The Truven Health Blog

The latest healthcare topics from a trusted, proven, and unbiased source.

 

Will Your Benefit Plan(s) Trigger ACA’s “Cadillac” Tax? Start Planning Today.

By Truven Staff
A recent outlined the efforts some CFOs are taking to prepare for the ACA’s so-called “Cadillac Tax” provision.  But is it enough? A survey from Aon Hewitt found that a quarter of employers have not yet determined the impact of the “Cadillac” tax on their benefit plans, and more than one-third reported that their executive leadership and finance teams have limited or no knowledge of the implications of the tax for their organizations.

It’s critical to effective planning for budgeting, collective bargaining, and benefit strategy that employers understand which plans — current and future — are likely to incur the tax and when each plan’s costs may be likely to cross the excise thresholds. The earlier employers can quantify the impact of the tax, the sooner plans can be put into place to mitigate or defray the expense.

According to ,* which analyzed recent MarketScan® claims data* for more than 13 million active employees, non-Medicare retirees, and their families in more than 2,500 self-funded plans to identify real-world healthcare spending trends, 15% of active employee plans are projected to incur the tax upon its activation in 2018, and by 2020, more than 19% of plans are expected to incur the tax. We estimate the tax would result in a cost increase of up to $480 per employee per year (PEPY) for plans expected to incur the tax.

Our study also found that early retiree plans are projected to exceed the statutory thresholds at a much higher rate than active employee plans. Eighty-one percent of early retiree plans for U.S. employers are likely to incur the “Cadillac” tax, and this rate is projected to increase to 84% by 2020. For the plans that we’ve projected will be impacted by the “Cadillac” tax, there will be an annual increase of $1,609 PEPY, or 6.8% of total costs.

We conducted similar research for industry groups such as health systems, universities, and public employers, and these analyses revealed that nearly 40% of active employee plans for health systems and more than 25% of active employee plans for universities in this study are projected to incur the “Cadillac” tax by 2020.

By implementing a combination of benefit design changes, premium contribution alterations, and health risk interventions, you can mitigate the impact of this new tax in 2018 and beyond. Early awareness is key. For more information on the effects of the Cadillac Tax, . And contact us to learn how our modeling tools can help. 


Tom Halvorson
Director, Practice Leadership


*The study was executed using data from the Truven Health MarketScan® Commercial Claims and Encounters Research Databases, which consists of medical and drug data from employers and health plans. It contains data for more than 59.9 million individuals annually, encompassing employees, their spouses, and dependents who are covered by employer-sponsored private health insurance.



Consumer Engagement Grows as CDHPs Gain Popularity

By Truven Staff

Consumer-Driven Health Plans (CDHPs) are one of the fastest growing benefit options offered to employees – and soon may become the dominant plan type. In fact, a recent Kaiser/HRET survey found that CDHP enrollment has gone from just 4 percent of all employees who were given that option in 2006 to 20 percent in 2013. 

In order to ensure CDHP members can effectively engage in their healthcare, employers must provide participants with timely access to consumer information tools to help them understand the range and cost of treatments available through plan providers and also information about provider quality. In the absence of this kind of help, CDHP participants are faced with a daunting task to make effective care decisions.

In addition to employees becoming more educated about their own healthcare, the companies they work for are offering new options that provide incentives and potential savings for the enrollees, as well as the employer itself. As part of a recent survey of Truven Health MarketScan™ data contributors, 64 percent of companies stated that they currently offer one or more CDHP options, and 76 percent stated that they will offer one or more in the future. The majority of these options consist of CDHP or high-deductible health plan (HDHP) with a health savings account (HSA) feature. 

This type of growth is leading to a new paradigm in which more patients are taking on a greater role in treatment decision-making. For instance, under a traditional PPO plan in the past, it was very likely that a breast cancer diagnosis would result in a set course of action. However under a well constructed CDHP, the patient can make assessments based on the price she is willing or able to pay, the quality of treatment and providers, and even the best locations to receive the necessary treatment. With the help of her doctors and advisors, she can decide what’s best for her. She is engaged in her own plan for her health and treatment. 

As this substantial shift continues, employers have the ability to empower their employees by providing the opportunity for them to be engaged in their own healthcare decisions, leading to cost-savings for the employee — and the organization.   

To learn more about achieving year-round engagement with your employees, please access this from Truven Health Analytics.

Chris Justice
Senior Director of Practice Leadership


Access to Pediatric Healthcare Stands to Raise Parental Awareness about Human Papillomavirus (HPV) Vaccines

By Truven Staff
Whitney Witt imageA that my colleagues and I published in the journal Sexually Transmitted Diseases, stated that improving access to pediatric check-ups may increase parental awareness of human papillomavirus (HPV) vaccines. The article was based on research that was funded by the Agency for Healthcare Research and Quality (AHRQ). We identified that parents of children who had a well-child checkup in the last 12 months were significantly more likely to have heard of HPV vaccines. These findings highlight the idea that pediatricians and family healthcare providers may serve as an important lifeline for HPV vaccine-related information for parents.

Our findings also have significant implications for child health insurance policy, as this study reports that children’s access to health insurance may be critical in ensuring that parents learn about HPV vaccines in the health care setting. The association between a child's lack of insurance and lower parental awareness may be a result of decreased access to preventive care.

We need to arm parents with important information about these vaccines and the implications for their child’s health, so that they have all the necessary information to make an informed decision about whether or not they want to vaccinate their child. Improving access to preventive pediatric healthcare may offer a critical opportunity to increase parental awareness of the HPV vaccines.

Read more in our press release.

