If you ever travel to Vail, Colorado, there’s a famous chef named Brian Little who used to work at one of the toniest spots in the Valley. Chef Little realized working nights and weekends towards a Michelin star at one of the largest hospitality brands in the world was not his purpose. He never saw his family, so he decided to walk away and open a small breakfast café that closes at 2:00 p.m. everyday. It’s a small diner where there are no regular tables or a kitchen. Instead, guests gather around a square seating area to watch the line cooks prepare the best German pancakes and eggs benedict in the world. It’s appropriately called …

How Hospital Chargemaster Law Impacts Employer Health Plans

How Hospital Chargemaster Law Impacts Employer Health Plans

This New Year’s Eve hospital systems across the country watched the ball drop in NYC while also preparing their double-dutch secret pricing lists to post online. In industry parlance, this master pricing is known as a Chargemaster. This federal mandate falls under a requirement in the 2010 Affordable Care Act that calls for every service or procedure and it’s associated billing costs to be listed online. Until this week, hospital systems were not required to publish them.



First a bit of background - ACA History

Starting in 2011, Departments issued regulations requiring non-grandfathered gropu health plans and carriers to cover all FDA-approved contraceptive methods, sterilization procedures, and related education and counseling. As a result, many of our clients that objected to these rules on faith-based principles, elected to remain grandfathered under the ACA. If you applaud this position, give credit to a company like Hobby Lobby for taking their case to the Supreme Court where a ruling was made to allow closely held for-profit companies that had religious objections to receive a similar accommodation that was previously granted to religious non-profits.

That Was Then … This .. Just In



The Internal Revenue Service ("IRS"), has just released their annual limits for 2019.   Yes, this is the kind of thing that gets me all excited.   It must be hard for the  IRS, whose sole purpose is to collect taxes, to furnish us the new limits allowing for greater tax savings for astute health plan participants who like to save money.   This does not mean we do not believe in paying our fair share ... it only means we do not like to pay more than our fair share.

Papa Bear and the Goldilocks Health Plan

Papa Bear and the Goldilocks Health Plan

Before a knee injury, one of my annual traditions was running with my fellow Holmies in the annual Dallas Marathon corporate relay....

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Health Plan Analytics Stuck in the Wild West?

Health Plan Analytics Stuck in the Wild West?

Our family loves traveling to Colorado each summer. This year, we passed through Leadville and Minturn, two old mining towns that remind...

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Taming the Big Cat? A Primer on Stop Loss Insurance

Taming the Big Cat?  A Primer on Stop Loss Insurance

As we transition from Halloween to Thanksgiving, we know many of our clients and their service teams are preparing for or have already conducted open enrollment. While most employees appreciate their benefits, they are not familiar with all the work that HR and executive leaders put into what gets delivered at the enrollment meeting. One of the major reasons for providing health insurance is to protect families from a catastrophic financial loss. This is why most employers buy stop loss insurance to cover large claims.  

Speaking Out On Transgender Benefits

Speaking Out On Transgender Benefits

I recently came across this article, published by Business Insurance with the following headline "Few employers offer transgender benefits".  This article, along with the growing news coverage around bathroom use for transgender, prompted me to investigate exactly what percentage of the population here is impacted.   According to two of  the largest surveys ever conducted on the topic, approximately .3 percent or 700,000 people in the United States identify as transgender.   

What Millenials Crave at Work?

As a latchkey kid that grew up watching the Brady Bunch, the family I wished to emulate had three boys, three girls, Carol and Mike as  parents and a maid named Alice.   Amidst parents that divorced when I was six years old, me and many of my GenX colleagues learned to fend for ourselves by working through high school and cooking our own dinner.   While my mother did her best to support us with dad's alimony check and her high school education, me and my two sisters grew up quickly and were taught not  to complain, get a good education and strive for a career that included a Rolex watch at a long-tenured employer.

The Best Food Picked from Trees - A Pizza Farm PSA from Nick Offerman

The Best Food Picked from Trees - A Pizza Farm PSA from Nick Offerman

Those who have completed  ACAP Health's (Accountable Care Accountable Patients) metabolic risk reduction program, Naturally Slim, have learned that food is fuel.   Hippocrates quote, "let food be thy medicine and medicine be thy food", is as true as ever today.   His advice then foreshadows now the importance food plays in  stemming the obesity epidemic that is leading to diabetes and other chronic conditions. That's what makes sharing this Funny or Die  video clip  by Nick Offerman a favorite of our staff.

