qotd: Family health costs now over $20,000 (MMI)

Milliman Research Report

May 2012

2012 Milliman Medical Index

The annual Milliman Medical Index (MMI) measures the total cost of healthcare for a typical family of four covered by a preferred provider plan (PPO). The 2012 MMI cost is $20,728, an increase of $1,335, or 6.9% over 2011. This is the first year the average cost of healthcare for the typical American family of four has surpassed $20,000.

Of the $20,728 medical cost for a family of four, the employer pays about $12,144 in employer subsidy while the employee pays the remaining $8,584, consisting of $5,114 in employee contributions and $3,470 in employee out-of-pocket costs.

Out-of-pocket costs are of particular significance given PPACA's focus on actuarial value, a concept predicated on the percentage of a plan's costs that is paid out of pocket by the insured. Figure 8 (link below) indicates how, as was the case last year, the MMI's plan remains slightly better than a gold plan as defined by PPACA. The MMI plan has maintained a relatively stable actuarial value over time because employers typically adjust their plan designs on an annual basis to keep pace with increases in the underlying medical trend. If no such adjustments were made and deductibles and copays remained static, the plan would become richer and would eventually exceed the platinum threshold. 

In addition to a typical PPO plan, many employers are providing employees an option that includes higher out-of-pocket cost sharing in exchange for employer contributions to a health savings account and lower payroll deductions. Along these lines, some plans that may become available through the state insurance exchanges may contain lower actuarial values than the type of plan exemplified by the MMI.

In the past year, the MMI plan did not undergo significant design changes. Long-term, employers may be looking for new design concepts that tackle the ongoing cost-control challenge. Design concepts under consideration may include a possible move toward increased use of defined contribution concepts and continued momentum toward high-deductible plans or plans leveraging accountable care organizations (ACOs).

Impact on MMI Family of Four

While several aspects of healthcare reform would have meaningful impact on the cost of insurance coverage, the effect on the total cost of care is very limited for our family of four. For example, medical loss ratio rules and stringent review of health insurance increases may reduce insurer profits and also put pressure on insurers to be as efficient and low-cost as possible. But the cost of care for this family of four is still $20,728, which excludes insurer profits and administrative expenses. 

While efforts to be more administratively efficient may lead to lower premiums, they do not directly affect the cost of delivering healthcare to the MMI family of four. 

http://publications.milliman.com/periodicals/mmi/pdfs/milliman-medical-index-2012.pdf

Comment:  The 2012 Milliman Medical Index (MMI) shows that the average cost of health care for a family of four is now over $20,000 - actually pushing $21,000 ($20,728).

The MMI measures the average spending on health care for a family of four that is insured through an employer-sponsored PPO plan. It does not include the administrative costs or profits of the insurers nor the administrative costs of the employers to manage their health benefit programs. It includes only what is actually spent on health care.

Keep in mind that this represents spending on a relatively healthy component of our society - the healthy workforce and their young healthy families. It does not include those unable to work because of chronic disabilities, nor older, retired individuals who generally have greater health care needs. Thus if you pool everyone together in a universal risk pool, it can be anticipated that average costs would be even higher.

Median household income in 2010 was $49,445. This is not a family unit that is identical to an individual and his family of four with employer-sponsored insurance. Also this does not include the employer's contribution to the health insurance premium which most economists consider to be paid by foregone wage increases. Nevertheless, it does provide a rough perspective showing that health care costs are placing an unbearable strain on household budgets.

Current proposals are aimed at reducing the financial burden on employers, but, as this report indicates, actual health care costs are not reduced by these measures. Thus the financial burden is being shifted more to workers and their families. Since these plans are, on average, slightly better than the gold plans in the exchanges (80 percent medical loss ratio) and most participants in the exchanges will have lower-valued bronze or silver plans, the burden will be even greater for those in the PPACA state exchanges.

We desperately need a more efficient and more equitable health care financing system. It is only as far away as the enactment of an improved Medicare for all.

qotd: Should nurses assume the role of family physicians?

Annals of Family Medicine

May/June 2012

From the Association of Family Medicine Residency Directors

Education Gaps between Family Physicians and Licensed Nurse Practitioners

As millions of Americans gain coverage for medical care in the coming years and as the need for primary care in patient-centered medical home (PCMH) models increases, our medical homes will need to provide more access to care. One such method is through advanced physician extenders which include physician assistants and nurse practitioners. Many entities are talking about allowing Advanced Registered Nurse Practitioners (ARNPs) work more independently without physician involvement. However, the vast difference in clinical training between family physicians and ARNPs is significant. Also, an effective provider in a PCMH is expected to manage without consultation a broad spectrum of disease. Therefore, practices without physician counterparts could lead to a tier of primary care that is limited in its effectiveness. ARNPs are a tremendous asset in providing some primary care services, ideally partnered with physicians in group settings, but have significant limitations when independently evaluating and managing undifferentiated patients due to the superficial coverage of medical topics during their training. The skill sets are complementary to each other, but not equal.