Whitney Witt, PhD, MPH
Director, Behavioral Health and Quality Research



HPV is a sexually transmitted disease that infects about 14 million people aged 15 to 59 years annually in the United States, with approximately seven million HPV infections among individuals aged 15 to 24 years. HPV infections cause genital warts and a variety of cancers, including cervical cancer. Although current guidelines recommend standard administration of HPV vaccines for boys and girls at ages 11 to 12 years, less than 34% of adolescent girls in the U.S. aged 13 to 17 years completed all three doses of HPV vaccines in 2012.

Testosterone Therapy Tied to Heart Attack (A Hint: It’s Not Rhinoceros Horn)

By Truven Staff
Bill Marder imageOver the years, men have tried a lot of things to cope with diminished sex drive — rhinoceros horn included. While that strategy created a lot of risk for the rhinoceros, a recent study published in PLOS ONE found that our modern pharmaceutical solutions are posing significant risks to the men.

The study, by William Finkle and colleagues, examined the frequency of adverse side effects stemming from testosterone therapy. It found an increased risk of heart attack in men younger than 65 with a history of heart disease and in older men even without a history of heart disease. The study results have garnered a lot of interest and even prompted the Food and Drug Administration (FDA) to review the safety of the therapy. The results and their ripple effects are getting a lot of attention in the press and for a number of good reasons.

First, testosterone therapy has been a rapidly growing phenomenon. Some of the growth is related to our aging population, but their manufacturers have also promoted these hormone supplements as a cure for low testosterone or
“low T” (code for diminished sex drive) — and that has been controversial. Sexual references tend to generate a fair amount of press, all other things equal.

Second, any drug marketed with direct-to-consumer advertising can expect more press because it is familiar to the public and the advertising itself generates controversy. Patients are more likely to request an advertised drug from their physician and that can influence prescribing decisions.

Finally, and perhaps most importantly, this study is getting a lot of attention because it is well done. This is an observational study that examined a large population — 55,593 men. All of these men had been prescribed testosterone treatments and 48,539 of them were younger than 65 years old.

The study was executed with great care and its results reflect the power of observational studies to advance our understanding of complex events, especially those that are rare. The authors analyzed medical and drug claims from our Truven Health MarketScan® Research databases, meaning they had access to the most robust Big Data healthcare claims source in the industry. It has been referenced in hundreds of peer-reviewed studies and this one is an interesting new addition to the literature.

Superior data is a necessary condition for a quality study. It may not be as sexy as a cure for “low-T,” but it is rewarding to know that we provide a quality foundation for research that is headline-worthy.

Bill Marder
Senior Vice President, Custom Services

No Going Back to the $20 Office Visit

By Truven Staff
Mike Taylor imageWhen I started my private medical practice, I priced an office visit at $20, because that was the prevailing rate in my town. I really had no idea of my cost structure, patient volume, or even practice viability. As we grew to a five physician practice, we updated our charges annually without any projections of the effect of the price increase. My patients had no interest in the cost of healthcare, and often requested unnecessary tests, knowing insurance would cover the cost. The hospital where I admitted patients had a sign in the emergency department listing the prices of various tests. That was price transparency in the early 1980s – very little transparency, very little understanding, and even less interest.

Fast forward to 2014 – the cost of healthcare is approaching 19% of GDP in the U.S., and we are all aware that per capita healthcare costs in the U.S. are more than twice the average of OECD countries. Payers have tried for years to control healthcare spending:

  • Employers started by including deductibles and co-pays in benefit plans. They tried HMOs, utilization review to limit services, disease and case management to control high-cost claimants, and wellness programs to decrease the need for services.
  • High-deductible health plans started several years ago, shifting more of the cost to consumers, and now payers are looking to exchanges to cap their portion of the healthcare spend.
  • Efforts by the Centers for Medicare & Medicaid Services (CMS) to control costs led to the sustainable growth rate (SGR) concept and to DRG-based payment in the inpatient environment. Now CMS is looking at bundled payments in both inpatient and outpatient settings.
  • Medicaid managed care plans are growing, and evidence suggests they may be cost effective for the Medicaid population.

Today, many plans require consumers to pay 25-30% of the cost so it’s not surprising that they are becoming very interested in healthcare costs. Consumers want to know the cost of suggested tests and treatments, and are starting to ask questions about the need for services.

Uwe Reinhardt, a well known and respected health economist, has noted the need for price transparency, and I would point out that transparency is becoming important not just for consumers, but also for hospitals and payers. Employers are not willing to continue writing “blank checks” without knowing what they are getting for the money. They view health benefits as an investment in workers, and want information about the price, but more importantly, about the value of their investment. Some employers are studying the idea of narrow networks to improve value, and hospitals are watching this move carefully as they begin to compete on value. The changes brought by the Affordable Care Act are accelerating the trend toward value.

At Truven Health, we have long recognized the need for, and support the notion of, price transparency. To serve this need, we have developed tools to help consumers. Our Informed Enrollment tool gathers a patient’s most recent year’s actual claims, inputs the elements of available benefit plans, and helps estimate the patient cost of each plan. The Truven Health Treatment Cost Calculator loads actual price data from the Truven Health MarketScan® database, and allows the user to compare prices based on actual data, not estimates. As an example, if I wanted to see the price of an MRI in my city, I could go to the Treatment Cost Calculator to learn the cost, location, and, when available, the relative quality of each option. I can even get directions. Both these tools use the patient’s real data, not estimates or models.

As the U.S. migrates from a fee-for-service environment to a value-based approach, health system and hospital costs and quality are being publicly measured and compared. As patients, we should be able to see the prices. As employers, we need to understand the cost. Price transparency is here to stay, and this is driving change for doctors, hospitals, the government, and all of us. There is no going back to the $20 office visit.

Michael L. Taylor, MD, FACP
Chief Medical Officer

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