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$200 Million Later, Was TNInvestco Worth the Risk?

Posted Mon, April 14, 2014

By Jamie McGee for The Tennessean, April 11, 2014 Christopher Parks launched Change Healthcare in 2007 to bring more transparency to health care, building the company with $1 million he raised from local investors. In 2010, a year after the state’s TNInvestco program was created with the mission of supporting entrepreneurship and job creation by funding early-stage […]

By Jamie McGee for The Tennessean, April 11, 2014

Christopher Parks launched Change Healthcare in 2007 to bring more transparency to health care, building the company with $1 million he raised from local investors.

In 2010, a year after the state’s TNInvestco program was created with the mission of supporting entrepreneurship and job creation by funding early-stage companies, Parks landed $5.5 million, $1.5 million of that coming from TNInvestco. His company has since raised $25 million more from local and national investors, allowing it to grow its staff to more than 70 employees with nearly 7 million people on the health care platform nationally.

Change Healthcare is one of 157 companies that have received funding from TNInvestco, now in its fifth year. More than 80 percent of the funds raised through $200 million in tax credits has been allocated, and investors say that while it’s too early to measure the program’s overall effectiveness, signs of success are abundant.

They point to the role the program has played in building the entrepreneurial ecosystem, the ability for TNInvestco companies to lure employees from outside Tennessee and the amount of funding the companies have been able to attract from private investors after receiving TNInvestco capital.

“It’s energized the venture capital community in this state and facilitated the building of a network of relationships within the state and outside the state,” said Townes Duncan, managing partner of Nashville investment firm Solidus Co.

As of 2013, 10 TNInvestco funds have allocated $111.2 million to Tennessee companies, which have received about $191 million in “follow-on” dollars, or additional, private investment, according to the funds. As of 2012, TNInvestco companies were supporting 577 new jobs, the majority in Tennessee, and nearly 1,400 jobs in full.

The reports detailing the number of jobs as of 2013 are being audited and are not available, according to the Tennessee Department of Economic and Community Development, which oversees the program.

Need for transparency

In 2009, the program was touted as a way to bring new jobs to Tennessee and support startups when capital was especially tight.

With millions spent on luring corporate headquarters to Tennessee, legislators and economic development staff pointed to the program as a way to build jobs from the ground up. Funds would invest in companies and split returns with the state in a liquidity event, such as a company sale or an initial public offering. Six funds were chosen to participate in 2009, and four more were added in 2010.

From its inception, the program has stirred controversy.

A venture fund not chosen to participate in 2009 filed a lawsuit concerning how the funds were selected, and some legislators questioned using tax dollars to finance companies. Others said the terms were too generous and more returns should go to the state.

In 2012, an audit found “serious and pervasive problems” with the program and said TNInvestco lacked safeguards to ensure companies receiving funding were eligible.

Legislation passed this year addresses how the state can eventually recoup returns in companies through means such as selling ownership stakes to a third party. It also gives funds more time to address noncompliance issues and increases fines for such noncompliance.

The bill stemmed from an interest to add “more transparency and greater accountability” to TNInvestco, and the liquidation rules were an oversight in the original legislation, said Sen. Doug Overbey, a sponsor.

“When you are starting a new and innovative program, you try to to look at it from all angles and anticipate a scenario, but that was one that wasn’t covered,” he said of the amendment. “I’m glad we could come back and cover it.”

Last week, Economic and Community Development informed the state comptroller that it had learned follow-on investment numbers (additional money from new investors) reported by funds had been inflated through 2012, with funds co-investing in companies both calculating the same investments in their follow-on estimates. The funds have been aware of the annual reports’ inaccuracy for 18 months, according to a letter sent to the comptroller by Ted Townsend, assistant commissioner of strategy for ECD.

The funds, which report individually, became aware of the discrepancy this week as they responded to media queries and “immediately” reported it to Economic and Community Development, according to a statement sent by Duncan. It said the error was the result of how the department aggregated reports.

Sen. Randy McNally said that although he initially voted for TNInvestco, he has concerns about the program. “Anytime (money) gets out of state control and into private control, we need to make sure we can follow the money,” he said. “The bill that was passed this year is certainly a step in the right direction. There probably needs to be a lot more transparency.”

Gauging success

Job creation and venture capital spending were cited as the program’s benefits when it was approved in 2009, but TNInvestco investors argue that at this point in the program’s life span, the follow-on capital is the most accurate gauge of success, as jobs typically come after a company has proved its value.

“Jobs follow business success,” Duncan said. “If they precede business success, they stop business success. If you hire a bunch of people and you’re paying a bunch of people too far ahead of your revenues, you violate the fundamental rule of a startup business: Don’t run out of money.”

Since Change Healthcare received three rounds of TNInvestco capital through Solidus’ TNInvestco fund, it has attracted capital from prominent venture capital firms including Mitsui Global Investment in New York, Sandbox Industries in Chicago, and HLM Venture Partners in Boston and San Francisco.

“The TNInvestco money has absolutely been a big part of bridging us from where we were as an early-stage company to … where we have brought in other investors, both locally and outside of Nashville,” said Doug Ghertner, CEO of Change Healthcare. “You don’t get to that point unless you have structures or vehicles like TNInvestco to get you there.”

Once larger firms with bigger purse strings begin looking to Tennessee for investment opportunities, that benefits all Tennessee startups, not just those receiving TNInvestco funds, said Sid Chambless, executive director of the Nashville Capital Network, which includes TNInvestco’s Tennessee Angel Fund.

Sandbox Industries, for example, invested in Nashville health care company InvivoLink before turning to Change Healthcare and Nashville-based naviHealth. It also helped launch Healthbox, a health care accelerator at the Nashville Entrepreneur Center. While these deals don’t show up in the TNInvestco annual report, they are a result of the program and will have a lasting impact on the state’s economic development efforts, Chambless said.

“The proof is in the follow-on capital going to these companies,” he said. “It suggests we are investing in really great companies that will scale.”

Five TNInvestco companies have attracted buyers, including NeighborMD in Nashville, bought by HCA’s TriStar Health System and CareSpot, and ExtraOrtho in Memphis, with the funds reinvesting their share of returns. The program also has prompted a handful of firms to move to Tennessee from other states. Health care company Shareable Ink moved to Nashville from Boston, cooling fan-maker Auramist relocated from Arkansas, and Molecular Sensing came from California.

“People are willing to move to town from outside the state if we’ll write a check,” said Joe Cook III of Mountain Group Capital, which runs TNInvestco’s Limestone Fund. “That never happened four years ago.”

Not every company has seen the same levels of growth, measured in jobs and follow-on capital. At least five companies have closed since receiving TNInvestco funds. Knoxville-based TrakLok closed after receiving $1 million, and The Smart Image, a Nashville online coupon company, closed after receiving $450,000.

Other companies have not stayed here. Krush Inc., a fashion shopping app, moved to Newport, Calif., after garnering $2 million in TNInvestco money. While Krush no longer employs Tennessee workers, the state and TNInvestco fund Tennessee Community Ventures will have access to returns, said fund manager Eric Satz.

Filling the gaps

The investors also point to the inception of programs, including Launch Tennesseeand Jumpstart Foundry, as one of the side benefits of TNInvestco. Companies that go through Jumpstart receive $15,000 from Solidus’ TNInvestco fund, which supports them as they go through the startup accelerator program and helps them develop their product or service. Several of those, including InvisionHeart and Evermind, have gone on to receive larger rounds from other TNInvestco funds or private investors.

As TNInvestco winds down with no plans for a second round, there could be a loss of momentum in early-stage funding, especially in the $2 million to $3 million investment rounds, Chambless said. Local investors are hopeful that private money, and money from the state’s federally funded Incite Co-Investment fund, helps fill the early-stage funding gaps TNInvestco has helped address in recent years. The Nashville Capital Network, Limestone Fund and TriStar Technology Ventures, each with TNInvestco funds, have launched new funds with private investors that will be directed to early capital rounds.

“TNInvestco just started the ball rolling and scratched the surface in terms of the early-stage capital needs here,” Chambless said. “There are more and more companies that are coming out of (Tennessee accelerator programs) that are seeking capital. … What keeps me up at night is the access to capital and the ability for these great companies … to be able to capitalize their business.”

Change Healthcare Offers Tools for Making Wise Choices

Posted Mon, April 14, 2014

By Jamie McGee for The Tennessean, April 11, 2014 Change Healthcare works with self-insured companies and health plans to help employees and members find cost-saving opportunities and make more-informed decisions concerning their health care. Founder Christopher Parks developed the concept for the company in 2007, when both of his parents died from cancer and he […]

By Jamie McGee for The Tennessean, April 11, 2014

Change Healthcare works with self-insured companies and health plans to help employees and members find cost-saving opportunities and make more-informed decisions concerning their health care.

Founder Christopher Parks developed the concept for the company in 2007, when both of his parents died from cancer and he realized the difficulty of managing medical bills and the need for greater price transparency.

