At the company’s annual investor conference, UnitedHealth Group released data on expenditures in the U.S. healthcare market for 2011 as follows:
Commercial
Members 171 million
Expenditures: $850 billion
Medicaid and Related Programs
Members: 60 million
Expenditures: $440 billion
Medicare:
Members: 48 Million
Expenditures: $575 billion
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Healthcare Costs | 
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Posted by Carl Mercurio
In an interview in the New York Times on his last day as head of Medicare, Don Berwick, M.D., outlined five reasons for the “extremely high level of waste” in the U.S. healthcare system.
1 Comment | Medicare and Medicaid | Permalink
Posted by Carl Mercurio
A Centers for Disease Control and Prevention survey shows that adoption of electronic medical records and electronic health records is rising among office-based physicians. Keep in mind that the word “adoption” means different things to different people (see the definitions used by CDC), and we still lag other nations by a lot.
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Posted by Carl Mercurio
I missed this study from October: According to the Assn. of American Medical Colleges (Washington), first-time applicants to medical schools reached an all-time high in 2011 at 32,600 — up nearly 3% from last year. Total applications also rose 3% to nearly 44,000.
Says AAMC chief executive Darrell Kirch, M.D.:
U.S. medical schools have been responding to the nation’s health challenges by finding ways not only to select the right individuals for medicine, but also to educate and train more doctors for the future. However, to increase the nation’s supply of physicians, the number of residency training positions at teaching hospitals must also increase to accommodate the growth in the number of students in U.S. medical schools. We are very concerned that proposals to decrease federal support of graduate medical education will exacerbate the physician shortage, which is expected to reach 90,000 by 2020.
Leave a Comment » | Physician Practice | Permalink
Posted by Carl Mercurio
Premiums go up, and lots of people remain uninsured — as illustrated in the charts below created by Aaron Carroll using data from Jonathan Gruber. (Hat tip: Healthbeatblog)
1 Comment | Healthcare Reform | Permalink
Posted by Carl Mercurio
A tally of 164 accountable care organizations shows that 99 (60%) are sponsored by a hospital or health system, 38 (23%) by an independent practice association, and 27 (17%) by an insurer. The tally, published by consulting firm Leavitt Partners (Salt Lake City, UT), found that the vast majority of states had at least one ACO. California had 17, the most of any state.
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Posted by Carl Mercurio
From a New York Times editorial following the decision by Don Berwick, M.D., to resign as tempory head of Medicare in the face of fierce Republican opposition to his nomination to the post.
Through no fault of his own, Dr. Berwick, a respected expert on health care costs and quality, became a lightning-rod for Republican attacks on health care reform and government entitlement programs. Republicans distorted his record and past statements to imply that he would introduce “socialized” medicine and “death panels” and ignored the praise heaped on him by health care professionals and medical organizations.
Leave a Comment » | Healthcare Reform | Permalink
Posted by Carl Mercurio
…until you read about Larry Smarr’s “10-year personal quest to increasingly quantify my body.” (Hat tip: Infectious Greed). Smarr, who is founding director of the California Institute for Telecommunications and Information Technology, makes use of a wide variety of consumer tools to track his health and wellness, including Zeo (Myzeo.com), Your Future Health (Yourfuturehealth.com), 23andme.com, Navigenics, Bodymedia.com and Patientslikeme.com:
I started my quantification program by stepping on a bathroom scale every morning and writing down my weight – and ended up having to synthesize more than five dozen blood markers, multiple stool markers, microbial population distributions, and a variety of imaging modalities to try to understand the state of my body’s health and how to improve it. Yet this is precisely what the digital revolution in healthcare is all about.
His findings are eye-opening. Here’s one interesting observation by Smarr about weight loss:
What gradually became clear to me was that one should think not in terms of weight loss as a goal, but rather think of altering your food intake to better match the biochemical systems of your body. The sub-components of our food (protein, fats, carbohydrates) and their ratios drive not only our digestive system, but much of our complex hormonal system which communicates to all organs of the body. After changing my nutrition to more of the “Zone” approach, introduced by Barry Sears…., and increasing my exercise, I lost 20 pounds over four years.
And here’s another regarding sleep after using the Zeo sleep monitor:
An even bigger unknown to most people than the minute-to-minute caloric burn of their bodies is the nature of their sleep during the night. I had no idea what mine was like or how important good sleep is to health….Waking up early cuts into my REM in a way I hadn’t realized before. Also, the length of sleep is critical to what Zeo computes as one’s “ZQ” – a score of the quantity and quality of one’s sleep each night.
