Health Plans

Molina, Cigna and CVS Health Report Solid First-Quarter Earnings

May 9, 2019

Several major publicly traded managed care companies, including some newly merged combinations, reported solid first-quarter 2019 earnings. Medicare for All, a health system overhaul being urged by many congressional Democrats, didn’t overshadow their earnings calls as it arguably did for harbinger UnitedHealth Group, which reported strong quarterly results in mid-April.

President and CEO Joe Zubretsky noted during Molina Healthcare, Inc.’s April 29 earnings call that there obviously are various proposals at the state and federal level “for public option, single-payer Medicare for All-type arrangements.” But Molina considers “most of these positions to be political rhetoric” still in the discussion phase.

By Judy Packer-Tursman

Several major publicly traded managed care companies, including some newly merged combinations, reported solid first-quarter 2019 earnings. Medicare for All, a health system overhaul being urged by many congressional Democrats, didn’t overshadow their earnings calls as it arguably did for harbinger UnitedHealth Group, which reported strong quarterly results in mid-April.

President and CEO Joe Zubretsky noted during Molina Healthcare, Inc.’s April 29 earnings call that there obviously are various proposals at the state and federal level “for public option, single-payer Medicare for All-type arrangements.” But Molina considers “most of these positions to be political rhetoric” still in the discussion phase.

Zubretsky focused on the impact of Molina’s corporate restructuring efforts, saying first-quarter results seem to validate that durable financial and operational improvements will allow the company to sustain attractive margins built in 2018, “all while we begin to grow the top line again.” For the three months ended March 31, Molina reported premium revenue of $4 billion, down 9% year over year, in line with the company’s expectations.

Molina raised its full-year 2019 earnings guidance, and Wall Street analysts by and large view the company as poised for growth.

This was Cigna Corp.’s first quarter reporting as a combined company following its acquisition of Express Scripts. Cigna President and CEO David Cordani said the company remains on track to deliver “attractive growth” in 2019 and beyond.

CVS Health Corp. beat first quarter expectations and raised its full-year outlook. Chief executive Larry Merlo described CVS Health’s first full quarter as a combined company as “a success on many fronts” following its acquisition of Aetna Inc.

Datapoint: Capital BlueCross to Form Strategic Partnership With WellSpan Health

May 7, 2019

Pennsylvania-based Capital BlueCross said it has entered a long-term agreement to form a strategic partnership with WellSpan Health, an integrated system of eight hospitals and more than 170 patient care facilities throughout Pennsylvania and Maryland. The two entities plan to launch new Medicare Advantage products, and will aim to more closely coordinate care delivery, enhancing benefits and creating new digital health strategies. Financial details of the arrangement were not disclosed. Capital BlueCross currently enrolls 696,572 lives in Pennsylvania, with 43.2% of members enrolled in risk-based commercial products.

Pennsylvania-based Capital BlueCross said it has entered a long-term agreement to form a strategic partnership with WellSpan Health, an integrated system of eight hospitals and more than 170 patient care facilities throughout Pennsylvania and Maryland. The two entities plan to launch new Medicare Advantage products, and will aim to more closely coordinate care delivery, enhancing benefits and creating new digital health strategies. Financial details of the arrangement were not disclosed. Capital BlueCross currently enrolls 696,572 lives in Pennsylvania, with 43.2% of members enrolled in risk-based commercial products.

Source: AIS’s Directory of Health Plans

Why Some Employee Wellness Programs Work, Others Don’t

May 7, 2019

A major wholesaler’s program recently grabbed the national spotlight after researchers studied it, published their findings in JAMA, and told The New York Times there is “a really weak evidence base” on whether such programs are worthwhile. But experts tell AIS Health the study focused on one problematic program, and its tepid results shouldn’t be extrapolated to other workplace wellness initiatives.

The study examined the BJ’s Wholesale Club wellness program after 18 months, and found some positives, including more regular exercise and active weight management among participants than in the control group.

By Judy Packer-Tursman

A major wholesaler’s program recently grabbed the national spotlight after researchers studied it, published their findings in JAMA, and told The New York Times there is “a really weak evidence base” on whether such programs are worthwhile. But experts tell AIS Health the study focused on one problematic program, and its tepid results shouldn’t be extrapolated to other workplace wellness initiatives.

The study examined the BJ’s Wholesale Club wellness program after 18 months, and found some positives, including more regular exercise and active weight management among participants than in the control group.

But the wellness program failed to align with many evidence-based best practices, asserts Jeff Dobro, M.D., strategy and clinical services leader in Mercer’s health care consulting practice. If a wellness program isn’t structured in the right way, by offering a “compelling design” of sufficient duration, along with effective employee communication and engagement, then incentives won’t drive change, he says. Moreover, it typically takes “two years or more to see a real health or financial benefit” from improved behaviors.

