Blues Association Expands Health Care Data Bank

The Blue Cross Blue Shield Association (BCBSA) has announced the collective commitment of its 36 independent Blue Cross and Blue Shield (BCBS) companies to contribute comprehensive data on health care quality and costs to Blue Cross Blue Shield Axis, an industry-leading data capability unprecedented in scope and scale.  BCBS says Axis will power the transformation of health care by providing insights and solutions for employers, consumers, and physicians to improve the quality and affordability of care.  

This commitment vastly expands the volume of data included in BCBS Axis, which reflects more than $350 billion in annual claims along with 36 million provider records and more than 700,000 Blue Cross and Blue Shield patient reviews.  The breadth of the data makes BCBS Axis the health care industry’s largest aggregated data resource and the only one that includes information from every ZIP Code in the United States.

The data include more than 2.3 billion procedures conducted annually from more than 20,000 health care facilities and 540,000 physicians.  It allows Blue Cross and Blue Shield affiliates to equip employers, consumers, and physicians with accurate and actionable information based on vast data resources.  Covering one in three Americans, the Blue Cross and Blue Shield system is uniquely positioned to provide insights and intelligence on health care quality and cost at the local, regional, and national levels by drawing on data from a network that includes more than 92 percent of physicians and 96 percent of hospitals nationwide.

“The depth, breadth, and scope of the data in BCBS Axis are unprecedented,” said Scott Serota, president and CEO of BCBSA.  “Through our actionable data, and the speed at which it is available, we are leading a transformation of the health care system to improve the quality and affordability of care.”

BCBS Axis gives employers a deeper understanding of their workers’ health care needs and utilization.  Employers can benchmark their organizations’ performance to deliver better patient outcomes and more affordable pricing.  By leveraging the data, BCBS companies also help consumers gain access to reliable and accurate information on more doctors, hospitals, and procedures.  This enables members to locate the right doctor at the best value and make better-informed, personalized health care decisions.  The unmatched breadth of data in BCBS Axis also powers solutions for health care professionals by benchmarking care delivery patterns and driving more coordinated, patient-focused care that improves health outcomes.

CMS Awards $110 Million in ACA Funds for Patient Safety

The Centers for Medicare & Medicaid Services (CMS) have awarded $110 million in Affordable Care Act (ACA) funding to 17 national, regional, and state hospital associations and health system organizations to continue efforts in reducing preventable hospital-acquired conditions and readmissions. Through the Partnership for Patients initiative – a nationwide public-private collaboration that began in 2011 to reduce preventable hospital-acquired conditions by 40 percent and 30-day readmissions by 20 percent – the second round of Hospital Engagement Networks will continue to work to improve patient care in hospitals.

“We have made significant progress in keeping patients safe and we are focused on accelerating improvement efforts through collaboration and reliable implementation of best practices,” said Patrick Conway, M.D., CMS acting principal deputy administrator and chief medical officer. “This second round of Hospital Engagement Networks will allow us to continue to improve health care safety across the nation.”

Since the launch of the Partnership for Patients, the vast majority of U.S. hospitals and many other stakeholders have joined the collaborative effort and delivered results. The Department of Health & Human Services estimates 50,000 fewer patients have died in hospitals and approximately $12 billion in health care costs were saved as a result of a reduction in hospital-acquired conditions from 2010 to 2013. Nationally, patient safety is improving, resulting in 1.3 million adverse events and infections avoided in hospitals in that time period. This represents a 17 percent decline in hospital-acquired conditions over the three-year period.

The Partnership for Patients and the Hospital Engagement Networks are part of an overall framework established by the ACA to deliver better care, spend dollars more wisely, and improve care. These initiatives – with Accountable Care Organizations, Quality Improvement Organizations, and others – helped reduce hospital readmissions in Medicare by nearly eight percent between January 2012 and December 2013, which translates into 150,000 fewer readmissions, in addition to quality improvements. 

The ACA takes important steps toward a more accessible, affordable, and higher-quality health care system. The CMS announcement is part of a broader effort to transform the nation’s health care system into one that works better for Americans and puts patients in the center of their care.

California Launches New Online Health Care Price Tool

California Insurance Commissioner Dave Jones, together with the University of California San Francisco (UCSF) and Consumer Reports, announced last week the launch of an innovative web-based tool that offers quality and price information in a consumer-focused, easy-to-use website. Whether researching the cost of a knee replacement in San Francisco or quality care for a woman preparing to deliver her first child in Los Angeles, the new website allows Californians to access and compare prices and quality ratings, so they can make better health care decisions about where to seek treatment.