Change Healthcare’s employers and health plans are located across the U.S., with nearly 7 million with access to the platform. Through the site, users can compare costs of health care and access educational tools that help them understand health care basics.

“Our job is really to educate people that there is variability in cost and the fact they can do something about it and then give them the decision support tools to act on that,” said CEO Doug Ghertner.

For a company that now employs more than 70 people and has backing from nationally established investment firms, raising capital has become less difficult, filled with more highs than lows compared with Change Healthcare’s earlier years, Parks said. The company has raised $30 million in capital, with $2.1 million from Solidus Co.’s TNInvestco fund.

“Nashville and Tennessee were good places to raise money if you fit into the bricks-and-mortar health care mold, but if you didn’t, then it became ridiculously challenging,” Parks said. “With TNInvestco, it actually armed, incented and supported those (venture capital firms) that wanted to make smart investments but historically had not broken outside that mold. … Without that, it would have been a longer, more arduous journey.”

http://www.tennessean.com/story/money/industries/health-care/2014/04/11/change-healthcare-offers-tools-making-wise-choices/7616425/

 

New Medical Data Create New Opportunities

Posted Wed, April 09, 2014

By Shelley DuBois for The Tennessean April 9, 2014 Starting Wednesday, the federal government is releasing health care data that have never before been available to the general public — numbers that show what doctors who treat Medicare patients charge the government and what they are actually paid. Doctors groups have fought for years to […]

By Shelley DuBois for The Tennessean
April 9, 2014

Starting Wednesday, the federal government is releasing health care data that have never before been available to the general public — numbers that show what doctors who treat Medicare patients charge the government and what they are actually paid.

Doctors groups have fought for years to stop this kind of data from being released, but the Obama administration recently decided to change course and release the numbers. The major release has excited health care observers and entrepreneurs, who are eager to discover new insight into the nation’s health care system through the use of this data.

This move follows other efforts by the Obama administration to bring more transparency into health care costs. Though many national groups, such as the American Medical Association, have been wary of the data dump, several local health care executives support the move.

“We see this as a net positive as it continues the trend towards bringing greater transparency to health care,” said Doug Ghertner, CEO of Change Healthcare, a local company that serves employers and strategic partners by helping track the true cost of health care procedures.

“There’s more to reducing costs than just knowing the numbers, so releasing (Centers for Medicare and Medicaid Services) data is a first step,” said Clayton Nicholas, Change’s vice president of strategy and marketing. “Next, customers need to know what to do with the information and be empowered to take action with it.”

The new data could aid the health care industry’s shift from volume to value, said Clay Richards, CEO of Nashville company naviHealth, which aims to help clients find high-quality, low-cost treatment options for long-term care patients.

“The Medicare fee-for-service reimbursement system has historically incentivized volume,” Richards said. “In our experience, greater transparency leads to improved practice patterns and, ultimately, better outcomes at lower costs.”

Improved outcomes

Greater transparency in other areas has already led to improved outcomes, said Dan Hogan, CEO of health care technology company Medalogix. “I am a big fan of the transparency that this administration is pushing” — namely, he says, because “if you are aware of the situation, you can begin to improve it.”

He says that already the administration’s transparency push has better aligned provider motives with patient care. “Say what you will about Obamacare or the Affordable Care Act — our data is indicating that providers are diligently preparing themselves to be measured by outcomes.”

There are several caveats to this new data: They will not reveal information about payments that physicians receive from private insurers. They will not include data for services performed on 10 or fewer Medicare members because of patient privacy concerns.

But for all the things the data don’t include, perhaps the most remarkable takeaway is that they were released at all. For many, this marks the largest opportunity yet to look behind the curtain to see how doctors are paid.

http://www.tennessean.com/story/money/2014/04/08/new-medical-data-create-new-opportunities/7485845/ 

You’ll Soon be Able to Shop Around for Your Imaging Testing Services

Posted Thu, March 27, 2014

By Barbara Mannino | Published March 27, 2014 | FOXBusiness High-deductible health plans can put consumers on the hook for several thousand dollars before their coverage kicks in, but informed consumers can put a lid on their out-of-pocket medical expenses. We can compare prices on pretty much everything we buy nowadays, and experts predict we will soon be doing […]

High-deductible health plans can put consumers on the hook for several thousand dollars before their coverage kicks in, but informed consumers can put a lid on their out-of-pocket medical expenses.

We can compare prices on pretty much everything we buy nowadays, and experts predict we will soon be doing the same with our health-care needs.

In fact, Peter Mazonson, a practicing physician and cofounder of ClearCost Health, says there are already tools that enable you to take out your smart phone when your doctor indicates you need a battery of tests, and pull up a comparative list of price and quality measures at eight imaging centers within a 10-mile radius.

“’Whom do you recommend?’” you’ll ask. “Your physician will say, ‘I don’t like him or she’s a great doctor,’” Mazonson explains.

The practice may not yet be commonplace, but it’s getting there, experts say. And the first step in motivating people to become comparison shoppers is identifying the challenges patients face when navigating the big black hole in the pricing and quality of medical services.

There’s a large variability in health costs for many of our most frequently-used medical services even in the same network or ZIP code, according to a recent quarterly Healthcare Transparency Index from Change Healthcare.

The report identifies several frequently prescribed services in the $100 billion a year medical imaging market and shows varying price tags of the same service.

Among them are CT scans, which have nearly tripled in use over the last 20 years, according to Dr. Rebecca Smith-Bindman, a professor of radiology and biomedical imaging at the University of California San Francisco. MRIs, she says, have increased fourfold.

CT scan prices vary as much as 794% and range from $300 to about $2,700. The price of having an MRI varies by 450% and fluctuates from about $500 to $2,700. Two other popular tests, colonoscopies and upper GI endoscopies, vary by 450% with pricing that spans from approximately $1,300 to more than $4,000.

A more expensive test does not indicate better quality, says Clayton Nicholas, Change’s strategy and marketing vice president.

Rather, when compared to independent imaging centers or smaller hospitals, the negotiating clout of large hospital systems gives them an edge in making lucrative deals with insurers and health plans, experts say.

Due to high hospital overhead and other factors, Medicare, which creates a baseline for reimbursement rates, compensates hospitals more than it does independent imaging centers for the same services, claims Naseer Hashim, CEO of Imaging Advantage.

Yet, Nicholas says lower-cost imaging centers contribute to only 19% of nationwide imaging business.

“No other part of our economy has a six-fold price variation for the same product or service,” says Mazonson.

With pricing arbitrary and under wraps, comparison shopping has been difficult for consumers. There’s an existing perception that consumers don’t have choices when it comes to health care, says Hashim, “and people are intimidated to ask questions. I am certain when a doctor instructs a patient to get a CT scan, that patient never asks about alternative facility services or questions costs or the qualifications of the radiologist reading the film—or how long it takes to get results.”

New models can drive change

Thankfully, experts predict new companies and business models will drive change in the marketplace and make pricing more transparent and steady.

Already, companies like Change Healthcare and ClearCost are making headway in reducing out-of-pocket expenses for employees as well as their employers. For example, Change claims a consumer who uses its services to comparison shop for a pelvis or abdomen CT scan saved nearly $1,600. It’s not uncommon to find fair price imaging providers who offer the same quality at rates that are half or even a third as much as high cost providers, says Mazonson. And, Imaging Advantage, for example, uses cloud-based technology and a network of more than 300 radiologists to link operations of ER radiology departments across 17 states to show price points and service levels to consumers.

Hashim says technology interoperability creates competition in a currently noncompetitive environment. “Physicians in Wichita can now compete with doctors in New York,” he says. “You’ve introduced competition and as a result pushed up quality and service levels and lowered cost.”

What’s more, because accountable care organizations and patient-centered medical homes share the financial risks and benefits in managing and coordinating care for a community of patients, Reid B. Blackwelder, a family physician in Kingsport, Tenn., and president of the American Academy of Family Physicians, says there is less focus on churning revenue, say by ramping up patient tests and services, and more focus on the value—or harm—of a particular test for a particular patient in a particular point in time and circumstance.

Blackwelder also says when doctors know imaging prices in advance they can provide more value-based referrals. In fact, researchers at the Johns Hopkins University School of Medicine saw a 9% decrease in test orders over six months for 30 lab tests when physicians saw fees based on the allowable Medicare fee as compared to a control group of 31 tests without pricing information which rose 5.1%.

The transparency represented a “modest” $436,115 decrease in hospital charges, researchers say, but showed “evidence” that presenting providers with associated fees as they order tests is a simple way to alter behavior.

Technical advances have made the tests better and therefore useful across a range of clinical indications, says Bindman. Still, diagnostic imaging does not change clinical decision making in every situation.

Here are expert tips for savvy imaging shopping:

Ask Why. The Choosing Wisely campaign and its supporters can offer guidance when addressing health issues. The AAFP has identified 15 tests and procedures that both doctors and patients should carefully consider and openly discuss before incorporating them into a treatment plan. If you are not faced with an emergent situation (e.g., manageable back pain), time, patience, anti-inflammatory medications, stretching and other simple measures will often help, says Mazonson.

