For better or worse: Governing healthcare organisations in times of financial distress.

Due to processes of financialisation, financial parties increasingly penetrate the healthcare domain and determine under which conditions care is delivered. Their influence becomes especially visible when healthcare organisations face financial distress. By zooming-in on two of such cases, we come to know more about the considerations, motives and actions of financial parties in healthcare. In this research, we were able to examine the social dynamics between healthcare executives, banks and health insurers involved in a Dutch hospital and mental healthcare organisation on the verge of bankruptcy. Informed by interviews, document analysis and translation theory, we reconstructed the motives and strategies of executives, banks and health insurers and show how they play a crucial role in decision-making processes surrounding the survival or downfall of healthcare organisations. While parties are bound by legislation and company procedures, the outcome of financial distress can still be influenced. Much depends on how executives are perceived by financial stakeholders and how they deal with threats of destabilisation of the network. We further draw attention to the consequences of financialisation processes on the practices of healthcare organisations in financial distress.

Contrasting Clinician and Insurer Perspectives to Managing Irritable Bowel Syndrome: Multilevel Modeling Analysis.

INTRODUCTION: Insurance coverage is an important determinant of treatment choice in irritable bowel syndrome (IBS), often taking precedence over desired mechanisms of action or patient goals/values. We aimed to determine whether routine and algorithmic coverage restrictions are cost-effective from a commercial insurer perspective. METHODS: A multilevel microsimulation tracking costs and outcomes among 10 million hypothetical moderate-to-severe patients with IBS was developed to model all possible algorithms including common global IBS treatments (neuromodulators; low fermentable oligo-, di-, and mono-saccharides, and polyols; and cognitive behavioral therapy) and prescription drugs treating diarrhea-predominant IBS (IBS-D) or constipation-predominant IBS (IBS-C) over 1 year. RESULTS: Routinely using global IBS treatments (central neuromodulator; low fermentable oligo-, di-, and mono-saccharides, and polyols; and cognitive behavioral therapy) before US Food and Drug Administration-approved drug therapies resulted in per-patient cost savings of $9,034.59 for IBS-D and $2,972.83 for IBS-C over 1 year to insurers, compared with patients starting with on-label drug therapy. Health outcomes were similar, regardless of treatment sequence. Costs varied less than $200 per year, regardless of the global IBS treatment order. The most cost-saving and cost-effective IBS-D algorithm was rifaximin, then eluxadoline, followed by alosetron. The most cost-saving and cost-effective IBS-C algorithm was linaclotide, followed by either plecanatide or lubiprostone. In no scenario were prescription drugs routinely more cost-effective than global IBS treatments, despite a stronger level of evidence with prescription drugs. These findings were driven by higher prescription drug prices as compared to lower costs with global IBS treatments. DISCUSSION: From an insurer perspective, routine and algorithmic prescription drug coverage restrictions requiring failure of low-cost behavioral, dietary, and off-label treatments appear cost-effective. Efforts to address insurance coverage and drug pricing are needed so that healthcare providers can optimally care for patients with this common, heterogenous disorder.

Japanese insurers' attitudes toward adverse selection and genetic discrimination: a questionnaire survey and interviews with employees about using genetic test results.

Since the 1990s, insurance has been the primary field focused on the social disadvantages of using genetic test results because of the concerns related to adverse selection. Although life insurance is popular in Japan, Japan does not currently have any regulations on the use of genetic information and insurers have largely kept silent for decades. To reveal insurers' attitudes on the topic, we conducted an anonymous questionnaire survey with 100 insurance company employees and recruited nine interviewees from the survey respondents. We found that genetic discrimination is not generally considered as a topic of human rights. We also found that insurers have uncertain fears and concerns about adverse selection in terms of actuarial fairness but not regarding profits. When it comes to preparing guidelines on the use of genetic information by Japanese insurers, we believe that public dialog and consultation are necessary to gain understanding of the people.

The role of insurance providers in supporting treatment and management of hepatitis C patients.