Sweet Advice from Hippocrates

"Let food be thy medicine and medicine be thy food." - Hippocrates When the father of western medicine, Hippocrates, gave us this quote back in the times of Ancient Greece, he was  providing one way of solving the public health crisis of our time.   I like what Dr. Albert Schweitzer said even better, "It's supposed to be a secret, but I'll tell you anyway. We doctors do nothing. We only help and encourage the doctor within."

The Business of Winning by Jimmy Johnson

The Business of Winning by Jimmy Johnson

For those of us who enjoyed those Super Bowl wins of the 1990's in Dallas, we all know that the Dallas Cowboys became a franchise team under Coach Jimmy Johnson. Jerry had the money and the smarts to hire his old Arkansas Razorback teammate, but Coach Johnson brought the formula for success.   It was honed in Florida at the University of Miami, where each Hurricane was conditioned to be faster, stronger, and have greater endurance than his competitor.  As Coach Johnson explains in this video from ESPN's 30 for 30, "Fatigue makes cowards of us all."

Holmes Murphy Launches Healthy Insurance Pool (HIP) in DFW

When we sit down with the leadership of our clients and their HR/Benefit departments, we usually get heads nodding when we share that 40-50% of Americans born after 2000 will have  diabetes.   There are plenty of peer-reviewed  case studies to show that leading companies who invest in establishing a culture of health and accountability in the right way experience returns that go far beyond the expense side of the ledger.

Getting "Fed Up" / Trends Not Sweet

What the World Eats Almost 60% of the U.S. diet is made up of sugar and carbohydrate.   Since 1977, Americans have doubled their daily intake of sugar, lurking in processed foods like cereal and catsup.   Our sugar intake has lead to a corresponding rise in obesity, metabolic syndrome and chronic conditions that are the result of  a pancreas that eventually exhausts itself from producing the hormone insulin.

How could it be that from 1980 to 2000, fitness memberships doubled along with a corresponding doubling of the obesity rate?   If our willpower is to blame why do we have obesity in 6 year olds?   And of all the nutrients listed on a food label, how is it that sugar, a substance more addictive than cocaine, is the only nutrient that a food manufacturer does not have to disclose under the food label's  percentage daily recommended allowance guidelines?   Could it be that Americans were misled into believing that a "low-fat" diet was best for us based on junk science?   Could federal guidelines have been influenced by powerful food lobbies and corporate profits placed ahead of our  public health interests?

Realizing we now have an epidemic that we are not going to be able to exercise our way out of, the U.S. Preventive Task Force (USPTF) has recommended coverage for progams that have demonstrated clinical success in reversing symptoms of Metabolic Syndrome be covered under the Affordable Care Act (ACA) at 100% with no cost sharing.   In a future post, I'll share more about how and when employers must cover behavioral weight management as a benefit and what our  ACAP Health  subsidiary is doing to help companies reverse these metabolic trends  caused by sugar.

Our company will continue to endorse only programs that adhere to  evidence based guidelines from trusted voices like Dr. David Katz, Dr. Mark Hyman, Dr. Robert Lustig, Tim Church, M.D., M.P.H., Ph.D and Dr. David Kessler.  Please commit to watching "Fed Up", produced by Katie Couric and Laurie David.

Infographic Source: National Geographic: What the World Eats (Interactive Calories Over Time / Country Comparisons)

Accountable Care - Transforming Healthcare Delivery

At no other time in the history of our country has the healthcare delivery system so rapidly transformed as it has since the passage of the Affordable Care Act (ACA).   With healthcare consuming nearly 20% of our country's GDP, traditional fee for service medicine simply was not sustainable.   Accountable Care Organizations ("ACO's") hope to change that with the aim of improving population health, improving the care experience and reducing the per-capita cost. The Centers for Medicare and Medicaid Services (CMS) have very clear rules and definitions as to what might comprise an ACO for the Medicare market, but when it comes to what it means for the private sector, definitions vary. An ACO is a health care delivery system that has partnered with a payer or purchaser of health care to develop arrangements that align financial interests with the delivery of effective and quality care for a specific population.   However, if you have seen one ACO ... you have seen one ACO since success is contingent upon IT integration, physician-led affiliation, care coordination, access, prevention and convenience, and payment reform that aligns stakeholder interests.