Speak up. If an advanced imaging test is ordered, ask your physician what he or she hopes to learn from the test, and how it will change management.

Know what you’re getting. If you do need imaging, work with your doctor to understand what code and subsequently test is ordered, says Blackwelder. Then call your insurer to try and discover if costs will vary from facility-to-facility.

Share your perspective. Make sure your physician hears and understands your perspective on all health decisions. Consumer-driven health puts patients at the center of care, says Blackwelder. Walk the talk.

..

http://www.foxbusiness.com/personal-finance/2014/03/27/youll-soon-be-able-to-shop-around-for-your-imaging-testing-services/

Mobile for the Masses: Technology Company Cerner Lowers Its Healthcare Costs Through Personalized Mobile Messaging

Posted Thu, March 20, 2014

By Kathleen Koster Employee Benefits News March 20, 2014 The overwhelming majority of Americans don’t understand basic health care concepts. In a Carnegie Mellon research survey, only 14% of consumers adequately understood four of the most common terms in health care: copays, co-insurance, deductible and out-of-pocket maximum, “yet those are the very dimensions that people […]

By Kathleen Koster
Employee Benefits News
March 20, 2014

The overwhelming majority of Americans don’t understand basic health care concepts. In a Carnegie Mellon research survey, only 14% of consumers adequately understood four of the most common terms in health care: copays, co-insurance, deductible and out-of-pocket maximum, “yet those are the very dimensions that people are making very important, financially meaningful benefits decisions [about], says Doug Ghertner, CEO of Change Healthcare.

As employers shift toward high-deductible health plan designs, they need to explain these benefits clearly so employees now holding the purse strings can become savvy health care consumers. In this day in age, technology allows employers to personalize benefits communication and reach an even wider swathe of their population.

“Tech is an enabler, it allows us to scale messaging,” says Arielle Bogorad, director of worldwide benefits and wellness at Cerner. The health care information technology company uses innovative technology outreach – personalized in ways not previously available — with its 9,000 employees based in Kansas City.

Cerner primarily uses engagement alerts that target relevant groups for colonoscopies, mammograms, and other common and recurring services. It also uses the system to try to improve medication adherence in a population, and support preventive or wellness initiatives. These “Ways to Save” alerts concretely show employees how they can save money on health care based on their care usage and the benefit plan’s offerings. The messages also can show participants the top five providers in their area and what price range they offer for services.

“We believe that you create a consumer by educating them about variability and cost and the fact that they can do something about it on the common and recurring things,” says Ghertner of the Change Healthcare program it implemented for Cerner. “Cost is very tangible,” he adds, and provides a good opportunity to engage employees.

So far, 80% of Cerner associates have received a “Ways to Save” alert, and of those, 66% of the push notifications were acted on, allowing employees to save money on a prescription drug or dental service, for example. On average, the company has saved $516 per purchaser per year.

Further, participants are four times more likely to shop around for health care when they read these alerts, according to Change Healthcare, meaning they are more likely than those who didn’t receive alerts to proactively research prices and service details for bigger ticket items through the vendor’s tool at a later date.

Real-time feedback

Because the tailored messaging gives participants personalized information, the alerts highlight meaningful savings that are relevant for that individual. Through the alerts, Cerner improved first-time utilization at its onsite pharmacy by 31%, and 22% of onsite clinic users took advantage of the benefit for the first time.

“The tech helps to personalize [the message] and give people a platform to interact with their health and wellness, which wasn’t possible before,” says Bogorad.

Employees can give real-time feedback on the program and other benefits through the company’s social page, which “allows us to continually make changes and augment the program to better serve the needs of our associates,” says Bogorad.

Being a health care technology company, Cerner constantly thinks “about how to leverage tech to personalize your journey and help you become a health care consumer. That may differentiate us from other employers in the benefits space because it aligns with our DNA as a company,” Bogorad says. “We think of ourselves as a living lab, so we’re given the latitude to test new technologies and ideas. Our philosophy is ‘if you’re going to fail, fail fast,’ so we’re a very a dynamic environment.”

Health care is personal

Cerner even built new state-of-the-art fitness centers with the most technologically advanced gym equipment on the market at two of its locations. A fitness coach creates a personalized workout for the employee and inputs the routine on a key. The individual simply inserts the key into the equipment and their tailored gym training guides them through each workout. Coaches can track the member’s workout and send alerts if they haven’t been to the gym recently or aren’t moving as fast as the last session.

“We believe that health care is personal, but it can sometimes take a lot of manpower to make it personal, so we leverage tech to help make it personal,” says Bogorad.

Ghertner believes companies will embrace more personalization through technology in the future.

“I think there will continue to be this trend towards consumerism, and not just on the financial dimension, but in how we determine the key decision points that matter to the individual and how we craft a user experience that allows someone to tailor their purchase to those specific attributes,” he says.

And as consumers continue to make more educated benefits and health decisions, technology will only play a larger role in employers’ outreach campaigns, enabling them to reach more people and tailor the information to each individual’s needs and lifestyle.

Brentwood-based Change Healthcare Tracks Costs of Medical Procedures

Posted Fri, February 14, 2014

By Shelley DuBois The Tennessean February 12, 2014 Change Healthcare is a Brentwood-based company that works with a variety of partners to keep costs down for employer-sponsored health plans. As part of that, the company tracks the cost of various medical procedures. The company, which has access to about 5 million covered patients across the […]

By Shelley DuBois
The Tennessean
February 12, 2014

Change Healthcare is a Brentwood-based company that works with a variety of partners to keep costs down for employer-sponsored health plans. As part of that, the company tracks the cost of various medical procedures. The company, which has access to about 5 million covered patients across the country, uses in-network claims to create the Healthcare Transparency Index — a measure of price variability for different procedures.

This report uses data from the third quarter of 2013 to identify certain procedures that had a huge variability in cost. Here are some of the findings:

 

MRI Scans

• Overall, these scans ranged 458 percent, from $485 to $2,708.

• Brain MRIs ranged 609 percent, from $515 to $3,652.

• Spine MRIs ranged 410 percent, from $465 to $2,374

• Lower extremity MRIs ranged 359 percent, from $488 to $2,237.

• Upper extremity MRIs ranged 416 percent, from $468 to $2,415.

CT Scans

• Overall, the cost of CT scans varied 794 percent, from $300 to $2,681.

• Chest CT scans ranged 489 percent, from $325 to $1,913.

• Face/jaw CT scans ranged 464 percent, from $255 to $1,437.

• Head/brain CT scans ranged 476 percent, from $320 to $1,844

• Pelvis/abdomen CT scans ranged 988 percent, from $300 to $3,265.

Ultrasounds

• Overall, the cost of an ultrasound ranged 472 percent, from $100 to $572.

• Abdominal ultrasounds ranged 714 percent, from $111 to $905.

• Breast ultrasounds ranged 434 percent, from $87 to $466.

• Transvaginal ultrasounds ranged 369 percent, from $103 to $481.

C-Section Delivery

• This procedure ranged 284 percent, from $6,128 to $23,526.

http://www.tennessean.com/apps/pbcs.dll/article?AID=2014302120133

 

 

Analysis: High Costs, Price Variability Mean Imaging Should Be a Healthcare Savings Target

Posted Sat, February 08, 2014

By Mike Bassett for Fierce Medical Imaging February 8, 2014 Medical imaging procedures figure prominently in a list of the high-cost, high-frequency and highly variable medical services that present the greatest opportunities to achieve healthcare savings, according to an analysis from Change Healthcare’s quarterly Healthcare Transparency Index. The index tracks cost variability of common healthcare services across […]

By Mike Bassett for Fierce Medical Imaging
February 8, 2014

Medical imaging procedures figure prominently in a list of the high-cost, high-frequency and highly variable medical services that present the greatest opportunities to achieve healthcare savings, according to an analysis from Change Healthcare’s quarterly Healthcare Transparency Index.

The index tracks cost variability of common healthcare services across various prescription, medical, dental and vision services. Among these services, Change Healthcare identified eight “target” categories with the greatest opportunities for cost savings. Those eight included five related to medical imaging: CT scans; MRI; colonoscopies and upper GI endoscopies; mammograms; and ultrasound.

According to the analysis, CT scans have the greatest variability in price at 794 percent, with costs ranging from $300 to more than $2,600. Ultrasound ranks next at 472 percent ($100 to $572), followed by MRI at 458 percent ($485 to $2,708), mammograms at 242 percent ($118 to $402), and colonoscopies and upper GI endoscopies ($1,290 to $4,035).

Price variations can be even greater depending on the type of modality and area of the body being imaged. For example, CT scans of the pelvis/abdomen varied in price by 988 percent, and abdominal ultrasounds by 611 percent.

“Our data show costs for common procedures can vary significantly, even in the same zip code,” Doug Ghertner, president and CEO of the Brentwood, Tenn.-based company that provides pricing information to health payers and employers. “Care setting may contribute to costs differences, but often there’s little explanation for why common treatments may cost two, three or four times more at one provider versus another.”

