don’t offer employees certain minimum coverage at an affordable rate.

Each state must establish an “exchange” offering health plans to individuals and small-business employers. Coverage will be classified as bronze, silver, gold or platinum. Small businesses are defined as those with fewer than 25 full-time employees and average annual wages of less than $50,000 for those employees. If a state doesn’t comply, the Department of Health and Human Services will operate a substitute exchange.

Insurers must not impose exclusions for pre-existing conditions, or annual or lifetime limits on the dollar value of health benefits, except in cases of fraud. (A similar provision affecting enrollees under age 19 took effect in 2010.)

Effective in 2018

So-called Cadillac plans—employer-sponsored health coverage exceeding a certain value—is subject to a 40% excise tax. The threshold is $10,200 for singles and $27,500 for families, although those figures might be adjusted upward based on health-care inflation before then.

__________________________________________

The US Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act today. On a 5-4 vote the Justices found the individual mandate at the heart of the PPACA constitutional as a tax. On a 7-2 vote the Court did limit provisions of the law relating to the expansion of Medicaid to 133% of the federal poverty level, but at the end of the day, the PPACA remains in-force.

As a practical matter what this means is that we’re back to where we were in early March when the Court heard arguments about the constitutionality of the health care reform law. As is often the case, all the commentary by all the pundits amounted to, well, not much. That the deciding vote was cast by Chief Justice John Roberts was as big a surprise as the LA Kings winning the Stanley Cup so easily.

Still, there’s nothing like a historic Supreme Court decision to focus one’s thinking. So here’s some observation and advice from your friends at SeeChange Health you may want to keep in mind as you consider the future:

1.     The PPACA  has never been as bad as its critics fear nor as good as its supporters claim. Like most laws, it’s. Like every law it will have unintended consequences. Some of these problems will be “fixed” by lawmakers and regulators over the next 18 months. Some won’t be. But the current system is flawed, too, and we’ve managed to muddle through. The PPACA creates new hurdles for us all to overcome. And the good news is, we will overcome them.

2.     The PPACA is also the catalyst for major changes in the industry. All of us – carriers, brokers, TPAs, providers, employers, consumers – will need to carefully think through the implications. For carriers and brokers, this means affirming the value we bring to the system and making adjustments to our businesses so we not only continue to have the opportunity to provide this value, but that the value is recognized by voters and lawmakers. Change is rarely either fun or comfortable. But change is something we’ve all done over the past several decades. Successful producers adapt to these changes and find a way to prosper. Guess what? Successful producers will adapt to the changes being created by the PPACA and prosper in the future, as well.

3.     For brokers an important strategy to consider is diversification. This is not the time to have too much of your income tied up with any one product line, any one carrier or any one client. The individual insurance market will likely experience more changes than the group market, so if you’re overly invested in individual, now’s the time to do some marketing to employers. Health insurance is an important and critical product line. There are other vehicles for health and financial security that brokers should consider. There are a lot of good health insurance carriers out there (SeeChange Health being of course, one of the best of them). Carriers make mistakes. They change over time. Spreading your business among several carriers will mitigate the damage of any one one carrier’s mistakes or changes.

4.     The space-time continuum has been split in two. In one reality politics reigns supreme. You’ll hear all sorts of rhetoric from politicians and pundits about the end of Western Civilization as we know it, the need to take beat the other party, so on and so forth. Then there’s the other reality where work gets done by serious people making serious decisions. The two worlds intersect here and there, but not often. The 24 hour news channels (the window into the political world) will provide very little in the way of useful information on what’s happening in the real world. These news channels will, however, raise your blood pressure, increase your stress levels, and may cause constipation. Your best bet is to take these newscasts in small doses.

5.     Which makes this a great time to tune into your carriers’ and associations’ communications. All of us will be devoting a lot of time and resources to keeping you informed of what’s happening in the real world. The National Association of Health Underwriters is an especially important resource for you. Their information is current and reliable. Their analysis is focused on what brokers need to know and is always insightful. If you’re not a member, join (please tell them Alan sent you). If you are a member, recruit more. Our ability as brokers to shape the future depends, in large part, on the strength of NAHU.

The Supreme Court’s decision doesn’t change much for SeeChange Health. We’re still committed to providing affordable, value-based coverage through independent brokers and general agencies. The PPACA’s encouragement of wellness and preventive care initiatives (an area in which we’re an industry leader) should wind up benefiting us. For us, and may I suggest for you, this decision brings us back to the future. We’ve all been planning on changes to the market. There’s no reason to stop that planning now.  We will comment on major developments along the way to implementing health care reform. We’ll also keep you posted on what we’re doing to prepare for 2014 and beyond. Whatever those preparations, I can assure you, our commitment to brokers and the value you deliver will not waver. We’re looking forward to working with you for years to come as we build a new, different and better kind of health insurance company.

Thank you for your support and happy selling!

Alan Katz
Executive Vice President
SeeChange Health

Updated June 21, 2012 | By Janet Adamy, The Wall Street Journal

Leigh Anne O’Connor, a lactation consultant in New York, is anxiously awaiting the Supreme Court’s decision on President Barack Obama’s health overhaul.

She is worried that if the court strikes down the law, it would wipe out a provision requiring larger employers to give women time and a private space to pump breast milk.

It isn’t just large employers, medical businesses and constitutional scholars who are invested in the court’s decision. Chain restaurants, tanning salons, breast-feeding advocacy groups and others far afield of health care have a lot riding on whether the law stays in place.

The broad interest in the decision underscores how the law touches nearly every American and most businesses, often in ways that haven’t gotten much notice.

The law’s central purpose is to expand insurance coverage to more than 30 million people. But it also reworks how consumers and businesses pay taxes and changes how the government reimburses health-care providers. It contains funding for a broad range of projects, including adolescent education on financial literacy and career preparation.

“It’s probably the most important thing on our radar screen,” said John Overstreet, executive director of the Indoor Tanning Association, whose members had to start paying a 10% tax on tanning-bed services in July 2010 to help pay for the law. He hopes the Internal Revenue Service would consider returning the levy to salon owners if the court strikes down the law next week.

The Business Roundtable, whose member companies provide insurance to more than 35 million Americans, has said the law has potential benefits, even as it criticized its lack of a medical liability overhaul. It recommended this week that public hearings be held before lawmakers come up with any new legislative measures on health.

Some groups have started lobbying on Capitol Hill to shape the possible replacement legislation that could emerge if the court voids the law. Mostly, action is coming from groups caught up in the first version who don’t want to be part of a second.

The Food Marketing Institute, whose members include grocery stores, is trying to ensure that a replacement law wouldn’t include supermarkets among those subject to calorie-listing requirements, as the current one does. The current law will eventually require eateries with 20 or more locations to list calorie contents on their menus.

“We don’t operate like restaurants,” said Erik Lieberman, regulatory counsel for the institute in Arlington, Va. Retailers are irked because it could mean grocers would have to list calorie totals for everything from deli potato salad to dishes of cut fruit.

Lynn Liddle, an executive vice president at Domino’s Pizza, hopes the calorie provision gets wiped out. Her concern is that pizzas would have to be labeled based on their entire calorie count, not just by slice. “People very rarely sit down and eat a whole pizza,” Ms. Liddle said.

Rick Kueber, co-founder and chief executive of Sun Tan City, a 215-outlet chain based in Louisville, Ky., is tracking online news reports on how the decision could turn out. The tanning tax has driven away some customers and has subjected his facilities to audits by the IRS, he said.

Other groups are worried they will lose valued perks if the court strikes down the law. La Leche League International, a breast-feeding advocacy organization, said losing the nursing mothers’ provision would set back its cause. “A lot of times the laws shape the culture, and one of the biggest challenges to breast feeding is culture,” said Ms. O’Connor, who also is a spokeswoman for the group.

Doug Roll, mayor of Libby, Mont., estimates that hundreds of residents in his small town were able to enroll in Medicare thanks to a provision added to the law that allowed certain victims of environmental health hazards onto the program before age 65. A now-defunct vermiculite mine near the town exposed residents to asbestos.

After Mr. Obama signed the health overhaul in March 2010, federal officials quickly set up shop in Libby and began signing up residents for Medicare, Mr. Roll said. He signed up and said that switching from his private insurance cut his insurance costs by more than half.

Mr. Roll can’t figure out whether he and other residents would immediately lose their Medicare coverage, or whether it would go away at all, if the court invalidates the law.

A spokesman for Medicare declined to comment.

“For the lower income, it would be devastating, because there is no other plan available,” Mr. Roll said.

A version of this article appeared June 21, 2012, on page A4 in the U.S. edition of The Wall Street Journal, with the headline: Much at Stake for Many Firms.

SeeChange Health and HealthCPA share a common philosophy about the importance of consumer engagement in lowering healthcare costs. SeeChange Health offers self-funded employers a benefits approach that rewards members for better health management, resulting in healthier and more productive employees, and lower costs for the long-term. HealthCPA Advocates help consumers navigate the increasingly complex healthcare system and resolve billing and claims issues, ensuring they never pay more than they need to for their healthcare. “We believe that healthcare consumers need an ally to help them navigate the system, and we are thrilled to partner with SeeChange Health to provide our innovative service to a greater number of people,” said Joshua Greenberg, Chairman and President of HealthCPA. “This alliance with HealthCPA will further allow our members to make more informed decisions about the value of care as well as understand the economics behind what they receive,” said Martin Watson, SeeChange Health’s CEO.

About SeeChange Health

SeeChange Health is the leader in value-based benefit design solutions for employers that encourage individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious conditions. SeeChange Health Solutions provides flexible administrative services with the proven cost-control advantages of value-based benefit designs. It also provides the leading consumer engagement and health incentive platform to employers, health plans and administrators. For more information, please go to http://www.seechangehealth.com.

About HealthCPA

HealthCPA is the premier provider of health care financial advocacy services, with an unmatched track record of saving its members time, money and stress. The company’s Financial Advocates provide personalized, concierge-style service to help members navigate the financial complexities of today’s health care system. HealthCPA is committed to delivering a truly exceptional service experience to its members around the country, and has built a proprietary technology system with bank-level security to ensure the highest levels of customer care, privacy and safety. For more information on the company and its services, go to http://www.healthCPA.com.

Contact:

Susan Cotton
(818) 824-9164
SCotton@SeeChangeHealth.com

This press release was issued through eReleases® Press Release Distribution. For more information, visit http://www.ereleases.com.

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Kansas City, Kan.— According to the Kaiser Family Foundation, Americans filled more than 3.7 billion prescriptions in 2010. Because the rate at which individuals developing chronic health conditions continues to increase, the expected decline in drug costs comes as little comfort to services industry employers who are largely footing the bill, as an overwhelming majority still offer prescription coverage to employees as a part of their medical plan. These increasing costs translate to higher premiums for employers and employees, as well as increasing co-pays.

“In the services industry, prescription drug co-pays have been trending upwards over the last few years, although on most plan types non-formulary co-pays have seen the largest increases,” said Amy Kaminski, director of marketing for Compdata Surveys. “On PPO plans for example, formulary co-pays have increased 7.1 percent since 2009, while non-formulary co-pays have gone up by 14.9 percent.”

Formulary drugs are medications included on a list of preferred medications issued by the insurer. Drugs not on this list are referred to as non-formulary and generally incur higher co-pays and may require pre-authorization from the insurer before coverage is granted.

The use of value based insurance design (VBID) has made headlines lately as a means to control prescription costs. Using VBID, services and treatments are priced based on the overall value to an individual’s health, so the greater the value the lower the cost. As a result, co-pays on medications for chronic conditions, such as high blood pressure or diabetes, may be reduced or eliminated completely. The assumption being that reduced out-of-pocket costs will encourage employees to continue taking needed medications, keeping them healthy and reducing long-term medical costs to the employer.

The use of high deductible health plans (HDHP) is also rapidly increasing as a means to control costs. In 2009, 18.3 percent of services employers offered HDHPs, compared to 29 percent in 2012. Because HDHPs carry a higher deductible, the premium costs are generally reduced. Eighty-eight percent of services employer sponsored HDHPs include prescription coverage, with 59.5 percent of those reporting a co-pay requirement. The average formulary co-pay under an HDHP is $33, with non-formulary co-pays averaging $54. Generic drug co-pays on these plans are the least expensive at $11.

About the Survey
Compensation Data 2012 Services provides a comprehensive summary of pay data, benefits information and pay practices with an effective date of January 1, 2012. More than 100 industry-specific job titles and 400 benchmark titles were surveyed ranging from entry-level to top executives, with data collected from more than 5,100 services employers across the country.

June 20, 2012 | By LAURA MECKLER And LOUISE RADNOFSKY, the Wall Street Journal

White House officials say they are confident the Supreme Court will uphold the health-care law, but they also are preparing for a range of outcomes, including pressing ahead with what remains of the law if the court strikes down only part of it.

Republicans, meanwhile, are preparing a two-step approach if the court doesn’t void the entire law: A quick vote in the House to repeal any parts of it that remain, which would be unlikely to get approval in the Democrat-controlled Senate, and then a push for a series of small changes to health-care policy.

The Supreme Court’s decision, expected by the end of next week, could reshape the health-care landscape for consumers and companies. If the court keeps it in place, attention would shift to preparing for millions more Americans to get coverage starting in 2014 and for businesses to pay new taxes and penalties. If the court strikes down all of the law, consumer-friendly benefits such as Medicare drug rebates likely would disappear along with the requirement that some people pay a fee for going uninsured.

A core question before the Supreme Court is whether the law’s requirement that most Americans must carry insurance or pay a fee, known as the individual mandate, is constitutional. Along with that, the court could also throw out a corollary provision that bans insurance companies from discriminating against people with pre-existing health conditions. If that happens, administration officials believe millions of Americans could still obtain health insurance through the law, and President Barack Obama could claim progress toward his goals, according to Democrats familiar with White House officials’ thinking.

White House officials have been fearful that any talk of contingency planning would send a message to the justices that there are alternatives if the court peels back the law. But senior officials have been talking through multiple scenarios in preparation for the court’s ruling, Democrats said.

House Speaker John Boehner (R., Ohio) said Tuesday that after a vote to overturn any parts of the health-care law that remain, the House would “move in a step-by-step approach to common-sense reforms that will lower the cost of health insurance and ensure that the American people can go to the doctor of their choice.” But GOP leaders haven’t settled on what specific proposals they would put forth.

In the Senate, senior Democrats plan to put the onus on Republicans to make the next move if the court kills the law, since they are the ones who backed the court cases against it. “You break it, you buy it,” said one Democratic leadership aide.

Administration officials point to a long list of provisions in the law that would help cover the uninsured even without a requirement that most everyone carry insurance. The law would still be expected to cover millions of low-income Americans by expanding the Medicaid federal-state program. It also would create health-care exchanges for people to shop for coverage, give lower earners tax credits to defray the cost and require larger employers to provide coverage or pay a fine.

Tim Jost, a consumer advocate and professor of health law at Washington and Lee University, said the administration could also use its regulatory powers to create incentives for insurance agents and brokers to sign up consumers. It also could use regulations to strengthen provisions for employers to automatically enroll employees in health plans unless they opt out and improve a small-business insurance tax credit.

“It’s like airplanes with four engines,” said Mr. Jost. “If one of them fails, the plane can still proceed with three engines and land safely.”

Three big health-insurance companies have said they would voluntarily keep some parts of the law already in place no matter what, including provisions that let children up to age 26 stay on their parents’ health plans and covering preventive care without co-payments.

With Congress divided, it is unlikely any health-care legislation will advance soon. The Business Roundtable, an association of chief executive officers, on Monday suggested lawmakers move slowly. “Whatever the ruling, the nation would be well served by a ‘cooling-off period’ that would allow elected leaders to fully consider their options,” the group wrote in an open letter.

Republicans are united in wanting to overturn the law if the court doesn’t, but there is less agreement on what to put in its place.

Some freshmen from centrist districts have said they want to move forward with an alternative in the run-up to November elections. Some want to take their time. And others, such as Sen. John McCain (R., Ariz.), worry that Republicans haven’t done enough to prepare a response to various court scenarios.

“I don’t think we’ve honed our message as much as we should,” Mr. McCain said Tuesday.

San Francisco, California and Austin, Texas — June 14, 2012 — SeeChange Health Insurance, the first health plan to offer value-based benefit designs coupled with health plans compatible with health savings accounts (HSAs) and health reimbursement accounts (HRAs) to small and midsize businesses, announced today that Tango Health’s HSA management software and services are now available to insured employers and their workers as a preferred HSA option. This partnership will enable SeeChange Health’s clients to offer employees a robust set of tools to help them become more engaged healthcare consumers.

“Our value-based plans reward members for taking control of their health,” said Alan Katz, SeeChange Health’s Executive Vice President. “Tango Health’s user-friendly HSA tools help consumers take control of their medical spending. By adding Tango Health to our Preferred Partner Program we enable employers to put together a powerful package.”

“As the leader in Value Based Benefit Design, SeeChange Health uses its innovative plan designs to improve employee health and lower health care costs over the long term through early identification and management of serious medical conditions. A key element of this approach is to provide members with significant financial rewards (in the form of reduced out-of-pocket exposure and/or deposits to a Health Incentive account) for taking simple and appropriate actions. The result is a healthier, more productive workforce for employers and a better quality of life for employees.

By taking advantage of Tango Health’s unique offerings, members will now be able to manage and track health spending according to their financial goals, lifestyle, and payment preferences. Members will also be able to use Tango Health’s online software to view and manage processed health claims, and they can reimburse themselves for expenses paid out of their own pocket or attach receipts to create a complete spending record.

