Tag Archives: healthcare

Preventative Health Practices : Investing Now to Save Later

Reducing chronic diseases in the United States through more prevention programs could offer long term financial benefits and cut down on future health care spending.

Photo by Kathleen LaPorte

Photo by Kathleen LaPorte

Health expenses grew to $2.7 trillion in 2011, averaging $8,680 per person, according to the Center for Medicaid and Medicare Services. Over the next ten years health spending is projected to grow by more than $2 trillion.

“Preventing disease is key to improving America’s health and keeping rising health costs under control,” stated the Center of Disease Control and Prevention, CDC, on its Gateway to Health Communication website.

Chronic Disease 

Chronic diseases make up 75 percent of health spending in the United States. Heart conditions, cancer, diabetes and hypertension, were all among the top-ten contributors to national health care cost.

These chronic health conditions are often related to certain health decisions including, diet, smoking and sedentary lifestyles choices.

Chronic health outcomes often present risk indicators that can be identified before the onset of a disease or in early stages when treatment is more manageable and cheaper.  However, most chronic illnesses are not addressed until patients need advanced medical treatment.

Preventative Health Practices

“A 1 percent reduction in weight, blood pressure, glucose, and cholesterol risk factors would save $83 to $103 annually in medical costs per person,” reported the U.S. Department of Health and Human Services, in its National Prevention Strategy.

The Patient Protection and Affordable Care Act supports prevention practices through a Prevention and Public Health Fund, which provides financial incentives to improve and grow evidence-based prevention and public health programs. The ACA will also increase coverage of some preventative treatments under new insurance requirements.

Though the ACA provides financial incentives and new legislation to increase coverage of some preventative medical programs, doctors still will not receive reimbursement from insurance companies for a majority preventative care treatments. Doctors cannot file for insurance reimbursements for certain practice, like consulting a patient on improving his or her weight or exercise.

Only under very specific terms can doctors get reimbursements for preventative practices, because many insurance codes are written for easy to measure medical treatments.

Prevention Cost 

Despite the cost saving that many health organizations relate to prevention programs, the United States’ current healthcare system is not set up to take on the extra upfront cost and increased volume of patients that many preventative medical programs would create.

“We think of health care as an expense, but we really should be thinking of health care as an investment. We want to invest where we have the greatest return. I would put prevention in that bucket. But the way we do it now, no one has an incentive to invest in things with a long-term return,” said Dana Goldman, director of the Schaeffer Center for Health Policy and Economics at the University of Southern California, in an interview with The New York Times.

The current healthcare system is based on insurance returns and incentives to reduce costs and increase profits. This system does not encourage large amounts of spending with delayed returns on the investments.

Only 1 percent of the $1.9 trillion spent on health care in the United States in 2009 was used for health protection, illness prevention and injury prevention programs, reported the National Business Group on Health.

Prevention Programs

Prevention programs rely largely on health education and awareness of the public to be effective. “A better gauge of the value of preventive medicine is bang for the buck; that is, not whether it reduces healthcare spending but whether it buys more health than treating the disease does,” reported Sharon Begley a senior health and science reporter for Rueters.

Image from page 1 of the National Prevention Strategy 2013 Annual report.

Image from page 1 of the National Prevention Strategy 2013 Annual report.

Instead of looking for doctors or health professionals to implement preventative health programs, community leaders and organizations are being used to provide support and training for community health leaders.

“Evidence-based preventive services are effective in reducing death and disability, and are cost-effective or even cost-saving,” the National Prevention Strategy stated, “While preventive services are traditionally delivered in clinical settings, some can be delivered within communities, work sites, schools, residential treatment centers, or homes.”

Preventative programs can be good financial investments if the programs are properly carried out by accessible outlets that will create effective relationships with the patients being served.

Advertisements
Tagged , , , ,

Health Insurance Reacts to Healthcare Reform

Insurance companies’ financial success will depend on how they navigate through the new healthcare reforms of the Patient Protection and Affordable Care Act–particularly the new medicaid and medicare services, and the new health insurance marketplace.

WellPoint Inc.

“WellPoint Inc (WLP.N), the nation’s second largest health insurer, sees President Barack Obama’s healthcare reform giving a $20 billion boost to its revenue by 2016, led by an expansion of the Medicaid program for the poor and the introduction of subsidized coverage for the uninsured,” reported Rueter in July.

Wellpoint is an insurance company that provides a variety of different health care plans and recently acquired Amerigroup, a leading medicaid provider.

WellPoints 2013 second-quarter financial report showed an early trend of growth with the net income raising to $800.1 million, or $2.64 per share, from $643.6 million, or $1.94 per share, from the previous year.

WellPoint Stock chart from Barrons.com. Tracking WellPoint Inc. Stock from Jan. 2012 to Oct. 2013

WellPoint Stock chart from Barrons.com. Tracking WellPoint Inc. Stock from Jan. 2012 to Oct. 2013

As the new health insurance markets open, health insurance stocks, like WellPoint, will get to see if the predicted expansion and their investments in new healthcare reform will payoff.