Many plan sponsors might first think an ACO of today is simply warmed over "HMO soup", reheated from the 1990's.   What's different is that we have advances in technology, larger systems of care with greater physician/hospital collaboration, bigger federal incentives and a decade of best practices to guide us.   Many systems will be smart to avoid the  mistakes made  during the HMO era when the market greatly underpriced  premiums, withheld care and failed to model risk accurately.   We're only in the first inning of the ACO era that will continue to  lead to pay for performance, bundled payments, episodic risk sharing and more fully capitated transfer of risk for health sytems.

According to Leavitt Partners latest study, there are over 600  ACOs now across the United States:

ACO's Across the Country

There are three considerations that should prompt employers of all sizes to  consider ACO's in their employee benefits portfolio:

1) Available Now  - Traditional health insurers, physician groups and health systems have been hard at work building partnerships that incorporate shared risk arrangements.   Last year, ACOs began rolling their products out to our  benefit consulting teams for us to share with our clients.   We were pleased to learn  the health systems and carriers are "eating at their own restaurant" by  enrolling their employees into their own ACO over the last couple of years.   For the early adopter seeking alternatives that promise greater value   with a narrower network or steerage mechanisms, ACO options are available now throughout the country.   Our firm has examples of clients who have deployed narrow network strategies in partnership with hospital based systems anchored in DFW.   One of the largests now boasts a network of approximately 50 hospitals, 500 patient access points and 6,000 affiliated physicians.

2) Geographic Density -  Since ACOs are about the delivery of healthcare at the local level, employers with great density (concentrations of a large number of employees) will fare better with this strategy.   In California for instance, CALPERS, one of the state's largest plan sponsors, had enough clout to form a direct contract with a upside  premium credit of nearly $16MM  with a physicians group, Blues plan and hospital system.   This alliance was formed to compete against the dominate player in the area, Kaiser of California.   If you are the major employer in an area, you and other employers have more clout than you might think in this new era of ACO alignment.

3) Show Me the Money -  The most fundamental change that ACOs may bring to the market is a substantial increase in the levels of collaboration among payors and providers.   So how will more integrated models prove to the private sector they can truly remove waste, impact steerage, align incentives with greater patient satisfaction?   These integrated systems realize they must offer up savings in the form of guarantees, ,risk-adjusted PMPMs and total cost guarantees for us to consider their offering.   Initial actuarial projections are targeting PMPM savings ranging from 5-10% off of current spending levels, as contracts mature.

But accountability is up to every organization and every body with a body. The ACO cannot foster health alone ... and that's why the early adopters must be prepared to lead with  executive sponsorship, design and contribution alignment to drive steerage, coordination and communications  that lend support to these exciting options. I am a voracious reader of  Benefits Quarterly,  a publication for peers in my industry.   This excerpt, written by Isabelle Wang and Michael Maniccia of Deloitte, provides a good primer for employers to consider on the topic of ACOs and is available on their website or download here:    

Being Thankful - A Christmas to Remember

I  landed in the middle of central Mexico and I had a 103 degree fever.    It was our family trip scheduled over the Christmas holiday.   We would celebrate my in-laws, Earl and Eileen Eliason's, 50th wedding anniversary.   We were to arrive at Hacienda las Trancas in the state of Guanajuato, Mexico.   As I stood in line waiting to show our visas to the customs officials, beads of sweat were forming on my brow.   My eyes darted about reading posters about Ebola and the symptoms that would preclude a tourist from entering the country.   It began to dawn on me that I might not make it into the country with my family.   I made it through  and  was thrilled to find our welcoming party did not include trumpets, tequila, mariachis and  sombreros.   Wait ... that was Cancun 1990 with my college friends. Thankfully, our driver spoke little English and allowed me to sleep for 90 minutes   in the front seat as we bumped along the Mexican highways to the small town of Trancas, Mexico. In the same way I conduct my business travel with little more than an iPhone and the map app, I had done little research on our destination.   Over the course of the trip, I began to realize that just like America fought to declare its independence from British rule, Mexico was rich in revolutionary history in their triumph over Spain. This central part of Mexico was the epicenter where it all took place in the early 1800s.   In other words, we were in the Boston, Massachusetts of Mexico.   It would be a trip our family would always remember, as we pulled up to a 450 year old ex-hacienda.   We felt like Spanish royalty entering a fortress through the giant wooden arched doors.   My wife was smart to point me to an area we later called the infirmary.   It was my own suite with a king-size bed where I slept for hours until my fever broke.

