Looking Back at Healthcare Headline news this week 20, 10 and 5 years ago

By Claire Thayer, June 14, 2019

The MCOL Weekend newsletter is a treasure trove of historical healthcare news, dating back over twenty years.  Here’s a look back on some of the top news items this week 20, 10 and 5 years ago: 


Health Care: Boehner proposes expanded coverage, June 10, 1999

U.S. Rep. John Boehner announced a proposal Wednesday to reform managed health care programs for most Americans through bills simultaneously introduced by several Republicans. Boehner said his plan seeks to make health plans more accountable to patients while expanding health insurance to most of the 43 million Americans now without coverage. After months of `bipartisan hearings,' on health care reform, no Democrats endorsed the Boehner program. 

Healthcare Industry Earnings Up 15.3% in 1st Quarter 1999, June 8, 1999

HealthCare Markets Group released today its first quarter 1999 analysis of the financial performance of publicly traded healthcare companies. First quarter 1998 Healthcare Industry adjusted earnings increased 15.3 percent, on 14 percent revenue growth. By way of comparison, fourth quarter 1998 Healthcare Industry adjusted earnings increased 21 percent, on 16.3 percent revenue growth, and third quarter 1998 Healthcare Industry adjusted earnings increased 14 percent over third quarter 1997, on a 14.3 percent increase in revenue.


Pfizer exec reinforces company's generic drug plan, June 10, 2009

The Associated Press reports that an executive at Pfizer Inc. said Wednesday the drug developer will focus on expanding its portfolio of generic drugs in order boost sales and build its position in that market.

Cigna's drug unit could fetch $1.3 billion-analyst, June 10, 2009

Reuters reports that Cigna Corp's pharmacy benefit unit could fetch $1.3 billion in a sale, an industry analyst said on Wednesday, as the health insurer's top executive reiterated the company is evaluating the business 


Mixed Bag for Health Co-Ops, June 12, 2014

The Wall Street Journal reports: Many of the nonprofit health-insurance cooperatives created by the Affordable Care Act have enrolled far fewer people than they had hoped, according to figures obtained by a Republican-led House committee, calling into question their viability. 

Hospitals Push Bundled Care as the Billing Plan of the Future, June 8, 2014

The Wall Street Journal reports: Hospital bills may soon get a lot simpler. Traditionally, hospitals have charged patients separately for every service and supply they use-as anybody who has waded through pages of charges knows.


Analyzing Blue Cross Blue Shield Plan Administrative Costs

By Clive Riddle, June 13, 2019

Sherlock Company in the June issue of their Plan Management Navigator examines administrative cost trends for Blue Cross Blue Shield Plans, analyzing year end 2018 vs 2017 data.  They found that costs “increased by 5.5% per member, up from an increase of 5.1% for 2017. Reweighting to eliminate the effects of product mix differences between the years, per member costs increased by 6.7% as compared with 5.9% in 2017. ASO/ASC increased as commercial insured membership declined. Medicare Advantage continued to grow rapidly.”

 Their key findings included:

  • Most clusters of expenses grew at rates less than last year.
  • Uniquely, Account and Membership Administration’s growth rate increased.
  • Growth in Information Systems was the single most important reason for administrative expense increase in 2018.
  • The shift in favor of products and market segments that are lower cost to administer muted the real growth.


Sherlock’s benchmarking study “analyzes in-depth surveys of 14 Blue Licensees serving 37 million members. Surveyed Plans comprise 52% of the members of Blue Cross Blue Shield Plans not served by publicly-traded companies.” 

Why does this benchmarking matter? Because the non-publicly traded BCBS plans provide a meaningful universe to benchmark, and plan administrative expenses are highly scrutinized, and certainly more controllable than medical expenses. As Doug Sherlock states, “in the current environment, optimizing administrative expenses is a high priority for health plan managers. Plans have completed their adaptation to the Affordable Care Act and the bulge in Exchange and Medicaid members. Plus, administrative expense visibility has been heightened by the rhetoric of presidential candidates.”