As health care benefit costs continue to rise, companies are looking for ways to reduce costs while still providing the best benefits for their workforce. Consumer-driven health plans (CDHPs) have become an increasingly popular option for these companies. According to the Employee Benefit Research Institute, CDHPs are growing rapidly and now cover about 21 million individuals, representing roughly 12 percent of the market. Both SeeChange Health and Tango leverage their technology platforms to enable members to navigate the healthcare system and make better informed decisions.

“SeeChange Health is an industry leader that shares our vision of the power of consumer-driven healthcare,” said Duncan Van Dusen, Tango Health Co-Founder and CEO. “As more employers around the country tap the value in health plans like those offered by SeeChange Health, we are pleased to have Tango’s unique software and service package be recommended as a preferred HSA offering to maximize healthcare savings.”

About Tango Health

Tango Health is the premier provider of Health Savings Account (HSA) management software and services. The company offers the only HSA management solution that serves the needs of an employer’s entire population of HSA-eligible employees, which ensures employers get the maximum HSA usage and tax benefits for themselves and their employees. Tango Health’s user-friendly, web-based software provides unprecedented visibility and control over HSA management. Tango sells directly to employers, and partners with the nation’s top custodial banks, insurance brokers, consultants and insurance carriers to enhance their offerings. Founded in 2008, Tango Health is a privately held company headquartered in Austin, Texas. To find out more about the tax savings, automated administration and employee satisfaction benefits that Tango Health offers, visit www.tangohealth.com or call 855-468-2646.

About SeeChange Health

SeeChange Health is the leader in value-based benefit design solutions for employers — delivering the plans and services they are looking for to create better health and quality of life for employees, increase workforce productivity and lower their health care costs. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups — and is among the first to bring this unique approach to small and midsize companies. SeeChange Health Solutions provides flexible, efficient administrative services with the proven cost-control advantages of value-based benefit designs to self-insured employers. SeeChange Health Solutions also provides the leading consumer engagement and health incentive platform to employers, health plans and third party administrators. For more information, go to www.seechangehealth.com.

Media Contacts

For Tango Health
Nicole Watson
nwatson@tangohealth.com
855-468-2646 x817

For SeeChange Health
Susan Cotton
scotton@seechangehealth.com
818-824-9164

Tango Health is a registered trademark of Tango Health, Inc. All other names may be trademarks or registered trademarks of their respective owners.

June 12, 2012 | By Chad Terhune, Los Angeles Times

Some California health insurers are proposing to raise small-business rates more than 10% next month, drawing scrutiny from state regulators.

Aetna Inc., which drew the ire of state insurance officials for a rate hike earlier this year, wants to increase premiums 10% on average, and as high as 24% for some employers. Anthem Blue Cross, the state’s largest for-profit insurer and a unit of WellPoint Inc., has proposed boosting rates 13%. Blue Shield of California is looking to charge some small employers up to 6% more.

Byron Tucker, a spokesman for the state Department of Insurance, said the agency is having discussions with the three companies about whether the proposed rate hikes are too high. Separately, the California Department of Managed Health Care said it is reviewing other proposed rate increases going into effect in July or August. But no matter what their decision is, neither agency has the power to deny increases. They can only urge the companies to cut rates and publicly criticize them if they don’t.

In April, insurance department officials objected to other small-business rate hikes as high as 21% by Aetna and called them “excessive.” But Aetna went ahead with the higher charges.

Aetna spokeswoman Anjie Coplin said its rates “are based on actuarially sound data and a reasonable projection of future cost.” The company also noted that some of its small-business customers will see a decrease in rates starting July 1.

Overall, about 3 million Californians get their health insurance through small businesses with fewer than 50 workers. But rising premiums and the recession have taken a toll. The percentage of California employers offering coverage has declined from 73% in 2009 to 63% last year, according to the California Healthcare Foundation.

California Insurance Commissioner Dave Jones is pushing for an initiative on the November ballot that would give him the authority to reject excessive rate increases for policies sold to individuals and small businesses. Insurers say the measure would give an elected official too much power and wouldn’t address the underlying costs driving up premiums.

In filings to regulators, insurers said the proposed increases are justified based on escalating medical expenses, in particular higher charges for hospital care and prescription drugs. They also cited slightly higher costs for new government-mandated benefits related to maternity and autism care.

Kaiser Permanente, the state’s largest nonprofit health plan, has proposed raising rates as much as 9% for certain small businesses. Joe Smith, vice president of small business for Kaiser, said his company isn’t immune to the industrywide pressures driving up medical costs, even with its coordinated approach of running its own hospitals and network of physicians.

“We still feel the same pressure on utilization, the aging population and new medical technology, which can drive increases in costs,” Smith said. “No small employers are happy. The market is still very tough.”

Tulsa Rib Company, a barbecue restaurant in Orange, has offered health benefits to its employees since 1983. But owners Steve and Liz Parker say they aren’t sure they can afford to do so much longer.

Liz Parker said she switched from Health Net Inc. to Kaiser Permanente in 2010 after her company’s premiums shot up more than 30% annually. She and her workers have been satisfied with Kaiser’s medical care, she said, but the insurer is raising her premiums 8% in August. That comes on top of higher costs for food and gasoline in their restaurant and catering business.

“We continue to be squeezed and squeezed and we can’t pass along all those costs to our customers,” she said.

The Parkers and some other small-business owners are hopeful a new online marketplace for health benefits set to launch in January 2014 will help them secure lower rates. Two years ago, the restaurant stopped paying all of the premiums for workers’ family members and boosted annual deductibles for individuals to $2,000 to reduce its costs.

“I hope the exchange will put my 50 people on a level playing field with companies that have 5,000 people,” Liz Parker said.

The California Health Benefit Exchange is designed to negotiate the best rates with insurers and to help consumers and small businesses purchase health plans using federal subsidies and tax credits.

Enrollment is set to begin in October 2013. The exchange board is scheduled to discuss its small-business program Tuesday in Sacramento.

May 29, 2012 | By Chad Terhune, Los Angeles Times

Thousands of patients in California and across the nation who take expensive prescription drugs every month for cancer, rheumatoid arthritis and other ailments are facing sticker shock at the pharmacy.

Until recently, most of these patients typically paid modest co-pays for the advanced drugs. But increasingly, Anthem Blue Cross, Aetna and other insurers are shifting more prescriptions to a new category requiring patients to shoulder a larger share of the drug’s cost.

The result: Pharmacy bills are going up by hundreds of dollars a month — on top of insurance premiums.

Robert Gomer, who owns an interior plant business in Rancho Mirage, saw his cost for three HIV drugs soar to $450 a month on a new Anthem Blue Cross plan this year from $80 a month on a previous plan.

“All of a sudden you’re starting to count pills and asking friends to borrow some,” Gomer said. “It was a very stressful situation to be faced with.”

Anthem, the state’s largest for-profit insurer and a unit of WellPoint Inc., adjusted its prescription drug coverage early this year. It said it shifted more medications to the most expensive tier for many of its employer plans to keep premiums more affordable.

“Because high-cost pharmaceuticals reduce the affordability of health insurance, Anthem moved some of these drugs from a co-pay tier to a cost-sharing tier,” said company spokesman Darrel Ng. “We continue to evaluate and refine the drug classifications in our four-tier plans to enhance value and affordability.”

Robert Galle, Aetna’s head of pharmacy benefit management operations, said his company is responding to employers’ concerns about escalating costs from these specialty drugs. “As new drugs are brought to the market, we are generally adding them to these tiers,” he said.

Consumer advocates and some benefit consultants argue this trend could backfire as a cost-saving tool if workers stop taking needed medications and require even more costly medical care down the road.

Proposed state legislation would cap out-of-pocket expenses for prescriptions and other medical costs, but the insurance industry is fighting that move. Insurers say those caps will drive up premiums for all customers and that state rules are unnecessary because the federal Affordable Care Act establishes out-of-pocket spending limits in 2014. Insurers also note that caps don’t address the underlying increase in drug prices.

Nationwide, an estimated 57 million Americans rely on specialty drugs for complex conditions. These medications account for only 1% of total drug use, but 17% of drug spending by insurers because of the high prices, according to IMS Health, which tracks medical data.

What’s more, the struggle over drug spending is projected to intensify as the number of biological drugs and the conditions they can treat is expected to soar in the years ahead. Healthcare researchers say they could account for 40% of overall drug spending by 2020.

In most cases, cheaper generic substitutes don’t exist for these drugs because many are derived from living organisms, not chemical compounds that can easily be copied.

The average annual cost for multiple sclerosis drugs was $24,116 in 2010, according to Express Scripts, a pharmacy benefit manager. The average for pulmonary hypertension was $32,570. Employers and insurers are picking up most of that tab now.

To help lower their costs, health plans are changing their approach to drug coverage, often expanding from a three-tier to a four-tier plan. The first tier would be generic drugs at a $10 co-payment, for instance, the second tier preferred brand-name drugs at a $30 co-pay, the next tier non-preferred brand-name drugs for $50, and the top tier would be dozens of specialty drugs costing patients 10% to 30% co-insurance or $150 co-pays.

Nationwide, 14% of workers are in a plan with four or more tiers of cost sharing for prescription drugs, compared with 7% five years ago, according to the Kaiser Family Foundation.

Melanie Rowen, a 34-year-old career counselor in Berkeley, racked up thousands of dollars of credit card debt to pay for her multiple sclerosis drug. She was responsible for 30% of the price of a medication called Rebif, which initially cost her $680 a month and jumped to nearly $900 a month in a year’s time — until she recently switched jobs.

“It blew my mind,” Rowen said. “I felt like I was staring into the financial abyss.”

Assemblywoman Fiona Ma, a San Francisco Democrat, is pushing a bill that seeks to limit consumers’ financial exposure to high drug costs and other medical bills. The proposed legislation would cap annual out-of-pocket medical costs at $5,950 for an individual and $11,900 for a family.

Lawmakers in more than 20 states have introduced similar measures to limit bills for expensive medications. In 2010, New York banned four-tier and higher pharmacy plans.

The California Assn. of Health Plans is fighting the proposed legislation on the grounds that it curtails ways to keep premiums affordable and the federal healthcare law addresses the issue. “Capping out-of-pocket costs doesn’t make healthcare less expensive. It just shifts costs into premiums,” said Charles Bacchi, executive vice president of the industry group.

But supporters say the uncertainty of whether the federal healthcare law will survive a constitutional challenge gives even more reason to enact these consumer protections at the state level.

“It doesn’t take a lot to push a whole range of families into medical debt and bankruptcy,” said Anthony Wright, executive director of Health Access, a consumer advocacy group.

Carrie Thorpe, a 52-year-old event planner in Temecula, pays $150 each month for an injectable drug to treat her multiple sclerosis that costs $4,000 per month overall. She said she couldn’t afford her share without help from a patient assistance program.

“I can’t function without this medication,” she said. “I’m at the mercy of whatever the cost is.”

chad.terhune@latimes.com

While wellness programs have existed for decades, their prevalence has grown significantly over the past 10 years. Nearly 60% of American employers implementing new wellness programs since 2008; 23.7% have started offering them since 2010. Additionally, nearly two-thirds of organizations increased their wellness budgets in the last five years.

The survey suggests a definite decrease in health care costs when wellness initiatives are offered, according to the 21.6% who have analyzed return on investment. Of the organizations that are analyzing ROI, 83% indicated a positive return. For every dollar spent on wellness initiatives, most organizations see between $1 to $3 decreases in their overall health care costs.

According to the survey, the most prevalent reasons that organizations provide wellness initiatives are to help workers enjoy better overall physical health (45.6%) and to control health care costs (39.8%). Of the respondents who presently do not have wellness programs but plan to implement them within the next 12 months, 50.7% cite controlling health care costs as their motivation for adding the initiatives.

Screening and treatment programs including flu shots (85%), health risk assessments (79.9%) and smoking cessation programs (67.5%) are some of the most popular wellness initiatives offered. Employers also make available fitness and nutrition programs such as walking/fitness challenges (58.6%), weight loss/management programs (52.5%), nutrition counseling (39.6%) and on-site fitness centers/equipment (36.4%).

“One measure of success for a wellness program is the participation rate,” said senior information/research specialist Julie Stich. “Organizations will not realize benefits unless there is sufficient participation.”

The survey found that the wellness initiatives with the highest participation rates are:

• Flu shot programs (49.6%);
• Health screenings (48.8%);
• Health risk assessments (48.2%); and
• Health fairs (44.7%).

Nearly 90% of the organizations surveyed provide incentives to increase participation in their programs. The incentives that are most often tied to health risk assessments, health screening and fitness programs include:

• Gift cards and gift certificates (38%);
• Insurance premium reductions (36.7%);
• Non-cash incentives – e.g. prizes and raffles (30.9%); and
• Cash rewards (26.9%).

Employers are often assisted in developing or managing their workplace wellness programs; more than 85% of the survey participants use an outside vendor such as an employee assistance provider or wellness consultant to implement or assist with the program.

Californians spent less per person for healthcare in 2009 than residents of all but eight other states. But the total tab is mounting, according to a new report from the California HealthCare Foundation.

Total spending for healthcare in California was $230 billion, nearly triple the level in 1991.

The state’s spending growth rate slowed, however, the report noted: ”Since reaching its peak of 9.7% in 2003, the pace of growth in health spending has been decelerating. By 2009, towards the end of the recession, spending grew 4.5%, similar to the U.S. rate of 4.6%, and the slowest pace since 1999.”

The state’s per capita spending in 2009 was $6,238, the ninth-lowest in the nation. Utah, Arizona and Georgia led the list. The U.S. average was $6,815. At the bottom: Massachusetts at No. 50, followed by the District of Columbia.

The report from the Oakland-based nonprofit foundation entitled “Health Care Costs 101: California Addendum” is chock-full of data about medical costs.

Other highlights for 2009, the most recent year that these numbers were available, include:

– Health spending accounted for 12.2% of California’s economy — a smaller share of the economy than that of most states or the nation.

– Hospital and physician services continued to account for the majority of spending, totaling 63%.

– Medicare and Medicaid accounted for nearly 40% of California health spending, up from 27% in 1991.

May 07, 2012 | By California Health Line

Last Thursday, Gov. Jerry Brown (D) issued an executive order requiring California Health and Human Services Agency Secretary Diana Dooley to create a task force for developing a 10-year plan to improve residents’ health and reduce health care spending, the Sacramento Bee‘s “Capitol Alert” reports.

According to the executive order, the “Let’s Get Healthy California Task Force” must report by Dec. 15 on strategies for:

Curbing chronic conditions, such as diabetes and asthma;

• Increasing the number of children receiving vaccinations; and
• Reducing hospital readmissions (Siders, “Capitol Alert,” Sacramento Bee, 5/4).

April 27, 2012 | By California Health Line

Certain companies on President Obama’s jobs council expect the federal health reform law to increase their health care costs, which could lead them to drop coverage for their employees, according to a report released on Thursday by Republicans on the House Energy and Commerce Committee, the Wall Street Journal reports (Radnofsky, Wall Street Journal, 4/26).

Report Details

The report — titled “Higher Costs, More Confusion, Less Coverage” — compiles public and private statements on the health reform law from business leaders on the President’s Council on Jobs and Competitiveness, a 27-member advisory panel established in January 2011 (Adams, CQ HealthBeat, 4/26).

According to the report, some companies anticipate their health care costs to increase because of higher taxes, fees and administrative burdens under the overhaul. They also voiced concerns that provisions requiring no-cost preventive care, the removal of lifetime coverage limits and coverage for dependents would create an incentive to drop employee-sponsored coverage because the health reform law’s penalties would be less than the cost of insuring each worker, the report stated (Morgan, Reuters, 4/26).

For example, Southwest Airlines in 2010 said the overhaul would increase its costs by between $4.7 million and $9.4 million, according to the report (CQ HealthBeat, 4/26). In July 2011, benefits consultant Mercer told Southwest that the overhaul would force the company to pay an extra $414 million annually, or the company could drop employee-sponsored coverage and pay $111 million in penalties.

According to the report, the documents corroborate concerns that “the law will increase costs, make future planning for hiring and expansions difficult due to the uncertainty created by the law, and could ultimately lead to employers dropping health-insurance coverage for their employees.”

Companies, Report Indicate Employers Will Not Drop Coverage

According to the Journal, several companies mentioned in the report — including Southwest — denied any plans to drop their health benefits.

The report states that “while no member of the council indicated that they were considering dropping their coverage at the current time, the temptation to drop coverage or provide a bare minimum level of coverage remains” (Wall Street Journal, 4/26).

Democrats Denounce ‘Biased and Partisan’ Report

House Democrats on Thursday accused Republicans of distorting the companies’ statements to create a “fundamentally misleading” report about the health reform law, The Hill‘s “Healthwatch” reports.

In a letter to Republicans on the House committee, Reps. Diana DeGette (D-Colo.) and Henry Waxman (D-Calif.) said, “The biased and partisan approach that you have taken in today’s report heightens our concerns about how the Committee is using its investigative powers.”

House Democrats noted that about one-third of the 27 members of the jobs council did not respond to the GOP’s inquiries for the report. Further, Democrats alleged that Republicans ignored reports by Intel, Kodak and other companies “that did not comport with the conclusion that you had reached even before opening the investigation” (Baker, “Healthwatch,” The Hill, 4/26).

April 17, 2012 | SAN FRANCISCO, CA and NEW YORK, NY (Marketwire) — Consumers are becoming more engaged in their healthcare and they want to be financially rewarded for their efforts, according to healthcare investment firm Psilos Group : ctt.marketwire.com/?release=874640&id=149337 .. . The firm’s 2012 Healthcare Economics & Innovation Outlook : ctt.marketwire.com/?release=874640&id=149337 .. , which investigated emerging trends in consumer engagement, also found that incentive programs and personalization are critical factors for enticing consumers to be more active in the day-to-day management of their health and wellness, and lowering the overall cost burden.