Ron Vianu, CEO of a company that provides data on imaging to employers and worker’s compensation insurance carriers, told in Bloomberg Businessweek, however, that price is not a good determinant of quality care when it comes to medicine, “and particularly radiology.”

Vianu added that since insurers negotiate different rates with different providers, two equivalent imaging centers could have vastly different costs. Hospital prices could be even harder to judge, he said, because they bargain on a wider variety of services.

http://www.fiercemedicalimaging.com/story/analysis-high-costs-price-variability-mean-imaging-should-be-healthcare-sav/2014-02-08#ixzz2tskRSIpc

Health Care Cost Disparities Highlighted in Change Healthcare Report

Posted Wed, February 05, 2014

By John Tozzi BusinessWeek February 05, 2014 What’s the right price for an abdominal CT scan? The cost can vary by an order of magnitude, from as low as $300 to as much as $3,265, according to a report today from Change Healthcare, a company that provides pricing information to health insurers and employers. CT scans aren’t an unusual […]

By John Tozzi
BusinessWeek
February 05, 2014

What’s the right price for an abdominal CT scan? The cost can vary by an order of magnitude, from as low as $300 to as much as $3,265, according to a report today from Change Healthcare, a company that provides pricing information to health insurers and employers.

CT scans aren’t an unusual in this respect: Diagnostic imaging tests make up four of the eight procedures on Change Healthcare’s list of medical care with wide variations in price. The most expensive MRIs, mammograms, and ultrasounds are often three to five times the cost of the least expensive, according to the company’s data. The report is based on in-network claims from Change Healthcare’s health-plan clients, which cover more than 5 million people in the U.S.

Medical imaging has been a booming industry and a potentially lucrative service for clinics and hospitals to offer. That growth has raised concerns that the scans, especially those that involve radiation that raises the risk of cancer, are overused.

Where the tests are done influences how much they cost. “Only 19 percent of all imaging work done by radiologists is done in private offices,” the report says. Most of the 95 million scans done each year happens in hospitals, according to Change Healthcare, which are the most expensive setting.

Patients choosing between a CT scan that costs $300 and one that costs $3,000 might be inclined to get the cheaper test, especially if they’re paying out of pocket on high-deductible plans, all else being equal. But if more some scans deliver better results—more precise images that could show a small tumor, for example—they might be inclined to pay more.

A higher price isn’t necessarily a good indicator of a better test, says Ron Vianu, chief executive of Spreemo. The New Jersey-based company provides data on imaging to employers and workers’ compensation insurance carriers, which pay for radiology tests for workplace injuries. ”I would not say price is a good determinant of quality in any area of medicine, particularly in radiology,” Vianu says.

Insurers negotiate different rates with each provider, so two equivalent imaging centers could have vastly different charges. Hospital prices are even harder to judge because hospitals bargain with insurers over a wide variety of services. “They may give a discount in cardiology but as a result they may increase the price in radiology,” Vianu says.

And quality can vary widely, too. Newer, more expensive MRI machines deliver more detailed images, the same way today’s digital cameras have higher resolution than models from 1999. Better radiologists can read scans more accurately. The stakes for getting the right scan are high; mistakes during diagnosis, when doctors are still trying to figure out what’s wrong, can lead to performing an unnecessary procedure, or delaying a needed one.

The bad news for patients: There’s no good way to find the best MRI, CT scan, or mammogram at the lowest cost. Spreemo is working on ratings for imaging facilities that take into account what technology they use and the skill of the radiologists. Patients can try to investigate the technology or doctors’ credentials themselves, but most wouldn’t know where to start. ”Today, unfortunately,” Vianu says, “there’s absolutely nothing [patients] can do to help distinguish.”

http://www.businessweek.com/articles/2014-02-05/americas-mixed-up-markets-for-medical-imaging

Shop Around: Eight Health Procedures with the Biggest Variations in Price

Posted Wed, February 05, 2014

By Eleanor Kennedy Nashville Business Journal Brentwood-based Change Healthcare’s latest Healthcare Transparency Index aims to give patients and plan sponsors price variability information they can use to find opportunities for savings. According to the report, an increasing number of consumers are enrolled in consumer-driven plans and plans with high-deductibles — a situation that will only […]

By Eleanor Kennedy
Nashville Business Journal

Brentwood-based Change Healthcare’s latest Healthcare Transparency Index aims to give patients and plan sponsors price variability information they can use to find opportunities for savings.

According to the report, an increasing number of consumers are enrolled in consumer-driven plans and plans with high-deductibles — a situation that will only reduce overall health care costs if consumers can make informed decisions based on transparent pricing. To that end, the company used an aggregation of in-network medical claims to highlight services with the most price variability, opening up the biggest opportunity for cost savings.

CT Scans lead the pack, according to the report, varying in price by close to 800 percent and more than $,2000.

“Our data show costs for common procedures can vary significantly, even in the same ZIP code,” Doug Ghertner, president and CEO of Change Healthcare, said in a news release. “Care setting may contribute to costs differences, but often there’s little explanation for why common treatments may cost two, three or four times more at one provider versus another.”

Ghertner said the index can be useful to both plan sponsors and participants, as they seek out the least expensive offerings to maximize savings.

The following is a breakdown of the top eight most variable procedures; you can download the full report here.

CT Scans

  • Price range: $300-$2,681
  • Price variability: 794 percent

MRIs

  • Price range: $485-$2,708
  • Price variability: 458 percent

Colonscopies and upper GI endoscopies

  • Price range: $1,290-$4,035
  • Price variability: 213 percent

Mammograms

  • Price range: $118-$402
  • Price variability: 242 percent

Colonscopies and upper GI endoscopies

  • Price range: $1,290-$4,035
  • Price variability: 213 percent

Mammograms

  • Price range: $118-$402
  • Price variability: 242 percent

Ultrasounds

  • Price range: $100-$572
  • Price variability: 472 percent

C-section deliveries

  • Price range: $6,128-$23,526
  • Price variability: 284 percent

Office visits with lipid screening

  • Price range: $179-$506
  • Price variability: 182 percent

Office visits with diabetes screening

  • Price range: $118-470
  • Price variability: 298 percent

http://www.bizjournals.com/nashville/blog/2014/02/change-healthcare-study-measures-care.html?page=2

Health Care Cost Disparities Highlighted in Change Healthcare Report

Posted Wed, February 05, 2014

By Michael Giardina Employee Benefit News February 5, 2014 Health care plan sponsors planning to get in the front of costly services this year may want to consider increasing employee communication, particularly if they have high deductible health plans. New data from Change Healthcare shows wide price variability among some common medical procedures. The company’s […]

By Michael Giardina
Employee Benefit News
February 5, 2014

Health care plan sponsors planning to get in the front of costly services this year may want to consider increasing employee communication, particularly if they have high deductible health plans. New data from Change Healthcare shows wide price variability among some common medical procedures.

The company’s Healthcare Transparency Index finds that “target” areas such as CT scans, MRIs, diabetes screening, mammograms and C-section deliveries have variable costs that range from 182% to 794% higher than the lowest cost procedure.

At the top of the variable price list, CT scans varied from $300 to $2,681, ultrasounds ranged from $100 to $572 and diabetes screenings ranged from $118 to $407.

However, these figures pale in comparison to the cost of C-section deliveries, which ranged from a high of $23,526 to a low of $6,128, according to the analysis.

Clayton Nicholas, vice president of strategy with Change Healthcare, a provider of health care cost transparency tools for employers, health plans and consumers, says the index’s new findings will help to open the conversation among the 40 million employees currently enrolled in high deductible plans. The HCTI tracks cost variability among common health care services by analyzing prescription, medical, dental and vision services on a quarterly basis.

“We want to identify target opportunities where a plan sponsor can look at their populations and kind of get a sense of the prevalence of different healthcare services in their population,” Nicholas says, while adding that this information can help “identify target opportunities to create either campaigns or targeted messaging around – to help direct people to the appropriate point of care for certain services or let them know there are opportunities to save.”

The company analyzed more than 167 million claims during the 2013’s third quarter for this current index update.

“Care setting may contribute to costs differences, but often there’s little explanation for why common treatments may cost two, three or four times more at one provider versus another,” says Change Healthcare president and CEO Doug Ghertner.

Some reasons for this disparity include the myriad places employees can obtain care.

“I think for certain services, prices have continued to have higher variances because you have different points of care where they can be done now,” Nicholas says. Imaging, for example, can be “done in a retail clinic, a workplace health center or outpatient care.”

One Tricky Thing About Transparency in Healthcare Is the Piecemeal Process

Posted Thu, January 30, 2014

In Deloitte’s weekly healthcare industry insights this week, Dr. Harry Greenspun, a senior adviser at Deloitte Center for Health Solutions, poses an important, lingering question about transparency: What are the implications of only having some transparency in healthcare? Companies like … Change Healthcare … have been winning over investors with their solutions for putting more information in the hands of consumers. Government, too, is […]

In Deloitte’s weekly healthcare industry insights this week, Dr. Harry Greenspun, a senior adviser at Deloitte Center for Health Solutions, poses an important, lingering question about transparency: What are the implications of only having some transparency in healthcare?