The Department of Insurance sought a $3.9 million federal Affordable Care Act grant to create the health care pricing platform. Commissioner Jones then partnered with UCSF and Consumer Reports to set up the new website,, as a first step in achieving cost and quality transparency in the Golden State’s health care marketplace.

The first of its kind, California Healthcare Compare allows consumers to compare hospital and medical group quality in the areas of maternity care, hip and knee replacement, back pain, colon cancer screening, and diabetes. The site also reveals estimated regional costs for more than 100 different medical procedures and conditions ranging from appendicitis to prostate cancer, illustrating dramatic price differences depending on where you seek care. To enhance consumers' knowledge of the health care system, Consumer Reports provides expert tips on how to navigate the health care system.

“The time for greater transparency for health care costs is long overdue,” said Commissioner Jones. “Consumers have been in the dark about the price of medical services from one medical provider and facility to the next and certainly haven't had cost information paired with quality measures to help them determine where they will get the best value. Purchasing health care now is like shopping with a bag over your head. This website makes it possible for Californians to search for common medical procedures, to get average and a range of prices in their area, and to compare medical providers based on quality measures before making the important decision about where to seek medical care. This is also a first step toward convincing doctors, hospitals, insurers, and legislators of the benefits of sharing more detailed price information to allow consumers faced with high deductible plans to make better decisions about how to spend their scarce dollars.”

Sutter Health Plus Expands to Bay Area

Sutter Health Plus, an HMO health plan serving the greater Sacramento, Central Valley, and Sonoma County areas, has expanded its service to five new counties in the Northern California Bay Area. The announcement comes after receiving approval from the California Department of Managed Health Care.

Sutter Health Plus initially launched in January 2014 in the Greater Sacramento and Central Valley. The HMO took its first step into the Bay Area when it added Sonoma County in March 2015. The latest expansion adds Alameda, Contra Costa, San Francisco, San Mateo, and Santa Clara counties to its service area.

“This significant expansion demonstrates that we're completely committed to giving more communities affordable, convenient ways to access to a high-quality network of providers,” said Steve Nolte, CEO of Sutter Health Plus.

The Sutter Health Plus network in the Bay Area includes 16 hospitals and campuses, dozens of conveniently located care centers, and nearly 3,600 physicians. Physician organizations in the area include Brown & Toland Physicians, Mills-Peninsula Medical Group, Palo Alto Medical Foundation, Sutter East Bay Medical Foundation, and Sutter Pacific Medical Foundation.

“Brokers and employers are all saying the same thing: they're excited there's more choice in the marketplace,” continued Nolte. “More choice means more competition, making this good for consumers who want more options.”

Sutter Health Plus has also expanded its distribution by becoming a participant in the CaliforniaChoice private health exchange, which is operated by CHOICE Administrators. The new agreement adds 12 new health plan options for groups participating in CaliforniaChoice, which is sold by independent brokers across the state. The addition of Sutter Health Plus expands employer and employee options under CaliforniaChoice to eight health insurers, 18 provider networks, and dozens of HMO, PPO, EPO, and health savings account-compatible plan designs.

AHIP Advocating Market-Based Solutions to Rx Costs

As some of the candidates in the race for the White House begin to talk about health care and prescription drug costs, America’s Health Insurance Plans (AHIP) has released its own statement on the need to develop a market-based solution to promote choice, competition, and affordability for consumers.

“From the start of this debate, we have made clear that the explosive growth in prices for prescription drugs will jeopardize patients' access to affordable, innovative treatments,” said Marilyn Tavenner, president and CEO of the 1,300-member association representing companies providing health insurance to more than 200 million Americans. “Over the past several months, consumers – as well as hospitals, providers, employers, and state Medicaid directors – have grown increasingly frustrated by drug costs that show no sign of slowing down.”

“Consumers are looking to policymakers and leaders of both parties to advance meaningful solutions to these cost challenges. Yet recent proposals that would impose arbitrary caps on insurance coverage or force government negotiation on prescription drug prices will only add to the cost pressures facing individuals and families across the country. These provisions will not make drug prices more affordable.  We strongly believe that greater transparency around drug pricing and more competition in the market are critical to support sustainable, private-sector solutions that deliver the best value for patients and the health system. We are committed to working with all policymakers to achieve those goals.”

