Affordable Care Act forces health insurance companies to actually spend money on medical care

Current TV correspondent Jacki Schechner helps uncover how Obama's Affordcable Care Act does may force health insurance companies to give U.S. citizens a billion-dollar rebate thanks to the Medical Loss Ratio's 80-20 rule
Tune in Weeknights at 7:00/6:00c on Current TV
http://current.com/shows/the-young-turks/

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Health Care Reform: Four Companies That are Leading Change

This week, Kathy Gersch, my Kotter International colleague, highlights four companies in the health care sector that are not waiting for a Supreme Court decision to transform their businesses.

The Supreme Court is set to rule on key provisions of the Affordable Care Act before the end of this month. With so much uncertainty around the future of the U.S. health care system, many companies have long been frozen, taking a “wait-and-see” approach to change, choosing to sit tight until the future becomes clearer.

But in a rapidly changing world, sitting tight can spell disaster.

“A leader of a large health care organization’s challenge is to play offense, not defense,” John Kotter wrote on this blog last summer. “If I were running a hospital… I would be focused on how do we make some significant change to take advantage of the opportunities that are going to be inevitable with this swirling, difficult, changing environment in health care.”

John is exactly right. And in the last few weeks alone, a number of hospitals and other health care providers have heeded his call and are taking drastic action.

The New York Times recently profiled one hospital in Brooklyn, New York — Maimonides Medical Center — whose leaders echoed John’s sentiments: “Win, lose or draw in court, administrators said, the policies driving the federal health care law are already embedded in big cuts and new payment formulas that hospitals ignore at their peril. And even if the law is repealed after the next election, the economic pressure to care differently for more people at lower cost is irreversible.”

With “value-based purchasing” programs mandated by the Affordable Care Act, where hospitals will be judged based on both cost and quality of care, Maimonides is taking major steps to boost patient satisfaction. As the Times reported, Maimonides “asked labor-management teams in every unit to invent their own improvement projects. In one initiative, nurses are making hourly rounds to offer patients extra help.” The hospital also provides valet parking and free Wi-Fi — certainly not business as usual.

Elsewhere in New York City, two of the largest hospital systems — NYU Langone Medical Center and Continuum Health Partners — are joining forces to boost their bargaining power with insurance providers and to cut costs, partly as a result of efficiency mandates outlined in the health care reform bill. Again, this is an example of medical organizations taking matters into their own hands and transforming the dynamics of the health care system, rather than allowing change to simply happen to them.

Insurance companies are also changing. As Aetna CEO Mark Bertolini explained to the Wall Street Journal last week, “If the Affordable Care Act were to go away tomorrow, we still would be better off as an organization, because who can argue with getting a lower health care delivery cost, more streamlined administrative structure, making yourself simpler and less complex to do business with? If that all happened and then health care reform went away, we would be better off and so would our customers.”

The leaders of UnitedHealthcare seem to agree. They made news recently when they pledged to keep popular coverage provisions mandated by the Affordable Care Act in place, regardless of the Supreme Court’s decision. The company said it would continue offering policyholders no-copayment preventative services, and third-party appeals for cases where treatments are denied. They also vowed, among other things, not to cancel policies retroactively, except when fraud had taken place. These are marked shifts in the way insurance companies typically operate.

In each of these examples, leaders are refusing to let complacency set in. They are not resting on their laurels, being myopic or tricking themselves into thinking that the old way of doing things will suffice in the future. The world is changing quickly, and those who fail to change with it are sure to be left behind. The winners will be in front of the transformation instead of behind the curve trying to catch up when things become “clear”. One thing is certain – change in healthcare will continue, and it’s accelerating. There is no point of perfect clarity.

Kathy Gersch is an Executive Vice President at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations.

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Drug Companies Are Testing Health Technology

Drug companies are dipping into health technology—or at least skimming the surface. Bristol-Myers Squibb is a new player at this week’s Health 2.0 matchmaking conference which seeks to pair health technology start-ups with deep-pocketed partners. The pharma company, which is a sponsor, says it is “interested in companies pursuing innovation/opportunities related to the digital workflow of health care providers, the role of big data/real world data in health care, and how social media will enable patients and health care providers to find appropriate health information and connect with peer communities.” Bristol-Myers is interested, among other things, in medication adherence.

“Pharma is showing a lot of interest, and trying to figure out how to deal with it”, says Marco Smit, president of Health 2.0 Advisors. Through its various conferences, Health 2.0 has had its pulse on emerging trends in the growing health technology community since 2007. At a Health 2.0 event called “Developer Challenge,” Novartis asked a team of developers to formulate a solution that allows patients to better manage their cardiovascular health, such as blood pressure. The winner, announced in March, was Sensei, Inc., which developed a mobile health app with a personalized education, nutrition, and fitness program.

Glaxo pops up in a Health 2.0 market monitor report, released today. In January, it launched a free mobile phone-based asthma management app which helps patients track their symptoms, and scores them on how well they’re doing it. Glaxo sells the asthma drug Advair.

Smit says that some smaller pharma companies are trying to do the smart thing by differentiating themselves on how they engage with patients. One example is Belgian biopharma UCB which developed the blockbuster allergy drug Zyrtec, and sells epilepsy drugs. UCB has been ahead of the curve by partnering two years ago with online patient community site PatientsLikeMe to form a community for people suffering from epilepsy. More than a quarter patients reported an improvement in sticking to their drug regimen, as a result.

Still, despite the fact that pharma can be a natural partner for health technology companies, it has been noticeably behind other industries, namely telecom and health insurance. Companies, such as Aetna, UnitedHealth Group, and AT&T are accelerating their partnerships and initiatives. According to Health 2.0’s report, during the first two months of 2012, AT&T announced it will launch a beta version of the AT&T Developer Center ForHealth to help developers integrate disparate health systems; it also launched a tablet-based management service for health care providers. UnitedHealth’s Optum plans a beta launch next month of a cloud-based platform that facilitates the exchange of electronic health data across multiple devices and locations. UnitedHealth also launched Health4Me, a mobile app that allows its members to connect with nurses, locate nearby physicians in their network, and access their health benefits information.

David Chase, the CEO of patient portal start-up Avado, is skeptical of what he sees is a half-hearted foray by pharma into health technology. In a recent Forbes post, he writes: “While the [app] challenges are a step in the right direction, they are doing the equivalent of providing polite applause from the stands and giving the gladiators (aka startups) some modest rewards for their efforts.” David Shaywitz, a pharmaceutical executive, has countered Chase on Forbes, stating: “I imagine the most effective applications will find a way to complement and enhance traditional therapeutics, rather than position themselves as “alt apps.””

At least the start-ups are not wasting time. Check out these natural partners to pharma: Happtique, mentioned by Chase. It plans to launch a mobile app that enables doctors to suggest health apps to their patients. See also First Life Research, which mines patient-generated content about drugs, and uses it to provide insight into medication use, including why patients switch drugs, and their concerns regarding use and costs. “They can bring a whole new level of innovation to how pharma understands what is really happening to patients who take their drugs,” says Smit.

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Fast Company Names Castlight Health One of the World’s Most Innovative Companies

Thu, Feb 23, 2012, 1:36 PM EST - U.S. Markets close in 2 hrs 24 mins

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