The challenge for health plans in 2017 will be driving more value from their relationships with enrollees and their reimbursement contracts with providers. Ten recent industry developments create a roadmap for health plans to overcome the challenge with better health for enrollees and better business health for themselves as the desired destination.


Alternative Payment Models


25% of health plan payments to providers made through alternative payment models (APMs) in 2016

That’s according to a study of 70 health plans and two state Medicaid programs by the MITRE Corp., a McLean, Va.-based research firm, for the Centers for Medicare & Medicaid Services. In its report, Measuring Progress: Adoption of Alternative Payment Models in Commercial, Medicare Advantage and State Medicaid Programs, MITRE said 25 percent of the payments made by the plans to providers in 2016 were through APMs. That’s up slightly from 23 percent in 2015. Medicare Advantage plans were further along in their transition to value-based reimbursement than either commercial health plans or state Medicaid programs. Some 44 percent of the payments made to providers by Medicare Advantage plans flowed through APMs in 2016 compared with 22 percent for commercial plans and just 18 percent for state Medicaid plans.

Providers say payers more interested in coordinating care than sharing savings in APM models

That’s according to a survey of 60 health system executives conducted by Premier, the Charlotte, N.C.-based health care alliance and group purchasing organization. In its survey report, Exploring Payer and Provider Relationships—C-Suite Survey, Premier said 45.8 percent of the health system respondents said commercial payers are offering to collaborate on care coordination to facilitate the transition away from traditional fee-for-service payment models to APMs. But only 28.8 percent said commercial payers are offering APM contracts that share savings with the health systems. Some 33.9 percent said payers are offering to help identify high-risk patients for care interventions; 30.5 percent said payers are offering to establish shared goals and measures of success; and 13.6 percent said payers are offering to develop value-based benefit designs for high-risk patients.


Coverage Trends


289.9 million people in the U.S. had health benefits from a private or public source in 2015

That’s up about 6.7 million people from the 283.2 million people who had health benefits from a private or public source a year earlier, according to the U.S. Census Bureau’s latest annual report on the status of health insurance benefits in the U.S. In its report, Health Insurance Coverage in the United States: 2015, the agency said the 2015 figure translated into 90.9 percent of U.S. residents having medical coverage for the full calendar year. Conversely, that left 9.1 percent of the population, or about 28.9 million people, without health benefits over that 12-month period. That’s down from 10.4 percent, or about 32.9 million people, in 2014.

Spending on private health insurance rose 7.2% to nearly $1.1 trillion in 2015

That’s according to the latest national health expenditures report by the Centers for Medicare and Medicaid Services. In “National Health Spending: Faster Growth in 2015 as Coverage Expands and Utilization Increases,” published in the journal Health Affairs, actuaries from the CMS said enrollment in private health insurance plans reached 197.3 million in 2015, up 2.6 percent from 192.3 million in 2014.

29.8 million people could lose health benefits from a repeal of the ACA

That’s according to a report from the Urban Institute, which estimated that the number of uninsured Americans will rise by 29.8 million people to 58.7 million people by 2019 from a repeal of the Patient Protection and Affordable Care Act. In its report, Implications of Partial Repeal of the ACA through Reconciliation, the think tank said of the 29.8 million newly uninsured, 22.5 million, or more than three in four, would lose their benefits from the elimination of tax credits, Medicaid expansion and the individual health insurance mandate.


Network Management


Nearly one-third of physician networks offered by health plans sold public exchanges were narrow

In 2016, nearly one-third of the health plans sold over the state and federal health insurance exchanges offered enrollees access to narrow networks of physicians in their areas. That’s according to a study by the Leonard Davis Institute of Health Economics at the University of Pennsylvania in Philadelphia. The study, “Trends in Physician Networks in the Marketplace in 2016,” defined a narrow network as one that included less than 25 percent of the available physicians in a given geographic area. Of the 531 networks offered by health plans sold by 281 issuers in 2016, 19 percent included between 10 percent and 24 percent of the doctors in the market. Another 12 percent included less than 10 percent of the local physicians. Some 24 percent were medium-sized networks with 25 percent to 39 percent of area doctors; 31 percent were large with 40 percent to 59 percent; and 15 percent were extra-large with 60 percent or more.

Monthly premiums for health plans with extra-large physician networks as much as 13% higher

A separate study by Leonard Davis Institute of Health Economics at Penn found big differences in the monthly premiums charged by health plans sold over public exchanges based on their network size. In “Marketplace Plans with Narrow Physician Networks Feature Lower Monthly Premiums than Plans with Larger Networks,” researchers analyzed monthly premiums for 1,075 silver-level plans sold in 2014 by 192 different issuers in 476 markets. The average monthly premium was $266. They found that the average monthly premiums for health plans with extra-large physician networks were 13 percent higher than the premiums for health plans with extra-small physician networks. Premiums for health plans with large physician networks were 6.7 percent higher than the premiums for plans with extra-small physician networks.

Only 7% of employers offer workers a health plan option featuring a narrow provider network

That’s according to a survey of nearly 2,000 companies conducted by the Kaiser Family Foundation and the Health Research and Education Trust. In their report, Employer Health Benefits 2016 Annual Survey, the groups said 7 percent of the surveyed firms offer narrow-network health plans to their employees in 2016. That’s up only slightly from the 6 percent that did so in 2015. However, large employers were far more likely to give workers a narrow-network option than small employers. For example, 18 percent of firms with 5,000 or more employees offered a narrow-network health plan this year compared with just 6 percent of firms with 50 to 199 workers, the report said.


Population Health


Steady 21-year climb in U.S. life expectancy stalled out in 2015 at 78.8 years

Life expectancy in the U.S. slipped to 78.8 years in 2015 from 78.9 years in 2014, ending a steady two-decade climb in the average number of years a person born in the U.S. is projected to live. That’s according to new data from the National Center for Health Statistics. In the NCHS report, Mortality in the United State, 2015, the agency said the last time U.S. life expectancy dropped was 1993, when it dipped to 75.5 years from 75.8 years in 1992. The leading cause of death in 2015 was heart disease followed closely by cancer. The other eight of the 10 leading causes of death, in descending order, were: unintentional injuries, chronic lower respiratory diseases, stroke, Alzheimer’s disease, diabetes, influenza and pneumonia, kidney disease and suicide.

Flu vaccines prevented more than 70,000 inpatient hospitalizations during 2015-2016 flu season

That’s according to data released by the Centers for Disease Control and Prevention. In its report, Estimated Influenza Illnesses, Medical Visits, Hospitalizations and Deaths Averted by Vaccination in the United States, the CDC said that, in addition to the avoided hospital stays, flu vaccines during last year’s flu season prevented 5.1 million cases of the flu, 2.5 million medical office visits for the flu and 3,000 flu-related deaths. Interestingly, flu vaccination rates during the season varied significantly by age group. The highest rate—70 percent—was in the 6-month-old to 4-year-old age group, followed by those 65 or older (63 percent); 5-17 years of age (56 percent); 50-64 years of age (43 percent); and 18-49 years of age (32 percent).

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