To date, incentives to promote wellness and prevention have not been tightly connected to consumer-focused health benefit plans. If used at all, they have been more of an afterthought or part of programs operated outside of the health insurance plan. A key finding of the Psilos 2012 Outlook : ctt.marketwire.com/?release=874640&id=149337 .. is that wellness incentives, if properly integrated with health benefit plans, can play a critical role in solving today’s healthcare crisis.

The 2012 Healthcare Economics & Innovation Outlook : ctt.marketwire.com/?release=874640&id=149338 .. was substantiated by a survey, completed in February 2012, and includes responses from 329 healthcare consumers, 25 years of age and older. The 2012 Healthcare Economics & Innovation Outlook : ctt.marketwire.com/?release=874640&id=149338 .. is one of the first to shine a light on consumers and their role in the fast-changing healthcare system, especially in the wake of healthcare reform. Though the Patient Protection and Affordable Care Act (PPACA) is now facing a challenge in the Supreme Court, it is clear that personal engagement must be a hallmark of all future healthcare plans and that individuals must take a more proactive role in their personal well-being if the goals of cost-effectiveness and improved quality are to be achieved.

In the United States, annual healthcare spending now totals $2.6 trillion or $8,402 for every citizen. Despite the uncertainty surrounding PPACA, insurance companies, hospitals and doctors are reshaping their policies and practices to match the new realities of a national economy crushed by healthcare costs and the looming imperatives of healthcare reform. For instance, health insurance companies such as UnitedHealth Group (“UHG”), Humana, Inc. and others are migrating from systems where they pay doctors simply for providing services like office visits or diagnostic tests. Instead, these firms are beginning to compensate their network providers based on performance, offering higher payments for better patient outcomes.

Sacramento, Calif. – April 10, 2012 – A state legislative committee considering legislation concerning wellness incentive and rewards programs (AB 1636-William Monning, D-Santa Cruz) today heard how one approach to such value-based benefit plans can save lives, improve Californians’ quality of life and reduce health care spending.

Alan Katz, executive vice president of SeeChange Health (www.SeeChangeHealth.com), testified before lawmakers that the company’s approach to wellness programs has the ability to reduce medical spending even while increasing utilization in the short-term. “SeeChange Health’s approach to wellness is based on three proven strategies. First, the financial rewards we offer members are meaningful, consistent and recurring. Second, our rewards are based on what members do, not on who they are. Third, we provide our rewards for completing actions that are based on from objective third parties such as the US Preventive Services Task Force,” Katz stated.

“The result is serious and chronic conditions are brought to light earlier than would otherwise be the case. And the impact of this fact is powerful,” Katz said.

Katz described how early-stage treatment of breast cancer costs, on average, nearly $14,000 per year while late-stage treatment averages nearly $61,000—a difference of $47,000 for one patient in one year. “Better still, early intervention saves lives and can greatly improve patients’ quality of life,” he added.

A copy of Katz’s testimony before the Assembly Health Committee is available at in the news section of the SeeChange Health website.

About SeeChange Health

SeeChange Health is the leader in value-based benefit design solutions for employers – delivering plans and services to create better health and quality of life for employees, increase workforce productivity and lower their health care costs for employers. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully-insured small and mid-size businesses. SeeChange Health Solutions provides value-based benefit platforms and services to self-insured companies and carriers.

For more information, please go to www.SeeChangeHealth.com.

#          #          #

Mr. Chairman, Members of the Committee, my name is Alan Katz and I’m the executive vice president for sales and marketing at SeeChange Health. Your deliberations today are extremely important to SeeChange Health as we are a value-based benefits company that incorporates wellness initiatives into all of our products. For several years now we have provided value-based benefit platforms and services to self-insured plans and carriers through our SeeChange Health Solutions division. And last year we launched statewide coverage to California’s fully-insured small and mid-size businesses through SeeChange Health Insurance. To the best of our knowledge, SeeChange Health Insurance is the first new carrier to enter the California small group market in at least two decades, delivering some of the expanded competition promised by federal health care reforms.

At SeeChange Health we believe that the best way to improve the quality of life of our members and to reduce health care costs is through positive reinforcement that leads to early and appropriate intervention in chronic and serious conditions, not by structuring products to punish individuals for having conditions over which they may have only limited control.

Our approach to wellness is based on three proven strategies. First, the financial rewards we offer members are meaningful, consistent and recurring. Studies—and our own observations—indicate that the most cost effective incentives are those perceived as having a value of about $500. Not all rewards “feel” the same, however. For example, our experience indicates reducing a member’s out-of-pocket exposure by $1,000 is perceived as roughly the equivalent of a $500 cash award. We have also learned that rewards provided on a one-time basis have less impact than ongoing incentives in improving health. So we incent members to complete age and gender-specific health actions on an annual basis.

Second, taking the steps necessary to earn rewards in our plans is voluntary and rewards are based on members taking specified actions, not on what those actions reveal of their medical condition. Put another way, our rewards are based on what members do, not on who they are. Yes, we want those actions to lead to better health. That is why members receive personalized health education and customized wellness tools designed to help them address their own, unique set of medical conditions. In addition, several of our plans offer additional financial rewards to members who take recommended steps to address their chronic conditions.

Third, we define our Preventive Health Actions based on guidance from objective third parties such as the American Heart Association, the American Diabetes Association, the US Preventive Services Task Force, and the National Asthma Education and Prevention Program. This keeps the requirements current and ensures they reflect the best available science.

This three-pronged approach can have a powerful and positive impact on both the quality of life of our members and the cost of medical care. In a case study of 500,000 members in a value-based benefits plan managed by SeeChange Health Solutions, the year-over-year cost trend was just 2.3% compared to the industry trend of 7.0%. This bending of the cost curve was achieved in spite of increased utilization because at the same time, overall per member per month costs dropped by 8.9% from the previous year.

This bears repeating: utilization increased while spending per member fell.

The reason is that our approach to value-based benefits often brings to light serious and chronic conditions earlier than would otherwise be the case. The resulting savings can be substantial. To cite just one example, early-stage breast cancer treatment costs, on average, slightly less than $14,000 per year while late-stage treatment averages nearly $61,000—a difference of $47,000 for one patient in one year.

This reality is often overlooked in efforts to reduce health care spending: instead of reducing utilization through denying treatment, savings can be achieved through improved patient outcomes—even if those outcomes result in increased utilization in the short-term. Better still, early intervention saves lives and can greatly improve patients’ quality of life.

As this Committee considers legislation concerning health and wellness programs, we urge you to take a sophisticated and targeted approach. There are numerous ways to implement value-based benefit plan designs. Care must be taken to encourage innovation and assure carriers can responsibly deliver on the promise of value-based benefits: healthier Californians, more productive businesses and lower overall health care spending.

Thank you.

January 24, 2012 | SAN FRANCISCO, CA–(Marketwire) – SeeChange Health (www.seechangehealth.com), an innovator in value-based benefit design solutions to improve health and reduce health care costs, today announced that the company’s growth is accelerating and is on pace to exceed $50 million in revenue over the next 12 months.

SeeChange Health offers value-based benefit design solutions to meet the needs of businesses of all sizes. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups in California and is the first to bring this unique approach to small and midsize companies. SeeChange Health Insurance is now the fastest-growing health plan in the market, as brokers and employers alike are embracing the value-based model.

According to Martin Watson, chief executive officer of SeeChange Health, growth is accelerating quickly, exceeding more than 300% in January alone. He also reports SeeChange Health Insurance will soon be launching in Colorado and the company has plans to expand into four additional states over the next two years.

SeeChange Health Solutions offers the first Software as a Service (SaaS)-based turnkey solution that enables large self-funded employers and health plans nationwide to offer highly customized engagement and incentive programs that motivate employees to improve their health; and recently launched an Administrative Service Only (ASO) solution that allows SeeChange Health Solutions to directly meet increasing demands from self-funded employers now seeking to take advantage of cost controls derived from value-based benefits.

According to Watson, the company closed 2011 with a 250% growth rate in the SeeChange Health Solutions business, which recently announced they will provide services to more than 1 million members this year. Meanwhile, customers of SeeChange Health Solutions are realizing meaningful results that provide empirical proof of the value-based concept. Employers that have implemented SeeChange Health’s private-label engagement and incentive platform have experienced just a 2.3% cost trend, as compared to the 7.3% industry norm. More specifically, they are reporting 13%-18% reductions in costly claims for employees with diabetes and cardiac problems.

“We are committed to this value-based health benefits model because we believe it will save lives, keep individuals healthier and ultimately make health insurance more affordable for businesses of all sizes,” said Watson. “What we are also proving is that we have the right idea at the right time and the right people in place to execute on our vision. We have successfully moved from a small company with a big idea to a fast-growing corporate enterprise.”

“We are very excited about what 2012 has in store for us and are optimistic that we are in the process of leading a new category in the health insurance marketplace, one that has the real potential to help employers achieve that elusive goal of a healthier workforce at a lower cost,” said Watson.

About SeeChange Health
SeeChange Health is the leader in value-based benefit design solutions for employers — delivering the plans and services they are looking for to create better health and quality of life for employees, increase workforce productivity and lower their health care costs. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups — and is the first to bring this unique approach to small and midsize companies. SeeChange Health Solutions provides flexible, efficient administrative services with the proven cost-control advantages of value-based benefit designs to self-insured employers. SeeChange Health Solutions also provides the leading consumer engagement and health incentive platform to employers, health plans and third party administrators. For more information, go to www.seechangehealth.com.

The Patient Protection and Affordable Care Act is set to test whether  value-based insurance design can be a viable tool for aligning out-of-pocket  costs and the value of medical services.

National reform will further encourage value-based insurance design in 2014,  when it allows employers to reimburse employees up to 30% of health insurance  costs if workers meet health and wellness goals. The current reimbursement rate  is 20%.

“As we move away from a one-size-fits-all, cost-sharing model to VBID, we are  removing barriers to accessing high-value care and at times, creating  disincentives to deter care of little value,” said A. Mark Fendrick, director of  the Center for Value-Based Insurance Design at the University of Michigan.

Value-based insurance adjusts out-of-pocket costs based on an assessment of  the clinical benefit value — not simply the cost — to a specific patient  population, according to Fendrick.

Simply put, value equals the clinical benefit achieved for the money  spent.

The Pacific Business Group on Health, an employer purchasing coalition based  in San Francisco, takes a broader approach to value-based insurance design.  Moving beyond just copayment or coinsurance reductions, the model should  include shared decisionmaking, network design, incentive design and  disease management, said PBGH Director Emma Hoo.

PBGH’s commitment to those principles comes into play within the development  of its Value Based Benefit Design and Right Price Projects, which help consumers  make decisions based on more transparent pricing. By analyzing cost variation  for certain procedures, PBGH recommends fixed-dollar coverage levels to  providers and insurers.

VBID Makes Inroads

In California, Blue Shield of California and SeeChange Health are working on  value-based plans with options that offer members a chance to put money back in  their pockets by engaging in healthy behaviors.

Two other California-based entities — CalPERS and Safeway — have introduced  “reference pricing,” which establishes a standard price for a medication,  procedure or service and requires members to pay any charges beyond the  price.

Suzanne Delbanco, executive director of Catalyst for Payment Reform — a San  Francisco-based independent organization working to improve health care quality  and reduce costs — said reference pricing offers an opportunity to engage  consumers in decisionmaking, while reducing unwarranted prices — especially if  members have access to information on provider volume, quality and outcomes. She  anticipates an increased emphasis on quality in reference pricing.

To secure a foothold in the VBID marketplace, San Francisco-based SeeChange  Health is launching a two-pronged approach.

Through an insurance arm, SeeChange began offering a value-based managed care  plan last June to insured California groups with two to 200 employees.

A self-insured option followed in November, targeting mid- and large-sized  groups nationwide through SeeChange Health Solutions, which provides only  administrative services. Cigna serves as the national provider network for both  products.

Janice Rahm, president of SeeChange Health, said, “As an ASO, we help  employers customize medical and prescription benefits, to promote maximum  control over costs and add design incentives to encourage healthy behavior by  employees.”

Employees earn incentives by completing a health risk assessment, undergoing  biometric testing and receiving an annual health screening. Typical incentives  include up to a $400 deposit into a health incentive account and the elimination  of in-network coinsurance.

When Steve Poizner launched Encore Career Institute — an online educational  company based in Los Gatos — six months ago, he wanted to ensure that his 30  employees received affordable and high-quality health care as soon as possible.  He chose SeeChange’s value-based plan.

“As premiums continue to grow, I sought an innovative set of benefits with  incentives that could focus employees on chronic disease before the conditions  became too serious. These diseases eat up a majority of health care costs,”  Poizner said.

With a health savings account embedded into the plan, Poizner offered his  employees a two-track program under SeeChange. If they achieve all three of the  preventive health actions prescribed by SeeChange, their coinsurance is  eliminated and they earn a deposit into their HSA. If they do not complete  requirements, employees are enrolled in a standard PPO plan. Most have opted for  the VBID component.

He said his employees can save as much as 20% over the regular PPO.

Blue Shield Develops Three-Tiered Plan

Blue Shield of California developed Blue Groove, a three-tiered, value-based  program for large employer groups to be piloted in the Sacramento area beginning  in 2012. Participants will use the services of Hill Physicians.

The three levels — basic, main and care+ groove — provide a range of health  and wellness benefits, opportunities to earn incentives and lower out-of-pocket  payments.

Participants who achieve healthy parameters can earn up to $500 in cash  deposited into a health reimbursement account and/or receive a discount on  premiums. They must comply with evidence-based protocols outlined in a  customized care plan.

The three tiers are determined by a member’s level of engagement and health  status, said Michael O’Neil, director of product innovation at Blue Shield,  which is based in San Francisco.

For example, members with diabetes are candidates for care+ groove,  which offers a primary care physician and care team, reduced out-of-pocket  expenses for specific services and access to a narrow network of providers.

O’Neil anticipates Blue Groove will reduce the premium for employers by 10%  to 15% in the first year and  significantly improve members’ health.

“Blue Groove represents the ‘next generation’ of VBID programs that  incorporate incentives for beneficiaries to use high-value services (demand  side) tied to supply side innovations, such as patient-centered medical homes,”  Fendrick says.

Blue Groove builds on the infrastructure of the plan’s successful two-year,  accountable care organization pilot with the California Public Employees’  Retirement System.

Reimbursement Tied to Value

CalPERS analyzed seven years of claims to develop its value-based insurance  offering. In 2009, the organization evaluated claims for osteoarthritis and  found a wide range in costs with little quality differentiation. “That  definitely raised eyebrows,” said Ann Boynton, deputy executive officer for  benefit programs policy and planning at CalPERS.

The result is a program for single joint, elective hip and knee replacements  not due to a traumatic event.

CalPERS asked its PPO, Anthem Blue Cross, to research the average costs for  hip and knee replacements among hospitals and develop a program that ensures  sufficient coverage by those hospitals that meet a certain cost threshold. The  program set a maximum of $30,000. In 2011, 46 medical institutions — including  Stanford and UC-San Francisco — were included in the plan.

“If there is homogeneity among services in quality, such as routine blood  tests and chest X-rays, there is a role for reference pricing in a value-based  insurance model — unlike heart bypass surgery, for which costs and quality can  vary greatly,” Fendrick said.

The program has paid off: During the first half of 2011, CalPERS incurred 246  claims with 70% falling below the $30,000 threshold and averaging $18,000; the  30% of claims above the threshold paid out an average of $34,000.

In addition, selection of the preferred centers rose by 6.8% and decreased by  26.5% for the higher cost centers compared with 2010.

Estimating about $16 million in savings for the hip and knee replacements  during the first year, CalPERS embedded the 2011 savings into its new rates to  reduce premiums.

“We have seen high-cost hospitals drop their costs and have encouraged  employees to negotiate with their current providers to remain under the  threshold,” Boynton said. “Our program also helps make the marketplace aware of  variation and why it is occurring.”

In 2012, CalPERS will extend its reference pricing to colonoscopies, cataract  surgery and arthroscopy conducted in outpatient hospitals and will assign  maximum reimbursements to the facilities of $1,500, $2,000 and $6,000,  respectively.

As one of CalPERS’ HMOs, Blue Shield plans to launch a similar VBID program  for hip and knee replacements for CalPERS members this  month.

San Francisco-based SeeChange Health boasts that it is the nation’s only health insurer that includes incentives in all of its health coverage products and offers only VBD options. The company’s insurance arm targets employers with fewer than 50 employees and seeks out chronically ill members — as well as those at risk for developing chronic conditions — and offers them richer benefits in exchange for compliance in managing the condition (HPW 10/5/09, p. 1).

In November, the company launched an administrative services only (ASO) product for self-insured employers in all 50 states. The company’s plan design uses financial incentives to encourage members to seek preventive care and comply with recommended treatment plans for chronic diseases.

“As much as they’d like to think otherwise, traditional carriers are not really known for being innovative,” says SeeChange Health CEO Marty Watson. “Health plans don’t yet seem comfortable with doing this for their fully insured book…because frankly it hits their bottom line pretty dramatically initially.”

One exception, he notes, is UnitedHealth Group, which he says was among the first large health insurers to embrace VBD on a large scale.

United Touts VBD Results

UnitedHealth says its VBD programs, which are designed for large employers, are proving to be effective. One program focuses on helping members manage a chronic illness, while another targets pharmacy adherence, and a third uses rewards and financial incentives to encourage healthy behaviors.

UnitedHealth says its Diabetes Health Plan, which is available to self-insured clients, reduces or eliminates out-of-pocket costs for diabetic and pre-diabetic members who follow medically proven preventive steps to manage the condition (e.g., regular blood-sugar checks and preventive screenings). Health care costs for an individual with diabetes average more than $11,700 a year, compared with $4,400 for employees without diabetes, according to UnitedHealth. Participants can reduce out-of-pocket costs by up to $500 a year.