Companies like … Change Healthcare … have been winning over investors with their solutions for putting more information in the hands of consumers. Government, too, is making an unprecedented push to promote transparency in healthcare.

http://medcitynews.com/2014/01/tricky-thing-transparency-healthcare/#ixzz2ruaoSHf7

Employees Unequipped to Seek Lower Health Costs

Posted Mon, January 13, 2014

By Stephen Miller, CEBS Society for Human Resource Management January 13, 2014 When it comes to health care costs, four out of five U.S. consumers indicate they would be comfortable approaching their doctor about the cost of services in order to find competitive pricing. Despite this, fewer than half of consumers have actually asked about […]

By Stephen Miller, CEBS
Society for Human Resource Management
January 13, 2014

When it comes to health care costs, four out of five U.S. consumers indicate they would be comfortable approaching their doctor about the cost of services in order to find competitive pricing. Despite this, fewer than half of consumers have actually asked about the price of care, according to the latest Survey of Consumer Health Care Opinions by the Altarum Institute.

http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/Employees-Lower-Health-Costs.aspx

Nashville Luring New Wave of Enterprising Health Care Execs

Posted Sun, November 17, 2013

By Shelley DuBois The Tennessean November 17, 2013 Combine Nashville’s history as a health care town, a relatively affordable cost of living and its growing reputation as a cool place to be, and the conditions are ripe for a new wave of enterprising health care executives. They’ve spent time on the coasts, East or West, and have […]

By Shelley DuBois
The Tennessean
November 17, 2013

Combine Nashville’s history as a health care town, a relatively affordable cost of living and its growing reputation as a cool place to be, and the conditions are ripe for a new wave of enterprising health care executives.

They’ve spent time on the coasts, East or West, and have come to Nashville to try something bold. They have big plans — they don’t want to just participate in the health care industry, they want to reshape it.

www.tennessean.com | Printer-friendly article page

‘Guardian of the Culture’: Change Healthcare Founder and Former CEO Maintains His Passion for — and Influence With — the Company in a Redefined Role

Posted Sun, November 10, 2013

By Linda Bryant Nashville Post It’s a typical scenario for a startup. A brilliant entrepreneur launches a company based on a promising product or service, grows that company to a certain point and then, within the first three or four years, is replaced or leaves the company by choice. It happened to Martin Eberhard at […]

By Linda Bryant
Nashville Post

It’s a typical scenario for a startup. A brilliant entrepreneur launches a company based on a promising product or service, grows that company to a certain point and then, within the first three or four years, is replaced or leaves the company by choice. It happened to Martin Eberhard at Tesla, Andrew Mason at Groupon and Jack Dorsey at Twitter.

Christopher Parks avoided the scenario at Change Healthcare. But he might not have if he hadn’t decided to seriously reconsider his role as the company’s chief executive officer.

In early 2011, Parks stepped down from the CEO desk to make way for Howard McLure, a former CVS Caremark executive who came out of retirement to take the job. Two months later, the company hired another CVS Caremark executive, Doug Ghertner, as president. Ghertner transitioned to CEO in mid-2012 and McLure is now executive chairman of the board.

“I spent the first three years figuring out many of the basics, building a 20- to 25- person team and we’d gotten A Round and B Round funding,” says Parks, who

now serves as Change Healthcare chief development officer. “But other things were coming into play. We needed to start thinking beyond next year.”
Parks saw the writing on the wall. He knew the company was going to soon require a new level of professional management if it were going to continue to grow. In addition, he was pretty sure he didn’t want to leave a company he lived and breathed for. But could he avoid the fate of so many serial entrepreneur-founders who exit their companies only to move on to the next start-up, and to the next one after that?

“I began to truly understand that an organization is not the founder,” Parks says. “I think it’s normal and organic for that to happen. At the same time, I felt an enormous amount of accountability to our investors. I didn’t want to have to look away from them if we didn’t succeed. I’d also made a promise to my mom that I wanted to keep.”

Parks started Change Healthcare in 2007 after both his parents died of cancer. Before his mom succumbed to the disease in 2006, she was overwhelmed with stacks of hard-to-understand medical bills. Parks promised her he would do something to make it easier for people to figure out if the charges on their medical bills were correct and fair.

The passion behind Parks’ promise to his mother is what drove the company’s core product, a cost-transparency software tool that helps employees with health plans find critical information that can help them make cost-effective decisions about their health care.

That same passion helped Parks do something rather remarkable. Along with Vic Gatto, a partner inthe Nashville-based venture capital firm Solidus (a major investor in Change Healthcare), Parks participated in the search for new C-suite leaders who could replace him.

“Once you get to a Series C round of funding, most investors start to think about bringing in new management,” Parks says. “They want their person to come in so they can take things to the next level. I thought of Change Healthcare as much bigger than one person. If I was truly going to be a servant-leader, I had to figure out a way to check my ego at the door and help in the transition to a new team.”

Parks says he wanted the company’s new top brass to have to pass benchmarks of professional criteria and experience, but he was even more concerned about the personalities involved. If he felt like a candidate couldn’t get behind Change Healthcare’s mission of transparency and cost-effectiveness for customers, he didn’t want that person.

“To me, Change Healthcare is much more than a business. It’s a legacy,” Parks says. “I wanted to find the talent that had the track record to move us forward. But I wanted to know if they really cared. Personality, mentality and emotional investment were more important to me than experience.”

Parks remains a significant shareholder at Change Healthcare as its founder and chief development officer. He likes to call himself “guardian of the culture” at the company. To his credit, Parks admits he may not have been able to stay on at Change Healthcare if it hadn’t been for his relationship with Gatto, who has a very hands-on approach with Solidus-funded companies. Gatto counseled Parks from Day 1 of the company and told him early on that Solidus (DisclosureSolidusis an investor in SouthComm, the parent of the Post.)was throwing its support behind the company’s mission and vision, not behind Parks or any other specific individual.

“Change in a company can be gut-wrenching,” Gatto says. “But it can’t be all holding hands and singing Kumbaya. One of the hardest things about building a startup is navigating a leadership transition, which is usually inevitable.

“Christopher needed to decide if he wanted to stay as the company’s CEO, which would mean working through other people to achieve goals, or to take on a role that would keep him close to customers and products like he’d been doing all along,” Gatto adds. ”It was my role to get him to decide. I didn’t want to see him rolling around in the middle; I wanted him to intentionally choose the role he was going to play.”

Parks decided to stay as close to the entrepreneurial edge of the company as he could in a role that has him overseeing and launching new product development.

“I do think he could have continued as CEO and gotten more and more into the operations and management, but he would have had to change his spots,” Gatto says. “That’s not an easy thing to do. Even when the company had 20 employees, he’d say to me, ‘All I do is sit in HR meetings.’ He’s really ideally suited for being close to the customers and finding out what they need.”

Despite the fact that Parks was a full participant in bringing in new management to the company, Gatto describes a six-month realignment period in 2011-12 as “a hard transition.”

“It certainly wasn’t always easy,” he says. “There were some bumps in the road and some people lost their jobs. But Christopher made the transition work.”

McLure felt from the get-go that the morale and commitment among employees would suffer unless Park’s personality, vision and distinctive skill set remained part of the company.

“He had really been the face of the company, and he really built a solid culture,” McLure says. “He has a huge amount of institutional knowledge. We needed some management in order to succeed on a much larger scale, but we wanted to keep Christopher’s passion and productivity.

“Keeping that passion in the company is key,” he adds. “It creates a better company and a culture that creates people who really believe in the mission.”

Ghertner agrees.

“I really think most of the credit for the successful transition goes to Christopher,” Ghertner says. “He built a company that has an environment of empowerment and creativity, a place where relationships matter. We want to make sure we don’t stray too far from that core.”

During the past two years, Change Healthcare has transitioned from impacting thousands of insurance consumers to impacting millions. Since the executive transition from Parks to McClure and Ghertner, the employee roster has grown from 20 to 70-plus staffers.

In August, Change Healthcare completed a $15 million Series D funding round led by HLM Venture Partners and Noro-Moseley Partners. Existing institutional investors BlueCross BlueShield Venture Partners, Sandbox Industries, Mitsui & Co. Global Investment, Inc., West Health Investment Fund LLC and the aforementioned Solidus also participated in the round. Since its inception, the company has raised $32 million.

Parks says he is particularly proud of the breadth of the recent Series D round.

“It’s significant that it brought in some West Coast investment,” he says. “It shows we are not stuck in a bubble. Not many companies started in Nashville have investment from the Southeast and the East and West coasts. I think it speaks well for our traction and where we are going.”

Despite the progress Change Healthcare has made and the success Parks has enjoyed reinventing himself and his role with the company, the questions remains: Does he miss sitting behind the CEO’s desk?

