A Group of Leading Private Sector Companies Is Working to Fix a Broken Health Care System
The Private Sector Won’t Wait
-Health Transformation Alliance Now Has 38 of America’s Largest Companies on Board-
New Partnership for Prescription Drugs; Focus on Converting Data into Insights; Creation of Medical Networks to Begin
(New York, NY – March 7, 2017) – As government officials consider their next steps in health care reform, a large and growing group of America’s leading corporations is moving ahead with major changes in how millions, and potentially tens of millions, of workers get their health care.
“Fixing health care is something everyone is talking about,” said Kevin Cox, chairman of the Health Transformation Alliance and chief human resources officer for American Express. “The employer-provided health care marketplace, which supplies a substantial portion of the profit margins to the entire health care system, is looking for meaningful change. We’re moving ahead to help companies take better care of the people who take care of us.”
Just one year after 20 corporations united to build a new way of delivering quality health care for their workers, millions of employees will soon benefit from a new partnership these companies are putting in place to purchase prescription drugs, the first of three major reforms the newly formed Health Transformation Alliance is undertaking. The other two reforms focus on translating big data into cognitive insights and setting up new medical networks.
Through a partnership with IBM Watson Health, the HTA will leverage data, analytics, and cognitive insights to support its transformational initiatives. Better understanding data, trends, and results, the HTA believes, has the potential to predict and prevent disease, improve outcomes, increase the value of health care for its members and employers, and enable the integration and collaboration of all stakeholders in the health care ecosystem. These three reforms (Pharma, Big Data/Cognitive Insights, and Medical Networks) are all expected to be in place beginning in 2018.
Today, 38 companies belong to the HTA, up from 20 last year, and collectively they spend more than $24 billion a year to provide health care to more than 6 million employees and family members, up from 4 million covered lives last year. Through the HTA, these companies have forged alliances with a variety of companies in the health care sector to change how health care is delivered to employees—and lower costs.
“Our job is to fix our broken health care system,” said Cox. “While it’s not yet clear what actions the federal government will take, we are working together toward a clear path to positively change health care for tens of millions of people in the private sector.”
Rob Andrews, CEO of the HTA, said, “We recognized last year that privately provided health care can’t go on the way it’s been. While costs for non-health care related expenses have risen 40 percent since 1999, costs for employer-provided coverage are up 191 percent and employer contributions for premiums are up 213 percent over the same period. If private sector companies don’t change the system, employer-provided health care is at risk of becoming unaffordable for companies, and for their employees and families.”
New Pharmaceutical Partnerships
In February, HTA launched partnerships with CVS Health and OptumRx to change how companies provide prescription drug benefits through prescription plan management companies, known as pharmacy benefit managers (PBMs).
Rather than having individual companies contract with these PBMs, HTA forged an innovative approach with CVS and OptumRx that focuses on partnerships and transparency, resulting in lower prices for the same medicines and allowing HTA members to achieve considerable savings. These changes go beyond what group purchasing coalitions have been able to achieve. It’s a path-breaking approach for the way companies deliver prescription drug benefits to their workers.
In addition, the HTA will work with its PBM partners to create better formularies, which list the prescription drugs commonly agreed to be used by the medical profession and the insurance industry. The solutions will not only result in increased savings to HTA member companies, but also help individuals select the most appropriate and cost-effective prescriptions to meet their medical needs.
“Beginning January 1, 2018, these prescription drug reforms alone are projected to save participating HTA member companies, their workers and, in some cases, retirees, at least $600 million over three years,” said Andrews. “We are moving ahead with similar reforms in payments for other medical care and are confident that the HTA can change the way health care is priced so our members and workers can benefit.”
Changing Medical Outcomes with Medical Networks
In addition to Pharma, HTA is focused on working in partnership with some of the nation’s leading health care provider systems to improve medical outcomes. HTA selected United Healthcare and Cigna as partners in administering this effort.
HTA’s medical reforms, scheduled for launch in 2018, will focus on the best treatments for several conditions that contribute greatly to health care spending, including Type 2 diabetes, hip and knee replacements, and treatment for back pain. These four conditions are among the most commonly treated ailments, accounting for as much as 40 percent of health care spending of HTA companies.
“The goal of these initiatives,” said HTA Vice Chairman Dr. Glenn Steele, “is to combine what HTA is doing with data and prescription drugs to create new medical networks that provide top-quality care for workers, retirees and their family members. These better health outcomes will reduce costs for families as well as employers, all while improving the health and well-being of employees.”
Dallas/Fort Worth, Phoenix and Chicago have been selected as the first markets in which these new networks will be created.
The HTA selected IBM Watson Health as its data and analytics partner. The HTA will use the IBM Watson Health cloud-based cognitive platform to aggregate data from across the participating members and provide descriptive, predictive and cognitive analytics. The insights from these data and analytics are expected to help HTA members lower the costs of care, reduce waste, and improve health outcomes and experiences for the population, including their employees, dependents and retirees.
Analytic priorities will focus on medical and pharmacy utilization, predictive insights for more proactive health management, and risk-based segmentation to identify appropriate opportunities to improve employee health care. When viewed collectively, these insights let employers approach the market collectively to truly transform the way care is delivered.
“A playbook for ‘personalized population health management’ is emerging, replacing outdated care management approaches, performance measures, and payment models,” said Deborah DiSanzo, general manager for IBM Watson Health. “This monumental shift creates an entirely new dynamic among employers and their employees, providers and payers. Working with the HTA, Watson Health has the opportunity to transform health by applying IBM’s distinct blend of domain knowledge, which includes a 360-degree perspective of health care; a century of experience managing large, complex data projects; and Watson cognitive computing.”