Here’s some key specific data from their report:


  • For the universe as a whole, the median total costs were $38.51 per member per month, higher than last year’s $34.99. 
  • By functional area, median pmpm costs were: Sales & Marketing $9.21; Medical & Provider Management $5.03; Account and Membership Administration $16.10 and Corporate Services $5.92
  • Median pmpm costs by product categories included: Commercial insured $49.84; Commercial ASO $28.32; Medicare Advantage $112.08; and Medicaid $46.08.
  • The median administrative expense ratio was 9.0% compared with 8.9% last year.
  • The median administrative expense ratio by product categories included: Commercial insured 10.8%; Commercial ASO 7.1%; Medicare Advantage 12.5%; and Medicaid 9.3%.
  • Staffing ratios increased by 6.8%, especially in Information Systems. 
  • Approximately 19 FTEs serve every 10,000 members in the commercial products. 
  • Compensation, including all benefits except OPEB, increased at a median rate of 3.8%. 
  • The median proportions of FTEs that were outsourced was 11.0%.
  • After the effect of the Miscellaneous Business Taxes, total administrative expense PMPM increased by 17.9% compared with a decline of 2.3% in the prior year 





Consumer Surveys on SDOH Experiences: Kaiser, McKinsey and Waystar

By Clive Riddle, June 7, 2019 

Kaiser Permanente has just released results of consumer SDOH survey they commissioned entitled Social Needs in America, which found “68% of Americans surveyed reported they experienced at least one unmet social need in the past year. More than a quarter of those surveyed [28%] said that an unmet social need was a barrier to health, with 21% prioritizing paying for food or rent over seeing a doctor or getting a medication.”  In two other recent consumer SDOH survey reports, one [Waystar] found the same exact percentage [68%] reporting one or more unmet needs, while the other [McKinsey] found a lower figure [53%.] 

Here’s some of the Kaiser survey’s other detailed findings:

Respondents that frequently or occasionally experience stress include:

  • 39%  over meeting their family’s needs for food/balanced meals;
  • 38% over social relationships needs;
  • 35% over meeting housing needs; and,
  • 32% over transportation needs

Respondents believe these factors are important to overall health:

  • stable housing (89%)
  • balanced meals (84%)
  • reliable transportation (80%); and
  • supportive social relationships (72%) 

35% lack confidence that they could identify the best resource if they or a family member needed to use community resources relating to transportation, food, housing, or social isolation. 

42% would turn to their medical services provider when looking for information on community resources to help with social needs, and 30% would turn to their health insurance provider for this information.

Respondents are supportive of medical service providers assessing social needs;

  • 93% say their medical provider should ask about access to
  • food and balanced meals;
  • 83% say their medical provider should ask about safe and stable housing;
  • 78% say their medical provider should ask about social relationships and
  • isolation; and
  • 77% feel that their medical provider  should ask about transportation to work, school, appointments, or activities

Mckinsey examined consumer interest in SDOH offerings and how SDOH impacted healthcare utilization rates in their 2019 Consumer Social Determinants of Health Survey report, released in April, which found 53% reported they were adversely impacted by at least one SDOH factor, with food security being the most commonly reported unmet need (35%), followed by safety (25%) housing (21%) social support (17%) and transportation (15%). McKinsey found that 45% of respondents with unmet social needs reported high healthcare utilization, compared to 21% of respondents reporting no unmet needs. 85% of respondents indicated they would use a social program offered by their health plan.

Waystar released results of their consumer SDOH survey in December, finding:

  • 68% of consumers have at least some level of SDoH challenge and 52% have a moderate to high SDoH risk in at least one category.
  • Patients with SDoH issues are 2.5 times more willing to talk about those issues with clinicians than they are with payers
  • Patients with high SDoH risk are more than 20 times more likely to miss a medical appointment at least once a month
  • Medicare and Medicaid, have the largest high-stress share with 33 percent having high stress in three or more areas, compared to 21 percent of the commercial insurance population being "high risk."