Today, one of the most important global public health challenges is represented by hepatitis C virus (HCV), which imposes relevant costs. Globally speaking, the median cost of HCV-related complications ranges from $280 for an uncomplicated hepatitis to $139,070 for a liver transplantation. There are effective therapies for HCV patients worldwide, which has increased the hope of improving the process of managing and curing these patients. The adherence of patients to the pharmacological treatment and the use of effective drugs in the management of HCV disease are of crucial importance for health policy- and decision-makers. Studies show that, globally, insurance coverage for patients with HCV is not adequate in that still many patients are not covered by insurance programs. This issue as well as the economic conditions of countries are very serious challenges for ensuring an effective treatment. The most important and greatest help currently available to ensure HCV treatment is to implement plans to reduce costs and support patients. Some studies have shown that the expansion of coverage by private payers seems able to generate positive spillover benefits to public insures. Insurers, in addition to maintaining and increasing their own interests, are trying to increase their social status as a sponsor of patients. In conclusion, HCV disease requires serious policies and affordable insurance coverage.

Objectives, Budgets, Thresholds, and Opportunity Costs-A Health Economics Approach: An ISPOR Special Task Force Report [4].

The fourth section of our Special Task Force report focuses on a health plan or payer's technology adoption or reimbursement decision, given the array of technologies, on the basis of their different values and costs. We discuss the role of budgets, thresholds, opportunity costs, and affordability in making decisions. First, we discuss the use of budgets and thresholds in private and public health plans, their interdependence, and connection to opportunity cost. Essentially, each payer should adopt a decision rule about what is good value for money given their budget; consistent use of a cost-per-quality-adjusted life-year threshold will ensure the maximum health gain for the budget. In the United States, different public and private insurance programs could use different thresholds, reflecting the differing generosity of their budgets and implying different levels of access to technologies. In addition, different insurance plans could consider different additional elements to the quality-adjusted life-year metric discussed elsewhere in our Special Task Force report. We then define affordability and discuss approaches to deal with it, including consideration of disinvestment and related adjustment costs, the impact of delaying new technologies, and comparative cost effectiveness of technologies. Over time, the availability of new technologies may increase the amount that populations want to spend on health care. We then discuss potential modifiers to thresholds, including uncertainty about the evidence used in the decision-making process. This article concludes by discussing the application of these concepts in the context of the pluralistic US health care system, as well as the "excess burden" of tax-financed public programs versus private programs.

Medical service provider networks.

In many countries, health insurers or health plans choose to contract either with any willing providers or with preferred providers. We compare these mechanisms when two medical services are imperfect substitutes in demand and are supplied by two different firms. In both cases, the reimbursement is higher when patients select the in-network provider(s). We show that these mechanisms yield lower prices, lower providers' and insurer's profits, and lower expense than in the uniform-reimbursement case. Whatever the degree of product differentiation, a not-for-profit insurer should prefer selective contracting and select a reimbursement such that the out-of-pocket expense is null. Although all providers join the network under any-willing-provider contracting in the absence of third-party payment, an asymmetric equilibrium may exist when this billing arrangement is implemented.

How does expansion of public health insurance affect risk pools and premiums in the market for private health insurance? Evidence from Medicaid and the Affordable Care Act Marketplaces.

Private insurance market risk pools are likely to be directly affected by expansions of public insurance, in turn affecting premiums. We investigate the effects of Medicaid expansion on private health insurance markets using data on the plans offered through the health insurance "Marketplaces" (also known as Exchanges) established by the Affordable Care Act. We employ geographic matching to compare premiums for private plans in neighboring counties that straddle expansion and nonexpansion states and find that premiums of Marketplace plans are 11% lower in Medicaid expansion states, controlling for demographic and health characteristics as well as measures of health care access. These results are consistent with evidence on the composition of the private insurance risk pool in expansion versus nonexpansion states and associated differences in expected health spending.

Do Larger Health Insurance Subsidies Benefit Patients or Producers? Evidence from Medicare Advantage.

A central question in the debate over privatized Medicare is whether increased government payments to private Medicare Advantage (MA) plans generate lower premiums for consumers or higher profits for producers. Using difference­in­differences variation brought about by a sharp legislative change, we find that MA insurers pass through 45 percent of increased payments in lower premiums and an additional 9 percent in more generous benefits. We show that advantageous selection into MA cannot explain this incomplete pass­through. Instead, our evidence suggests that market power is important, with premium pass­through rates of 13 percent in the least competitive markets and 74 percent in the most competitive.

Advice from the health insurer as a channelling strategy: a natural experiment at a Dutch health insurance company.