ARNP schools exhibit a wide variation of training standards from school to school and from state to state. There is no national accreditation body like the Accreditation Counsel for Graduate Medical Education (ACGME) that monitors advanced nursing profession schools or creates national standards for clinical experiences. Without a similar structure to the ACGME, it is impossible to assess the quality of the education across these various schools.

The diagnostic challenges primary care physicians face on a daily basis require they have extensive clinical exposure in order to perform efficiently. The depth of knowledge required to filter undifferentiated patients' complaints and to understand the subtleties of management is vast. The average family medicine physician has 21,000 total hours of training, most of it with clear patient management responsibilities and decreasing levels of supervision. The total hours of training a nurse practitioner receives is 2,300 to 5,300 hours depending on the advanced nursing program, and much of the clinical training is observational. Many states only require a 30-day observation period of a licensed active physician before an ARNP can deliver care unsupervised. Grandfathering people into independent practice would be like grandfathering a family physician into a subspecialty after doing a month of observation in that specialty.

In the end, to practice independently, one should be judged by those who have the experience and background to make that assessment. Family physicians are the experts of primary care in this country and our understanding of what it takes to practice competently and independently is quite thorough. Family physician faculty that teach residents are skilled at making such assessments.

We believe there are excellent roles for physician extenders who work in collaborative settings with physicians, enabling more independence for the physician extenders. The medical team in the PCMH has key roles for Physician Assistants and ARNPs within its structure. Just as physicians gain greater skill with experience, these practitioners will gain great skill in many aspects of primary care as their experience develops over time. However, the underlying knowledge base and formative clinical experience cannot be shortcut. Not knowing what one doesn't know can be dangerous to the public. On the physician side, we would never allow a 2nd- or 3rd-year medical student (who would have the equivalent amount of training as an ARNP), to evaluate and manage patients independently. Though states may pass laws that allow other providers with less training to practice independently, it doesn't change the reality that without competent physician supervision, we are lowering the standard of acceptable primary care and creating a 2-tiered system of access for our community.

Todd Shaffer, MD, MBA, Michael Tuggy, MD, Stoney Abercrombie, MD, Sneha Chacko, MD, Joseph Gravel, MD, Karen Hall, MD, Grant Hoekzema, MD, Lisa Maxwell, MD, Michael Mazzone, MD and Martin Wieschhaus, MD

http://www.annfammed.org/content/10/3/270.full

And...

The New England Journal of Medicine

January 20, 2011

Broadening the Scope of Nursing Practice

By Julie A. Fairman, Ph.D., R.N., John W. Rowe, M.D., Susan Hassmiller, Ph.D., R.N., and Donna E. Shalala, Ph.D.

The critical factors limiting nurse practitioners' capacity to practice to the full extent of their education, training, and competence are state-based regulatory barriers. States vary in terms of what they allow nurse practitioners to do, and this variance appears not to be correlated with performance on any measure of quality or safety. There are no data to suggest that nurse practitioners in states that impose greater restrictions on their practice provide safer and better care than those in less restrictive states or that the role of physicians in less restrictive states has changed or deteriorated.

Sixteen states plus the District of Columbia have already liberalized and standardized their scope-of-practice regulations and allow nurse practitioners to practice and prescribe independently.

This is a critical time to support an expanded, standardized scope of practice for nurses. Economic forces, demographics, the gap between supply and demand, and the promised expansion of care necessitate changes in primary care delivery. A growing shortage of primary care providers seems to ensure that nurses will ultimately be required to practice to their fullest capacity. Fighting the expansion of nurse practitioners' scope of practice is no longer a defensible strategy. The challenge will be for all health care professionals to embrace these changes and come together to improve U.S. health care.

http://www.nejm.org/doi/full/10.1056/NEJMp1012121

Comment:  Is there a difference between a nurse and a physician? More specifically, can advanced registered nurse practitioners replace family physicians in the independent practice of medicine? Or should they?

These are important questions. There is an urgent need to reinforce our primary care infrastructure. Should we do this by continuing to expand medical homes by including nurse practitioners as parts of teams led by primary care physicians? Or should we encourage the independent practice of nurse practitioners in competition with physician practices?

Since there is a shortage of family physicians, it seems that the proper solution would be to train more family physicians. Is it really logical to convert another category of health care professionals - nursing - into independent physicians?

Advanced nurse practitioners have much to contribute to the team comprising the medical home. But would it be proper for medical homes to be led by nurses while excluding physicians?

It's really all about the patient. Medical teams should be designed foremost to serve the patient. It seems like there should be a physician in there somewhere.

qotd: Are workplace wellness programs enough to make you sick?

