Facing a Difficult Surgery
Vincent White tried everything to get rid of his back pain. Neck clamps. Surgery. Spinal decompression. This lab supervisor at Carolinas Healthcare had persistent pain from a narrowed bone channel housing the spinal cord and nerves.
The calcification worsened. Finally, doctors recommended another back surgery. “He was stumbling around the house,” said wife Lisa. “He could barely move.”
When Lisa walked into her husband’s hospital room after the operation, a doctor from the critical ICU team delivered bad news. Vincent was paralyzed.
“He was in ICU for 21 days,” said Lisa. “Doctors said he probably would not walk again.” Vincent had another surgery while in ICU to repair a spinal cord leak. After six weeks in rehab, he came home to his wife and 11-year-old daughter Olivia.
Experienced Nurse Support
Long before Vincent’s release, Lindsay Spainhour, RN, BSN, the Whites’ MedCost Case Manager*, was working with the medical providers, planners and discharge team. Lindsay followed his progress closely to ensure that he received all the care needed in this crucial time of their lives.
“Lindsay got to know me and took time to care about what my husband and I were going through,” Lisa said. “She got the special kind of air mattress we needed, and told us not to worry about authorization.” Lindsay called the supplier for Vincent’s wheelchair until it finally arrived. And when Vincent was diagnosed with a wound two weeks after arriving home, she provided education, supplies and questions for Lisa to ask medical staff when Vincent was readmitted to the hospital.
Vincent and Lisa continue to make lifestyle adjustments. He wears a catheter. He can’t take a normal vacation with his family. But Lisa says that their MedCost Case Manager made a big difference.
More Than Just a Job
“She did things she didn’t have to do, to make sure my husband’s needs were met over and beyond. I could tell in Lindsay’s voice that it was more than just a job.
“We sometimes complain about what we pay for premiums, but the benefits of having a case manager like Lindsay far outweighed the cost. Get a case worker. It can save you energy to focus on your family.”
*The Whites gave MedCost permission to share their story to help others realize the benefits of the Complex Case Management program. MedCost Complex Case Management is a program where registered nurses who are also certified case managers work with individuals who have experienced a life-changing illness or injury. The goal of the program is to ensure the best use of available health plan resources while enhancing quality of life.
How Can Employers Balance Medical Care & Benefit Costs?
MedCost Care Management programs are designed to conserve health care costs for our clients while improving an individual’s health.
Our nursing staff averages 22 years of experience; and includes board-certified case managers and nurses certified in intrinsic coaching and grief counseling.
Here are our 2017 results that exceed industry averages, resulting in lower health care costs for our clients.
Care Management Resources
Want to know more about how to manage medical costs? These resources give employers more details:
- Complex Case Management
- Inpatient Management
- Outpatient Management
- Telehealth Services
- Nurse Health Coaching
- Maternity Management
- Behavioral Health
An even distribution of weight enabling someone or something to remain upright and steady.
A condition in which different elements are equal or in the correct proportions.
The definitions make it sound easy—spreading the load around so no one person or group is under duress.
But balance is quite elusive.
We strive for it in all aspects of our lives.
Employers are no exception.
CEOs, CFOs and HR directors are caught in the tugs of emotion and cost spreadsheets.
MedCost helps employers in their pursuit of balance.
Balancing medical care and cost management. Balancing the ideal with the reality.
Other benefits administrators can’t match our integrated clinical programs that combine member care with effective claims management.
And big name insurance companies, well, they use a scale. Scales are not negotiable. They don’t allow employers to make choices.
Achieving Employers Benefits Balance
We enable companies to achieve the benefits balance™ that’s right for them.
(This is a transcript of the video, “Helping Employers Achieve the Benefits Balance.”)
Ready to Balance the Care of Your Employees
with the Financial Health of Your Company?
- Annual health care costs in America are $3.2 trillion.
- Employees average 5.3 unplanned sick days per year.