Last year, the company launched a program that offers $20 discounts on certain prescription copays for members who refill their medications on a timely basis. The Refill and Save Program, which includes certain asthma drugs and antidepressants, reduces a customer’s copayment for refills of these drugs by $20 — a 40% savings on a typical copay plan, the company says.

November 14, 2011 | SAN FRANCISCO, CA, (MARKETWIRE) — SeeChange Health Solutions (www.SeeChangeHealth.com/Wave), the leader in value-based benefit design solutions to improve health and reduce health care costs, announced today a national launch of its Administrative Services Only (ASO) product to self-insured employers in all 50 states. Building upon its proprietary data analytics that have enabled health plans to successfully manage value-based benefits programs, the company is now offering its services directly to self-insured employers.

“This move allows SeeChange Health Solutions to directly meet increasing demands from employers now seeking to take advantage of cost controls derived from value-based benefits,” said Janice Rahm, SeeChange Health Solutions president. “Our value-based benefit designs use incentives to encourage individuals to participate in preventive health care, follow recommended treatment plans for chronic conditions, and adopt healthy behaviors.”

SeeChange Health Solutions’ ASO product uses a proprietary data analytics tool to inform employers of the potential health risks within their insured population. The use of individual incentives to encourage preventive care services and adoption of healthy behaviors is an increasingly popular tool given the success many large, innovative employers have experienced with value-based programs.

“The importance of aligning incentives cannot be overstated,” said Cyndy Nayer, president and chief executive officer of The Center for Health Value Innovation.

“SeeChange Health is the only health plan that includes incentives in all of its plan designs as a lever for behavior change to help employees improve their health, increase productivity and reduce health care costs in the long term.”

“One of SeeChange Health’s strengths is the ability to offer employers the flexibility to design and quickly implement a program that best suits their individual needs and the culture of their organization,” said Rahm. “While some employers may choose to design a program around a prevalent chronic condition, such as diabetes, for example, and use cash incentives to encourage adherence to condition-specific Health Actions; others may focus solely on preventive Health Actions and use enhanced benefits to encourage participation in wellness examinations and diagnostic testing.”

“Employers can contribute greatly to the transformation of the health system by focusing on value and not simply on financing and who pays,” said A. Mark Fendrick, M.D., co-founder of the University of Michigan Center for Value-Based Insurance Design. “SeeChange Health Solutions’ ability to administer health care benefits centered around value-based insurance design encourages employers to offer health benefits focused on getting more health for their health care dollar by making high valued services more accessible and affordable which in turn produces better health and increased productivity.”

SeeChange Health Solutions’ early-detection model identifies each member’s health status and potential risk of specific chronic conditions. Using robust analytics, SeeChange Health Solutions creates a Personalized Health Action Plan that provides each person with specific Health Actions based on age, gender, ethnicity and condition specific guidelines.

Of its current operations, the fast growing company announced last month that it had more than doubled the participants set to enroll in its consumer engagement and health incentive platform at the beginning of 2012. SeeChange Health Solutions will surpass a 1-million-member-milestone in the 2012 first quarter.

About SeeChange Health SeeChange Health is the leader in value-based benefit design solutions for employers — delivering the plans and services they are looking for to create better health and quality of life for employees, increase workforce productivity and lower their health care costs. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Solutions provides flexible, efficient administrative services with the proven cost-control advantages of value-based benefit designs to self-insured employers. SeeChange Health Solutions also provides the leading consumer engagement and health incentive platform to employers, health plans and third party administrators. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups — and is the first to bring this unique approach to small and midsize companies. For more information, please go to www.seechangehealth.com.

November 01, 2011 | SAN FRANCISCO, CA–(Marketwire) – SeeChange Health Insurance  (www.SeeChangeHealth.com),  a rapidly growing health insurance company that provides value-based health  insurance plans to small and medium-sized employers, has signed an agreement  with Withings (www.withings.com),  an innovator of connected health and wellness products, to make available home  scales and blood pressure monitors to individuals enrolled in a SeeChange Health  plan.

Under the terms of agreement, SeeChange Health will serve as a reseller of  Withings household health devices to SeeChange Health plan members. For those  plan members who have a Health Incentive Account (HIA) funded by SeeChange  Health, the devices can be purchased with HIA dollars, meaning the individuals  are able to obtain the state-of-the-art scales and blood pressure monitors at no  out-of-pocket cost.

“The exciting aspect of this agreement is that the scales and BP monitors  from Withings are equipped with simple WiFi-enabled interfaces that allow  individuals to transmit their weight and BP readings directly into their  confidential, personal Health Action Plan on MySeeChangeHealth.com through a  secure Internet connection, as well as to any iPhone, iPad or Android-based  mobile device they may own,” said Martin Watson, SeeChange Health’s chief  executive officer. “These tools allow our members to take daily medical  readings, which are central to preventive care maintenance. Being up to date on  their health status enables our members to work more closely with their medical  providers to make sure they are getting all necessary care.”

Completing a statewide expansion into all of California last month, the  innovative SeeChange Health group product offers employers increased access to  preventive care and employee incentives to encourage healthy behavior. Unlike  standard health insurance with traditional wellness programs, SeeChange Health  is engaging its enrolled individuals in proactive health management, focusing on  early detection of chronic conditions. Financial incentives include providing  from $200 to $1,000 credit annually to an HIA and/or reducing total  out-of-pocket exposure if they and their spouse simply take three steps: see  their doctor for a preventive exam, take a basic lab test, and fill out a health  questionnaire.

“We are committed to this value-based health plan model because we believe it  will save lives, keep individuals healthier and ultimately make health insurance  more affordable for small businesses to obtain for their employees,” said  Watson. “The agreement with Withings is another piece in our strategy of  deploying the best available technologies that support value-based health  benefits and robust data analytics that will help improve the health profile of  our plan members. Indeed, this is the first of several other innovative,  technology-based devices we will be rolling out to our members over the next  several months.”

About SeeChange Health SeeChange Health is the leader in  value-based benefit design solutions for employers — delivering the plans and  services they are looking for to create better health and quality of life for  employees, increase workforce productivity and lower their health care costs.  SeeChange Health’s unique approach encourages individuals to play an active role  in the management of their own health to prevent, detect and treat today’s most  serious health conditions. SeeChange Health Insurance provides value-based  benefit plans to fully insured employer groups — and is the first to bring this  unique approach to small and midsize companies. SeeChange Health Solutions  provides flexible, efficient administrative services with the proven  cost-control advantages of value-based benefit designs to self-insured  employers. SeeChange Health Solutions also provides the leading consumer  engagement and health incentive platform to employers, health plans and third  party administrators.

American Express Co. paid thousands of employees to exercise this summer, giving each $200 toward their healthcare expenses simply for walking 21/2 miles a day.

Health insurance giant Humana Inc. has begun offering camping gear, cameras and even hotel rooms in the Caribbean to customers who see the doctor and undergo tests for blood pressure and cholesterol.

And when the new year arrives, Blue Shield of California will introduce its new Blue Groove plan offering breaks of up to $500 on insurance premiums or healthcare costs to policyholders in the Sacramento area who fill out health questionnaires and get medical screenings.

Growing numbers of employers and insurance companies, stung by continued hikes in healthcare costs, are offering employees money and merchandise to lead healthier lives. Advocates of the approach are betting that preventive action will keep workers productive and hold down healthcare bills for expensive diseases like cancer and diabetes.

Economists say it’s too soon to tell whether rewards will be successful in the long run, but corporate leaders say the strategy is already paying off by helping to slow the growth of their medical costs.

And experts expect President Obama’s healthcare overhaul to expand the use of incentives by upping the amount of money employers can use to entice workers to see the doctor.

“This is the next evolution in trying to squeeze costs out by not incurring them in the first place,” said Sean Slovenski, chief executive of the firm handling rewards for Humana, which expects to enroll nearly 1 million customers in its incentive program in the coming months.

“It’s not the holy grail, but it’s a giant leap forward in bending the healthcare cost trend,” Slovenski said.

Thousands of insured workers are jumping at incentives, even though employees at some sites complain about preferential treatment for colleagues healthy enough to win money or prizes.

American Express travel manager Carmen Macias signed up for the company’s Walk This Way program in July, lured by an offer of $200 to pay for healthcare expenses.

Macias logged 2 1/2 miles a day for 12 weeks on a pedometer walking around her Irvine neighborhood. Once the program ended, she kept exercising, nearly doubling the distance she covers on weekdays while adding hiking and biking on weekends.

“It got me off the couch and away from the computer,” Macias, 45, said of the program she credits for reducing her stress level and weight. “A whole new window has opened up.”

The expanding use of incentives comes as employers grapple with record spending on healthcare.

The average price of employer-sponsored health insurance for families reached $15,073 this year, more than twice the cost a decade ago, the nonprofit Kaiser Family Foundation recently reported. This year’s costs jumped 9% over 2010, with employers shouldering most of the increases.

Many companies are passing more costs along to employees, while some are reducing or canceling insurance altogether. Incentive programs offer an alternative.

National surveys highlight the changes underway.

One study by benefits consultant Towers Watson and the National Business Group on Health found that 58% of large employers are offering money, insurance discounts or other inducements this year to workers who manage their weight or engage in other activities to improve their health. That’s up from 52% in 2010 and 49% in 2009.

Another survey by Buck Consultants found that 62% of large companies offered incentives in 2010, and that 25% more plan to do so in the future.

“There is tremendous interest from employers,” said Barry Hall, a principal in the consulting firm. “We’ve got this big surge in wellness programs, and incentives are the fastest-growing aspect of that.”

Jennifer Baca Morris’ employer, California tech giant Intel Corp., offered to cut her insurance premiums $250 for going to the doctor and losing weight.

After learning that she was obese at more than 200 pounds last year, the 43-year-old started running three times a week and replaced fatty cheeses and high-carb breads with fruits and vegetables. Morris has since shed 65 pounds.

“The program changed the way I live,” she said.

The incentive programs are likely to get a boost from the federal healthcare overhaul, which will allow employers in 2014 to reimburse workers as much as 30% of the cost of health insurance for losing weight, controlling cholesterol levels or meeting other health targets. Currently, the federal reimbursement limit is 20%.

Health insurers in California and elsewhere are rushing to capitalize on the growing interest.

One insurer, SeeChange Health, launched insurance plans in July that give workers at small and medium-size businesses up to $500 toward medical costs for undergoing blood tests, completing health questionnaires and getting checkups. The San Francisco insurer also caps rate increases for employers who sign up most of their workers.

SeeChange executives say they believe that the upfront investment in preventive care will pay off. They also note that workers’ spouses are eligible for financial incentives.

“We’re ultimately going to pull large spending out of the system over time,” Chief Executive Martin Watson said.

But not everyone is sold on the idea.

Some healthcare experts say that rewards are unfair to low-income workers who struggle to stay healthy because they may work longer hours, have limited access to high-quality food and endure more stress from economic insecurity.

The result, critics say, is that disadvantaged employees may wind up paying more for health benefits than colleagues with access to gyms and other amenities. Charging one group of workers more for insurance is a violation of the new healthcare law.

“I worry about vulnerable populations — people living in poor neighborhoods, people prone to certain health conditions,” said Sabrina Corlette, a research professor at the Georgetown University Health Policy Institute. “They face more challenges trying to meet a target than an upper-middle- class professional.”

Some successful incentive programs have met criticism within corporate ranks.

Nonsmokers at General Electric Co. complained about not getting a financial break for their healthful behaviors after the company paid more than 400 workers as much as $750 each to stop smoking as part of a 2006 experiment.

Although the effort yielded promising results (smokers who got the cash incentives were about three times more likely to quit than those who received no award), GE scrapped the rewards and last year began imposing an annual $625 insurance surcharge on smokers while also providing them with free nicotine replacement therapy.

“If you don’t pick the right health behaviors, it’s going to cost you more because you cost us more,” said Virginia Proestakes, director of health benefits for the Fairfield, Conn., company.

Most corporate incentive programs steer clear of penalties.

DreamWorks Animation provides free Weight Watchers courses, picks up the cost of health club memberships and spends as much as $2,500 on programs for employees to give up smoking. It also opened health clinics last year at its offices in Glendale and Redwood City, Calif.

Before the incentive programs were put in place three years ago, the company’s insurance costs were rising 10% to 12% a year. Now, costs are increasing at about half that rate.

“This has already paid for itself in terms of the money we put into these programs,” said Dan Satterthwaite, DreamWorks’ head of human resources. “We’ve seen huge positive outcomes.”

The program, developed by San Francisco-based SeeChange Health Insurance Co., provides up to $1,000 deposited into a health incentive account that plan members can tap to reduce their out-of-pocket medical costs if they take three steps: see their doctor for a checkup, take a basic lab test and complete a health-risk questionnaire.

If the screening process determines that the plan member has a chronic condition, the insurer will deposit another $200 in their health incentive account to help cover maintenance costs, provided they meet a further set of conditions based on treatment guidelines established by such organizations as the U.S. Preventive Services Task Force.

Other perks

The plan also offers other wellness-oriented perks such as admission to state parks to encourage outdoor activity, and access to a physician house-call service to deter use of hospital emergency rooms.

The insurer also is in talks with Cupertino, Calif.-based Apple Inc. to create personal computer, iPhone and iPad applications to monitor blood pressure and infant care.

The product, available only to employers in California with two-to-300 employees, is among the first VBID products to be offered to the fully insured group health market. The primary objective of a VBID is to remove the financial barriers to purchasing “high-value” drugs or services with the hope of raising compliance and avoiding more expensive future medical costs, such as hospitalization.

Plans to expand

Though VBIDs have been widely adopted by large, self-insured employers, access to fully insured employers has been limited for a variety of reasons. Among other things, health insurers have blamed the need to seek regulatory approval, restrictive community rating laws, and the fact that small and midsize employers often shop their health coverage annually, either inviting adverse selection or not allowing sufficient time for the benefit changes to positively affect plan members’ health.

Having gone statewide Aug. 1 after launching the product on a limited basis in Fresno, Calif., SeeChange plans to expand nationally once it receives regulatory approval for its product in the 24 other states where it has insurance licenses, according to SeeChange CEO Martin Watson.

SeeChange acquired those licenses when it purchased Central Benefits National Life Insurance Co. in Westerville, Ohio, in 2009, he said.

SeeChange Health Solutions offers the first Software as a Service (SaaS) turnkey solution that allows health plans and self-funded employers to offer highly customized engagement and incentive programs to encourage and motivate employees to improve their health. Implementation can be accomplished within weeks, given the platform’s ability to integrate with any Health Plan or TPA’s existing technologies and applications.

“Our private-label engagement and incentive platform helps to reduce health care costs for employers by encouraging individuals to play an active role in the management of their health,” explained Martin Watson, SeeChange Health’s chief executive officer. “And we offer clients the flexibility to design and quickly implement a program that best suits the needs and culture of their organization. For instance, some clients may choose to design a program around a prevalent chronic condition, such as diabetes, and use cash incentives to encourage adherence to condition-specific Health Actions, while others may focus more on preventive Health Actions and use enhanced benefits to encourage participation. Our consumer engagement and incentive platform is capable of delivering successful programs in all situations.”

According to Janice Rahm, SeeChange Health Solutions president, “Our platform is powered by our software enabled rules and real time data analytics engine, which begins by analyzing 12-24 months of historical claim data to identify potential costly health conditions within a client’s population so they can develop the best program that will help them improve health and reduce costs.”

SeeChange Health Solutions’ early-detection model identifies each member’s health status and potential risk of specific chronic conditions. “Our rules and analytics engine also delivers a Personalized Health Action Plan that provides each member with specific Health Actions based on age, gender, ethnicity and condition specific guidelines. The Health Action Plan is continuously updated with medical, laboratory and pharmacy claim data so progress to achieving preventive and condition specific Health Actions, and the rewards earned as a result, is easy to track and manage.”
“We’ve heard from many health plans and employers that they are looking for a solution that improves upon the early versions of wellness programs. SeeChange Health Solutions designed a program that is personalized based on an individual’s health status and one that measures participation, outcomes and health improvements over a specified period of time.”

SeeChange Health Solutions utilizes its software enabled rules engine and real time data analytics platform to help employers better identify population health risks, deploy early detection screening models to uncover serious health conditions and design value-based benefit plans to reward employees for engaging in the management of their health.

About SeeChange Health SeeChange Health is the leader in value-based benefit design solutions for employers — delivering the plans and services they are looking for to create better health and quality of life for employees, increase workforce productivity and lower their health care costs. SeeChange Health’s unique approach encourages individuals to play an active role in the management of their own health to prevent, detect and treat today’s most serious health conditions. SeeChange Health Insurance provides value-based benefit plans to fully insured employer groups — and is the first to bring this unique approach to small and midsize companies. SeeChange Health Solutions provides flexible, efficient administrative services with the proven cost-control advantages of value-based benefit designs to self-insured employers. SeeChange Health Solutions also provides the leading consumer engagement and health incentive platform to employers, health plans and third party administrators.

Here’s a look at four companies that are working to reform the health system in their own way.

(1) SeeChange Health: Martin Watson left UnitedHealth Group’s productdevelopment division in 2009 to launch a value-based insurance model aimed at small employers. While some large, self-insured employers have had value-based benefit designs in place for years, it’s a model that hasn’t really been seen on the small-group side. “We’ve seen data that show these plan designs are having a positive impact for these self-funded companies. But [small] employers have traditionally been ignored by insurers when it comes to innovative products” because they’re more expensive to administer, he tells HPW. “Because we’re a new company, we don’t have a bunch of legacy administrative costs tied to our model,…so we can afford to bring an innovative product design to smaller employers.
The San Francisco-based insurer began selling coverage in several California markets late last year, and expanded statewide to the large-group market in August. The plans will be available statewide to small employers on Oct. 1, and Watson says he hopes to move into Colorado by the first quarter of 2012. The company is licensed to sell coverage in 25 states. Watson, SeeChange’s CEO, received $40 million in venture capital (VC) financing from Psilos to get off the ground, and in May received another $20 million from Psilos and Maverick Capital.