“The private sector can’t afford to wait to get this done,” said Cox. “Through the HTA, we can change health care for the better, in a way that none of us would be able to do as individual companies. Employer-provided health care is important to our employees and retirees. We’re proud of what we’ve done in just a year, and we look forward to delivering for our workers, retirees and their families.”
Five things I think I think about the next phase of health care reform
March 28, 2017 at 1:13 PM
Photo by Jon Collier
This is not the end of Obamacare; it’s the beginning
In a surprising move, Paul Ryan pulled the American Health Care Act, the Republican ACA repeal and replace bill, last Friday. It had become clear that there was no movement to the left or the right that would garner enough votes to allow passage in the House. Even if it had passed in the House by moving right, much of that movement was likely to be stripped out in the Senate, where the Republican majority is slimmer, but no less internally conflicted. The president has stated he is moving on to other issues like tax reform and infrastructure building.
So you might think that health care reform on the federal level is done for now. Whether that is true or not, it is also pretty clear to me that there is still a great deal of work to do to stabilize and improve the ACA. Cost constraints are still lacking, and insurance marketplaces at the state level are still suffering from shrinking insurer participation. While coverage has vastly improved under the ACA, affordability remains elusive if you don’t qualify for a subsidy.
Where are we going next? Some (including me) are hoping that this opens the door to real bipartisan negotiation. Here’s the theory. The Trump administration cares about the appearance of winning, not ideology. If you can’t work over the Freedom Caucus to get the votes, you go to the Tuesday Group, a group of moderate Republicans. Perhaps they’ll even appeal to the next group over from them, moderate Democrats, to get onboard for something.
Here are five things I observed from this last round of negotiations:
- The Freedom Caucus has a literal interpretation of the phrase “repeal and replace”. All the rhetoric about removing Obamacare “branch and root”? Turns out it wasn’t simply rhetoric for them. They believe that Medicaid expansion to childless adults must be removed entirely, because it is enabling able-bodied citizens to get care without working for it. All the headlines about 24 million more uninsured shocked many of us, but for conservatives was actually not a bad thing, and for some a desired outcome, judging from the rhetoric surrounding the debate.
- Loss aversion works. One of the truisms of behavioral economics is that fear of loss is about three times as motivating as desire for gain. This has been shown over and over again by people like Amos Teversky and Danny Kahnemann in psychology experiments. Thus, some people didn’t like the Affordable Care Act until they faced the possibility that they would lose coverage if it was repealed. For the first time in years, public approval of the ACA is greater than disapproval. (By the way, now that the immediate threat of repeal is gone, I predict those numbers will reverse again.) If you want people to value something, don’t try to sell it to them; give it to them and then try to take it away (the Classic Coke strategy).
- Trying to sneak legislation through in the age of Twitter is like trying to sneak to the bathroom in your pajamas through Grand Central Station. Hiding stuff so you don’t get criticized for it doesn’t work. Nor does speeding up timelines for the same purpose. We may have to do this a few more times before people get it, but the old days of passing legislation that hasn’t been dissected under a microscope I think are gone. There are too many smart people out there with time on their hands and a Twitter following to feed. They have an immediate platform to do the Roman thumbs up or down on literally everything in view, and are just waiting for something to tweet about.
- The emerging centrist view is that we need to maintain coverage for everybody who has it now, but get to cost containment to make the system sustainable. In a previous post, I talked about the hard truths that both sides are avoiding by blaming the other guy. But what do we do to control costs? The conservative answer is market forces, and the progressive one is government regulation. Neither one has a great track record when it comes to health care. So what’s an industrial superpower to do? There was funding in the ACA to set up CMMI, and much of their work has been on alternative payment models intended to bend the cost curve over time. But pragmatically the experience has been mixed for medical homes, bundled payment, and population-based payment. Rollout has been slower than many would like, and affect too few providers to declare it a success. I would love to see a real and thoughtful bipartisan discussion on some hybrid possibilities.
- And there is no guarantee the next move is toward bipartisanship. Winston Churchill said, “Americans will always do the right thing—after exhausting all the other possibilities.” If the last twenty years teaches us anything, it’s that governing from the extremes doesn’t work very well. So you’d think that the next move would be to try to govern from the center. But this is one of those Clayton Christiansen moments. Christiansen says that the winners of the last game are unlikely to be the inventors of the new game, since the new game displaces the old one. The existing game goes like this:
- Point out what’s wrong with any plan offered by your opponents, which is much easier to figure out than how to make things work (boring). It also gets a lot more attention on Twitter. And, the bonus is that you get to go home to your district and tell people you stood on principle, and that everyone else has the morals of a used car salesman.
- Foment anger and frustration, and promise that you are the only person capable of breaking through the mess. Do this, while you are all the while perpetuating the mess.
- Repeat, and fund-raise.
Both parties have had the chance to be in the majority and the minority in the last two decades, and both have gotten pretty good at the existing game. It will take a sea change to find the next game that rewards centrist compromise. Here’s hoping we exhaust all the other possibilities sooner rather than later.
NOTE: Permission to share the above blog from Want Healthcare LLC granted by Jay Want, MD.
Below is the link to an article recently published in The Hill on March 2, 2017. It was written by Ceci Connolly, CEO of the Alliance of Community Health Plans and former national health correspondent for the Washington Post, Dr. Denis Cortese, Director of the Healthcare Delivery and policy Program, Arizona State University and Emeritus CEO of Mayo Clinic and Robert Smoldt, Associate Director of the Healthcare Delivery and Policy Program, Arizona State University and Emeritus CAO, Mayo Clinic.
The article shares with us history that major social policy change seldom succeeds without the backing of both parties. It is a great “read” to help us understand that “Obamacare” and “Trumpcare” won’t work for our country until leaders of both parties stand together to become, as the article says, “the effective salve to health system woes that Americans deserve”.