To promote a more affordable prescription drug market for consumers, AHIP’s member health plans support encouraging alternative payment and incentive structures for new drugs and technology;

shortening the exclusivity period for biologics to promote greater price competition and earlier access to lower-cost specialty drugs and biosimilars; prohibiting abuse of the patent process by drug companies;

removing barriers at the state level that restrict the use of biosimilars; expanding research on treatment effectiveness; and promoting transparency on prescription drug research, development, and pricing.

The New York Times reported last week on the overnight cost increase of more than 5,000 percent for a drug used to treat tuberculosis, after the firm making the drug was acquired by a new company. The CEO has since said he will consider adjusting the price increase. 

Brokers Positive ACA Has Increased Voluntary Sales

Brokers, more than carriers, are positive the Affordable Care Act (ACA) has helped them increase the sale of voluntary insurance products, according to the latest survey by Eastbridge Consulting Group, a marketing advisory group serving U.S. and Canadian insurance and financial services organizations.

Among those surveyed, more than half (56 percent) of brokers believe the ACA has helped increase their sales, with nearly one-quarter of participants saying the impact has been “very positive.” This is in comparison to only about one-third of carriers taking part in the survey, which is summarized in Eastbridge’s Voluntary Benefits in an ACA World: How are Carriers and Brokers Adapting? Spotlight™ Report. The report is intended to help carriers better understand how the changes and adaptations being made with respect to the ACA compare to how other carriers and brokers are responding.

The 2015 study also finds brokers and carriers are both seeing relatively low usage of private exchanges for voluntary products. More than half of the brokers surveyed said they suggest a private exchange to employers less than 25 percent of the time. Most of the carriers estimated that only about one-fifth to one-third of their business currently goes through a private exchange. However, both brokers and carriers expect continued growth in the use of private exchanges in the next several years.

Carriers and brokers both also agree the broker’s role will change because of the ACA. Carriers see brokers becoming more strategic and consultative when working with employers, while brokers are anticipating lower commissions in exchange for playing a more consultative role. Brokers also see more of their services becoming fee-based, according to the Eastbridge report.

Health Record Hacking Tops 140 Million and $50 Billion

News broke this month that Rochester, New York-based health insurer Excellus Blue Cross Blue Shield was the victim of a sophisticated cyberattack by hackers that potentially exposed the personal information of 10 million individuals. That includes about seven million Excellus members and another 3.5 million members in its non-Blues subsidiary, Lifetime Healthcare Companies.  It is just the latest example of privacy and security breaches disclosed this year that have compromised the health information of nearly 144 million people, according to the U.S. Department of Health & Human Services.

The message from Christopher Booth, Excellus CEO and president, said the company discovered the attack in early August and determined it occurred in December 2013. The disclosed information includes customers’ names, dates of birth, Social Security numbers, mailing addresses, telephone numbers, member identification numbers, financial account information, and claims data. Like cyberattacks at other Blue Cross and Blue Shield Association (BCBSA) plans, the data breach affects members outside of its primary service area because it includes members of other BCBSA plans who were treated by physicians and hospitals that are part of the Excellus network.

Anthem Blue Cross and Blue Shield, the nation’s second largest health insurer that does business in a dozen states including California, said in January a hack on its systems potentially affects as many as 78.8 million people, including millions of non-customers. Premera Blue Cross, which does business in the Pacific Northwest, reported in March a hack affecting 11 million customers. UCLA Health said in July the health information of 4.5 million people was compromised in a cyberattack on its systems.

Based on an average health care data breach cost of $398 (versus $217 in other industries), an American Action Forum report says “more has been spent on responding to security breaches of health care records in the first six months of 2015 than the total amount of federal incentives paid through the HITECH Act to make this transition happen.”  The Health Information Technology for Economics and Clinical Health (HITECH) Act was signed into law in 2009 to promote the adoption and meaningful use of health information technology. Breaches have more than doubled since 2014 and are estimated to have cost the health care industry $50 billion.

AHIP Believes SHOP Expansion Hurts Affordability

Big changes are coming for small and mid-sized businesses under the Affordable Care Act (ACA) Small Business Health Options Program (also known as the SHOP marketplace). Starting in 2016, mid-sized employers (with up to 100 employees) will be required to transition into the small group marketplace, currently made up of smaller companies of up to 50 employees. This is significant because expanding the definition of the small group market will drive up premium costs for the majority of mid-sized businesses, according to America’s Health Insurance Plans (AHIP), a national association representing nearly 1,300 member companies providing health insurance to more than 200 million Americans.