- That productivity lost is more than 1 and 1/2 hours of an 8-hour day.
When disease management and wellness programs combine, employers average $30 per member per month in decreased health care costs.
That’s why we’ve developed a comprehensive program called HEALTHY & WHOLE.
HEALTHY & WHOLE encompasses physical, emotional, financial and social health – and
greater job satisfaction for employees.
The goal is to help employers balance the care of employees with the financial health of your
HEALTHY & WHOLE Includes Disease Management
Our nurse health coaches provide hands-on support, helping members reduce blood
pressure, glucose levels and lose weight.
Over 73% of businesses offer corporate wellness to attract and retain talent, and strengthen
company culture. Another advantage is to encourage enrollment in consumer-directed health
plans, a growing trend.
HEALTHY & WHOLE Supports Lifestyle Changes
HEALTHY & WHOLE addresses not only members with chronic diseases, but the 75% who
need support with lifestyle changes.
Lifestyle changes – even small ones – create measurable outcomes of better health, productivity and bottom line.
The Results of Corporate Wellness Programs
Implementing corporate wellness programs dropped claims costs -28%, doctor visits -17% and hospital admissions -63%.
This same study showed disability costs down -34% and injury incidence down -25%.
An employer we worked with said that he is passionate about having happy employees. If they
are happy, they will be productive and engaged.
A Program That Benefits Employees and Companies
Lifestyle coaching. Financial education. Fitness. Nurse health coaching. Long-term medical
conditions. HEALTHY & WHOLE serves everyone’s needs, including your company’s.
(This post is a transcript from the video, “MedCost HEALTHY & WHOLE.”)
For more information on wellness consultations for employers, email Kati Davis.
By Zafeira Sarrimanolis, PharmD, MedCost Clinical Consultant
In 2016 we saw 22 brand-new novel drugs hit the market. This year the FDA has approved 46 novel drugs.
A novel drug is an innovative product with a chemical structure that has never been FDA approved before and usually meets a previously unmet medical need.
In 2017, these novel drug approvals were accompanied by an influx of specialty and brand-name drugs to the market – many treating common chronic conditions like diabetes, asthma and RA.
It is a very exciting time in the healthcare world as these new drugs significantly advance patient care. However, these treatments come at a cost… literally.
This is not a comprehensive list of new-to-market drugs, and does not include all 46 novel drugs, but is a snapshot of key 2017 FDA approvals.
It is hard to predict what the FDA and drug manufacturers will do in 2018. However, we should expect even more high-cost drugs to be approved and available for members.
Hopefully these will be accompanied by the influx of generics and biosimilars to the market – which may help off-set rising drug costs.
One thing we know for sure is that managing drug costs will continue to be key. We employ cost-management strategies such as:
- Formulary management
- Prior authorizations
- Step-therapy programs
- Regulation of copay cards
Estimated Annual Cost
|11/16/17||Hemophilia A with FVIII inhibitors||$450,000|
|11/15/17||Mucopolysaccharidosis VII (MPS VII, Sly syndrome)||$375,000|
|11/14/17||Severe asthma (add-on treatment)||$30,000|
|9/14/17||Relapsed follicular lymphoma||$160,000|
|8/30/17||Acute lymphocytic leukemia||$475,000 per treatment||First gene therapy ever approved in the US|
|8/17/17||Relapsed or refractory acute lymphoblastic leukemia||$170,000
|8/1/17||Relapsed or refractory acute myeloid leukemia||$280,000
(sofosbuvir, velpatasvir, voxilaprevir)
|7/18/17||Hepatitis C||$75,000 for 3-month treatment|
|7/17/17||Reduce risk of breast cancer returning||$125,000|
|7/13/17||Moderate-to-severe plaque psoriasis
|7/7/17||Sickle cell disease||$11,000 – $18,000||Second drug approved for Sickle Cell in the US|
(C1 esterase inhibitor)
|6/7/17||Congenital fibrinogen deficiency||n/a||Pending launch date|