And here’s one more about what our blood tells us:
I have blood tests four to eight times per year [since insurance only covers certain tests, his out-of-pocket cost for blood tests is $5000 annually] and keep a spreadsheet with all the values….I had no idea that blood samples can reveal whether you need to take vitamin D, if your liver and kidneys are in good shape, if your zinc or molybdenum levels need supplementing, or if you have mercury contamination; today, however, I routinely use food and supplements to “tune my numbers” to more optimal levels. For instance, when blood tests showed that my vitamin D had dropped to 30, I took vitamin D3 supplements till my tests showed it had come back up to 50.
Leave a Comment » | Wellness/Disease Management | Permalink
Posted by Carl Mercurio
UnitedHealth shares are up nearly 4% in morning trading today, reflecting a broader market rally and I’m guessing relief among investors regarding the company’s 2012 profit forecast. After spooking investors last month with warnings that costs would rise in 2012, United announced today that it projects 2012 earnings per share to be $4.55 to $4.75 per share, compared to $4.52 to 4.57 in 2011. That’s up to a 4.5% increase (or about 2% at the midpoint), which is below Wall Street expectations. Still, Scott Fidel of Deutsche Bank notes that United tends to be conservative in its initial guidance for the coming year, adding that investors will view this early outlook positively.
Leave a Comment » | Managed Care | Permalink
Posted by Carl Mercurio
It’s always difficult to get a read on health plan premium price increases for the coming year, but our best guess based on interviews with employers and by reading into published surveys is that 2012 premiums will rise 7% to 9% before benefit changes. That’s pretty much in line with findings from Mercer’s annual survey of employers, which notes that 2012 premiums before benefit changes will rise 8.2% in 2012, down from a 9.8% increase in 2011. For complete details, you can download our free white paper on the topic.
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Posted by Carl Mercurio
Notes Christine Arnold of Cowen, “Key leading indicators metrics suggest medical cost trends may no longer be decelerating, although a dramatic uptick seems unlikely at this point.” She points to an uptick in physician visit volume and a trough in the S&P non-Medicare healthcare cost index.
Leave a Comment » | Healthcare Costs | Permalink
Posted by Carl Mercurio
Karen Davis, 69, will retire as president of The Commonwealth Fund at the end of 2012 after 20 years with the organization. My view on Davis: if there were more people like her, the world would be a far better place.
Leave a Comment » | Healthcare Reform | Permalink
Posted by Carl Mercurio
Data from Citi on historical managed care merger and acquisition returns.
Source: Citi
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Posted by Carl Mercurio
Dolores Mitchell, executive director of the Massachusetts’ Group Insurance Commission, which covers state and municipal workers, on premium rate negotiations with health plans:
I reminded all these health plans that we had lower utilization and no inflation, and what earthly reason could there be for rates to go up?
Leave a Comment » | Employers | Permalink
Posted by Carl Mercurio
From Walter Isaacson’s biography of Steve Jobs, who died of cancer this year:
Jobs allowed his wife [Laurene Powell] to convene a meeting of his doctors. He realized that he was facing the type of problem that he never permitted at Apple. His treatment was fragmented rather than integrated. Each of his myriad maladies was being treated by different specialists — oncologists, pain specialists, nutritionists, hepatologists, and hematologists — but they were not being coordinated in a cohesive approach…”One of the big issues in the health care industry is the lack of caseworkers or advocates that are the quarterback of each team,” Powell said. This was particularly true at Stanford, where nobody seemed in charge of figuring out how nutrition was related to pain care and to oncology. So Powell asked the various Stanford specialists to come to their house for a meeting that also included some outside doctors with a more aggressive and integrated approach….They agreed on a new regimen for dealing with the pain and for coordinating the other treatments.
Leave a Comment » | ACOs and Medical Homes | Permalink
Posted by Carl Mercurio
From Mercer’s annual National Survey of Employer-Sponsored Health Plans:
2 Comments | Employers | Permalink
Posted by Carl Mercurio
Oh yeah, 49 million was right around the number of Americans without health insurance prior to the passage of ObamaCare. (It actually came close to 51 million in 2009).
What’s interesting about the 49 million figure released last week by the Census Bureau for people living in poverty in 2010 is that it’s based on a new measure. In the past, the poverty threshold was set at three times the cost of a minimum food diet for a family of four — or about $22,000 in 2010. (Imagine living on an income of $22,000 a year. Hell, imagine living on twice that). Using this measure, there were 46.6 million in poverty in 2010.
