April 25, 2013
For anyone still wondering about the value of social media in health care, just look at the latest examples in the wake of the Boston Marathon bombings and wonder no more.
April 2, 2013
The last few weeks have finally started to bring the exchange networks into focus, especially when we consider a patchwork of data points and stories from across the country. It’s sort of like staring at a poster covered in dots – after some period of time, you see a B1 bomber, or whatever image is hidden in the dots.
First, let’s consider what we’re hearing from health systems in different markets. Negotiations for hospital participation in the exchange networks is starting to yield contracts around the country. Most are being done at payment rates slightly below existing commercial rates, with most reported discounts under 10 percent. This has been confirmed by Carl MacDonald, our favorite analyst at Citi who covers the payor space. The highest profile example is Tenet Healthcare (THC), which just announced three separate agreements in three markets with three different Blues plans. The recent analyst report from Sheryl Skolnick states that Tenet signed deals which included discounts slightly less than 10 percent in aggregate – hardly the Medicare rates some payors have aggressively promoted to the market. Here’s how Sheryl describes the impact of these deals, and the others that will follow:
1. The contracts are at slight (or even modest) discounts to commercial rates. Given the delta between commercial and Medicare rates, even a 10% discount could yield a revenue per adjusted admit that is still 30% higher (or more) than Medicare (assume a commercial rate of $14,000 per adj. admit and Medicare around $10,000 and do the math).
Beyond Tenet’s smart strategic play, we recently learned of another deal just about to be signed – at similar rates and with similar steerage protections – by an HCSC-owned Blue Cross plan with a multi-hospital statewide health system. There is definitely a pattern emerging here, and it’s a clarion call for any hospital considering Medicare or near-Medicare rates: don’t do it. There are good deals to be done, at rates close to commercial.
WellPoint has made similar claims in recent days – just last week, a Barclay’s analyst report coming out of their annual investor conference said:
“With Dennis Matheis, who runs exchanges, joining Wayne DeVeydt this morning we spent a good amount of time on exchanges. WellPoint believes that the government is on track for exchange implementation in 2014. The company believes its scale, brand advantage, and local presence make it well positioned to win enrollment. WellPoint expects to get a lot more clarity on market positioning over the next 8 weeks, with notably California rates due on March 31st. [WellPoint] is still in the early stages of exchange contracting, and is seeing rates closer to Medicare than commercial, while ‘No one is interested In Medicaid.’ The company is 1/3 to 1/2 done contracting depending on the market. On average, WellPoint sees rate shock of 40 percent, with variability in states depending on current market reforms. WellPoint sees the exchange opportunity as a land grab, where it needs to take advantage of the early opportunity to diversify risk, and it could take 5-7 years to catch up. The company is expecting employer dumping to be low.”
These claims simply defy our experience and all market intelligence. That’s why we are fielding a quick survey to take the pulse of hospitals in WellPoint markets – we’re going straight to the source to validate or discredit WellPoint’s claims. We certainly don’t want false information to create a sense of urgency for hospitals to do the wrong deals on exchange networks.
No doubt WellPoint and other payors want hospitals to believe that Medicare rates are their only option. They want to create a sense of scarcity and desperation. And no doubt it’s working with some hospitals. Yet the truth is different – rates close to commercial are available for those hospitals serious about doing the right deals. The exchanges can be a success if health plans and hospitals alike approach exchange negotiations as commercial negotiations.
Stay tuned for more information on this topic.
March 25, 2013
The annual HIMSS conference can be overwhelming, and this year’s experience in New Orleans was no different. More than 1,100 vendors came together in the hope of capturing the imagination (and business) of potential clients, vendor collaborators, investors and of course, the media. In years gone by it was easy to put HIT companies into their respective buckets:
Today, through years of acquisition activities, it’s becoming increasingly challenging to differentiate the players, and it’s probably going to get worse before it gets better.
There was an aura of sameness that permeated the conference – everyone positioning themselves to be everything to everyone, trying to get into health care reform alignment.
Additionally, the industry is still being challenged to prove its promise and value in the health care delivery and cost management equations.
For buyers of HIT services, this has to be very confusing times. For firms like ours, though, these are the challenges we live for – helping create marketplace differentiation, competitive separation and buyer preference for our clients.
March 18, 2013
If Budweiser can encourage the world to “Drink Responsibly” with a straight face, there’s absolutely no reason why Coca-Cola can’t tackle the world’s obesity problem with a promise to “Market Responsibly.”