(coagulation factor IX)
|5/31/17||Hemophilia B||n/a||Expected launch early 2018|
|5/22/17||Rheumatoid arthritis||$39,000||Second-line agent|
|5/5/17||ALS||$145,000||Second drug ever approved for ALS|
|4/28/17||Acute myeloid leukemia||$180,000|
|$700,000||Very rare, inherited condition|
|4/11/17||Tardive dyskinesia||$64,000 – $128,000 depending on dose|
|3/28/17||Multiple sclerosis||$65,000 (~20% less than current treatments)|
|3/27/17||Epithelial ovarian, fallopian tube or primary peritoneal cancers||$160,000|
|3/23/17||Merkel cell carcinoma||$150,000|
- OptumRx® RxNews
- FDA: “Novel Drug Approvals for 2017”. Accessed: https://www.fda.gov/drugs/developmentapprovalprocess/druginnovation/ucm537040.htm
- FDA: “Drugs@FDA: FDA Approved Drug Products”. Accessed: https://www.accessdata.fda.gov/scripts/cder/daf/index.cfm?event=reportsSearch.process
- Pharmacy Times (http://www.pharmacytimes.com/)
- Specialty Pharmacy Times (https://www.specialtypharmacytimes.com/)
(To print, click on the title and scroll to “PRINT THIS PAGE” at the bottom)
Confused by all the “insurance-speak” in your company health plan? Here’s a quick guide for phrases in benefit plans for self-insured employers.
Self-Insured: What Does It Mean?
1 Self-Insured: Also called self-funding. Employers choose this model of funding to pay for health claims from company assets and employee premiums. Self-insurance allows employers to pay only for actual claims, instead of the fixed premiums of fully-insured plans. A 2013 study by the Kaiser Family Foundation noted three of five covered employees are in self-insured health plans.
2 ERISA: Employee Retirement Income Security Act of 1974, passed by Congress to establish federal regulations for self-funded benefit plans. Self-funded employers avoid fees such as the Health Insurance Provider Fee, Risk Adjustment Fee and Federally Facilitated Exchange User Fee. Self-funded employers also avoid certain state premium taxes.
3 SPD: Summary Plan Description that lists health plan terms and conditions, written for a particular employer or organization. The SPD defines the benefit coverage and exclusions. MedCost ensures that coverage and exclusions mirror the stop loss contract. If the stop loss contract does not mirror benefits offered, the employer may have to pay claims that were not covered by the stop loss carrier.
Fixed Vs. Variable Cost
4 Fixed Cost: Predetermined fees that are paid as part of a health plan, regardless of actual expenses. Fully-insured plans are 100% fixed cost, paid out in set premium rates to the carrier. Self-insured fixed costs range from 18%—21% of total plan costs for administrative fees and stop loss insurance.
5 Variable Cost: Also called soft dollars, which may translate into potential savings for a self-funded employer. Prudent employers deposit funds for the total estimated employee claims into a reserve account in the company’s name. These dedicated funds remain in the employer’s account for future medical expenses if not spent during a plan year. MedCost provides professional underwriting services to help employers ensure that they are adequately covered for both expected and unexpected claims.
6 Corridor: Also known as claims or risk corridor, or margin. Underwriters include this as a cushion to cover unexpected claims. Generally this amount is around 25% for self-funded plans and 20% for fully-insured plans. Expected claims plus risk corridor (for variable expenses) determine the maximum liability (or attachment point).
Stop Loss Insurance
7 Stop Loss Insurance: Coverage designed to protect self-funded employers from the risk of catastrophic claims beyond a predetermined liability. MedCost underwriters recommend policies with consistency between the stop loss policy and the employer’s SPD, to avoid any gaps in coverage when claims are submitted.
8 Specific Stop Loss Deductible: The limit of liability under stop loss coverage on an individual employee covered under an employer’s heath care plan. The employer chooses this amount based on total group size and selected risk tolerance.