“Not much,” Parks responds. “Being CEO sounds glamorous but it can be a big emotional weight. That has been lifted from me; I get to share the weight with everyone.”

http://nashvillepost.com/news/2013/11/10/guardian_of_the_culture

Open Enrollment Season is Coming: Here’s How to be Prepared

Posted Fri, September 20, 2013

By Barbara Mannino Fox Business September 20, 2014 Historically, open enrollment season has been a complicated process for consumers trying to navigate the health insurance world, but this season the roadmap in picking the right plan is going to be a lot more circuitous. This year’s enrollment season will include an expanded health insurance marketplace […]

By Barbara Mannino
Fox Business
September 20, 2014

Historically, open enrollment season has been a complicated process for consumers trying to navigate the health insurance world, but this season the roadmap in picking the right plan is going to be a lot more circuitous.

This year’s enrollment season will include an expanded health insurance marketplace as part of the president’s Affordable Care Act that includes federal and state health insurance exchanges. While more options can make the price point more competitive, it can also make the finding the right plan daunting.

http://www.foxbusiness.com/personal-finance/2013/09/20/open-enrollment-season-is-coming-heres-how-to-be-prepared/#ixzz2fSkZySLO

 

What You’ll Really Pay for Health Care

Posted Wed, September 18, 2013

By Elizabeth O’Brien The Wall Street Journal: MarketWatch September 18, 2013 Imagine if your auto insurance worked the way your health insurance does. For years, you probably would have paid a fixed monthly premium plus, say, $20 every time you took your car to the body shop, regardless of whether you got an oil change […]

By Elizabeth O’Brien
The Wall Street Journal: MarketWatch
September 18, 2013

Imagine if your auto insurance worked the way your health insurance does. For years, you probably would have paid a fixed monthly premium plus, say, $20 every time you took your car to the body shop, regardless of whether you got an oil change or your entire engine replaced.

Now, your plan has switched, and in addition to premium payments you’re responsible for the first few thousand dollars of bodywork each year. And here’s an extra wrinkle: The mechanic won’t tell you how much you owe until after your car has been serviced.

http://www.marketwatch.com/story/what-youll-really-pay-for-health-care-2013-09-12

Healthcare Shopping Data Reveals Unique Factors that Drive Consumer Decisions and Opportunities for Savings

Posted Sun, September 01, 2013

By Doug Ghertner Healthcare Consumerism Solutions September 2013 As the cost of basic healthcare services continues to rise and place an increased burden on individuals and families across the country, consumers need to take a more active role in their healthcare decisions – especially when it comes to choosing “shopable” healthcare services.i The strain of […]

By Doug Ghertner
Healthcare Consumerism Solutions
September 2013

As the cost of basic healthcare services continues to rise and place an increased burden on individuals and families across the country, consumers need to take a more active role in their healthcare decisions – especially when it comes to choosing “shopable” healthcare services.i

The strain of healthcare costs is a growing concern, given the average annual premium for a family is now $16,351, according to the Kaiser Family Foundation. That’s up 4 percent from last year.

2013.SepOct_Healthcare_Consumerism_Solutions_Ghertner

Modern Healthcare’s 2013 Best Places to Work in Healthcare (Alphabetical List)

Posted Wed, August 14, 2013

Modern Healthcare August 14, 2013 When it comes to exceptional quality and service, it’s an organization’s staff that makes the difference — especially true in healthcare. And top talent always gravitates toward the best places to work. Modern Healthcare is proud to present the 100 companies and organizations that have been named to its Best […]

Modern Healthcare
August 14, 2013

When it comes to exceptional quality and service, it’s an organization’s staff that makes the difference — especially true in healthcare. And top talent always gravitates toward the best places to work. Modern Healthcare is proud to present the 100 companies and organizations that have been named to its Best Places to Work for 2013.

http://www.modernhealthcare.com/article/20130814/INFO/308149999/modern-healthcares-2013-best-places-to-work-in-healthcare?utm_source=frontpage&utm_medium=newsitem309&utm_campaign=carousel-traffic

Change Healthcare Nabs $15M to Promote Health Care Cost Transparency

Posted Tue, August 13, 2013

By Christina Farr Venture Beat August 13, 2013 Millions more people will gain access to health care next year, as the Affordable Care Act comes into effect. With change comes opportunity — and confusion. So investors are placing their bets on health transparency startups like Change Healthcare, which help people save money and select the best insurance plan. […]

By Christina Farr
Venture Beat
August 13, 2013

Millions more people will gain access to health care next year, as the Affordable Care Act comes into effect.

With change comes opportunity — and confusion. So investors are placing their bets on health transparency startups like Change Healthcare, which help people save money and select the best insurance plan.

Today, Change secured $15 million in financing from strategic investors, including the venture arm of BlueCross Blue Shield.

http://venturebeat.com/2013/08/13/change-healthcare-nabs-15m-to-promote-health-care-cost-transparency/

HHS Starts Features to Help Consumers Learn Insurance

Posted Mon, August 05, 2013

By Kelly Kennedy USA Today August 5, 2013 WASHINGTON — The government launched a new webpage, training videos and infographics Monday to help Americans better understand the health insurance exchanges that will launch Oct. 1. “Everywhere I go, I meet people who are excited about the marketplaces and hungry for information,” Health and Human Services […]

By Kelly Kennedy
USA Today
August 5, 2013

WASHINGTON — The government launched a new webpage, training videos and infographics Monday to help Americans better understand the health insurance exchanges that will launch Oct. 1.

“Everywhere I go, I meet people who are excited about the marketplaces and hungry for information,” Health and Human Services Secretary Kathleen Sebelius said Monday.

About 7 million Americans are estimated to start buying health insurance as part of the new law, but a new survey shows they don’t understand the basics of how health insurance works or is provided.

http://www.usatoday.com/story/news/politics/2013/08/05/survey-americans-dont-understand-insurance/2619007/

Five minutes with Change Healthcare CEO Doug Ghertner

Posted Wed, June 26, 2013

By E.J. Boyer Nashville Business Journal June 26, 2013 I checked in recently with Brentwood-based Change Healthcare to learn more about Healthcare University, a new offering the company unrolled in February that uses a series of interactive quizzes, videos and games to help consumers make better decisions when it comes to health care. Chief Executive […]

By E.J. Boyer
Nashville Business Journal
June 26, 2013

I checked in recently with Brentwood-based Change Healthcare to learn more about Healthcare University, a new offering the company unrolled in February that uses a series of interactive quizzes, videos and games to help consumers make better decisions when it comes to health care.

Chief Executive Officer Doug Ghertner has high hopes for the product as Change Healthcare looks to grow its numbers of clients and users.

http://www.bizjournals.com/nashville/blog/2013/06/five-minutes-with-change-healthcare.html

New Data Show Price Differences for Health Procedures

Posted Wed, May 08, 2013

By Kelly Kennedy USA Today May 8, 2013 WASHINGTON — Hospitals will now be required to tell patients how much they charge for procedures, a move federal officials said Wednesday should spark competition and lower costs. The federal Centers for Medicare and Medicaid Services released data Wednesday showing the differences in costs for 100 medical […]

By Kelly Kennedy
USA Today
May 8, 2013

WASHINGTON — Hospitals will now be required to tell patients how much they charge for procedures, a move federal officials said Wednesday should spark competition and lower costs.

The federal Centers for Medicare and Medicaid Services released data Wednesday showing the differences in costs for 100 medical procedures, from surgery to poisoning treatment. The data show a wide disparity in costs, even for hospitals located near each other.

http://www.usatoday.com/story/news/nation/2013/05/08/hospital-transparency-report-shows-difference-in-health-costs/2144133/

Clayton Nicholas, Change Healthcare, On Improving Consumer Engagement

Posted Wed, April 10, 2013

By Doug Field IHC Radio April 10, 2013 http://www.youtube.com/watch?v=qM4QL3VO2Ao

By Doug Field
IHC Radio
April 10, 2013

http://www.youtube.com/watch?v=qM4QL3VO2Ao

Nashville Post’s 2013 “In Charge”

Posted Fri, March 22, 2013

Nashville Post March 22, 2013 Each year, In Charge presents the women and men who have positively exerted their influence on Nashville and its surrounding communities. Our list is neither a popularity contest nor a typical “who’s who” listing. As has been our standard since we launched this concept in 2010, we looked not only […]

Nashville Post
March 22, 2013

Each year, In Charge presents the women and men who have positively exerted their influence on Nashville and its surrounding communities. Our list is neither a popularity contest nor a typical “who’s who” listing. As has been our standard since we launched this concept in 2010, we looked not only to those people’s local (and sometimes national) prominence but also to their ability — and connections — to create opportunities for others and for the city.

http://nashvillepost.com/2013incharge

 

How to be a Smart Shopper when Picking a Health Plan

Posted Fri, March 15, 2013

By Barbara Mannino Fox Business March 15, 2013 Employers have been picking up the lion’s share of the employee health benefit tab for years, but they are desperate to find a less revenue-draining way to offer coverage in the face of soaring health costs. Reducing benefits and lowering pay are impractical choices because of their […]

By Barbara Mannino
Fox Business
March 15, 2013

Employers have been picking up the lion’s share of the employee health benefit tab for years, but they are desperate to find a less revenue-draining way to offer coverage in the face of soaring health costs.