Health Affairs
Health Policy Brief
May 10, 2012
Workplace Wellness Programs

The Affordable Care Act of 2010 will, as of 2014, expand employers'
ability to reward employees who meet health status goals by
participating in wellness programs--and, in effect, to require employees
who don't meet these goals to pay more for their employer-sponsored
health coverage. Some consumer advocates argue that this ability to
differentiate in health coverage costs among employees is unfair and
will amount to employers' policing workers' health.

Wellness program content

Typical features of wellness programs are health-risk assessments and
screenings for high blood pressure and cholesterol; behavior
modification programs, such as tobacco cessation, weight management, and
exercise; health education, including classes or referrals to online
sites for health advice; and changes in the work environment or
provision of special benefits to encourage exercise and healthy food
choices, such as subsidized health club memberships.

Inducements to participate

Although almost all workplace wellness programs are voluntary, employers
are increasingly using incentives to encourage employee participation.
These incentives range from such items as t-shirts or baseball caps to
cash or gifts of significant value

Employers are also linking participation in wellness programs to
employees' costs for health coverage--for example, by reducing premium
contributions for workers who are in wellness programs, or by reducing
the amounts they must pay in deductibles and copayments when they obtain
health services. Another trend among employers who offer multiple health
plans is to allow participation in a comprehensive plan only to those
employees who agree to participate in the wellness program. Those
employees who do not participate in a wellness program are offered a
less comprehensive plan, or one that requires them to pay more in
premiums or cost sharing.

What are the concerns?

There is widespread support for wellness initiatives in the workplace
among both employers and employees. At the same time, there is conflict
over programs that tie rewards or penalties to individuals achieving
standards related to health status--and especially over those
arrangements that affect employee health insurance premiums or
cost-sharing amounts.

In general, business groups want employers to have maximum flexibility
to design programs with rewards or penalties that will encourage
employees to not only participate but also to achieve and maintain
measurable health status goals, such as quitting tobacco use or reducing
body mass index. They argue that individuals should bear responsibility
for their health behavior and lifestyle choices and that it is unfair to
penalize an employer's entire workforce with the medical costs
associated with preventable health conditions as well as the costs of
reduced productivity.

Unions, consumer advocates, and voluntary organizations such as the
American Heart Association are generally wary of wellness initiatives
that provide rewards or penalties based on meeting health status goals.
They are concerned that, rather than improving health, such approaches
may simply shift heath care costs from the healthy to the sick,
undermining health insurance reforms that prohibit consideration of
health status factors in determining insurance premium rates.

They argue that such incentives are unfair because an individual's
health status is a result of a complex set of factors, not all of which
are completely under the individual's control. For example, genetic
predisposition plays a significant role in determining many health
status factors, including such attributes as excess weight, blood
pressure, blood sugar, and cholesterol levels. Consumer advocates also
caution that poorly designed and implemented wellness initiatives may
have unintended consequences, such as coercing an individual with a
health condition to participate in an activity without adequate medical
supervision.

Another concern is that tying the cost of insurance to the ability to
meet certain health status goals could discriminate against low-income
individuals or racial and ethnic minorities. These individuals are more
likely to have the health conditions that wellness programs target and
also may face more difficult barriers to healthy living.

These barriers may include some that are work related, such as having
higher levels of job stress; job insecurity; and work scheduling issues,
including shift work. Barriers outside of work may include personal
issues, such as financial burdens, and environmental factors, such as
unsafe neighborhoods, poor public transportation, and lack of access to
healthy food.

In addition, some critics warn that wellness program requirements may be
used to discourage employees from participating in their employers'
health benefits plan by making their participation unaffordable.
Employers might use a system of rewards or penalties totaling thousands
of dollars annually to coerce employees who cannot meet health status
goals to seek coverage elsewhere, such as through a spouse's plan; a
public option, such as Medicaid; or a separate private plan purchased
through the new health insurance exchanges.

http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=69


Comment: Altruistic employers who, out of the goodness of their hearts,
offer wellness programs to their employees, also theoretically benefit
by improving productivity through having a healthier work force. These
are admirable goals. But employers are now playing the blame game as
they use their programs to penalize employees who have medical needs, by
reducing their health care benefits and increasing financial barriers to
care.

Employers can enhance employee health through work-sourced exercise and
nutrition programs, through work safety measures, and through programs
such as smoking cessation. In sharp contrast, disease screening should
be provided privately in an entirely separate primary care environment
where the screening is a part of a comprehensive, integrated health care
program that belongs to the patient, not the employer.

Above all, whereas the medical health status of employees should be
maintained through the health care delivery system, never, never should
the employer be allowed to reduce health care benefits because the
employee has greater needs.

This is yet one more reason why health insurance should be totally
dissociated from employment. If we had an improved Medicare that covered
everyone, health care access would be continuous throughout life, and
barriers to care could never be used to punish individuals unfortunate
enough to have manifested or contracted medical problems.