BACKGROUND: In a health care system based on managed competition it is important that health insurers are able to channel their enrolees to preferred care providers. However, enrolees are often very negative about financial incentives and any limitations in their choice of care provider. Therefore, a Dutch health insurance company conducted an experiment to study the effectiveness of a new method of channelling their enrolees. This method entails giving enrolees advise on which physiotherapists to choose when they call customer service. Offering this advice as an extra service is supposed to improve service quality ratings. Objective of this study is to evaluate this channelling method on effectiveness and the impact on service quality ratings. METHODS: In this experiment, one of the health insurer's customer service call teams (pilot team) began advising enrolees on their choice of physiotherapist. Three data sources were used. Firstly, all enrolees who called customer service received an online questionnaire in order to measure their evaluation of the quality of service. Enrolees who were offered advice received a slightly different questionnaire which, in addition, asked about whether they intended to follow the advice they were offered. Multilevel regression analysis was conducted to analyse the difference in service quality ratings between the pilot team and two comparable customer service teams before and after the implementation of the channelling method. Secondly, employees logged each call, registering, if they offered advice, whether the enrolee accepted it, and if so, which care provider was advised. Thirdly, data from the insurance claims were used to see if enrolees visited the recommended physiotherapist. RESULTS: The results of the questionnaire show that enrolees responded favorably to being offered advice on the choice of physiotherapist. Furthermore, 45% of enrolees who received advice and then went on to visit a care provider, followed the advice. The service quality ratings were higher compared to control groups. However, it could not be determined whether this effect was entirely due to the intervention. CONCLUSIONS: Channelling enrolees towards preferred care providers by offering advice on their choice of care provider when they call customer service is successful. The effect on service quality seems positive, although a causal relationship could not be determined.

The effect of cost-sharing design characteristics on use of health care recommended by the treating physician; a discrete choice experiment.

BACKGROUND: Cost-sharing programs are often too complex to be easily understood by the average insured individual. Consequently, it is often difficult to determine the amount of expenses in advance. This may preclude well-informed decisions of insured individuals to adhere to medical treatment advised by the treating physician. Preliminary research has showed that the uncertainty in these cost-sharing payments are affected by four design characteristics, i.e. 1) type of payments (copayments, coinsurances or deductibles), 2) rate of payments, 3) annual caps on cost-sharing and 4) moment that these payments must be made (directly at point of care or billed afterwards by the insurer). METHODS: An online discrete choice experiment was used to assess the extent to which design characteristics of cost-sharing programs affect the decision of individuals to adhere to recommended care (prescribed medications, ordered diagnostic tests and referrals to medical specialist care). Analyses were performed using mixed multinomial logits. RESULTS: The questionnaire was completed by 7921 members of a patient organization. Analyses showed that 1) cost-sharing programs that offer clear information in advance on actual expenses that are billed afterwards, stimulate adherence to care recommended by the treating physician; 2) the relative importance of the design characteristics differed between respondents who reported to have forgone health care due to cost-sharing and those who did not; 3) price-awareness among respondents was limited; 4) the utility derived from attributes and respondents' characteristics were positively correlated; 5) an optimized cost-sharing program revealed an adherence of more than 72.9% among those who reported to have forgone health care. CONCLUSIONS: The analyses revealed that less complex cost-sharing programs stimulate adherence to recommended care. If these programs are redesigned accordingly, individuals who had reported to have forgone a health service recommended by their treating physician due to cost-sharing, would be more likely to use this service. Such redesigned programs provide a policy option to reduce adverse health effects of cost-sharing in these groups. Considering the upcoming shift from volume-based to value-based health care provision, insights into the characteristics of a cost-sharing program that stimulates the use of recommended care may help to design value-based insurance plans.

Cost-benefit analysis of investment in occupational health and safety in Colombian companies.

OBJECTIVE: To determine whether investment in preventive measures by a Colombian insurer reduces rates of work-related injuries and results in positive returns from these investments. METHODS: The study is based on monthly panel data of 2011-2015 of 303 medium and large companies affiliated with a private insurer in Colombia. We undertook regression modeling analysis to assess the effectiveness of incremental investments in occupational health and safety (OHS) prevention measures. The cost-benefit analysis is from the insurer's perspective. RESULTS: Investment in OHS per full-time equivalent was statistically significant at the 1% level. We estimated that 4919 injuries were averted through these investments, resulting in the avoidance of $3 949 957 in costs. Our results suggest that the investments were worth undertaking from the insurer's perspective. CONCLUSIONS: This paper provides new empirical evidence on the effectiveness and cost-benefit of OHS investments in a middle-income country. Incremental investment in OHS can be effective and cost-beneficial.

Competition and Premium Costs in Single-Insurer Marketplaces: A Study of Five Rural States.

