Miranda Hester

Ms. Hester is Content Specialist with Contemporary OB/GYN and Contemporary Pediatrics.

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Unnecessary diagnostic tests such as echocardiograms and computed tomography scans are harmful to patients and costly for health plans. Such tests can be avoided with the help of imaging management programs, according to an analysis from AIM Specialty Health and HealthCore, both WellPoint subsidiaries. 

The analysis recorded a 12% overall reduction in the likelihood of follow-up tests, including myocardial perfusion imaging and cardiac CT scans. 

The study hypothesized that members in plans with utilization management programs were less likely to have repeated imaging because the programs evaluate the need for the test against appropriateness criteria. Claims data from 96,906 commercially insured Anthem members in Indiana, Kentucky, Missouri, Ohio and Georgia was reviewed.  

Allowing relevant factors such as age, gender, comorbidity, medication use,  and cardiovascular event history, the repeat testing rate was lower for the managed group. 

According to AIM, unnecessary testing has no positive impact on patient outcomes, and might have procedural risks and unnecessary radiation exposure. Studies published in 2010 and 2011 indicate that approximately 15% of cardiac imaging exams are inappropriate based on criteria established by the American College of Cardiology. 

Articles

Unnecessary diagnostic tests are harmful to patients and costly for health plans.

Imaging programs reduce costs

It's estimated that between $60 billion and $230 billion is stolen from the healthcare system every year through fraud, which represents 3% to 10% of total spending, according to a new report by Thomson Reuters. 

 According to FBI statistics, among 1,676 indictments of fraud and 736 fraud convictions, the FBI was able to recover $1.2 billion in restitution, $1 billion in fines, $96 million in seizures, $320 million in civil restitution, and $1 billion in civil settlements. The problem is expected to get worse as more Americans enter Medicaid and Medicare programs-classic targets for fraud. 

 Government programs are the hardest hit by fraud, including Medicare, Medicaid, and the Children's Health Insurance Program (CHIP).  

 While providers and hospitals make up a sizeable portion of fraud perpetrators, organized crime groups have started to get into the game. The organizations bring their criminal abilities and skills to the fraud game and if caught face prison terms among white collar criminals like Bernie Madoff. Healthcare fraud allows these organizations to launder money. It also makes more money for the organizations than their usual businesses: illegal drugs and prostitution. 

 A Baton Rouge, La., fraud bust discovered $225 million paid out to seven people for mental health services falsified since 2005.  A Brighton Beach, N.Y., fraud scheme cost $250 million and involved nine clinics. A fake medical device company in Southern California raked in $11 billion submitting claims for high-price durable equipment. 

 Centers for Medicare and Medicaid Services (CMS) officials and law enforcement agencies are putting more agents into areas where fraud runs rampant. These areas dot the country such as Miami-Dade County, Los Angeles, Detroit, Houston, Brooklyn, Baton Rouge, Tampa, Chicago and Dallas. 

 In addition to more manpower, agencies are using a two-prong technology approach to fraud. The first prong is CMS' Fraud Prevention System. The system is an analytic program that roots out fraud in the same way that companies identify stolen credit cards. The other prong is the Automated Provider Screening (APS), which validates every new provider and hospital. APS also runs routine checks on all validated providers in the system. 

Source: Thomson Reuters White Paper From Drugs to Wheelchairs

A white paper from Thomson Reuters indicates that organized crime is entering the healthcare fraud market.

Checklist: Organized crime and fraud

The industry will see yet another year of historically low growth, according to PwC. Greater cost sharing, new care models that move away from fee for service, and the stalled economy are among the reasons for projected trends. 

According to a report from PwC's Health Research Institute, the medical cost trend will continue the low growth seen in 2011 and 2012. The trend is expected to be 7.5% in 2013, which is generally flat.  An influx of newly insured could send healthcare spending soaring. 

 The effect of $54 billion worth of drugs going off patent will reverberate throughout 2013. "Single source" generics can help lessen the blow with a price tag that is 20% less than the original branded drug. Payers are concerned about the pricing of specialty drugs. Several of these drugs have extremely high costs, such as the specialty drug, Soliris, which carries annual treatment costs of $400,000, but treats a life-threatening form of anemia. 

