Wharton’s Mark Pauly on health insurer mergers: worry not vs. worst of both worlds

We have a story in the works here at Managed Care on the mega–health insurers that may soon be roaming the land.

Yes, the deals may yet run into antitrust problems, but the way things stand now there will be three super-sized national companies: an Aetna-Humana behemoth, an Anthem-Cigna giant, and the already gargantuan UnitedHealthcare.

Wharton health economist Mark V. Pauly is one of the experts that Susan Ladika, a Tampa-based freelancer, interviewed for our merger story.

I went to the Leonard Davis Institute website recently and read a couple of blog posts that Pauly wrote these mergers (you can read them for yourself here and here). He provides some fresh (to me, anyway) insights into these deals and what they might mean for coverage and cost of American health care.

In a few days our August issue will be out with a story about the implications of the Supreme Court’s King v. Burwell decision on health and health insurance coverage for the LGBT community.

The article by contributing editor Joseph Burns (definitely follow Joe on Twitter  @jburns18) has a sidebar on transgender health issues.

So a perspective piece in this week’s New England Journal of Medicine titled “Caring for Our Transgender Troops—The Negligible Cost of Transition-Related Care” caught my eye.

The Obama administration is preparing to end the ban on transgender people serving in the military, so it makes sense that NEJM would devote some space now to a discussion of the cost of transition-related health care, which can include surgery, hormone treatments, or both.

The author, Aaron Belkin, a political scientist at San Francisco State University who is a visiting professor this year at University of California Hastings College, started the his calculation with this ratio: 0.044 per thousand, or 1 out of 22,727. That’s the claims experience for transition-related health care among large civilian employers, according to a Williams Institute survey.

Today’s military has 2,136,799 troops, so with some simple math (2,136, 799 x .000044) Belkin arrives at an estimate of 94 transgender soldiers seeking transition-related care each year.

The National Business Group on Health is out with its health benefits survey of large employers and what they are expecting in 2016.  The group received answers from 140 employers that collectively employ 7.6 million people.

Here are five of the key findings:

1) Rate of increase is holding steady. By adopting consumer-directed health plans (high deductibles combined with health savings accounts, FSAs, and other financial accounts) and wellness programs, they expect their 2016 health care costs to increase by 5%, which is the same rate of increase as in 2014 and 2015.  Of those surveyed, 43% identified high-cost claimants as the biggest driver of their health care costs.

You could never really describe the health insurance industry as sleepy. Born during World War II to address a labor shortage, employer-sponsored coverage may have, at times, been the butt of jokes similar to those aimed at accounting and banking. However, Eisenhower’s no longer in office and as Virgil said, “Health is the greatest wealth.” It trumps mere money. So in recent decades, from about when employers started turning to HMOs to contain costs (what a coincidence!), coverage debates run like the bulls of Pamplona: movement aplenty resulting in a goring now and then.

For a method that transcends distance, there are a lot of dustups over turf when it comes to telemedicine, as Managed Care made clear in our June issueManaged Care’s July issue (coming soon!) gives telemedicine the cover story treatment, and with good reason. Videoconferencing, text messaging, email (and now, even Facebook—but more on that below) means that a treatment option that’s been called “the next big thing” since at least the Clinton administration (Bill, that is; no jumping the gun) may have finally passed the audition. Well, maybe.

As Kaiser Health News pointed out recently, significant roadblocks remain. The population that’s most homebound and physically impaired—the demographic that could really benefit from this technology—lacks access. Fewer than 1% of Medicare beneficiaries get care remotely. That, for a lot of reasons, as Kaiser points out, the primary one being that Congress said “no,” concerned that telemedicine could lead to overutilization and more costs.

What many health plans like about the Affordable Care Act is that it’s going to expand the marketplace, handing insurers millions of new enrollees. The Supreme Court’s ruling today against King in King v. Burwell ensures that that should still be the case. Of course, the law is sometimes a “a river that don’t know where it’s flowing,” in the words of Bruce Springsteen. Today’s decision offers a bit of stability.

3: Nevada, New Mexico, and Oregon have authorized state-run exchanges but are using the federal exchange for many enrollment functions. If King prevails, it’s not clear how the court decision will affect these three states.

3: As Lyle Denniston and others have written, the premium subsidies at issue in King v. Burwell are one of the legs of the ACA’s three-legged stool. The other two are the individual mandate and the rules against denying or pricing insurance because of pre-existing conditions.

ACA supporters say that if court rules in favor of King, the premiums will become unaffordable and the insurance markets that the ACA has created will go into a death spiral of fewer and fewer participants and higher and higher premiums.

The law’s critics note, though, that the effect of the ruling against the insurance subsidies will depend on how Congress responds and, moreover, it’s in the interest of ACA supporters to paint a scary picture of the consequences of a ruling against the premium subsidies.

4: “….established by the State.” King v. Burwell hinges on those four words in the ACA.

It will take some time to fully digest the 592 pages of new rules for the Medicare Shared Savings Program (MSSP) ACOs.

You can get started and read them for yourself here.

But few items pop out even in an Evelyn Wood reading of the first 30 or so pages.

653-page rule handed down yesterday by CMS definitely represents one giant step for Medicaid managed care, and a step taken (for the most part) in the right direction, according to one industry insider.

Jeff Myers, president and CEO of the Medicaid Health Plans of America (MHPA), told us last week to expect something big, and big is what CMS provided for the most substantial change in Medicaid in over a decade.

The rule includes a medical loss ratio (MLR), something commercial health plans know all too well. Under the ACA, health insurers must spend at least 80% to 85% of premium dollars on medical care, or refund the difference to consumers. The new rule says that Medicaid plans will also have to meet the 85% MLR goal, but the penalty would be definitely delayed or even, possibly, discarded, depending on how states react.

Blame Hollywood. Or, at least, partly blame Hollywood. (We’ll take what we can get.)

Women ages 30 to 55 too often ignore the warning signs of an acute myocardial infarction (AMI), according to a study in Circulation: Cardiovascular Quality and Outcomes. They either don’t recognize more nuanced symptoms (dizziness, aching muscles, indigestion, fatigue), or they fear that their interpretation may be wrong. They often believe that a heart attack must always include an episode of intense chest pain, and while more than 80% of men and women in that age range with AMI do have chest pain, younger women are more likely to not have it

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