The new measure counts the value of government programs like food stamps as part of household income, but in addition to the cost of food includes expenses like clothing, shelter, utilities and out-of-pocket medical expenses. That raises the poverty threshold to $24,000 — meaning more people fall at or below the poverty level.
The impact of out-of-pocket medical expenses is big. Under the new measure, about 16% of Americans live in poverty. That percentage would fall to 12.7% if it wasn’t for medical expenses. In other words, about 10 million people would be lifted out of poverty if they didn’t have to pay out-of-pocket medical expenses.
As I’ve noted before, one reason we have ObamaCare today is because of the uninsured. Simply put, the numbers were getting too big for people to find comfort in platitudes like “it won’t happen to me.” “It” being sickness and financial ruin. (Another reason is the uncomfortable fact that health insurers sometimes abandon their own sick members).
With the number of people living in poverty reaching similar heights (coupled with rising economic risk and uncertainty for those lucky enough to have a decent job), you have to wonder if movements like Occupy Wall Street are just noise or a sign that another round of social reforms is coming.
2 Comments | Healthcare Reform | Permalink
Posted by Carl Mercurio
Third-quarter 2011 net income among 14 publicly traded managed care organizations declined 5%, according to a CRG tally. Net margin was 4.6%. A complete analysis appears in this week’s issue of Health Plan Market Trends.
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Posted by Carl Mercurio
From Weight Science: Evaluating the Evidence for a Paradigm Shift, published by Linda Bacon and Lucy Aphramor in Nutrition Science. (Hat tip: Infectious Greed).
Current guidelines recommend that “overweight” and “obese” individuals lose weight through engaging in lifestyle modification involving diet, exercise and other behavior change. This approach reliably induces short term weight loss, but the majority of individuals are unable to maintain weight loss over the long term and do not achieve the putative benefits of improved morbidity and mortality. Concern has arisen that this weight focus is not only ineffective at producing thinner, healthier bodies, but may also have unintended consequences, contributing to food and body preoccupation, repeated cycles of weight loss and regain, distraction from other personal health goals and wider health determinants, reduced self-esteem, eating disorders, other health decrement, and weight stigmatization and discrimination. This concern has drawn increased attention to the ethical implications of recommending treatment that may be ineffective or damaging. A growing trans-disciplinary movement called Health at Every Size (HAES) challenges the value of promoting weight loss and dieting behavior and argues for a shift in focus to weight-neutral outcomes. Randomized controlled clinical trials indicate that a HAES approach is associated with statistically and clinically relevant improvements in physiological measures (e.g., blood pressure, blood lipids), health behaviors (e.g., eating and activity habits, dietary quality), and psychosocial outcomes (such as self-esteem and body image), and that HAES achieves these health outcomes more successfully than weight loss treatment and without the contraindications associated with a weight focus.
4 Comments | Wellness/Disease Management | Permalink
Posted by Carl Mercurio
Remember how bad things were at Humana before Michael McCallister took over as president and chief executive in February 2000? Shares in the company had plummeted 54% the prior year. Losses were mounting. Costs were rising. And Michael Moore was roaming the halls of Humana’s corporate headquarters in Louisville, KY, trying to convince the company to change its policy on pancreas transplants by staging a mock funeral for a dying member. It did.
Over a decade later, Humana is one of the nation’s most successful health plans — and McCallister is one of the industry’s most successful chief executives. Under his watch, Humana’s stock price has risen 10-fold and net income 12-fold. Revenues have tripled to $34 billion in 2010. He led the company’s push into Medicare, and it is now one of the nation’s top Medicare plans.
I always found McCallister to be accessible, down-to-earth and a straight-shooter. I remember his response to an investor who questioned the company’s heavy reliance on government programs like Medicare. McCallister’s reply: if you’re concerned about Humana’s exposure to government programs, then don’t invest in Humana.
McCallister, 59, will retire in 12 to 18 months after nearly 40 years with the company. Humana has put in place a succession plan, naming Bruce Broussard president. Broussard, who was most recently head of McKesson Specialty Health, is expected to be named CEO upon McCallister’s departure.