Unlike more traditional health insurance, SeeChange Health’s model seeks out chronically ill enrollees — as well as those at risk for developing chronic conditions — and offers them richer benefits in exchange for compliance in managing the condition (HPW 10/5/09, p. 1). And treating illnesses early ultimately will reduce costs, he says. Case in point: While treating early-stage colon cancer might cost $12,000, late-stage treatment can cost 10 times as much.

SeeChange enrollees can dramatically reduce out-ofpocket costs if they (1) meet with a primary care physician for a wellness visit and preventive screening, (2) submit to a blood draw for biometrics screening, and (3) complete a 15-question health risk assessment. A person enrolled in a plan with a $500 annual deductible, for example, could receive a $500 contribution into a health fund for completing all three of those tasks.

When a chronic condition is identified, the member can receive additional funds for following SeeChange’s  recommendations for managing that condition. The idea is to catch high-cost illnesses early and make them inexpensive, or free, for members to manage. While the company has just a few thousand members now, Watson anticipates having as many as 10,000 by February. “We’re growing at a rate of about 800-to-1,000 members a month and 60-to-80 new employers a month.”

The reform law requires HHS to develop a rating system for health policies offered through the exchanges. The ratings are likely to be based on premium costs, payment policies and practices, enrollment and disenrollment levels, claim-denial rates, financial soundness of the company, medical loss ratios and member satisfaction surveys. In the eyes of consumers, ratings might trump brand recognition.

Moreover, using the Internet as a distribution point will give participating carriers the same access to potential new customers. And that could make it easier for some of the smaller insurers to break into new markets, adds Sam Gibbs, president of eHealth Government Systems. “At least initially…there will be a level playing field,” he tells HEX.

“I think [insurance exchanges] could help smaller carriers compete” with larger ones, adds Enrique Martinez-Vidal, a vice president at AcademyHealth and director of the Robert Wood Johnson Foundation’s State Coverage Initiatives (SCI) program, which works with state policy leaders to develop strategies to improve insurance coverage. Through a website, insurance exchanges will let consumers compare standardized coverage options. That might help small carriers overcome some of the marketing strength that many of the big carriers have outside of the exchange, he says.

Case in point: Martin Watson, CEO of California-based SeeChange Health, expects his company to be ready to participate in six state exchanges by 2014. Martin left UnitedHealth Group’s product-development division in 2009 to launch a value-based insurance model aimed at small employers in several large markets in California. SeeChange expanded statewide on Oct. 1.

“We already administer and support all of the benefit designs required under the reform law….I think we’re very well positioned for the exchange model,” Watson tells HEX. “We’re very excited about the exchange model and moving into that space.” Martin’s company is licensed to sell coverage in 25 states; it expects to expand into Colorado by the first quarter of 2012 and intends to have a presence in six states by 2014.
Disproportionate Enrollment in Mass.
The creation of insurance exchanges in Massachusetts in 2006 led to disproportionate enrollment increases for the smaller carriers. Neighborhood Health Plan (NHP) says its enrollment has nearly doubled to about 230,000 — largely due to the state’s reform law. The company offers Medicaid and subsidized coverage through the Connector as well as unsubsidized commercial group and individual products inside (i.e., Commonwealth Choice) and outside of it.

The exchange “definitely helped us to compete and expand coverage to similar populations as those we have been serving for over 25 years. It also helped us diversify product offerings,” says Carla Bettano, vice president of business development. While the company still has just a tiny fraction (1.5%) of the state’s overall commercial market, it has the largest market share (35%) of the unsubsidized enrollment offered through the exchange. “Our overhead tends to be low and we are very cost-effective,” she tells HEX.

“They still don’t have huge enrollment numbers, but they did very well within the Connector against the state’s three largest insurers,” says Rosemarie Day, the founding deputy director and chief operating officer of the Connector Authority, who now heads her own consulting firm.
Unlike NHP, Network Health was strictly a Medicaid managed care company prior to the state’s reform law. While the insurer still doesn’t sell commercial coverage, the state’s exchanges opened the door to a new market — individuals and families with annual incomes below 300% of the federal poverty level (FPL).

“We had tremendous growth in membership once the Connector introduced the subsidized product for previously uninsured adults,” says Debbie Gordon, Network Health’s chief marketing officer. “I think it created a new avenue to attract members and it created a new segment [of the population] that was eligible for our product.”
Yes, Size Does Matter
Scale will ultimately dictate price, and that is a key advantage for large carriers. So if small insurers aren’t able to compete on price, they might be able to set themselves apart on quality, suggests Mark Lutes, an attorney in the Health Care and Life Sciences practice at Epstein Becker & Green. “I don’t think that small is inherently beautiful. On the other hand, if you’re a small player, you need to create a better mousetrap in terms of care management,” he tells HEX.

Carriers will need to have strong provider contracts to compete with bigger players based on price. “It will be very tough to break into a market where the other carriers have contracts with all of the key providers,” Martinez-Vidal adds. Lower overhead or streamlined administrative services might help small carriers reduce coverage costs.

Some carriers that sell products through eHealth’s Web portal are more nimble and better at working in an online environment than others, says spokesperson Nate Purpura. “The insurers that work closely with our carrier relations team to examine what’s working and what consumers are buying…and then quickly adjust their products to fit those trends tend to have more success.” Smaller carriers are often nimble enough to make changes quickly and take advantage of market trends. Larger organizations, by contrast, might take six months to change a pricing point, Gibbs adds.

The ambitious project, led by the non-profit Mid-America Coalition on  Health  Care, involved 400,000 Kansas City-area employees and their  dependents. The  National Business Coalition on Health and Pfizer Inc. supported the work.

The program focused on providing employees and dependents access to  better  health information, making preventive care more available, engaging them in reducing health risks and accessing earlier treatment  of chronic disease.

”It’s always easier to learn from other peoples’ mistakes, than to  make them  on your own…It was truly a collaborative piece,” says KC2  participant Melissa Campbell, benefits manager for American Century  Investments.

Campbell’s employee population currently is healthy, but with many  workers  approaching their mid- to late 40s, she believes it’s important  to catch potential health risks early.

Though ACI has long provided free preventive services, after working  with the  other employers in the community, the company has eliminated  its age limits for  preventive services. Now, if a doctor feels an  employee needs a test before the  recommended age in traditional  guidelines, the company will cover it 100%.

“We took away the age barrier and [felt] it would strengthen the doctor  patient relationships,” she says.

In 2010, preventive care utilization rose to 63% at ACI, compared to the  corporate norm of just 46%.

Campbell says the company is succeeding in its goal of “keeping healthy  people healthy.”

ACI also added a tobacco-cessation program for the 8% of the  population that  smokes — a small group, but as Campbell realizes, a  costly one. ACI pays for  doctor visits, prescriptions, counseling, and  over-the-counter drugs to help  employees quit.

Mirroring ACI’s successes, eight additional KC2 employer-participants  have  achieved an estimated average savings of $194 per employee as a  result of  focusing on reducing costly chronic diseases through this  program. among the  participants’ cost-saving strategies:

• 60% offer preventive care treatment with no copay, and 60% waive  copays for  medication for those enrolled in disease management  programs.
• 50% charge lower insurance premiums for employees completing a  health risk  assessment, obtaining an annual physical, becoming a  nonsmoker or reducing body  weight by 5%.
• 30% implemented new benefit programs to help employees to quit smoking.
• 100% offer healthy cafeteria and vending machine options and 89%  provide  onsite fitness facilities or other convenient options to help  employees get in  shape.

The KC2 employers also worked to tear down information silos so that  data  could flow freely between internal departments and external  vendors. KC2 helped  each employer develop a scorecard for their goals,  so that they could more  uniformly measure participation and health.

“What surprised me was the thought that I [shouldn’t] treat these  vendors as  suppliers, but [rather] treat them as part of my team,” says  Campbell. She  encourages employers to explain health goals to vendors  and have them measure  and report using employer-provided metrics and  definitions.

“By having everyone speak the same language or provide the data with  the same  lines in the sand, we were able to see how people were  progressing through  disease states and whether we were capturing the  right people at the right point  in time,” Campbell says.

Though some employers made dramatic changes to their benefits design,   Campbell says it was possible for others, like her, to tackle problems  in  piecemeal while still making a difference.

“You can take little steps to make changes, and you don’t have to go  quite as  far as these others have done. A lot of us have to take a  little slower steps to  make changes for value based benefits,” she  explains.

“It doesn’t mean tearing apart your benefits structure and starting  over, you  can cut off small areas that cost a lot or future cost  drivers and tackle a  little at a time,” Campbell adds. “It was great to  make friends with some of the  people in the community who were  struggling with the same benefits challenges  that I was.”

SAN FRANCISCO, CA–(Marketwire – Sep 13, 2011) – Swimming against a   tide of insurance companies that are retrenching in face of health care   reform, SeeChange Health (www.SeeChangeHealth.com)   has launched a new group health insurance product that offers  customers  two of the most important advancements included in health  care reform:  increased access to preventive care and incentives to  encourage healthy  behavior.

Unlike standard health insurance or wellness programs that  offer gym  memberships, SeeChange Health is engaging its enrolled  individuals in  proactive health management, focusing on early detection  of chronic  conditions. Financial incentives include providing up to  $1,000 credit  to a Health Incentive Account and/or reducing total  out-of-pocket  exposure if they and their spouse simply take three steps:  see their  doctor for a preventive exam, take a basic lab test, and fill  out a  health questionnaire.

“We are offering these incentives because frankly they will  save  lives, keep enrollees healthier and keep their health insurance  more  affordable,” said Martin Watson, SeeChange Health’s chief executive   officer. “For example, breast cancer is on the rise. The American   Cancer Society statistics gauge the average treatment cost for early   stage breast cancer at $16,000 annually. Late stage treatment for the   same disease averages $108,000 annually, with the patient enduring   ongoing medical treatment as well as tragically higher risk outcomes.   Our Health Actions program does everything possible to help the people   we cover avoid the advancement of these serious illnesses.”

One recent, and more notable, customer is California’s former  state  insurance commissioner and 2010 gubernatorial candidate Steve  Poizner,  who just signed his company’s workforce up with SeeChange  Health.  Poizner, who demonstrated a keen acumen with health coverage  costs in  his former state role, commented, “Keeping your company’s  employees  healthy while taking real steps to control health costs is the  best way  for businesses today to get the upper hand on this growing  cost  factor. Our new company, Encore Career Institute, is partnering  with  UCLA to help redefine education through innovative online  technology  and we wanted a healthcare provider with similar plans for  redefining  common healthcare practices through innovation. SeeChange  Health’s  plans match perfectly with Encore because they utilize a new  approach  to a longstanding system, all while keeping down the cost to  the  consumer.” Poizner is the CEO of Encore Career Institute, a new  online  educational company for baby boomers based in Los Gatos, Calif.

The insurer’s unique and innovative approach to health  insurance is  enabled by proprietary technologies that combine  value-based benefit  designs, robust data analytics and an interactive  personal health  record to consistently improve the health profile of  individuals.  Preventive health actions are assigned and tracked at an individual  level. Individuals with disease states such as pre-diabetes,  diabetes,  asthma and heart disease receive specific health actions based  on their  medical conditions. As many large employers can attest, this  focus on  personal health management leads to a healthier workforce,  lower health  care costs and more stable premiums over time.

SeeChange Health is offering these value-based plans to  businesses  with 2-200 or more employees in major markets throughout  California –  and will be available everywhere in California on October  1. The health  plan is supported by a network of more than 50,000 primary  care  physicians, 90,000 medical specialists and nearly 500 hospitals throughout the state.

July 11, 2011 | SAN FRANCISCO, CA–(Marketwire – Jul 11, 2011) – SeeChange Health, the leader in value-based health management, announced today that it has secured $20 million in Series B financing from new investor Maverick Capital and continued participation from Psilos Group. SeeChange Health will use the capital to further enable the company’s next stage of growth and on-going product development initiatives.

“SeeChange Health brings a much needed change in health engagement and health care accountability,” said Maverick Capital managing director, Eric Kim. “Unlike other health insurance or wellness products, SeeChange Health’s value-based products and services are engaging individuals in proactive health management and focusing on early detection of chronic conditions. SeeChange Health actually provides incentives for their members to see their doctor. Our investment will further enable SeeChange Health’s next stage of growth.”

The next generation health engagement platform developed by SeeChange Health is completely customizable allowing employers to design a health incentive program that best suits the culture of their organization. SeeChange Health’s new offering for health-insurers, third-party administrators and employers uses proprietary analytics to identify markers for potential increases in company health care costs and to create Personalized Health Action Plans.

SeeChange Health helps employers and health plans proactively manage health and reduce health care costs by creating Personalized Health Actions Plans uniquely designed based on an employee’s health status and rewarding individuals for successful completion of their Health Actions. The value-based programs are completely customized to address personal health, manage chronic conditions, and engage individuals in lifestyle and behavior programs all leading to a healthier workforce and lower health care costs. Individuals earn financial rewards simply by completing a Health Questionnaire, a Biometric Screening (basic lab tests) and Health Actions unique to their age, gender, lifestyles, and as applicable, chronic condition management. Regardless of a person’s health status, financial incentives are earned through engagement of personal health management.

“SeeChange Health is benefiting from the focus and attention employers are placing on workforce wellness and lifestyle management. Most employers today are searching for creative ways to incent their employees for living healthier lifestyles. Employers recognize behavior change is necessary to achieving a lasting reduction in health care costs,” said Al Waxman, senior managing member of Psilos and chairman of SeeChange Health’s board of directors. “SeeChange Health creates a Personalized Health Action Plan that is unique to an individual. A variety of incentives are provided when employees complete their Health Actions. Individual accountability for health is a great step toward controlling soaring health care costs.”

“The knowledge and experience Maverick Capital brings to SeeChange Health will assist us greatly as we position our company for significant membership growth and on-going product development initiatives,” said Martin Watson, SeeChange Health’s chief executive officer. “Maverick’s support will be instrumental as we continue to focus our efforts on growth and our ability to be the market-leader in value-based health care solutions. SeeChange Health is well positioned to provide employers, health plans, and third-party administrators a solution for rewarding healthy behavior and engaging in proactive health management.”

About SeeChange Health

SeeChange Health provides integrated health management, value-based insurance products, and an engagement platform to employers, health plans, and third-party administrators. SeeChange Health Insurance provides value-based health insurance to employer groups. The company combines value-based benefit designs, Personalized Health Action Plans, and financial rewards, all designed to consistently improve the health profile of individuals. SeeChange Health Solutions provides an engagement platform, HealthInsight, a completely customizable health and wellness platform that generates and tracks preventive and condition-specific Health Actions unique to an individual’s health status. Through data analytics, on-going receipt of medical, biometric (laboratory) and pharmacy claim data, SeeChange Health Solutions allows employers to design a health incentive program that best suits the culture and needs of their organization. With headquarters in San Francisco, SeeChange Health is focused on reducing health care costs through proactive health management and early detection of health conditions.

About Psilos Group

Psilos Group Managers, LLC (“Psilos”) is a healthcare investment firm focused on providing venture and growth capital to companies operating in the healthcare economy. The firm believes that successful healthcare innovation must reduce cost, improve quality, and align incentives across payers, providers and patients. Founded in 1998, Psilos has $580 million under management and invests across three core healthcare sectors: healthcare services, healthcare information technology and medical technology. Funds managed by Psilos have invested in companies such as ActiveHealth, AngioScore, Definity Health, HealthEdge, Extend Health, Mauna Kea Technologies, and VeraLight, among many others, which have played, and continue to play, key roles in the transformation of the U.S. healthcare economy. Psilos has offices in New York, the San Francisco Bay Area, and in Santa Fe, New Mexico. For more information, go to http://www.psilos.com.

About Maverick Capital

Founded in 1993, Maverick Capital has grown to over $11 billion in assets under management with offices in New York, Dallas, San Francisco, Philadelphia, London, Hong Kong and Taipei.

The Patient Protection and Affordable Care Act, which became law  in March 2010, requires most Americans to have health insurance  beginning in January 2014. People who do not receive coverage through  their employer will be able to buy it through health-insurance  exchanges, or marketplaces for consumers to choose among  health-insurance products.

The report predicts that a growing number of employers will try to  lower their costs through defined-contribution health plans, in which  they provide a certain amount to workers so they can buy their own  medical insurance.

These trends will force insurers to deal directly with consumers  and to differentiate their offerings based on cost, quality and their  ability to customize their services, according to the report. Meanwhile,  consumers will have to be well-versed about their options to shop  effectively for medical insurance and services.

Companies and consumers will need new technologies to help them  adjust to the coming changes. Psilos has already funded some companies  with technologies and services geared toward this new environment. One  portfolio company, SeeChange Health Insurance Co., provides value-based  health plans that enable beneficiaries to save money by agreeing to take  preventive measures to reduce their risk of health problems, and by  following guidelines on how to manage illnesses.

The San Francisco-based company combines these plans with various  administrative services and supportive technologies. By helping workers  better-manage their health problems, or prevent them altogether, the  company aims to help employers reduce their medical expenses.

Psilos is considering various other technologies that help  individuals obtain the information they need to be get the best value  for their health-care dollar. Yet the right business model for  delivering this information to consumers is not entirely clear,  according to Lisa Suennen, a Psilos Group managing member.