Dobro explains there are two main components to health improvement programs. First is the quality of the program itself. Second is the use of incentives for employees to participate. He asserts incentives have been shown to drive people to engage.

Dobro says his advice to employers is to avoid “narrow, rigid” wellness programs. “There is no one design that’s going to work with everybody,” he says, “because an employee population encompasses many types of people.”

Datapoint: Fallon Health Offers New Financial Incentives for Employer-Sponsored Plans

May 1, 2019

Massachusetts-based insurer Fallon Health this month unveiled two new incentive programs for its employer group segment. One program offers a premium credit to employers if their group medical costs are lower than 89% of the paid premium, while the other offers a $5,000 credit to new employer group customers if Fallon fails to meet certain expectations during onboarding. Fallon currently enrolls 36,540 large group members and 7,307 small group members, with about 65,000 other members enrolled in self-funded arrangements.

Massachusetts-based insurer Fallon Health this month unveiled two new incentive programs for its employer group segment. One program offers a premium credit to employers if their group medical costs are lower than 89% of the paid premium, while the other offers a $5,000 credit to new employer group customers if Fallon fails to meet certain expectations during onboarding. Fallon currently enrolls 36,540 large group members and 7,307 small group members, with about 65,000 other members enrolled in self-funded arrangements.

Source: AIS’s Directory of Health Plans

Health Systems Build Micro Hospitals to Provide Care Near Home

April 30, 2019

Health systems are turning to micro hospitals — small inpatient facilities with emergency departments and eight to 25 beds that include full services — as a way to provide community-based care that’s more patient-centric and potentially significantly more cost-effective than traditional emergency care.

When they include these facilities in networks, stakeholders say, payers can drive emergency care to facilities less costly than traditional emergency departments.

By Jane Anderson

Health systems are turning to micro hospitals — small inpatient facilities with emergency departments and eight to 25 beds that include full services — as a way to provide community-based care that’s more patient-centric and potentially significantly more cost-effective than traditional emergency care.

When they include these facilities in networks, stakeholders say, payers can drive emergency care to facilities less costly than traditional emergency departments.

A 2018 report from the Advisory Board found that the long-term clinical and economic results of micro hospitals are still uncertain, but said the facilities could help provider organizations reach new patients, integrate into the community, downscale from older facilities and anchor ambulatory development.

The value proposition for payers is that micro hospitals provide “high-quality, comprehensive care close to home,” says Vic Schmerbeck, executive vice president, strategy and business development for Emerus, the most prolific micro hospital developer in the U.S.

Emerus partnered with Pittsburgh-based Allegheny Health Network (AHN) and Highmark Health to open four micro hospitals later this year. The partnership is aimed at providing emergency care closer to home, says David Hall, vice president of enterprise strategic partnering at AHN parent company Highmark.

Some payers have been less responsive than others to the concept of micro hospitals, Schmerbeck says: “As with anything new, payers frequently have many questions at the outset, but once they understand the value proposition to both the payer and their patients, the process usually goes smoothly.”

Small-Group Market Offers More Plan Choices with Lower Premiums Than Individual Market

April 26, 2019

The small-group health insurance market had, on average, more plan choices and lower premiums in 2018 compared to the individual market, according to a new Health Affairs study. The study shows that 39 states provided enrollees with access to both an HMO/Exclusive Provider Organization (EPO) plan and a PPO/Point-of-Service (POS) plan in their small-group markets, yet only 17 states offer such choices on their individual marketplaces.

by Jinghong Chen

The small-group health insurance market had, on average, more plan choices and lower premiums in 2018 compared to the individual market, according to a new Health Affairs study. The study shows that 39 states provided enrollees with access to both an HMO/Exclusive Provider Organization (EPO) plan and a PPO/Point-of-Service (POS) plan in their small-group markets, yet only 17 states offer such choices on their individual marketplaces. Average premiums across the nation were 38% higher on the Affordable Care Act (ACA) exchanges than in the small-group market. In addition, the study found that the small-group market had greater access to platinum plans, with 45 states and the District of Columbia offering such plans in 2018. Only 14 states provided platinum plans to ACA marketplace enrollees in 2018, while platinum plans were available off-marketplace in 18 states.

NOTES: A state-market has a given plan type if at least 70% of its enrollees, weighted by billable member-months, has access to the given plan type. Tennessee did not have any plan type broadly available to at least 70% of enrollees in its on- or off-exchange markets. The District of Columbia and Vermont merged their on- and off-exchange markets. Data for Wyoming was missing for the off-exchange and small-group markets. Hawaii does not have silver plans in its small-group market.

SOURCE: Health Affairs 38, No. 4 (2019): 675-683. “Plan Choice And Affordability In The Individual And Small-Group Markets: Policy And Performance — Past and Present.” Visit https://www.healthaffairs.org/doi/10.1377/hlthaff.2018.05401.