Friday Five: Top 5 healthcare business news items from the MCOL Weekend edition

Every business day, MCOL posts feature stories making news on the business of health care. Here are five we think are particularly important for this week:

Why Some CEOs Figure ‘Medicare For All’ Is Good For Business 

Walk into a big-box retailer such as Walmart or Michaels and you’re likely to see MCS Industries’ picture frames, decorative mirrors or kitschy wall décor.

Kaiser Health News

Friday, June 7, 2019

U.S. Records 1,000th Case of Measles, Officials Blame Misinformation for Outbreak

The United States has recorded 1,001 measles cases so far this year in the worst outbreak of the highly contagious disease in more than a quarter-century, federal health officials said on Wednesday as they issued a new plea for parents to vaccinate their children.

NY Times

Thursday, June 6, 2019

Growing Hack of Health-Care Data Gets Scrutiny From Congress

A hack of health-care data involving a medical bill collector and two major diagnostics companies has grown to almost 20 million people, and is now attracting more questions from key members of Congress.


Thursday, June 6, 2019

CVS to expand health hubs to 1,500 stores by end of 2021

CVS Health Corp said it would offer expanded health services such as nutrition counseling and blood pressure screenings in 1,500 stores by the end of 2021, following through on plans announced during the pharmacy chain’s 2018 acquisition of health insurer Aetna.


Wednesday, June 5, 2019

Supreme Court rules against Obama-era provision on Medicare reimbursements 

The Supreme Court on Monday ruled that an Obama-era rule change on how Medicare reimbursements to hospitals are made should be removed because officials did not follow the proper notice and comment regulations in implementing the formula.

The Hill

Tuesday, June 4, 2019

These and more weekly news items on the business of healthcare are featured in the MCOL Weekend edition, along with the MCOL Tidbits, and more, for MCOL Premium level members.


ACA Exchange 2020 Final Rule Changes and Survey of Exchange Health Plan Participation and Expectations

By Clive Riddle, May 31, 2019 

Last month CMS issued their final rule with ACA benefit and payment parameters for 2020. Their changes for 2020 included: 

  • The method for calculation of premium assistance for lower-income enrollees (projected to lower the total amount of financial assistance provided by $900 million, when compared with 2019, and result in 100,000 fewer exchange enrollees in 2020.)
  • Allowing plans to make mid-year changes to their drug formularies
  • Allowing plans to implement cost-sharing requirements if enrollees choose a brand-name drug when a medically appropriate generic version of the drug is available (even when out-of-pocket spending maximum is reached)
  • Allowing plans to implement copayment accumulator programs for prescription drugs
  • Lowering user fees for the 2020 coverage year by half a percentage point
  • Increases maximum out-of-pocket spending limits by 3.2%, from $7,900 to $8,150 for individual plans and from $15,800 to $16,300 for family plans      


How will these changes, and overall market forces, impact health plan participation in the ACA exchanges for 2020? eHealth has just released survey results from 17 plans that collectively cover 80 million lives that participate in ACA exchanges, that found “more than twice as many insurers intend to increase plan offerings for 2020 as compared with 2019, with premiums holding fairly steady.”



Here’s some of their detailed findings: 

  • 45% intend to add to the number of ACA plans they'll offer in 2020, compared to 21% who did so for the 2019 plan year
  • 42% expect to raise premiums between 5 and 10 percent over 2019 rates. 33% do not expect to make any noteworthy changes to premiums, while 23% expect to reduce monthly premiums by 5 percent or more.
  • 69% said that sales during the last open enrollment period were within 10 percent of their expectations. 15% reported that sales outpaced expectations by 10 to 15 percent, while another 15% of said sales were 10 percent or more below expectations.
  • 71% said they are paying attention to public discussions about "Medicare for all" but don't expect major changes, compared to 67% in 2018