Advertising-based strategies that make information available for  free are difficult because it’s not clear how much value users place on  the company’s content, for example. One solution may be to package this  medical information along with an insurance product various other  products and services focused on prevention and wellness, Suennen said.

Another Psilos Group portfolio company that may benefit from  health-care reform is Click4Care Inc., whose medical-management software  may be used by Accountable Care Organizations that will be established  as a result of the law. The legislation provides incentives for  physicians to form ACOs, which will be designed to better-coordinate  patient care to head off disease and to reduce unneeded hospital  admissions.

Find Psilos Group’s report here.

“Value purchasing by payer organizations is more critical than ever,” said Rideout, senior vice president and chief medical officer at TriZetto. “VBID helps manage consumer health and demand for services. Physician engagement is critical, and both clinicians and health plans should be encouraged that Washington’s recent medical-loss ratio definitions of qualifying medical expenses treat value-based solutions quite favorably.”

VBID, explained Rideout, financially incents patients and clinicians to encourage the use of high-value medical services and medications. The model is a response to evidence of declining patient health as a result of increased cost-sharing in insurance plan designs such as health savings accounts and other consumer-driven health plans. It responds, as well, to U.S. healthcare costs, which continued to climb in 2010 and early 2011, despite passage of the reform law.

“VBID addresses directly the $600 billion to $800 billion spent each year on care that does nothing to improve our health1 and more than $100 billion in additional costs due to patients who don’t take their medications as prescribed2,” Rideout said. “More importantly, it improves clinical outcomes. Among the many success stories, QuadMed reduced medical cost trend 4.9 percent; the city of Asheville, N.C., reduced ER visits and hospitalizations; and Blue Cross and Blue Shield of North Carolina posted a three-to-one return using VBID.”3

Rideout noted that TriZetto value-based applications can automate and streamline the adjudication of claims based on an individual member’s health profile and the clinical efficacy of medical services and medications for particular conditions.

Important elements of value-based models, he said, can include patient-centered medical home (PCMH), clinical analytics and payment bundling. Though emerging and still under evaluation, PCMH programs across the country number around 100 and, according to one study, typically save several hundred dollars per patient, said Rideout.4 Analytics employ clinical-risk modeling, identification and stratification, patient-compliance monitoring, provider cost and utilization analysis and comparison and cohort analysis to maximize the use and benefits of VBID and care management programs.

“Payment bundling is when a group of healthcare providers agrees to accept a single prospective payment for a well-defined episode of care,” explained Sultan, TriZetto’s associate vice president of systematic health management and applied analytics. “The industry is moving toward payment bundling. By 2012, 80 percent of payers will adopt it, as will 74 percent of large hospitals and 52 percent of providers overall.”5

Reasons for its uptake are numerous. Sultan pointed to Centers for Medicare & Medicaid Services (CMS) projects in which payment bundling demonstrated 5 to 6 percent top-line reductions in medical costs, 6, 7 and a Rand Corporation study of numerous approaches that concluded that payment bundling had the greatest proven ability to reduce costs.8 Additionally, said Sultan, the vast majority of physicians, hospitals and healthcare payers believe payment bundling is a stepping stone to accountable care organizations, a highly touted and promising model of post-reform care. Further, TriZetto and other technology vendors are developing technology that will enable health plans and providers to administer payment bundling on a large scale.

“Perhaps the biggest reason for adoption, though, is that this value-based model can benefit all constituents,” Sultan said. “Two CMS projects showed that payment bundling saved costs for payers and hospitals, increased revenues for physicians and improved satisfaction and reduced morbidity among patients.”9

TriZetto’s Rideout and Sultan are available for reporter interviews through Schwartz Communications at trizetto@schwartzcomm.com or 781-684-0770.

Footnotes:

1.Dartmouth Atlas Project, December 2009.

2.Dunbar-Jacob, Journal of Clinical Epidemiology 54 (2001) S57-S60.

3.Rideout, Jeff, M.D., “Value-Based Insurance Design – Opportunities for Clinicians to Engage,” presentation, March 24, 2011.

4.Deloitte Center for Health Solutions, Issue Brief: “Medical Home 2.0, The Present, the Future,” reporting on 2010 Harvard study (Fields et al).

5.The TriZetto Group, Inc., industry survey, 2010.

6.Medicare Participating Heart Bypass Center Demonstration – Executive Summary, Final Report, prepared by Health Economics Research Inc. for HCFA, July 24, 1998.

7.Samitt, Craig; Walters, Barbara; and Zucker, Michael; “Medical Home Reimbursement ABCs: Funding Care Delivery Through ACOs, Bundled Payments and Concrete Contracts,” Healthcare Intelligence Network, November 2009; and Dobbs, Steve, “The Medicare ACE Demonstration Program, Testing a new Bundled Payment System at Hillcrest Medical Center,” presentation at the World Health Care Congress Leadership Summit, 2010.

8.RAND Corp., “Controlling Health Care Spending in Massachusetts: An Analysis of Options,” report, August 2009.

9.The Commonwealth Fund Commission on a High Performance Health System, The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way; and Mechanic, Robert E. and Altman, Stuart A., “Payment Reform Options: Episode Payment Is a Good Place to Start,” Health Affairs 28, 2, web exclusive, Jan. 27, 2009.

Source: http://insurancenewsnet.com/article.aspx?id=253950&type=newswires

The resulting lack of physical activity and a growing disconnect  with the natural environment have been linked in a host of studies to  obesity and obesity-related diseases in children and adults, including  Type 2 diabetes, high blood pressure, heart disease, asthma and  nonalcoholic fatty liver disease, as well as vitamin D deficiency,  osteoporosis, stress, depression, attention deficit disorder and myopia.  Dr. Daphne Miller, a family physician affiliated with the University of  California, San Francisco, calls them “diseases of indoor living.”

Now, the good news: There’s a simple remedy — get outside and  start moving around in green spaces near and far, most of which are  free. A consortium of physicians, health insurers, naturalists and  government agencies have banded together to help more people of all ages  and economic strata engage in health-enhancing physical activity in  parks and other natural environments.

This grass-roots movement has already reached the White House.This  year President Obama started the America’s Great Outdoors Initiative,  proclaiming June “Great Outdoors Month.” The initiative aims not just to  counter sedentary lifestyles but also to reacquaint Americans with the  farms, ranches, rivers, forests, national and local parks, fishing holes  and beaches that provide opportunities for people “to stay active and  healthy.”

The goals dovetail with Michelle Obama’s battle against childhood  obesity and her initiative Let’s Move Outside, a program that’s part of  her Let’s Move campaign. Dr. Miller said that the aim was to “turn our  public lands into public health resources. Doctors around the country  are beginning to realize that getting patients out of doors has benefits  even beyond getting people to exercise.

“It’s a lot cheaper to go outside and move than it is to build gyms and a lot of hospitals,” she said.

Doctor’s Orders: Be Active

Accordingly, Dr. Miller and a growing number of like-minded  doctors have begun writing specific prescriptions for outdoor activity,  providing patients with maps, guidelines and programs of gradually  increased activity based on their abilities. She said that such  prescriptions are necessary because many people “are unfamiliar with the  outdoors — they’re scared to walk through a park, and they don’t know  what to do when they get there.”

Among possible sources of help: volunteer health guides in parks  who can tell people where to go and what to do and park rangers who are  trained to advise people who may have health issues. “Our parks provide a  huge opportunity,” Dr. Miller said. “Currently, fewer than 40 percent  of visitors use them for any form of exercise.”

Some health insurers have come on board as well. SeeChange Health  in California and the Blue Cross and Blue Shield Foundation in North  Carolina are supporting outdoor programs in their areas, like the Kids  in Parks Initiative of the Blue Ridge Parkway Foundation. SeeChange  Health this yearannounced a pilot project to reimburse members for  visits to California state parks.

Other movers and shakers include the National Wildlife Federation,  which established the “Be Out There” public-education campaign to  foster a daily “green hour” during which every child could enjoy 60  minutes of unstructured play and interaction with the natural world. On  its Web site, www.nwf.org, the federation has posted the rationale and  specific suggestions for schools and families to counter the physical,  emotional and educational drain of an “indoor childhood.”

The campaign’s mission “is to return to the nation’s children what  they don’t even know they’ve lost: their connection to the natural  world,” with activities suitable for all children, whether rural,  suburban or urban.

As for its health and educational benefits, the federation cites  scientific findings that outdoor play enhances fitness, raises blood  levels of vitamin D (which in turn protects against bone loss, heart  disease, diabetes and other health problems), improves distance vision,  lowers the risk of nearsightedness, reduces symptoms of stress and  attention deficit hyperactivity disorder, raises scores on standardized  tests and improves students’ critical-thinking skills.

The National Environmental Education Foundation is now training  pediatric health care providers to serve as nature champions in their  communities.

One study of children living in poor urban environments found that  those who relocated to greener (though not more affluent) home  surroundings “tended to have the highest levels of cognitive functioning  following the move.” The author of the study, Nancy M. Wells, also  found in research among ruralchildren that nearby nature can act as a  buffer against stressful life events and improve children’s  psychological well-being.

Lest you remain unconvinced, I urge you to read the best-selling  book “The Last Child in the Woods,” by Richard Louv, who coined the  phrase “nature-deficit disorder.” Mr. Louv describes dozens of studies  demonstrating the benefits that wilderness outings can have on mental  and physical health.

‘Park Prescriptions’

The National Park Service, too, has joined the “park  prescriptions” campaign, offering free wellness services that are  accessible to all, regardless of health status. (I was shocked to learn  on a recent visit to Grand Canyon National Park that, despite many  well-maintained trails, only 5 percent of visitors ever venture below  the rim of the canyon; about half the people I encountered on the trails  were from other countries.)

The park service helped Dr. Eleanor Kennedy, a cardiologist in  Little Rock, Ark., create a downtown “Medical Mile,” a section of the  Arkansas River Trail, and now hopes to support access to similar open  spaces in communities nationwide. Dr. Kennedy reports that once she gets  her patients outdoors “they are more likely to be consistent about  exercise.” The Medical Mile project, which had an initial goal of  $350,000, managed to raise $2.1 million in two years.

Dr. Robert Lambert, a cardiologist at the Heart Clinic of  Arkansas, said: “We see too many patients who need our assistance  because of their lifestyle, not because of factors beyond their control.  That is why my colleagues and I decided to become involved.”

Other programs include Prescription Trails, established in Santa  Fe, N.M., with the help of the Centers for Disease Control and  Prevention, to counter runaway rates of diabetes in the community. Local  physicians get trail guides to distribute to their patients. The Web  site www.prescriptiontrailsnm.org is a guide to some of the state’s best  park and trail walking and wheelchair rolling paths.

This is the second of two columns on health-promoting physical activity.

Source: http://www.nytimes.com/2010/11/30/health/30brody.html?_r=1&ref=jane_e_brody

Silicon Valley has been working on cures for years. Now, five  months after President Barack Obama signed landmark legislation intended  to extend health coverage to nearly all Americans and bring rocketing  costs under control, venture capital firms, startups and giants like  Intel are angling to apply tech know-how to an industry known for  inefficiency and resistance to change.

Much like the clean-tech firms that have scored Department of  Energy grants and loan guarantees, many health-sector companies hope to  tap into a new $10 billion innovation fund created by the law to test  and promote technologies and ideas that can improve health care while  reducing its cost.

The law, for all its complexity, provided investors and  entrepreneurs with greater clarity about opportunities in an industry  facing dramatic transformation. During the second quarter, investments  totaling more than $2.2 billion surged into biotechnology, medical  device and health-related information technology, about 66 percent above  the previous quarter. Funding into health-related information  technology alone totaled more than $150 million during the quarter,  nearly doubling the year-ago quarter.

Better information technology, investors say, is critical to  health reform because it can minimize waste and reduce errors by  caregivers. Other promising innovations include diagnostic devices that  detect maladies early, “telehealth” systems that help the chronically  ill avoid hospitalization, and genomic advances that could lead to  medicine tailored to a patient’s DNA.

The Patient Protection and Affordable Care Act will gradually  phase in new regulations, taxes and incentives on the private sector in a  bid to minimize waste, maximize efficiency and promote a healthier  populace. While debate raged over the approach, few question the need to  defuse what Obama has called “a ticking time bomb” that imperils the  nation’s economy as it consumes a growing share of family, company and  government budgets.

Before the adoption of the law, the federal Centers for Medicare  and Medicaid Services projected that the cost of national health  expenditures, already more than 17 percent of the U.S. economy, would go  from $2.47 trillion in 2009 to $4.5 trillion in 2019, an increase  driven chiefly by the rising cost of chronic illness in an aging  population.

Entrepreneurs such as Adam Bosworth, the former vice president of  Google Health and founder of a Web service called Keas that helps  consumers manage their health, and venture capitalists such as Lisa  Suennen of the Psilos Group say that the reform law’s ultimate objective  should be to foster a healthier populace while overhauling the  “sick-care” system that exists today.

The vast majority of Americans, they say, are served by a medical  establishment that provides rich rewards for treating catastrophic  illness but little financial incentive for keeping people healthy.  Kaiser Permanente, which combines the insurance and medical functions,  is often cited as a notable exception and role model for reform — an  institution that profits by promoting wellness.

Martin Watson, CEO of the San Francisco-based insurance startup  SeeChange Health, said many hospitals as recent as a year ago were  skeptical of SeeChange’s emphasis on preventive care. But since the  adoption of the health reform law, he said, SeeChange has received a  warmer reception as institutions prepare for changes to come.

In the near term, some companies see immediate cost-saving  opportunities in “telehealth” products that provide at-home monitoring  of the chronically ill.

Intel, which recently announced a partnership with General  Electric to develop at-home health monitoring systems, is following a  trail blazed by a valley startup called Health Hero Network that in 2007  was acquired Bosch Healthcare, which renamed the product Health Buddy.

Health Buddy is now used by “tens of thousands” patients, with the  Department of Veterans Affairs its largest customer, said Suneel Ratan,  who directs marketing and government relations in Bosch Healthcare’s  Palo Alto, Calif., office. A clinical study found that the system, which  encourages and enables patients to communicate vital signs and other  information to their physicians, reduced the rate of re-hospitalization  for chronic illness within 90 days by more than 60 percent.

Source: http://www.omaha.com/article/20100927/LIVING01/708199965

September 01, 2010: SAN FRANCISCO–(BUSINESS WIRE)–SeeChange Health Insurance  Company, a provider of value-based health insurance plans to employers,  has partnered with California State Parks to provide reimbursement to  its members for day use park fees. Since SeeChange Health plans focus on  wellness and prevention, encouraging plan participants to frequent  California State Parks is one more way the company will enable healthy  behavior.

Plan participants will submit their park receipts directly to  SeeChange Health for reimbursement. California State Parks boasts 278  parks across 1.4 million acres.

Our health insurance products are designed to encourage and reward  people for playing an active role in staying healthy  and there is no  better way to exercise while soaking up some California sunshine, said  Martin Watson, CEO of SeeChange Health. With the help of this innovative  program, plan participants will have ample access to biking, hiking,  camping and the countless other activities these parks provide.

Ruth Coleman, director of California State Parks, said: The State  Parks system shares SeeChange Healths passion for healthy living, one of  the many benefits our parks offer to millions of visitors each year.  SeeChanges willingness to reimburse plan members 100 percent for  unlimited access to our state parks not only encourages healthy  lifestyles, it is an added plus for Californias economy.

SeeChange Health rewards individuals who proactively manage their  health. Besides the park program announced today, plan participants also  receive up to $400 when they complete a personalized Health Action  Plan, such as having an annual check-up, completing a health  questionnaire and participating in a biometric screening (basic lab  tests).

In addition to the $400 reward, SeeChange Health members who  select the new value-based insurance plans and complete their  personalized Health Actions will enjoy richer benefits and will see a  significant reduction in out-of-pockets medical costs.

Earlier this year, SeeChange Health successfully launched its  value-based insurance plans in California, beginning with the Fresno  area. The company recently expanded into Monterey, Santa Clara and San  Benito counties. Over the upcoming months, SeeChange Health will have  value-based insurance plans available in various locations throughout  the state.

About SeeChange Health Insurance Company

SeeChange Health Insurance Company provides value-based health  insurance to employer groups. The company combines value-based benefit  designs, data analytics and a personalized Health Action Plan to  consistently improve the health profile of individuals. Preventive  health actions are assigned and tracked at an individual level.  Individuals with disease states such as pre-diabetes, diabetes, asthma  and heart disease receive financial incentives for completing specific  health actions based on their medical condition. SeeChange Health  rewards its members for completing both preventive and  condition-specific health actions by depositing money into a Health  Incentive Account and reducing the plan participants out of pocket  expenses for health care services. With headquarters in San Francisco,  SeeChange Health is focused on reducing health care costs through  proactive health management and early detection of health conditions.

About California State Parks

California State Parks manages 278 park units, which contain the  finest and most diverse collection of natural, cultural, and  recreational resources to be found within California. These treasures  are as diverse as California: From the last stands of primeval redwood  forests to vast expanses of fragile desert; from the lofty Sierra Nevada  to the broad sandy beaches of Californias southern coast; and from the  opulence of Hearst Castle to the vestiges of colonial Russia.  Responsible for almost one-third of Californias scenic coastline,  California State Parks manages the states finest coastal wetlands,  estuaries, beaches, and dune systems. The workplace consists of nearly  1.4 million acres, with over 280 miles of coastline; 625 miles of lake  and river frontage; nearly 15,000 campsites; and 3,000 miles of hiking,  biking, and equestrian trails. For more information, please call or  visit www.parks.ca.gov.