Issue: In 2017, five states--Alabama, Alaska, Oklahoma, South Carolina, and Wyoming--had only one issuer participating in their health care marketplaces, limiting consumer choice and competition among insurers. Goal: Examine the history of participation in the individual market from 2010 (before the Affordable Care Act was enacted) to 2017, and analyze premium changes among marketplace plans. Methods: Robert Wood Johnson Foundation's HIX Compare, which provides national data on the marketplaces from 2014 to 2017. Findings and Conclusions: In 2010, the individual insurance market was already concentrated in the five study states, with Blue Cross and Blue Shield (BCBS) plans covering the majority of enrollees. By 2015, with the marketplaces in full swing, more issuers were competing in the five states. But by 2016, co-ops were facing bankruptcy and left the marketplaces in these states; and in 2017, citing large financial losses, national issuers UnitedHealthcare, Aetna, and Humana also exited, leaving only a single BCBS plan in each state. Three of the five states experienced substantially higher annual premium increases than the national average. Policy options with bipartisan support, such as resuming cost-sharing reduction payments and reestablishing reinsurance and risk corridors, could help attract new or returning issuers to marketplaces in these states.

A Conversation With Mai Pham, MD. Payment Innovation at Anthem: Downside Risk Will Be Rewarded.

The insurer's vice president of provider alignment solutions says: "We're going to start to signal to providers that if you are going to stay an upside-only arrangement, we're not going to give you free money forever in the form of the care-coordination fees that we've been paying out. They're not an entitlement."

A Financial Analysis of New York City Start-up Health Plans and Reasons for Their Losses.

PURPOSE: Using New York City as an example, this research explores reasons for the consistently poor financial performance of three start-up health plans (Health Republic, CareConnect, and Oscar) while other health plans have performed relatively well in the same market. DESIGN AND METHODS: This study compiles insurer data from financial years 2014 through 2016, submitted to the New York State Department of Financial Services as part of the rate-review process, including premium revenue, claims cost, risk adjustment, administrative costs, net income, and premium. The financial data were used to create a novel metric, adjusted net income, that evaluates the financial performance of an insurer excluding risk adjustment and assuming a market average administrative cost. Descriptive statistics were used to compare the performance of start-up plans, commercial plans, and Medicaid plans in the ACA exchange market. RESULTS: Premiums for start-up plans were within 9% of median silver premiums yet adjusted net income was negative (-$190 PMPM) for all three start-ups while it is positive (+$27 PMPM) for the non-start-ups. The difference in adjusted net incomes shows that poor financial performance of start-ups was due to claims costs, not high administrative costs and poor performance in risk adjustment. CONCLUSION: The consistent financial losses by New York City start-ups is driven by higher-cost provider contracts for the start-ups relative to competitors.

Who Pays To Care for the Seriously Ill? Maybe It's Insurance Companies.

Palliative care would fill a need and could save health care dollars in the process. But providers often need to patch together CPT codes to get paid for it.

Decision Making on Medical Innovations in a Changing Health Care Environment: Insights from Accountable Care Organizations and Payers on Personalized Medicine and Other Technologies.

BACKGROUND: New payment and care organization approaches, such as those of accountable care organizations (ACOs), are reshaping accountability and shifting risk, as well as decision making, from payers to providers, within the Triple Aim context of health reform. The Triple Aim calls for improving experience of care, improving health of populations, and reducing health care costs. OBJECTIVES: To understand how the transition to the ACO model impacts decision making on adoption and use of innovative technologies in the era of accelerating scientific advancement of personalized medicine and other innovations. METHODS: We interviewed representatives from 10 private payers and 6 provider institutions involved in implementing the ACO model (i.e., ACOs) to understand changes, challenges, and facilitators of decision making on medical innovations, including personalized medicine. We used the framework approach of qualitative research for study design and thematic analysis. RESULTS: We found that representatives from the participating payer companies and ACOs perceive similar challenges to ACOs' decision making in terms of achieving a balance between the components of the Triple Aim-improving care experience, improving population health, and reducing costs. The challenges include the prevalence of cost over care quality considerations in ACOs' decisions and ACOs' insufficient analytical and technology assessment capacity to evaluate complex innovations such as personalized medicine. Decision-making facilitators included increased competition across ACOs and patients' interest in personalized medicine. CONCLUSIONS: As new payment models evolve, payers, ACOs, and other stakeholders should address challenges and leverage opportunities to arm ACOs with robust, consistent, rigorous, and transparent approaches to decision making on medical innovations.