Stop Loss Coverage Specific Example
Jane Smith suffers from renal failure and undergoes kidney dialysis. Her claims total $300,000. Jane’s employer is self-funded and has purchased specific stop loss with a $75,000 deductible.
|Amount Reimbursed by Stop Loss Carrier||$225,000|
9 Aggregate Stop Loss Deductible: This amount is the self-funded employer’s overall or group liability under a stop loss policy. Underwriters typically project expected claims plus a 25% margin to determine an employer’s maximum liability (or attachment point).
Stop Loss Coverage Aggregate Example
- Includes claims paid that do not exceed the specific deductible
- When underwritten appropriately, expenses should approach the amount of expected claims ($4 million), rather than the maximum liability ($5 million)
|Maximum Claims Liability||$5,000,000|
10 Benefits Administrator: Also called a third party administrator (TPA) or administrative services organization (ASO). Employers typically contract with an administrator to handle benefits plan documents, claims payments and provide other services. Experienced administrative companies like MedCost can preserve significant savings for employers through careful management of resources, with customized benefits and targeted products to meet employer needs.
We’ve spent over 30 years in the industry. We know health care choices are complicated and not getting any simpler.
Have questions? Contact your health care consultant or Jason at MedCost for more resources.
 “2013 Employer Health Benefits Survey,” Kaiser Family Foundation, August 20, 2013, http://kff.org/report-section/ehbs-2013-section-10/
 “Affordable Care Act Provision 9010, Health Insurance Providers Fee,” http://www.irs.gov/Businesses/Corporations/Affordable-Care-Act-Provision-9010
 “Explaining Health Care Reform: Risk Adjustment, Reinsurance, and Risk Corridors,” Kaiser Family Foundation, January 22, 2014, http://kff.org/health-reform/issue-brief/explaining-health-care-reform-risk-adjustment-reinsurance-and-risk-corridors/
 For more information, download Stop Loss Coverage White Paper: Maximizing Benefits, Limiting Risk
A sick child might have a fever at 3:00 am. Or the family might be visiting grandparents a long way from home. But if an employer-sponsored health plan includes telemedicine services, a board-certified doctor’s consultation is only a phone call away.
Employers Are Choosing Telemedicine
An overwhelming 96% of US employers plan to offer telemedicine services in applicable states* in 2018, the National Business Group on Health reports. The reasons for this rapidly growing health benefit are obvious:
- Quick Response. Teladoc, the nation’s largest provider of telemedicine consultations, averages 22 minutes for a call-back from a licensed, board-certified doctor who practices in the caller’s state.
- Convenience. This consultation can be held by phone or online. Teladoc requests some medical information before having the doctor return the call.
- Appropriate Care for Less. Almost 80% of adult Emergency Room visits are due to lack of access to other providers.** Access to telemedicine visits can limit hours spent away from work, as well as more expensive care at any hour, day or night.
Telemedicine Offers Treatment Alternatives
Telemedicine consultations are not meant to replace primary care providers. But if an employee has one of the minor ailments listed below, 24/7 access is convenient, and reduces spiraling costs for the employer and the employee.
Treatment Alternatives to the Emergency Room
Common conditions treated through a telemedicine phone call or online visit are:
- Minor joint trauma
- Gastroenteritis (stomach flu)
Telemedicine Services Are Expanding
Teladoc has expanded optional services for employer health plans to include behavioral health. If an employer chooses to add this option, experienced psychiatrists, therapists and counselors would be available at a flat, per-encounter fee. Members can choose to see the same provider throughout the course of care.
Behavioral health conditions*** range from:
- Domestic abuse
- Grief counseling
Just a Phone Call Away
Need a better prescription for your health care expenses? Expert care from area doctors may be available with a phone call, whether on vacation at Disney World or in pajamas at 3:00 a.m.
*Teladoc operates subject to state regulation and may not be available in certain states.