Source: http://www.businesswire.com/news/home/20100901005375/en

Yet CEO Martin Watson believes that SeeChange is well-positioned,  thanks  to its technology-based agility and its engagement incentives.  SeeChange includes two companies:

1. Value-based fully insured SeeChange Health. SeeChange has launched in Fresno, Monterey, San Benito and Los Angeles and plans  to roll out in Santa Clara and Santa Cruz this fall, says Watson. The  company now sells insurance to employers with two to 200 employees, as well as supporting self-funded customers. “We are on track to have less  than 1,000 fully insured members by the end of the year, and we will  have close to 18,000 self-funded customers by Jan. 1,” he explains.

2. Value-based healthcare administration platform provider HealthInsight. This already-profitable company “is the entity that houses all of the  technology and service components that enable us to deliver the  value-based solutions,” says Watson. HealthInsight also supports  value-based products offered by other health insurers, including  UnitedHealth and the regional insurer Medica. “We have a little bit north of 200,000 members that have been on our system for over a year now,” he says.

SeeChange has 12 insurance product designs. Next-generation  technology platforms give SeeChange the functionality to provide  “multiple plan designs running in parallel for an employer,” says  Watson. In other words, members aren’t stuck choosing a single plan  during annual enrollment that they then have to keep for the next 12  months.

Consider this potential scenario: A SeeChange member starts with a  base benefit of an 80/20 plan and a $2,200 deductible. SeeChange will  ask that member to take three steps. First, the member will need to have  a routine annual wellness visit with his or her physician. Second, the  member will have to participate in a biometric screening (i.e., basic  lab tests). Third, the member will need to register at SeeChange’s  member portal and complete a short health-risk questionnaire.

“When the person completes the three items, we move them to a much  higher benefit design,” explains Watson. “So they might go from an 80/20  to a 100/0 coinsurance. We lower their out-of-pocket by a thousand  dollars, and we fund a health incentive account with $200 for a single  or $400 for a subscriber plus one, such as a spouse. We also  retroactively re-adjudicate any claims that have come through the system  during the plan year against the richer benefit. So members may get a  check from us for some out-of-pocket expenses.”

The cost differentials associated with the stages of type-2 diabetes  highlight SeeChange’s logic. “For us, a stage-1 type-2 diabetic costs  about $6,800 a year vs. a stage-3 type-2 diabetic, who is about $15,000  to $16,000 a year. So we are on board with giving you a richer benefit  and having an additional benefit cost of $1,000 or $2,000 if we can help  keep you in stage 1 vs. progressing to the next stage,” says Watson.  “That’s the whole bet: We can look at a total population, identify the  conditions, and help them change behavior and manage their conditions  through benefit design and engagement with physicians. And that will  result in an overall smoothing out of both premium and medical-cost  trend.”

SeeChange uses HealthMedia’s online support tools, but physicians are  the insurer’s “first-line coach,” stresses Watson. “We present it to  physicians that we are delivering appropriate revenue opportunities that  they might normally ignore.” SeeChange, he adds, is also developing a  pay-for-performance platform tied to physicians reducing the company’s  medical-loss ratio trends.

Source: http://www.fiercehealthpayer.com/story/seechange-believes-plan-flexibility-will-set-apart-its-value-based-insurance/2010-08-16

Editor’s note: After this article was published, HealthInsight was renamed SeeChange Health Solutions

July 27, 2010 | SAN FRANCISCO–(BUSINESS WIRE)–SeeChange Health Insurance  Company, a provider of value-based health insurance plans to employers,  will offer a variety of Health Savings Account (HSA) products in parts  of California beginning August 1, 2010. The product launch will make  SeeChange Health the first insurance company to offer value-based HSA  products to California employers.

The SeeChange HSA products will be available first in the Monterey  and Fresno areas, before expanding to the Los Angeles area later this  year. As with the overall SeeChange Health plan, the value-based HSA  products are designed to reward patients for taking an active role in  managing their health.

“We reward individuals for seeing their doctor because we  recognize proactive health management and early detection of chronic  conditions will save employers money,” said Martin Watson, CEO of  SeeChange Health. “Health Savings Accounts enable employees to have more  control and flexibility on how they spend their health care dollars.  With our new HSA products, we provide individuals with financial  incentives to encourage them to foster a relationship with their  physician and continually engage in their health management.”

With SeeChange Health’s HSA accounts, employees may continue to  contribute pre-tax dollars into their existing Health Savings Account.  There are no “use it or lose it” annual requirements. Contribution  limits for HSAs currently are $3,050 for individuals, $6,150 for  families and $7,150 for people who are 55 or older and signing up for a  family plan. Money contributed to the account is tax deductible,  earnings on the invested funds are tax deferred, and withdrawals are  tax-free if they are used to pay for qualified medical expenses.

“This is a highly anticipated product line,” said Chuck Trogdon,  CEO of health insurance brokerage firm Renberg, Trogdon, & Cavale  Insurance Services. “Since the passage of health care reform, employers  are asking for innovative solutions to lower health care premium costs.  The SeeChange Health value-based HSA products offer low cost premiums  and incentives to employees who visit their doctor annually for  preventive care. We are delighted to work with an innovative insurance  company that recognizes the importance of annual wellness examinations  and rewards individuals for going to the doctor.”

Health Savings Accounts (HSA’s) are tax-preferred savings accounts  managed and owned by individual employees enrolled in HSA-eligible  health plans. Like individual retirement accounts (IRA), contributions  are not subject to federal income tax at the time of deposit. Both  employers and employees may contribute to the employees’ HSA account  providing the flexibility to use their HSA funds for current or future  medical expenses. Employees may choose to spend their HSA money on  medical deductibles and expenses incurred before the annual deductible  has been met. These out-of-pocket medical expenses include services such  as dental, vision, over-the-counter drugs, and long-term care.

California leads the country in HSA enrollments. For example, more  than 50 percent of small businesses in Fresno offer HSA products to  their employees. Business owners determine the company’s contribution  amount to the employees’ HSAs and the company is able to choose the  frequency from which they make such contributions.

Last spring, SeeChange Health successfully launched its  value-based insurance plans in California, beginning with the Fresno  area. The company recently expanded its offerings into other Monterey,  Santa Clara and San Benito counties. Over the upcoming months, SeeChange  Health plans to have healthcare insurance plans available in Los  Angeles, San Diego, Bakersfield, Sacramento and other parts of the San  Francisco Bay Area.

Unlike typical health insurance companies, SeeChange Health has  designed its value-based benefit plans to encourage individuals to see  their doctor and be active participants in managing their health.  SeeChange Health’s proactive approach to health management identifies  chronic health problems before they become serious – and expensive.  Individuals who complete personalized health actions consisting of an  annual visit to their doctor, a simple health questionnaire and a  biometric screening consisting of basic lab tests receive richer health  care benefits at no additional cost. SeeChange members who select the  HSA product and complete their personalized Health Actions receive 100  percent coverage for their eligible medical expenses after the annual  deductible is satisfied.

About SeeChange Health

SeeChange Health Insurance Company provides value-based health  insurance to employer groups. The company combines value-based benefit  designs, data analytics and a personalized Health Action Plan to  consistently improve the health profile of individuals. Preventive  health actions are assigned and tracked at an individual level.  Individuals with disease states such as pre-diabetes, diabetes, asthma  and heart disease receive financial incentives for completing specific  health actions based on their medical condition. SeeChange Health  rewards its members for completing both preventive and  condition-specific health actions by depositing money into a Health  Incentive Account and reducing the plan participants out of pocket  expenses for health care services. SeeChange Health is headquartered in  San Francisco and is focused on reducing health care costs through  proactive health management and early detection of health conditions.

These types of designs encourage patients and clinicians to make  better choices to improve care based on proven best practices, using  both better information and financial incentives.

83% of doctors believe value-based benefits (VBB), which  personalize health-plan co-pays and co-insurance to help individuals  manage their chronic illnesses, would have a moderate to high effect on  selecting care alternatives that are proven effective and cost less.  Also:

• 74% of health-care payer executives say VBB would reduce overall  health-care costs; 75% believe it would help win more new business.
• 88% of employer executives report they would be encouraged to switch to an insurance company that offers VBB.
• 86% of consumers and 88% of brokers who sell health insurance  policies say VBB would encourage people to be healthier and more  productive.

The study also found broad support for value-based reimbursement  (VBR), models that reimburse physicians for delivering care that  complies with proven effective care guidelines, enhances care  coordination and improves clinical outcomes: 80% of physicians, 91% of  payers, 84% of employers and 82% of brokers believe VBR is somewhat or  very important in helping reduce overall health-care costs.

Reliable at a 95% confidence level, the study was conducted as a  60-day online survey and included 1,761 interviews with 157 health-care  payers, 200 brokers, 200 employer executives, 203 clinicians and 1,001  consumers.

Contents © 2010 WorldatWork. No part of this article may be reproduced, excerpted or redistributed in any form without express written permission from WorldatWork.

Source: http://meltwaternews.com/r/?dT04MDc5NTMmcD0yMDg3NzA1JmQ9MTE2OTUyNDU2NyZ3PW1haWxfcmVwb3J0

VBID’s approach is to remove barriers to patients’ receiving  high-value health services—those that prevent illness or keep chronic  conditions from worsening—requiring costly treatment and eroding quality  of life.

“There is substantial underutilization of high-value health  services,” including wellness, screening, diagnostic testing, various  therapies, and monitoring, said A. Mark Fendrick, MD, codirector, Center  for Value-Based Insurance Design, at the University of Michigan.

“The current approach to cost sharing is predominately based on  the cost – not value – of medical services,” he said. For example,  generic drugs require the lowest co-pay and non-preferred brands the  highest.  Yet, this “one size fits all” cost shifting does not recognize  that some non-preferred brands may have high value in controlling a  chronic illness.

There is no logic for requiring the same co-pay for a toenail fungus drug as for a drug that controls asthma, he said.

Research has shown that high co-pays reduce adherence to  appropriate medication use. Up to 60 percent of chronically ill patients  have poor adherence to evidence-based treatment, with costs from poor  adherence estimated to exceed $100 billion annually, Fendrick said.

A number of employers have followed the lead of Pitney Bowes and  the City of Asheville, N.C., and implemented VBID for conditions  including diabetes, asthma, and cardiovascular disease. These programs  generally waive or reduce co-pays for necessary drugs and tests and  provide counseling from a community pharmacist.  To receive these  enhanced benefits, an employee must adhere to evidence-based protocols.  The programs have documented cost savings and improved health outcomes.

Pitney Bowes’ success with VBID prompted Highmark to offer a VBID  product in 2007. The product initially targeted the entire member  population and focused on prescription drugs for eight conditions, with  employers choosing the condition and the cost sharing, said Marcia  Bondi, director—product management and development at Highmark.

Fewer than 20 employers now participate, she said. “Employers are  not as ready as we think” for VBID, she said. “The concept is still  relatively new and not well understood, even among national accounts,”  she said.

“Some employers with a young workforce did not see savings  because they were not right for the program,” she said. However, with  the percentage of members with chronic conditions increasing annually,  interest in VBID continues to grow among clients and consultants.

Highmark is revamping its program to target the high-risk  population with 10 conditions. The program now requires members to sign  up with a health coach and complete a wellness profile.

Highmark has developed actuarial and other criteria to select  employers who could benefit from VBID. Employers must be “willing to  bite the bullet,” she said, because prescription co-pays and health  coaching costs for newly-engaged members will increase with VBID. But  employers can expect savings in direct medical costs, reduced  absenteeism, and improved presenteeism.

Cristie Upshaw Travis, CEO of the Memphis Business Group on  Health, said employers should identify the cost-drivers in their  populations and determine if employees have easy access to appropriate  medical services. Employers can motivate employees through benefit  design. “It’s one of the strongest levers that employers have” to change  behaviors, she said.

“We’ve watched Asheville and the Midwest Business Group on  Health” VBID programs for diabetes, said Deneen Vojta, MD, senior vice  president, Center for Health Reform & Modernization at UnitedHealth  Group. “We want to put this on steroids nationally” through United’s  Diabetes Prevention and Control Alliance, she said.

United’s program has initially partnered with Walgreens for  pharmacist counseling of diabetics and with the YMCA of the USA for  lifestyle coaching to keep people with pre-diabetes from developing the  disease through exercise and proper nutrition.

The program is free to individuals covered by United Health Group  policies.  United will reimburse pharmacists for their services and  will pay YMCA coaches for each participant as well as reward the coaches  for outcomes in weight reduction.

United is offering its program to its insurer competitors as well as to plan sponsors.

Since 2007, Sentara Healthcare, an integrated delivery system  including Optima Health Plan, has offered up to $546 annually in reduced  premiums to employees who participate in wellness programs. It  contributes up to $420 to the health savings accounts of employees who  participate in disease management. Participants in these programs  variously work with health coaches or case managers and complete all  evidence-based care.

With the increase in appropriate care, tests, and prescription  drugs, Sentara saw its costs go up in 2008. “It scared us,” said Karen  Bray, vice president of clinical care services at Optima Health.  But in  2009, costs started coming down, and “the disease management cohort saw  enormous reductions in hospitalizations and ER visits,” she said.

And in 2009, Sentara saw a 10 percent decrease in its expected  cost trend, she said. “The program saved enough on people who are sick  to allow us to offer a wellness program to all our employees.”

Speaking at the Institute, David Cutler, professor of applied  economics at Harvard, said, “reform legislation will live or die on our  ability to lower costs.  We have to figure out how to save money on  medical care.”  Many in the industry believe VBID is one way to do that.  Content and Design. AHIP-All Rights Reserved: © AHIP 2010

Source: http://www.ahiphiwire.org/News/default.aspx?doc_id=598780

The small business healthcare tax credit calls for a maximum tax  refund of 35 percent on health insurance expenses incurred by small  businesses that employ 24 or less workers during tax years 2010-2013. It  is one of the first healthcare reform provisions to go into effect.

“The fact is healthcare reform, thanks to this tax credit, is very  attractive for thousands of small business owners,” Watson said. “This  valuable tax credit incentivizes small employers to offer affordable  health plans, and promote a healthier workforce. Many small employers  are citing the tax credit as one of the main reasons they are  considering a change in health insurance carriers. Our approach  dovetails with the new law. We’re aiming to drive down healthcare costs  and improve the quality of care that its participants can avail with  preventive measures.”

After launching in Fresno last month, SeeChange Health is  expanding its offering next month to other markets in California  including Monterey, Santa Clara and San Benito. Over the upcoming  months, SeeChange Health will have healthcare insurance plans available  in Los Angeles, San Diego, Bakersfield, Sacramento and the San Francisco  Bay Area.

SeeChange Health’s value-based insurance plans allow small and  medium businesses to offer affordable health plans wherein individuals  have preventive care covered at one hundred percent and plan  participants receive financial incentives for completing personalized  health actions. SeeChange Health’s proactive approach to health  management identifies looming health problems before they become serious  – and expensive. Unlike typical health insurance companies, SeeChange  Health has designed its benefit plans to encourage individuals to see  their doctor and take an active role in managing their health.

In addition to providing enhanced benefits for completing  preventive examinations and related screenings, SeeChange rewards its  members with additional financial incentives for completing health  actions necessary for proactively managing chronic conditions, such as  diabetes, asthma and coronary artery disease.

Per the U.S. federal government, the new healthcare tax credit is  available to small employers that pay at least half the cost of single  coverage for their employees in 2010. The credit is specifically  targeted to help small businesses and tax-exempt organizations that  primarily employ low- and moderate-income workers.

About SeeChange Health

SeeChange Health Insurance Company provides value-based health  insurance to employer groups. The company combines value-based benefit  designs, data analytics and an interactive personal health record to  consistently improve the health profile of individuals. Preventive  health actions are assigned and tracked at an individual level.  Individuals with disease states such as pre-diabetes, diabetes, asthma  and heart disease receive specific health actions based on their medical  condition. SeeChange Health rewards its members for completing both  preventive and condition-specific health actions by depositing money  into a Health Incentive Account and reducing the plan participants’ out  of pocket expenses for health care services. SeeChange Health is  headquartered in San Francisco and is focused on reducing health care  costs through proactive health management and early detection of health  conditions.

Source: http://eon.businesswire.com/news

Value-based health care encourages individuals to access  preventive care, which will identify looming health problems before they  become serious – and expensive. Participants who complete a health  questionnaire along with age and gender specific preventive  examinations, including cancer screenings and basic lab tests, are  rewarded with enhanced benefits such as reduced coinsurance and  deductibles along with cash rewards.

Unlike typical health insurance companies, SeeChange Health  designed its benefit plans to encourage individuals to see their doctor.  SeeChange Health covers preventive examinations, including cancer  screenings and associated lab tests, at 100 percent.

“We are thrilled to partner with a health plan that rewards its  members for building and maintaining a relationship with their doctor,”  said Dr. Daniel Bluestone, Chief Medical Officer of Santé Community  Physicians. “SeeChange Health promotes healthy behaviors, which will  ultimately reduce chronic illnesses and help people live fuller,  healthier lives.”

In addition to providing enhanced benefits for completing preventive  examinations and related screenings, SeeChange rewards its members with  financial incentives for completing health actions necessary for  proactively managing chronic conditions, such as diabetes, asthma and  coronary artery disease.

“When SeeChange approached us with its groundbreaking solution, we  eagerly embraced the only health plan to completely align its benefits  with preventive care and chronic condition management,” said Cyndy  Nayer, President of the Center for Health Value Innovation, the nation’s  premier information exchange for value-based design.

“The reaction and feedback we are receiving from employers is  overwhelmingly positive,” said Chuck Trogdon, CEO of Renberg, Trogdon,  & Cavale Insurance Services. “Employers are clamoring for affordable  health plans with benefits designed to support individual efforts for  staying healthy. This approach drives down health plan costs and  promotes a healthier workforce.”