Shifting healthcare costs onto employees:

 Twenty-two percent of surveyed companies indicate that their in-network deductibles were more than $1,000, up from 8% of firms in 2008. For out-of-network deductibles, 43% of the companies report a deductible over $1,000, up from 21% in 2008.  

 In order to stay competitive, many insurers are providing some form of price transparency. Over 30 states have laws on the books requiring some form of price transparency.

 Ever more common, high-deductible health plans are having an effect on consumers' utilization of healthcare services. Further, 46% of consumers stated that they had delayed care due to costs at least once in 2011. Ten percent stated that they had delayed care five times or more because of costs. 

 In the age of high deductibles, consumers are looking for ways to receive care without spending too much and have increasingly turned to retail clinics. Retail clinics charge roughly 30% to 40% less than a private physician's office and 80% less than emergency departments. Over 1,300 such clinics operate in the United States and 23.5% of the survey's respondents had visited one in 2011, up from 9.7% in 2007. 

 In addition to choosing high-deductible health coverage, employers are turning to wellness programs to cut costs. In the past, such programs would reward employees just for participating, but a current trend is to reward employees who meet certain pre-set goals. 

Source: PwC Medical Cost Trend: Behind the Numbers 2013

A study from PwC indicates what lies ahead for the healthcare industry in 2013.

Checklist: Medical Cost Trends in 2013

Employer coverage is declining: More than 58% of U.S. adults under age 65 were covered by health benefits offered by an employer, down from 62% in 2008. Of all working adults, 68.6% were covered, while 35.3% of non-working adults were covered. Through a parent, coverage was also provided to 54.8% of children. But during the 13 year span of the EBRI study, the percentage of people with work-related health benefits dropped, particularly hurt by the recent recession. 

Coverage varies by firm size: The size of the worker's firm had an effect on the number of workers offered coverage and the number of workers who used their employer's healthcare plans. In 2010, only 39.4% of small companies (with 24 employees or fewer) offered coverage, down by 8% from 1997. While the number of small companies offering benefits is low, 77.8% of employees at small firms were taking advantage of the offered coverage-a decline of 4% during the course of the study. Larger companies with 100 or more employees report a much greater coverage rate with 76.5% in 2010. But, even large companies, those with 100 or more employees, saw a 4% dip in offered coverage during the study's span. Employees in large companies were signing up for health benefits 84.9% of the time, down by 3% from 1997. Firms with 25 to 99 employees saw decreases of 2% for both offering and accepting coverage. 

Men are more likely to enroll: Men were more likely (69.2%) to be offered healthcare coverage in the workplace than women (65.8%). But, over the study's 13 year tracking period, men saw a decrease in being offered coverage of 6%, and women 4%. When offered coverage, men were also more likely to enroll in the plan, at a rate of 87.2%, down 4% from 1997's numbers. Women chose to enroll 79.7% of the time, down only 1% from 1997.  

Unions have an advantage: Being a part of a union also increased the likelihood of benefits. Only 64.4% of non-union employees were offered coverage, while 87.6% of union members got the opportunity. However, union employees saw a bigger decrease between 1997 and 2012 in offered coverage, losing 5%. Non-union workers saw coverage decline by 3%. 

Why are employees uninsured? One of the biggest reasons that workers didn't have health coverage was because their employer didn't offer it. More than 58% of workers fell into this category. When coverage was offered to employees, more than 77% of those who remained uninsured stated that the cost was too much. Almost 6% said that they didn't take the offered coverage because they didn't need or want it.   

Source: Employee Benefit Research Insititute Issue Brief

With health reform transforming the industry, a study from the Employee Benefit Research Institute (EBRI) shows the current realities of employer-based care.

Author | Miranda Hester

Articles

Imaging programs reduce costs

Checklist: Organized crime and fraud

Checklist: Medical Cost Trends in 2013

Checklist: Employer-based care