Reducing benefits and lowering pay are impractical choices because of their inevitable negative impact on recruitment and retention, pushing consumer-directed health plans (CDHP) to center stage.

The low premium, high deductible (typically $1,000 or more) CDHPs combine with a tax-exempt health reimbursement arrangement or a health savings account that helps enrollees pay for out-of-pocket expenses—meaning both employers and employees save.

Experts say giving employees skin in the game will make them more motivated to be smart shoppers and be more active and responsible in their health-care decisions.

http://www.foxbusiness.com/personal-finance/2013/03/15/how-to-be-smart-shopper-when-picking-health-plan/

 

The New Era of Healthcare Benefits: Engaging Employees to Become Better Healthcare Consumers

Posted Fri, March 01, 2013

By Doug Ghertner For Employee Benefit Plan Review March 2013 Even as we await significant elements of the Affordable Care Act (ACA) that will be implemented in 2014, the healthcare industry is evolving in a way that will impact how all consumers think about their healthcare. As employers grapple with rising healthcare costs, many are […]

By Doug Ghertner
For Employee Benefit Plan Review
March 2013

Even as we await significant elements of the Affordable Care Act (ACA) that will be implemented in 2014, the healthcare industry is evolving in a way that will impact how all consumers think about their healthcare.

As employers grapple with rising healthcare costs, many are turning to high-deductible and consumer-directed health plans (CDHPs), which place more responsibility on the shoulders of their employees. In fact, in recent years, CDHPs have seen significant growth, while enrollment in other plan types has remained flat or fallen.

The American Association of Preferred Provider Organizations (AAPPO) estimates that 33 million people were enrolled in CDHPs in 2011, up from 28 million in 2010, an increase of 18%.[1]

Meanwhile, states are implementing public health insurance exchanges and private exchanges are expanding – bringing a new era of individually driven healthcare choices. An estimated 27 million people are projected to participate in public exchanges by 2016, and more than half of employers expect to move to defined-contribution plans and private exchanges during this same time.[2]

It’s a new age in healthcare: the consumer age.

Greater consumer involvement in healthcare presents significant opportunities to drive down healthcare costs. According to cost transparency and consumer engagement company Change Healthcare, costs of common treatments and tests can vary widely among different providers, even within the same zip code.[3]

 

Cost Range for Services Low High Price Variance
Computed Tomography (CT/CAT) scan – Chest $347 $1,832 527%
Magnetic Resonance Imaging (MRI) – Arm $439 $2,466 501%
Office Visit – Family Practitioner $105 $292 278%
Physical Therapy (PT) Evaluation $50 $233 466%
Prescription Simvastatin $192 $259 134%

This chart illustrates tremendous opportunities to save, but often, consumers are either unaware that such great disparities in cost exist, or they are ill equipped to identify savings opportunities. To navigate the new health benefits landscape, consumers must have simple, personalized tools to help them understand healthcare costs, identify high quality providers of care, and take advantage of savings opportunities. And then they must be engaged to use these tools on an ongoing basis.

According to a National Business Group on Health survey, employers report lack of engagement as the top barrier to healthcare-related behavior change.[4] A survey of human resources professionals by the Society for Human Resource Management found 77 percent of respondents said it was challenging to engage employees in getting the best value from their plan and to encourage them to focus on their health and wellness.[5]

To realize the significant opportunity to reduce healthcare costs through greater cost transparency, consumers must be engaged in their care now more than ever.

Keys to Engagement: Helping Employees Seek Out the Best Value

Engagement is more than just signing up for a service offered by an employer or health plan. To truly save on healthcare costs, consumers must understand and regularly seek out savings opportunities. True engagement requires three key elements:

1.     Greater Benefits Education: Benefits are complex and, with the rise of public and private insurance exchanges and high-deductible plans, consumers may no longer be able to rely solely on their company’s human resources professionals to help them understand and get the most out of their health benefits. As more consumers are forced to shop for their own care, they will need greater knowledge about their benefits, healthcare consumerism and legislation that impacts their care.

Today, fewer than 20 percent of employees understand their health benefits, according to a survey by benefits company Unum.[6] Best practices reveal that, to help combat this, benefits education should start early and continue throughout the year. By presenting the information in a fun and visual way, and in multiple formats, employees will better understand, apply and retain the information.

2.     Personalized and Relevant Cost Information: Average cost information for a particular region isn’t enough to help consumers become actively involved in shopping for their care. Consumers need to know what their provider charges and what their out-of-pocket costs will be based on their own health plan’s co-pay levels, co-insurance and other factors. To truly help consumers save on care, they need the ability to compare providers side-by-side, and savings must be personalized across the healthcare spectrum – prescription, medical and dental services. Quality ratings should also go hand-in-hand with cost information, so consumers can seek out care based on the best value – identifying the highest quality providers and not just the lowest cost option. Finally, the information needs to be easy to understand and simple to find. Without relevant and personalized information, consumers are less inclined to act on a savings opportunity.

3.     Proactive Savings Opportunities Delivered on an Ongoing Basis: Saving on healthcare isn’t a one-time opportunity. Proactively alerting consumers to savings opportunities on an ongoing basis, based on services they are already using, is key to helping them stay engaged in their care all year long.

Change Healthcare’s Ways to Save AlertsTM provide proactive savings notifications via email or text message on services consumers typically shop for and have been shown to drive engagement to nearly 60 percent.  While some cost-transparency solutions tout higher engagement rates, it’s important to remember that sustainable engagement is the goal – not just single encounters. Consumers must do more than just register to use a tool. They’ve got to register and then engage in the process of shopping for care – again and again.  Further, consumers who receive proactive, personalized savings information and act on that information are more than four times more likely to look up cost information in the future on their own.

Proactively engaging consumers around new savings opportunties – personalized to their needs – keeps healthcare top of mind and turns shopping for care into a habit.

Shopping for Care Pays Off: Navigating the Road Ahead

Engaging employees to shop for their care can result in significant savings for employers. An analysis of savings opportunities for an international diversified technology company in the Midwest with more than 40,000 employees found the company and its employees could save $17.5 million a year, or roughly $450 per employee, on “shoppable services”.

And it’s not just employers that save. A recent Change Healthcare study found employees in a CDHP who have access to cost transparency tools can increase their healthcare savings by more than 114 percent on average; families can increase healthcare savings 43 percent, compared to those in a CDHP without access to a cost transparency solution.[7]

Faced with skyrocketing healthcare costs and new insurance rules under the ACA, more of the nation’s biggest businesses will look to high-deductible plans, CDHPs and defined-contribution plans to reduce their healthcare costs, compelling plan members to become more proactive, informed healthcare consumers. We know that savings opportunities exist. It’s a matter of finding them and taking appropriate action.

To do this, consumers must have easy-to-use, personalized tools to keep them engaged in their own healthcare, and resources for staying abreast of the ever-changing healthcare landscape. The time has come to start shopping for healthcare the way we shop for everything else — with an eye for cost, quality and convenience and ultimately, getting the best value.


[1] American Association of Preferred Provider Organizations. AAPPO Survey of Consumer-Directed Health Plans. June 2012.

[2] Updated Estimates for the Insurance Coverage Provisions of the Affordable Care Act, Congressional Budget Office, March 2012.

[3] Analysis of Data from Change Healthcare’s Customer Database

[4] “Performance in an Era of Uncertainty: 1th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care.” National Business Group on Health. Web 3 Dec. 2012. http://www.towerswatson.com/assets/pdf/6556/Towers-Watson-NBGH-2012.pdf

[5] “The State of Consumer-Directed Health Plans in the Workplace: SHRM Poll.” SHRM. Web 3 Dec. 2012. http://www.shrm.org/Research/SurveyFindings/Articles/Pages/StateofConsumerDirectedHealthPlans.aspx

[6] “Beyond the Usual Benefits: 2012; The Power of Employee Education to Influence Workforce Satisfaction.” UNUM. Web 15 Feb. 2012. http://forms.unum.com/StreamPDF.aspx?strURL=/FMS_099229-4.

pdf&strAudience=StreamByNumber.

[7] “The Case for CDHPs: Why Your Business and Your Employees Should Consider Abandoning the Traditional PPO.” December 2012. www.ChangeHealthcare.com.

Employee Benefit Plan Review 3.2013

New Age of Healthcare Requires New Behaviors, New Attitudes

Posted Fri, March 01, 2013

By Doug Ghertner For Managed Care Outlook March 1, 2013 Health and wellness are often top of mind at the start of a new year – a time when many of us make resolutions to lead healthier lives. This year, however, amid the complexities of health reform and with the increased focus on the individual […]

By Doug Ghertner
For Managed Care Outlook
March 1, 2013

Health and wellness are often top of mind at the start of a new year – a time when many of us make resolutions to lead healthier lives. This year, however, amid the complexities of health reform and with the increased focus on the individual market, either through exchanges or Medicare – health and wellness are receiving even greater attention, especially among employers and employees seeking ways to manage rising healthcare costs. Both parties want more effective strategies for ensuring high quality, cost-effective care, and many are looking to their managed care providers to deliver them.