Why the initial focus on California? One out of seven residents is  uninsured and the number is growing. In the coming months, SeeChange  will expand their health insurance offerings throughout California and  into twenty-four states where they are licensed to sell value-based  health insurance.

“While the nation debates the merits of a national health care plan,  the elephant in the room is who is going to pay for it,” said Martin  Watson, CEO of SeeChange Health. “With our new plan, we are effectively  showing that you can lower health care costs and improve the quality of  care while you’re doing it.”

About SeeChange Health

SeeChange Health provides fully-insured, value-based health insurance  to employer groups. The company combines value-based benefit designs,  data analytics and an interactive personal health record to consistently  improve the health profile of individuals. Preventive health actions  are assigned and tracked at an individual level. Individuals with  disease states such as pre-diabetes, diabetes, asthma and heart disease  receive specific health actions based on their medical condition.  SeeChange Health is headquartered in San Francisco and is focused on  reducing health care costs through proactive health management and early  detection of health conditions.

Source: http://eon.businesswire.com/news

In an article published today by Health Affairs, the researchers  analyzed data from a large corporation that implemented a VBID program  in 2005. Co-payment rates were reduced for employees using five classes  of drugs used to treat several serious but common chronic conditions,  including diabetes, hypertension and heart disease.

In this VBID program, patients using the specified medications were  offered at least a 50% co-payment reduction. The study’s authors  examined both the amounts spent on the high value services and overall  spending by the employer using the VBID plan.

“From a total cost perspective, the VBID program likely broke even,  and possibly saved money,” said A. Mark Fendrick, M.D., co-director of  the University of Michigan’s Center for Value-Based Insurance Design.

The financial returns from an employer perspective will be less  favorable, but significant savings from reduced use of non-drug services  are likely and will substantially offset the added employer spending on  prescription drugs, the researchers found.

“But even if the VBID program were to slightly increase employers’  medical costs, our expectation is that as people increase the use of  high-value services, their health will not only improve, but overall  medical costs will decline.”

Fendrick, who also is a professor in the Department of Internal  Medicine and professor of Health Management and Policy, created the VBID  concept with Michael Chernew, professor in the Department of Health  Care Policy at Harvard Medical School. Both are authors on the new  study.

“It seems reasonable to conclude that the financial effects of this  VBID intervention were at least cost neutral – if not cost saving – from  a total cost perspective. Value-based insurance designs could be an  important component of a broader cost containment strategy,” says  Chernew about the study.

Fendrick stresses that VBID programs focus on removing barriers for  treatments that are proven to be effective. When costs are reduced,  patients are more likely to use high value services. For those with  lower co-payments, the percentage of patients not taking their  medication declined by about 10 percent in 4 of the 5 drug classes.

The financial impact of behaviors resulting in improved health can be  measured in terms of savings on both medical [such as fewer emergency  room visits and hospitalizations] and non-medical [such as fewer  disability days, less absenteeism and greater worker productivity]  spending, Fendrick says.

Fendrick and Chernew currently are working with Congressional leaders  on incorporating VBID concepts in health care reform. Language  encouraging the use of VBID concepts is in the bill being negotiated in  conference committee.

“The clinical benefits of removing barriers to high value services  were clear, but before this paper, the economic ramifications of VBID  programs were uncertain. We can now say, at worst, VBID programs are  cost neutral from a total cost perspective,” Fendrick says.

Chernew adds. “Payers are facing tremendous pressure to reign in  health care costs. Compared to the status quo, we are confident that, if  carefully designed, VBID programs can produce more health at any price.  We believe that VBID should remain an integral part of ongoing health  care reform discussions.”

Funding: The study was funded with support from GlaxoSmithKline and Pfizer.

Additional authors: Allison B. Rosen, M.D. assistant professor of  Internal Medicine and Health Management & Policy at the University  of Michigan; Iver A. Juster, Mayur Shah, Arnold Wegh, Stephen Rosenberg,  all of ActiveHealth Management; Michael C. Sokol of Merck and Company;  and Kristina Yu-Isenberg of Ortho-McNeil Janssen Scientific Affairs.

Source: http://www2.med.umich.edu/prmc/media/newsroom/details.cfm?ID=1452

A few years back, Dr. Robert S. Galvin was desperately searching for  new ways to control medical costs at his company, General Electric (GE).  Galvin is GE’s chief medical officer. It’s his job to keep the  company’s 323,000 workers healthy. But he was growing frustrated with  the challenge: Too many employees with chronic illnesses such as  diabetes were not taking their medications or following other prescribed  treatment plans, and that led to serious—and expensive—complications.  “I said, ‘We need to innovate around managing costs,’” Galvin recalls.

One of GE’s major benefits providers, UnitedHealthcare (UNH), was  thinking along the same lines. So last year, United introduced the  Diabetes Health Plan, a first-of-its-kind benefit now in pilot testing  at GE and two other companies. Fifteen more workplaces plan to roll it  out in 2010. This is far more than a “disease management” program where  patients sign up to receive, say, discounts on medications but are left  to fill the prescriptions themselves. The diabetes plan requires  patients to adhere to treatment and drug guidelines and to agree to be  tracked by the company to ensure they are compliant. Those who stick  with it receive significant discounts on out-of-pocket expenses such as  co-pays for diabetes-specific treatments. Those who don’t are kicked out  of the program and put back into their company’s standard plan.

Harsh as it sounds, it’s exactly the type of plan that’s likely  to catch on as the country debates health-care reform. No matter which  of the many proposals knocking around Congress actually passes, there’s  no doubt companies and their insurers will be expected to hold down the  costs of caring for chronically ill people. And diabetes is a doozy:  United estimates that newly diagnosed diabetes patients cost payers  $12,000 each in their first year. A patient with a complication such as  heart disease may cost $30,000 a year. But the biggest potential savings  for the employer, according to United, come when you prevent people  with “pre-diabetes”—who are also eligible for United’s plan—from  developing the full-blown illness. “We know if a pre-diabetic loses 7%  of their body weight, the chance they’ll become diabetic goes down by  58%,” says Dr. Deneen Vojta, vice-president and medical officer at  United. “The numbers get astronomic.”

The finances work out well for patients, too. The parameters of  the plan differ by employer, but United offers up a hypothetical  scenario: Say a company’s standard plan charges co-pays of $30 to $50  for prescription drugs; those fees would be waived on medicine diabetes  patients use to control their blood sugar and on glucose meters for  testing their blood. Deductibles might also be reduced. But patients  must agree to twice-yearly physician checkups and other preventive  measures, and they have to allow United to keep an online scorecard that  uses claims data to keep track of their compliance. United’s database  technology ensures that the plan is completely secure, so neither the  employer nor United gets access to the identities of the employees who  participate, unless those patients choose to disclose the information.

MEDICATION DISCOUNTS Although United is the first major insurer to offer a  disease-specific plan, other insurance companies offer incentive  programs for patients to manage chronic diseases properly. Aetna, for  example, has embraced the concept of “value-based insurance design,”  which is focused on providing medication discounts to patients with  diabetes, high cholesterol, asthma, and other conditions. The hope is  that incentives added by Aetna will boost compliance, keep patients  healthier, and save money for Aetna’s corporate clients. Aetna  introduced one such plan, Healthy Actions Rx-Savings, last year, and it  was pilot-tested by Marriott International  it’s not as extensive as  United’s offering because it’s merely a discount program rather than a  comprehensive plan design with strict monitoring. Dr. Edmund Pezalla,  Aetna’s national medical director for pharmacy management, says it’s too  early to say if such programs are working, but he’s optimistic. “We  know people are filling more prescriptions,” he says.

United is offering the Diabetes Health Plan only to large  companies that are self-insured, meaning the employers bear the entire  risk while the insurer administers the plan. What does United gain? For  one, it can better compete with its rivals by offering a wider menu of  innovative services. More important, the insurer protects itself over  the long run: Diabetic patients who don’t control the disease could  become liabilities down the road, if they change jobs and end up working  for a company that’s fully insured by United. “Insurers always benefit  from healthier members,” says Sheryl R. Skolnick, a managing director at  Pali Capital who specializes in health care. “It’s cheaper to give up  co-pays and premiums rather than pay for a diabetic in full-blown  distress,” regardless of when the patient runs into trouble, she adds.

PRIVACY HURDLES Plans such as United’s haven’t always been greeted with applause,  however. GE’s Galvin says a couple of non-diabetic employees complained  that they had more out-of-pocket costs than did those who were eligible  for the diabetes plan. And Peter L. Ebb, a partner at the law firm Ropes  & Gray, says he was recently hired by a hospital that wanted to  implement a plan similar to United’s but was getting hassled by its  labor union. “Employees were initially suspicious,” Ebb says. “They  worried, ‘Is the information I disclose going to be passed along to my  manager? Is there a risk I’m going to get fired?’” Ebb convinced the  union that there were enough privacy firewalls built into the program to  shield employees’ identities, but he suspects similar worries will  arise in other workplaces. “This idea can be successful if employers can  overcome those concerns,” he says.

United is now designing studies that will help it quantify the  diabetes plan’s impact on health outcomes and expenses. If the insurer  can prove the plan reduces costs, it may consider rolling out similar  programs for a host of chronic but manageable diseases. Says Vojta: “We  can see it moving to other conditions where patient behavior drives  outcomes.”

Source: http://www.businessweek.com/magazine/content/09_44/b4153056904077.htm

The “debate” about health care reform continues. But of a little more   interest to me is an article I read earlier today on MarketWatch. This   article, from Kristen Gerencher, describes one health insurance  company  that is gravitating toward what is known as “value-based”  health  insurance. And, quite frankly, this type of health insurance  looks  better than what we have now.

What we have now for health insurance

Right now, our health insurance is costly and largely  inefficient.  In any insurance system, the healthy are going to subsidize  the  unhealthy. That is just the way it is. But right now, we have a  system  that is costly largely because there are no real incentives to  engage  in healthy behaviors. In fact, Gerencher describes one of the  main  issues associated with the way insurance is currently administered:

…Health insurers’ tendency to pay attention to members only when   they’re diagnosed with a costly chronic condition, as opposed to   actively encouraging healthy people’s routine and preventive care. …

Some health insurers create the conditions where small-business   clients can afford their coverage no more than two or three years,   giving the insurer an excuse not to invest in members’ long-term health.

For all the costliness of our health insurance, we don’t even  have  the best health care system in the world. We rank #37. The fact  that we  pay more per person for health care than any other developed  country,  but that our health care isn’t even the best, is an indication  that our  current insurance system is horribly inefficient.

Value-based health insurance from a new company

Instead of relying on an insurance culture that basically  encourages  unhealthy behavior, the company SeeChange Health is looking  to change  things up a bit. The company claims that it will offer  affordable  health insurance, and adjust premiums and co-pays so that  there are  incentives to live healthier and get preventative care. The  idea is  that if people can use their insurance more easily to see  doctors and  get the care they need early on, they can avoid the costs  that come  with waiting until it becomes too late.

SeeChange will initially launch in California, and could spread   elsewhere. This insurance company is a big reason why the idea of   getting insurance across state lines is appearing even more attractive   to me. I didn’t care at first at the idea of being able to better shop   around, since nearly all insurance companies are the same. But this idea   of value-based health insurance would definitely make a difference.

Taking care of your health can help you prevent some of the   costliest diseases. Unfortunately, health insurance companies have not   made this particularly easy. Perhaps SeeChange can provide us with a   health insurance alternative that makes sense — and saves everyone   money.

Source: http://www.bizzia.com/yieldingwealth/is-it-time-for-value-based-health-insurance/

It was unanimous: June’s National Institute for Health Care  Management (NIHCM) Foundation Health Care Research award winner was the  paper, “Impact of Decreasing Copayments on Medication Adherence Within a  Disease Management Environment,” (Health Affairs 2008; 27(1):103-112).  The paper was authored by researchers and analysts from Harvard  University, the University of Michigan, and care management company  ActiveHealth Management.

The study described in the paper evaluates the impact of  selectively lowering co-pays for certain classes of drugs used in the  treatment of chronic medical conditions.

“Research has proven that co-pays, even very small ones, can  serve as financial barriers to accessing needed care,” says author  Stephen Rosenberg, MD, ActiveHealth senior vice president for outcomes  research, in an announcement. “This leads to costly and avoidable  hospitalizations and emergency room visits. Our study demonstrated that  reducing or eliminating co-pays significantly increases compliance with  potentially life-saving medications. A value-based insurance design  program can reduce a barrier to compliance, resulting in improved  quality care and lower costs.”

In addition, two of the authors, A. Mark Fendrick, MD, University  of Michigan Medical Center and Michael Chernew, PhD, Harvard Medical  School, have produced an essay in the NIHCM publication New Expert  Voices: “Value Based Insurance Design: Maintaining a Focus on Health in  an Era of Cost Containment.”

The essay advocates varied cost sharing according to the value of  the health service provided, encouraging patients to use high-value  services and avoid services of low value. “The principles behind  value-based insurance design can work synergistically with a range of  patient- and provider-oriented cost containment strategies to promote  value,” according to the essay. The paper also contains some historical context. The idea that  higher patient cost sharing reduces the use of health care services and  lowers spending for purchasers dates back to the 1970s. Consensus holds  that a 10% price increase yields a utilization drop of 1.7%-”a modest  effect, [but] the ramifications can still be meaningful,” the authors  write.

But consensus also holds that increased cost sharing reduces use  of both high- and low-value services, “even potentially life-saving  services.”

Value-based insurance design, by contrast, applies “clinically  sensitive” cost sharing, “preserving the demand-dampening advantages of  higher cost sharing while lessening the adverse health consequences that  can result when high out-of-pocket expenditures reduce the use of  high-value clinical services,” according to the authors.

By contrast, a recent commentary that ran in Workforce Management  appears to advocate an opposite approach: replacing co-pays with  co-insurance, so that as healthcare costs rise, so too does the amount  contributed by patients.

Author Jeffrey Shovlin, senior director for global benefits at  human resources consultancy Hewitt Associates, argues that co-insurance  forces employees to think about health care costs but does not require  major benefit changes. “This makes employees better consumers, because  their health care costs are directly related to the choices they make,”  writes Shovlin. “A co-insurance model also protects the plan from  bearing the full burden of health care inflation.”

Shovlin notes that the fixed co-payment model works in favor of  plan participants during times of inflation, and favors heavy users,  while co-insurance serves as a hedge in the plan’s favor during a period  of rapidly escalating price increases.

Shovlin acknowledges the risk of co-insurance-that employees  become noncompliant with their medication regimen because they can no  longer afford prescriptions or check-ups. “This is particularly  worrisome in today’s economy, when we know more employees are forgoing  the cost of care because they can’t afford it.”

But he’s quick to dismiss the risk: “The compliance challenge can  be overcome if employers put measures in place to encourage the right  behaviors and discourage the wrong ones.” He identifies such measures as  capping employees’ co-insurance obligation, providing prescriptions at  no cost for employee enrolled in a disease-management program for their  condition, and covering preventive services at 100%.

Shovlin concludes with the following: “My position is that  co-payments should go the way of the dinosaur before health care as we  know it today has the same fate as Tyrannosaurus rex.”

For their part, authors of the NIHCM-recognized Health Affairs  article found that in the context of disease-management programs,  medication adherence in the value-based intervention of reduced  co-payments increased for four of five medication classes studied,  reducing nonadherence by 7% to 14% compared with a control group using  the same disease-management program without the reduced co-pays. The  results, they write, “demonstrate the potential for copayment reductions  for highly valued services to increase medication adherence above the  effects of existing disease-management programs.” Article Content: AHIP-All Rights Reserved: © AHIP 2008 Source: http://www.ahiphiwire.org/LearningCenter/Feature.aspx?doc_id=393857

The acquisition of Central Benefits National Life Insurance Co.  will allow SeeChange Health to rapidly expand their fully-insured,  value-based products into 25 states in the coming months. The program is  expected to launch in California later this year pending final  regulatory approval.

“Value-based health care is an innovative approach toward lowering  healthcare costs while at the same time improving the quality of care,”  said Janice Rahm, executive vice president of SeeChange Health.  “Instead of continuing to shift healthcare costs from insurer to  employer and plan member, our new value-based plans will actually reduce  medical claims, because the plans will ultimately improve the health of  our members.” “It has been over 20 years since a new insurance company  entered the California market,” said Martin Watson, CEO of SeeChange  Health. “We are confident SeeChange Health is uniquely positioned to  adjust quickly to both market needs and regulatory changes that may  impact the industry.”

About Value-Based Health Care The problem with healthcare today is that the current system only focuses on delivering care when treatment options are most costly and outcomes are most limited. The “80/20” rule stipulates that 20% of the insured population accounts for 80% of the healthcare spent today. By only focusing on the current 20% who are high claimants, we are not managing the 80% who are tomorrow’s high claimants.

Value-based healthcare, on the other hand, is designed to drive consumer engagement by incenting individuals to access highly-valued preventive care, and value-based insurance companies are able to do this by rewarding participants with richer benefits when compliance criteria (pre-defined health actions) are completed. Compliance examples include:

• Completing a health questionnaire
• Participating in an annual biometric (lab) screening
• Following age, gender and condition specific guidelines

The rewards and incentives for participating in a value-based program include:

• Waiving or reducing copays, deductibles and/or coinsurance
• Reducing health insurance premiums

About SeeChange Health SeeChange Health, a division of Triveris LLC, provides fully-insured, value-based health insurance to small employer groups. The company combines value-based benefit designs, data analytics and an interactive personal health record to consistently improve the health profile of individuals. Preventive health actions are assigned and tracked at an individual level. Individuals with disease states such as pre-diabetes, diabetes, asthma and heart disease receive specific health actions based on their medical condition. SeeChange Health is headquartered in San Francisco and is focused on reducing healthcare costs through proactive health management and early detection of health conditions.