Big brands know better than anyone that social responsibility is not just some feel-good, nice-to-have initiative, but rather a business imperative. Now health is moving to the forefront of that agenda as the intensity of the world’s health issues push to the top of mind and top of the media’s agenda.
Consider John Commins’ latest HealthLeaders article comparing the food industry to Big Tobacco. Commins makes the case that it’s time for health care providers to lead the fight against the food industry.
“The sad truth is that wellness movements by themselves aren’t enough to reverse the obesity and overweight epidemic, no matter how well-intentioned or proactive. They will fail unless we address the larger issue of what people eat. The processed food industry must be held accountable and pressured to modify the addictive junk it peddles to the American people. Healthcare providers, the people who see first-hand the devastating effects of overweight and obesity, must lead this fight.”
Commins’ call to action comes on the heels of a string a high-profile stories in the nation’s leading news publications detailing food industry tactics to sell more food that’s not necessarily contributing to our country’s good health.
An interesting trend, however, is how non-health care companies are positioning themselves as ambassadors of good health.
When it comes to the “new black” of corporate social responsibility, wellness is very clearly the new green. A real focus on sustainability and “green” practices is now being supplemented by a real focus on health and wellness. A healthier bottom line is increasingly being tied to a brand association with healthier habits, healthier choices and healthier lifestyles.
Wellness as a business strategy is finding all kinds of odd and disruptive bedfellows. Smart communications and marketing executives are recognizing the connection. Read more here.
January 31, 2013
As part of our periodic guest blog series, Cliff Frank, president of Partnera Partners, elaborates on ways hospitals can connect with consumers and drive brand loyalty in the face of narrow networks and changing financial models.
2014 is our year. It’s the year when Provider Brands become important to a whole new class of insurance buyers – just about everybody. If your hospital or physician group is stuck inside a broad payor network, you will simply be drowned out by the cacophony of insurance electioneering called open enrollment. But you have a brand of your own. This makes you the main event because you want consumers to make a health care decision, not merely a financial one. Your loyal patients can find you and meaningfully show their love for you by enrolling in a plan that features you. But to Stand Out, you have to Stand Up.
Stand Up means deciding you are going to abandon the myth that insurers will market you to their customers so that their customers become your customers. That hasn’t worked in broad networks; why would it work in narrow networks any better? Insurers don’t want patients. That’s the whole point. They want members who are not patients, and are not likely to be patients. They speak a different language to a different group of prospects.
Stand Up means deciding to control your growth through expanding your relationship with consumers while they are still vertical, so when they need to be horizontal in a facility, they have already affiliated with your brand. Connecting with consumers is a process, not an event, but it starts when you Stand Up to accept the responsibility to drive the process.
Stand Up means not accepting insurer demands for more discounts, preferred pricing, and leverage against other providers. Instead, you can go directly to individuals, businesses and other entities with your own insurance products on the exchange, off the exchange, or through defined contribution alternatives. You don’t have to own the product, you don’t have to own the risk, but you do have to own and operate a clinically efficient and effective network that produces superior clinical outcomes over time.
Stand Out means eliminating the background noise of too many confusing alternatives for the purchaser – whether they are individuals, small groups, or any other entity that buys health insurance. Stand Out means defining the decision consumers are going to make as a health care decision, not just an insurance or financial choice.
Stand Out means reaching out to consumers now to become their reference point for health care financial matters. Create a center where you can inform them about health plans you favor, you trust, and that you believe will behave honorably to your patients.
Stand Out means building consumer loyalty programs that continuously connect them to your health system each time they interact with it. Make your brand relevant to consumers more often, more deeply.
Stand Out means building new access points for non-scheduled care outside of the Emergency Room, so that consumers can find you in a moment of need, and stick with you for life.
The Narrow Network conversation is an opening to build a consumer relationship with your brand. And your brand will Stand Out when consumers find you, stick to you, and love you, year after year. Consumer loyalty is the annuity platform for your future that can be adapted to whatever payment model evolves. Stand Up and Stand Out!
Cliff Frank is president of Partnera Partners, LLC, and CEO of PartneraHealth, which helps healthcare organizations become more consumer-focused by increasing access, reducing costs and engaging the consumer before they get sick. Learn more at www.partnerahealth.com or contact Cliff directly at firstname.lastname@example.org.
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