Managed Care Outlook 3.2013

Making the Financial Case for a Client’s CDHP Switch

Posted Fri, February 01, 2013

Employee Benefits Advisor February 2013 A Change Healthcare case study says that employers should consider abandoning a traditional preferred provider organization in favor of a consumer-directed health plan. The study finds that 91% of employees with families and 65% of employees overall would have spent less with a CDHP. http://www.changehealthcare.com/downloads/press/2013.02%20Employee%20Benefit%20Adviser_By%20the%20Numbers.pdf Employee Benefit Adviser_By the Numbers […]

Employee Benefits Advisor
February 2013

A Change Healthcare case study says that employers should consider abandoning a traditional preferred provider organization in favor of a consumer-directed health plan. The study finds that 91% of employees with families and 65% of employees overall would have spent less with a CDHP.

http://www.changehealthcare.com/downloads/press/2013.02%20Employee%20Benefit%20Adviser_By%20the%20Numbers.pdf

Employee Benefit Adviser_By the Numbers

 

Should Health Insurance Be Like Car Insurance?

Posted Wed, January 23, 2013

By Jen Wieczner The Wall Street Journal MarketWatch January 23, 2013 Car insurance companies reward good behavior: Drivers with records free of 15-car pileups and tickets for doing 90 in a 55 pay cheaper premiums. Health insurers, on the other hand, offer people little incentive to stay out of harm’s (and doctor’s) way. But a […]

By Jen Wieczner
The Wall Street Journal MarketWatch
January 23, 2013

Car insurance companies reward good behavior: Drivers with records free of 15-car pileups and tickets for doing 90 in a 55 pay cheaper premiums. Health insurers, on the other hand, offer people little incentive to stay out of harm’s (and doctor’s) way. But a growing number of health advocates say this is a mistake, and that the system would function better if bodies were treated more like Buicks.

With policymakers still ironing out the details of the nation’s health-reform plan, hospitals, corporations and consumers are all trying to figure out ways to save on medical costs. While employers and health insurers have tried to steer plan members to lower-cost care and healthier behaviors in order to save the companies money, employees often pay the same amount in premiums and copays no matter what. Since employees generally don’t see any financial benefit from choosing the cheaper option — for instance, urgent-care clinics over emergency rooms — experts say it’s no surprise consumers are unwilling to do their employers any favors.

Some Fortune 500 companies and other employers — from JetBlue to IBM to equipment manufacturer Caterpillar — have begun to experiment with new health-care models that allow employees to keep some of the money they don’t spend on health care, or that reward or penalize them based on how well they manage their health.

Many of these plans more closely resemble auto insurance — with healthier employees effectively paying less than colleagues who are at greater risk for developing diseases related to smoking or obesity. For example, 38% of companies planned to charge higher premiums or deductibles in 2012 to employees who smoked, had high cholesterol levels, did not actively treat a chronic condition like diabetes or high blood pressure or failed on other health measures, according to Towers Watson — the same way people with speeding tickets pay higher auto insurance rates to compensate the plan for their greater risk of car damage.

And although healthier employees may not be paying lower premiums, per se, while their unhealthier colleagues get penalized, they may get to see some savings later on, as 80% of companies planned to financially reward employees for healthy behavior (such as participating in weight- or disease-management programs) in 2012, according to Towers Watson. Such incentives often take the form of deposits into an employee’s health savings account, say experts, or removal of the premium penalties if employees show they’ve quit smoking or lowered their blood pressure. Experts say the rewards are the equivalent of lower premiums for safe drivers: After IBM began offering employees rebates worth up to $300 a year for participating in exercise and nutrition programs, the company saved $190 million in health care costs between 2005 and 2007, says a spokeswoman. IBM employees spend up to 60% less on their overall health-care bills than industry norms, according to the National Business Coalition on Health.
This year, JetBlue launched an overhauled health plan designed to simultaneously reward healthy employees and save the company money— with crewmembers who participate in wellness programs ultimately paying less for their medical benefits. Employees can now earn up to $400 individually or $800 for a family by participating in certain health programs, and workers with some chronic conditions can snag an additional $250 individually or $500 per family if they enroll in a care-management program. In a letter to employees explaining the changes, CEO Dave Barger said the airline’s old health-care model was backward: “Our plans are not structured in ways that are making us healthier — physically or financially.”
While reminding employees that they split JetBlue’s health-care bill with the airline, Barger linked the company’s success to employees’ “smart decisions,” writing, “I am convinced that solving for ‘health,’ where controllable and possible, presents the greatest chance of successfully arresting our rising health-care costs.” JetBlue did not respond to a request for comment.

Other companies are trying to solve their employees’ health problems by waiving copays for generic drugs, second opinions and preventive care, believing they will save in the longterm, since employees will be less likely to get sick. Some Cigna health plan members can now get free second opinions from the Cleveland Clinic. Companies like Dell, Caterpillar and Marriott have eliminated or reduced copays for certain medications and services, which has sometimes resulted in fewer employee health claims, according to a report by the National Business Coalition on Health. And an IT company that offered its workers free services at the on-site health clinic not only lowered its health costs but also saved its employees a combined $140,000, according to Change Healthcare. “Luring people into the good behavior by making it free is another way of sharing the savings on the frontend with employees,” says Dave Fortosis, a consultant in Aon Hewitt’s health and benefits practice. Dell, for one, knocks off up to $800 in annual premiums for employees who take a health survey and check in with a health counselor once a quarter over the phone, according to a company spokesman. Caterpillar and Marriott did not return requests for comment.

The basic “staywell” health plan concept isn’t new. Back in the 1980s and ’90s, some employers tried awarding cash bonuses to employees who spent little or nothing on health care. Publishing company Forbes Media, for one, paid bonuses of $1,000 to employees who filed no health-care claims, and a smaller prize to those who had less than $500 in health expenses. Employees of the Mendocino County SchoolDistrict in California received up to $500 back if they racked up less than that in health claims.

But those types of bonuses fell by the wayside as employers realized it wasn’t the best idea to reward people for never going to the doctor. “By and large, that approach fell into disrepute because employees or their families were not getting the treatment they needed,” says Fortosis. “Employees and families were just denying themselves care they needed so they could get a little cash.”

Indeed, those plans relied on a model that probably wouldn’t work for an auto insurer: After all, if you never take your car to a mechanic, there’s a greater likelihood it’ll have a major breakdown in the future. But employers have continued to tinker with and fine-tune the strategy.
Forbes’s bonus model was a precursor for its current consumer-driven health plan, featuring health savings accounts that the company was not allowed to offer at the time because of government regulations. These plans, which allow employees to personally save what they don’t spend on health care, are the wave of the future, some experts say. “You own it. So you pay attention. And that’s the whole premise behind consumer-driven healthcare,” says Margy Loftus, Forbes Media’s senior vice president for human resources.

Such consumer-driven plans as health savings accounts and health-reimbursement accounts allow employees to get their savings back, says Tony Holmes, senior health care consultant for Mercer, a firm specializing in human resources. Companies like Caterpillar and Dell have sweetened the pot further, offering incentives worth up to $900 for enrolling in an HRA, according to the National Business Coalition on Health Report, since the firms directly benefit when members use their health plan frugally, rather than forgo care entirely. “It makes a lot more sense to have your programs do that every time someone makes a decision, rather than sending them a check,” Holmes says. Caterpillar and Dell did not respond to requests for comment.

Some health-care experts feel that these new models perpetuate the old 1990s problem by discouraging some workers from caring for their health. But even employers with traditional health plans, which provide broader coverage at set monthly premium rates, have tried to encourage their staff to be thriftier with them. “We’ve seen their executive leadership tie what their company spends on healthcare to the company’s ability to invest in new facilities and bonuses,” says Douglas Ghertner, CEO of Change Healthcare, which makes health-care cost comparison tools for health-plan members. The logic: “Going to the lower-cost provider may benefit our company as a whole and consequently benefit you as an employee, because we’ll have more money to pay in bonuses because we’re paying less in healthcare,” Ghertner says. Pinnacle Financial Partners in Nashville, Tenn., for one, has been educating employees about finding lower-cost health providers and prescriptions because all employees are also owners of the firm, “So they have a vested interest in helping reduce expenses for themselves and for the firm overall,” says Stacy Gammons, a Pinnacle human resources specialist.

The new health-care models, say experts, so far fall short of allowing employees to share directly in the cash they save the company. But that may soon change, says Ghertner, as employers have begun to discuss paying employees a percentage of what they save the company on healthcare — for example, 20% of the cost difference between a $4,000 CT scan at a hospital and the same scan for $1,000 at an outpatient facility, or a potential $600 back to the employee. “I think you will start to see employers over time explore it,” Ghertner says.

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