S&S Benefits.....Opinion, Hearsay & News Review

Why be like everyone else?

United Healthcare is buying B rated Midwest Security in Wisconsin subject to approval. The guess is that they will use that company as a shell for PPO products with more flexibility than Primecare (UHC’s Wisconsin name) offers in WI.

As costs skyrocket, many are turning to disease management programs. One study of a group conducted by E&Y showed savings of approximately $90 annually per employee. Another study showed approximate savings of $135 per employee annually. Given that both populations were composed mainly of 55-64 year olds, the savings are not as impressive as the talk about the programs…especially for those companies with high turnover.

Researchers from Conning examined 1,800 state mandates and found that such measures increase costs by 15%-25%. The NE Journal of Medicine says that in-vitro costs are 3 times as high in states where the coverage is mandated. One attempt is $10,000-$15,000. Out of 61,650 attempts there were 15,367 births. At $10,000 per attempt, that would be $462 Million spent without results! And the states wonder why groups that can, choose self-funding.

Did anyone tell Congress that HIPAA was an enormous waste of money that will change nothing about the use of health information? One survey of 687 providers covered by HIPAA shows that only 7% will be compliant by the deadline. 44% of people say their jobs are more stressful than one year ago according to Cigna. Could some of this be compliance related? Stress? The number one drug in sales is Lipitor for cholesterol. Number 2 and 3 are antiulcerants. No. 6,7 & 9 are antidepressants. So it looks like 5 of 10 of the top selling drugs are related to stress. But, a review of 52 FDA studies by a Northwestern professor found that a placebo was just as effective as antidepressants in over half the studies.

The Segal trend survey projects 2003 trend as follows: PPO with Rx-14.4%. POS with Rx-14.7%. HMO with Rx-14.4%, Indemnity with Rx-16.3%,. Without Rx drop 1.2% from the above. Indemnity Dental-7.7%, PPO dental-6.3%, DHMO-6.1%. By the way, High deductible Medical plans rates high at 16% with Rx. See below.

Speaking of High-D plans and defined contribution plans (which are actually High-D in most cases), most people have forgotten about trend leveraging and an old stop loss adage. The greater the deductible, the more likely those that hit it will keep on going. And when it comes to HRAs for these High-D plans, does anyone remember that 50% of the people produce only 3% of the health cost, while 5% produce 53% of the cost? If employers give healthy people money in HRAs (but remember you can’t discriminate), their plans will likely cost more! Is that why the head of Wyatt’s Healthcare practice is always being quoted as advocating these plans? What is the thought pattern here?

BC/BS-IL is paying pharmacists $1.00 each time they persuade a BC/BS-IL customer to ask for a generic drug. Large pharmacies could earn as much as $10,000 per quarter.

A study at by Stanford of NA and AA found that they were more effective at reducing relapses than professional programs that cost $4,729 per year.

Harris says that 60% of PPO participants gave their plans top marks compared to 55% for HMO’s. A Hewitt survey of 140 employers shows HMO preliminary cost increases requested for 2003 are 22%.

The Florida Insurance Department suspended the insurance license of American Medical Security, but the court overturned it. AMS is accused of re-underwriting individual policies on renewal and raising rates as much as 200% when people are sick. No wonder we have never quoted any AMS product.

Anthem and Trigon (Virginia) have been approved for merger by shareholders and Anthem has been added to the S&P 500. In the meantime the AMA and other physician societies have written to Anthem to complain about their reimbursements to providers according to articles. Sounds like a money making stock?

In order, cancer, pregnancy, back, cardio and depression are the leading causes of LTD claims according to UNUM.

What is next? Aetna, BC/BS and Harvard are reportedly asking Massachusetts to approve HMO plans with high deductibles from $1,000 and up. The power of the PCP apparently is not containing costs. What a surprise!