**“Emergency Room Use Among Adults Aged 18-64: Early Release of Estimates from the National Health Interview Survey, January-June 2011.” National Center for Health Statistics. May 2012. https://www.cdc.gov/nchs/nhis/releases.htm (accessed October 31, 2017).
***Consult your employer’s summary plan description for complete coverage details.
By Phil Galewitz, Kaiser Health News
Family health insurance premiums rose an average 3% this year for people getting coverage through the workplace, the sixth consecutive year of small increases, according to a study released Tuesday.
Average 2017 Family Premiums: $18,764
The average total cost of family premiums was $18,764 for 2017, according to a survey of employers by the Kaiser Family Foundation and the Health Research & Educational Trust. That cost is generally divided between the employer and workers. (Kaiser Health News is an editorially independent program of the foundation.)
Employer-provided coverage for a single person rose on average 4%, to $6,690. Those individuals pay $1,213 on average.
Still, the employer market looks remarkably stable compared to the price increases seen in the Affordable Care Act’s insurance marketplaces for people who buy their own coverage. Premiums on those plans spiked on average about 20% this year, and many insurers dropped out because of financial concerns.
Average ACA Premiums Up 20% in 2017
For all the media attention and political wrangling over the Obamacare exchanges, their share of the market is relatively small. They provide coverage to 10 million Americans while 151 million Americans get health insurance through their employer.
The continued slow rise of employer health premiums identified in the Kaiser survey surprised some analysts who have expected the trend to end as the economy picked up steam, leading to a jump in use of health services and health costs.
Drew Altman, CEO of the Kaiser Family Foundation, said it’s “health care’s greatest mystery” why health insurance costs have continued their slow pace even as the economy has picked up the past few years. “We can’t explain it.”
Employee Deductibles Have Nearly Doubled Since 2010
Another unexpected result was that workers’ deductibles — the health bills that workers must pay before their insurance coverage kicks in — remained stable this year at $1,221. Since 2010, as companies sought to keep premiums in check, deductibles have nearly doubled. Higher deductibles can limit premium increases because costs are shifted to workers and it gives them greater incentive to cut spending.
“Increasing deductibles has been a main strategy of employers to keep premiums down and we will have to watch if this plateauing is a one time thing … or if this portends a sharper increase in premiums in future years,” said Altman. “It could be deductibles are reaching their natural limit or could be the tighter labor market” that’s causing employers to back off, he added.
Meanwhile, a second employer survey released Monday by Mercer, a benefits consulting firm, suggests a modest increase in health costs coming next year, too. Employers said they expect their health costs to increase by an average 4.3% in 2018, according to the survey.
To deal with higher medical costs — notably big increases in the prices of prescription drugs — employers are using multiple strategies, including continuing to shift more costs to workers and paying doctors and hospitals based on the value of the services rather than just quantity of services.
Jeff Levin-Scherz, a health policy expert with benefits consultant Willis Towers Watson, said there is a limit on how much employers can shift costs to their workers, particularly in a tight labor market. “Single-digit increases doesn’t mean health care costs are no longer a concern for employers,” he said.
Trend: Employer-Based Coverage Has Dropped
The survey highlights that the amount workers pay can vary dramatically by employer size. Workers in small firms — those with fewer than 200 employees — pay on average $1,550 more annually for family premiums than those at large firms. The gap occurs because small firms are much more likely than large ones to contribute the same dollar amount toward a worker’s health benefits whether they’re enrolled in individual or family coverage.
More than one-third of workers at small employers pay at least half the total premium, compared with 8% at large employers.
That’s the case at Gale Nurseries in Gwynedd Valley, Pa., where health insurance costs rose 7.5% this year. Its 25 workers are paying nearly half the cost of the premium — at least $45 a week for those who choose the base coverage plan. Employees also have deductibles ranging from $1,000 to $2,500.
A decade ago, the nursery paid the full cost of the premium.