A recent analysis by AHIP also says the planned change could lead to potential coverage disruptions for millions of employees and their families. In fact, nearly two-thirds of mid-sized businesses face average premium increases of 18 percent or more resulting from the move. However, there is a way to protect the 3.4 million employees and their families enrolled in health insurance through mid-sized firms from significant cost increases. Bipartisan legislation introduced in the U.S. House of Representatives and the U.S. Senate would allow states to maintain their current definition for small group markets and provide stability for millions across the country. AHIP strongly supports this common sense solution, as do many others, including the U.S. Chamber of Commerce, the National Association of Insurance Commissioners, and The Center on Health Insurance Reform, all of which agree this is an important step to protect health coverage, which employees depend on.

“Unless this current law is reversed, the disruption in the marketplace will be significant,” said Congressman Joe Pitts (R-PA), chair of the House Energy & Commerce Health Subcommittee. “For example, it is estimated that under current law, more than three million employees will experience a double-digit percent increase in their health care premiums. Ultimately, cost increases for small employers will change their choices regarding offering coverage, could change their business model, and will ultimately be felt by millions of workers.”

Regardless of the disposition of proposed legislation in Washington, DC, California has already approved the expansion of small group to 100 and each state has the right to regulate insurance within its borders, provided the state meets minimum federal guidelines.

House Lawsuit Against ACA to Proceed

A ruling last week by U.S. District Judge Rosemary Collyer will allow Republicans in the U.S. House of Representatives to proceed in their legal challenge against President Obama over the Affordable Care Act (ACA). Judge Collyer said lawmakers have legal standing to sue and the House can proceed on its claim the administration is violating the Constitution in paying more than $175 billion over a decade to reimburse health insurers for offering reduced health care co-payments to lower-income participants. The Republican argument is that cost-sharing subsidies require annual authorization from Congress. They are different from premium subsidies, which are built into the ACA.

“The House of Representatives as an institution would suffer a concrete, particularized injury if the Executive were able to draw funds from the Treasury without a valid appropriation,” wrote Collyer. Members of the House argue Congress never specifically appropriated the cost-sharing subsidiary funds and in fact denied President Obama’s request for them. The administration says it is relying on funds previously allocated, which it is allowed to use. Department of Justice spokesperson Patrick Rodenbush said the White House will appeal the September 9 ruling.

While Judge Collyer, a 2003 appointee of President George W. Bush, gave the House a victory in agreeing to hear the case, it is only the first step in the process. The original lawsuit was filed in 2014 against the U.S. Department of Health & Human Services and the U.S. Treasury in response to frustration by Republicans to circumvent the health care reform law. The House has voted more than 50 times to repeal all or parts of the ACA, although Senators have failed to support the House actions.

Legal experts were split about whether the legal tactic would succeed, and Democrats contend it is a politically motivated attack. If Judge Collyer finds in favor of the House on the merits of the case, the White House would appeal to the U.S. Court of Appeals for the District of Columbia, where Democratic appointees are in the majority. The case could then move to Supreme Court, which likely would not rule until after President Obama has left office. 

Assurant Announces Sales of Employee Benefits Group

Assurant, Inc. announced last week it has entered into a definitive agreement to sell its employee benefits business for $940 million to Sun Life Assurance Company of Canada, the wholly ­owned subsidiary of Sun Life Financial Inc. The sale ends speculation on the future of the firm that was put up for sale last April. Headquartered in Kansas City, Missouri, the business has approximately 1,700 U.S.-based employees, many of whom are expected to be offered positions with Sun Life Financial.

“Assurant Employee Benefits’ success has been driven by their talented employees, and we look forward to welcoming them to the Sun Life team,” said Dan Fishbein, president of Sun Life Financial U.S. “This transaction will allow us to grow profitably and bring value to our customers, partners, distributors, employees, and the communities we serve.”

Assurant Employee Benefits will continue to provide exceptional customer service, sell policies, and meet all claims, benefits, and broker commission responsibilities throughout the transition period. The sale to Sun Life Financial is structured as a combination of reinsurance agreements and sale of certain legal entities and assets. Subject to regulatory approvals and customary closing conditions, the transaction is expected to close by the end of first quarter 2016, resulting in approximately $1 billion of net proceeds inclusive of capital releases. Serving more than 30,000 small and mid­-sized employers, Assurant Employee Benefits offers a product suite of voluntary and employer­-paid products including dental, long-­term disability, short­-term disability, and life insurance.

Last spring when Assurant announced its planned exit from health insurance, it said it would sell or shut down its Milwaukee-based firm specializing in coverage for small businesses and individuals. Assurant Health discontinued individual major medical, small group health, and short-term health in mid-June. It is expected to cease all operations in Milwaukee by the end of the year.