“With Amerigroup, WellPoint’s affiliated Medicaid health plans now serve approximately 4.5 million beneficiaries of state sponsored healthcare programs in 20 states, bringing the company’s total medical enrollment to approximately 36 million members in all affiliated plans. WellPoint also now has a presence in several states with significant dual eligible managed care opportunities,” stated WellPoint in a 2012 press release.

Medicaid

Medicaid is a state-run health insurance program that is partially funded by the federal government and provides health insurance for, low-income families and children, pregnant women, the elderly and people with disabilities. The ACA provides states with funds to expand state medicaid coverage if they choose.

“The ACA expands Medicaid coverage for most low-income adults to 138% of the federal poverty level,” reported the Kaiser Family Foundation.

Twenty-three states and the District of Columbia have passed legislation to expand Medicaid. To manage these state-run program, many states chose to hire private insurance companies to handle the growing number of Medicaid recipients, reported Johanna Bennett for Barron’s.

Medicare

The ACA also will increase incentives for insurers to invest in Medicare. Medicare is federally funded health insurance that covers adults over the age of 65, people with disabilities and people will end-stage renal diseases.

“The Center for Medicare and Medicaid Services announced plans to increase the amount the government pays to insurance firms for its Medicare Advantage plan,” CNN Money reported. “Payments to insurers under Medicare Advantage will increase by 3.3% in 2014.”

Health Insurance Marketplace

In addition to Medicaid and Medicare expansion, the ACA is predicted to expand the health insurance market through legislation that requires all U.S. citizens to have health insurance by 2014, or pay of fee. To expand the number of health insurance options a new online health insurance marketplace opened Oct 1.

Insurance companies filed to participate in state or the federal health insurance marketplaces, and are offering plans targeted at people who are currently uninsured because they can not afford health insurance plans or previously did not qualify for coverage.

An increased number of people buying health insurance could increase health insurers profit, but will also increase health coverage cost.  In anticipation of additional cost some insurance companies raised premium costs on their current insurance plans.

Health insurance stocks, like Wellpoint, must decide how their services and investments can be utilized in new health insurance marketplaces to capitalize on the changes and growth being made in the insurance market.

Tagged , , , , , , , ,

Shopping for Health Insurance: New Coverage, New Market

The first major component of the Affordable Care Act  will go into effect next week, when the online health insurance marketplace opens on Oct.1.

Despite current legislation that passed through the House to defund the Affordable Care Act, state and federal health insurance marketplaces are still on track to open.

The health insurance marketplace is a provision of the Affordable Care Act, ACA, that creates an online marketplace for individuals and small businesses to purchase health insurance plans.

Health Online Insurance Marketplace

“Starting in 2014, all health plans must offer essential health benefits. But the only way to get lower costs based on income is through the Marketplace,” stated the federal health insurance marketplace website, www.healthcare.gov.

Individuals; who do not have health insurance, who previously did not qualify for health insurance, who are unemployed or who are students, will be able to purchase specialized health insurance on the online health insurance market.

The website home page for the online health insurance marketplace.

The website home page for the online health insurance marketplace.

Healthcare.gov will also help individuals determine the best health insurance plan for them based on income levels and health coverage needs, and inform people if they qualify for medicaid or medicare benefits.

The Affordable Care Act left the creation and management of these new health insurance markets in the hands of the state governments. If a state chooses not to create a health insurance marketplace its will become part of the federal government run marketplace.

Health Insurance Plan in Georgia

Georgia’s Gov. Nathan Deal, opted out of creating a state-run insurance marketplace, turning over control of Georgia’s health insurance marketplace to the federal government.

The new marketplace is expected to provide health insurance for 900,000 Georgia residents, reported the Atlanta Journal Constitution. These citizens will use the federal healthcare.gov marketplace to compare and purchase different healthcare plans.

Insurance coverage from plans purchased on the new marketplace will go into effect in January 2014.

Insurance companies will have to spend more to cover the increase in number of people with health insurance plans and the number of people with preexisting health conditions that now qualify for equal coverage.  To cover additional cost many insurance companies will increase their premiums.

Experts predict that though there will be a large increase in the number of people who qualify for health insurance, many of these people will not know how to navigate the new health insurance marketplace. In response to the confusion that health insurance reform has created, there is a demand for advisers to help people navigate through this new system.

The Atlanta AP reported that Georgia will receive $3.8 million to hire people to help individuals navigate the new health insurance market.

The Structured Employment Economic Development Corporation and the University of Georgia’s College of Family and Consumer Sciences and Cooperative Extension Service will receive funds from the grant to train navigators. These navigators will serve as counselors to Georgia residents to help them in understanding the new health insurance marketplace.

Follow-up Report Oct. 21. 

After the opening of HealthCare.gov, the website experienced multiple technical malfunctions that prevented many people from completing applications or making purchases on the online marketplace.  Officials reported more than 19 million people have logged on to the website and close to 500,000 people have filled out applications through both the federal and state-run online marketplace sites, but they are not releasing numbers on the number of people who have successfully purchased a health insurance plan through the website. 

Tagged , , , , , ,