Leave a Comment » | Managed Care | Permalink
Posted by Carl Mercurio
From the Haynes & Boone Oct. 31 Healthcare Alert, commenting on the final regulations for Medicare ACOs:
Under final rules issued by the Centers for Medicare and Medicaid Services (CMS), Accountable Care Organizations (ACOs) will continue to face large start-up costs and uncertain savings, despite a decreased regulatory scheme and increased financial incentives….In an implicit acknowledgement that healthcare providers will be slow to warm to the idea of ACOs, CMS lowered its range of anticipated ACOs to between 50 and 270, a drastic decrease from the 300 to 800 potential ACOs it estimated in its draft regulations. However, CMS maintains that start-up and ongoing annual operating costs will remain at approximately $1.7 million per ACO, despite a widely-publicized American Hospital Association (AHA) study that estimated such costs to be in the range of $11.6 million to $26.1 million, depending on the size of the ACO.
Leave a Comment » | Uncategorized | Permalink
Posted by Carl Mercurio
At a recent family party, someone asked me what I thought of ObamaCare. “It’s O.K., but it doesn’t go far enough,” I said. The reply: “Well, we can’t pay for everybody.” Actually, we can. It’s just a matter of deciding what we want to spend our money on. The cost of healthcare reform is projected to be about $1.1 trillion over the next 10 years — or $110 billion per year. Here are five things that cost at about that much.
1. War: U.S. Defense Dept. spending on war (e.g., Iraq and Afganistan) has averaged $130 billion annually over the past decade. Source: Costs of War
2. Wall Street Bailout of 2008: The total amount outstanding (mostly loans and net of TARP funds and liquidity loans already paid back by banks and financial companies) is $1.56 trillion. Source: SourceWatch
3. Tax Cuts for the Wealthy. Since 2001, the Bush tax cuts have saved the wealthiest 5% of Americans $1 trillion. Source: Costoftaxcuts.com
4. Health Insurance Administrative Costs: At about 7% of total healthcare spending, administrative costs associated with health insurance total about $160 billion annually — a figure that could be reduced by $100 billion by simply achieving international benchmarks. Source: The Commonwealth Fund
5. The New York Yankees Payroll. All right, it’s actually “only” $200 million annually, but give it time.
Special Bonus Update: For those of you who argue that ObamaCare is just a handout for freeloaders, I ask you this: Do you own a home? Do you deduct mortgage interest payments from your taxes? Good, because the mortgage interest deduction costs the federal goverment about $100 billion annually — or nearly the entire cost of ObamaCare. Source: The Tax Foundation
6 Comments | Healthcare Reform | Permalink
Posted by Carl Mercurio
Jay Feldstein, northeast regional president of AmeriHealth Mercy during CRG’s annual Managed Medicaid conference in New York, Oct. 27:
Why is Medicaid a state program [rather than funded and administered entirely by the federal government]?
Complete coverage of Feldstein’s comments will appear in the Nov. 7 issue of Health Plan Market Trends.
Leave a Comment » | Medicare and Medicaid | Permalink
Posted by Carl Mercurio
I’d wanted to write a brief note about the departure of Jeffrey Kang, M.D., as chief medical officer of Cigna earlier this month but got a bit pressed. Alan Muney, M.D., replaces. Kang, who was with Cigna since 2002, has taken a job as senior vice president of health and wellness services and solutions for Walgreen Co.
I always found Kang to be more thoughtful than dogmatic in his approach to the problems surrounding the U.S. healthcare system. I interviewed him in the run-up to healthcare reform, when the insurance industry was circling the wagons in opposition of the public option. Kang noted at the time that health plans would actually “be able to compete favorably with any public option” as long as there was a national provider fee schedule that leveled the playing field — an approach I agreed with then and agree with now.
Former Cigna public relations executive turned industry whistleblower Wendell Potter calls Kang ”a compassionate man,” noting that “he could always be counted on for a reasoned point of view.” Prior to joining Cigna, Kang worked for the federal government, serving stints as chief clinical officer for the Health Care Financing Administration (now CMS) and as chief medical officer for the Office of Managed Care.
Leave a Comment » | Managed Care | Permalink
Posted by Carl Mercurio
From Paul Kedrosky’s review of Walter Isaacson’s new biography of Steve Jobs:
Among the book’s telling revelations is Jobs’s decision, after an October, 2003, diagnosis of a rare but treatable pancreatic cancer, to do nothing for nine months. Where he should have gone in for immediate surgery, Jobs engaged in magical thinking, ignoring the problem and self-medicating with bowel cleansings, juice and other mainstays of woo-woo medicine. When he finally went in for surgery in July, 2004, Jobs’s cancer had metastasized to his liver, forcing him to begin chemotherapy. He eventually had a liver transplant in 2009, but that growing cancer finally killed him this Oct. 5, at the age of 56.
2 Comments | Consumer-Driven Healthcare | Permalink
Posted by Carl Mercurio
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