“It’s crazy — we keep paying more and getting less,” said comptroller Candy Koons.
At the Westport (Conn.) Weston Family YMCA, health insurance premiums rose about 7% this year, leaving its 50 full-time employees to pay a $156 premium for individual coverage.
“It’s not problematic, but it’s one of our bigger costs associated with payroll,” said Joe Query, the human resources director.
Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.
To Manage Employer Prescription Costs, Get the Right Drug for the Right Condition
Zafeira Sarrimanolis, MedCost Pharmacist and Clinical Consultant,knows the value of reviewing pharmacy usage patterns for clients, to identify opportunities to contain costs.
“From a more clinical perspective, the key to managing drug costs is making sure that the right people are using the right drug for the right medical condition,” she said.
Obstacle #1: Not Adhering to the Formulary
“What is a formulary?” asked Michael Cornwell, Director of Sales and Underwriting. “A formulary is a guide that the Pharmacy Benefit Manager puts out that says these brand drugs are the preferred versus the non-preferred versus generics.
“For example, the average cost of a generic today is about $28-$29. The average cost of a brand drug is probably in the $167 range.
“Members do not always know what drugs are on the formulary,” said Ms. Sarrimanolis. “Certainly their providers don’t always know what drugs are on the formulary, so that’s where some of the confusion and disruption comes from.
“We try to fill a lot of these gaps through member education. Pharmacy Benefit Managers do a great job of outreaching to members through the mail, emails and on their websites. Unfortunately, members might not always understand that information.
“What we need to do is to encourage members to become smarter consumers and to make the best, most cost-effective choice for their own medication.”
The Pharmacy Benefit Manager’s Role
“A Pharmacy Benefit Manager, or PBM, serves multiple purposes,” Mr. Cornwell said. “One purpose is to process all the pharmacy claims. By doing that, benefits administrators like MedCost are able to collect the data and analyze it.
“Zafeira, as our pharmacist on staff, and our Care Management teams know what usage patterns are. We know what kinds of drugs people are taking.
“The PBMs certainly are negotiating discounts at the drugstore and contract rates for us to get the best prices that we can for the drugs that we take. PBMs can also provide data on clinical reasons to manage those drugs and make sure that they’re the most appropriate and cost-effective.
Obstacle #2: Not Educating Members
“One of the largest reasons that people are readmitted to the hospital is because they don’t adhere to directions to take their medication.
“Programs like step therapies ask: ‘Have you tried this drug before you try that one?’
“Prior authorizations ask: ‘Why do you need this drug?’ For example, you must have the proper genotype to be able to take certain treatments for Hepatitis C.
“Prior authorizations cause a lot of disruption to the member. You go to the doctor for a prescription. You go to the drugstore and they say why do you need to take this drug? And you go back to your physician but they’re busy. It takes time, so it’s all disruptive at a time when you want your medication. It’s hard to understand.
“Member education is extremely important. It would be nice if we could fill that gap to where physicians knew exactly what your formulary was at the point that physicians are prescribing that medication. Right now that doesn’t exist.
“Every 1% increase in generic utilization results in about 1.5% savings,” said Michael Cornwell.
“In drug costs, it becomes pretty significant. As Zafeira said, as the drug manufacturers continue to make more drugs (which is a good thing), it puts more challenges on us to make sure that the drugs are appropriate and cost-effective.
Using PBM Websites to Shop Employer Prescription Costs
“We’re going to go through more disruption as a result of that. We’re going to have to get used to it. But there are a lot of new tools coming on the marketplace to try to help people shop for drugs,” Mr. Cornwell observed.
“The PBMs have websites where you can log in under your personal account with your PBM that is administering your drugs. You can put in the name of the drug and the details; and it will show you the best places the most price-competitive places, to buy that drug. It will also match up what your formulary is and if there are alternatives that are cheaper than the drug you have.
(This post is a transcript from the video, “2 Obstacles to Managing Drug Costs.”)