When I walked out into a daze into the courtyard, I realized that we were in the most magical of places in Central Mexico, north of San Miguel de Allende,  Dolores Hidalgo and Guanajuato.   The same site was photographed by Vogue magazine in this shoot. The dinner  bell rang out at 6:00 p.m.   I found the rest of the family (who somehow escaped my germs)  at the dinner table waiting to be served.   What's this ... a staff of fifteen would be caring for our every need and serving us homemade Mexican cooking (every fruit and vegetable was safe to eat). Each day also brought homemade tortilla chips and margaritas at 5:00 p.m. in the courtyard. At dinner, I made sure to keep my distance as we sat at a Spanish style table that was no less than 30 yards long.   We were greeted by Yolanda, the sweetest Spanish cook and caretaker you could ever meet.

While our trips into each town provided cultural and artistic surprises, it was our sanctuary at the Hacienda that we looked forward to the most.   Our two boys had a blast riding horseback and playing ping pong every day while Kristen and I enjoyed hot stone massages, riding bikes, reading books in the hammocks, watching the sunrise and sunset, and playing games with our family.   There was even a full-service gym next to the spa that was as nice as most fitness centers in Dallas.

This Christmas was not full of the tradition of driving to different houses to open presents like we have done in years past.   In fact, there were no presents to be opened at all with one exception ... Kristen and Lois had reached out to all of Earl and Eileen's friends and family over 50 years of marriage and asked if they would provide a memory, write a letter or furnish a picture for the anniversary book that was being secretly put together for Earl and Eileen.   Watching them open the gift, cry together like two teenage sweethearts and savor every page was unforgettable.   While all the credit goes to our awesome  wives, it allowed us all to play a part in presenting a special gift to the two most deserving of recipients.

As our trip started coming to an end, we got concerned we were running out of time.   Earl and Eileen concluded the celebration anniversary dinner by sharing some memories and Earl read a poem he wrote entitled a "Half Century Day".   One of my favorite evenings was when the parents and kids all joined together to play Uno.   As we pulled away from Hacienda las Trancas, we signed the guest book with the same wonderment we shared when we arrived. A half century day ... turned into a magical week ... full of cool nights and seventy degree days that our family will never forget.   Memories made that will last a lifetime ... and 50 years of marriage celebrated  in the grandest of style.

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Oil Change or Health Screening - Which do we value more?

Americans have had a love affair with the automobiles ever since Henry Ford introduced the Model-T in 1908 to the Model S of today.   With all the hype around new model releases, A  USA Today article found that Americans are actually holding onto our existing cars for longer periods of time.   The average lifespan of a car on the road increased from 8 to 11 years over the last two decades. There were  two primary reasons cited why we drive our vehicles longer: advancements in technology and changes in the economy are forcing us to become more thoughtful consumers. Michael Calkins, AAA's manager of technical services, cited that this trend brings "a corresponding rise in maintenance and repair costs as our vehicles age".

These same economic forces are occurring in healthcare as one out of every eight Americans will be 65 or older by 2030.   The average American now has a life span approximating 80 years old. So how much exactly should we be investing in ourselves each year to keep humming down life's  highway?  We were curious to learn if we spend a greater percentage of money to keep our cars or ourselves in tune.

WHICH DO YOU PREFER-We decided to look at how much we spend each year to keep the asset in good working order and compare it to  the annual ownership cost for each asset.   Consumer Reports gave us the average amount Americans spend to maintain their cars each year divided by the annual cost of ownership. The annual ownership cost of our health is a function of the premium we pay to insure ourselves.   We calculated the average wellness spend at $728 per year divided by the total health costs an active employee costs to insure in the workplace at $11,830 per year.

Surprisingly, our findings showed we spend the same percentage on both.   Six cents of every dollar was spent to keep both of these assets in working order  each year. Investing the same percentage in each might make sense if each asset depreciated at the same rate.   The reality of this finding is that the less important asset we drive for eleven years and the more important asset (for most Americans) is driven into the ground for eighty.

At ACAP Health, our business models forecast plan sponsors will do better by investing closer to 10% of health spend towards prevention, as compared to the  industry average of 6%.   The right allocation will vary based on the demographics of your workforce, with additional  screenings and diagnostic costs correlating with age.   As technology enables more sophisticated modeling, we'll continue to see investments made in what I'm calling the "Preventive Economy".   This approach to risk management will impact policy decisions on everything from climate change to obesity.   And it will force health payors to reevaluate their current prevention vs. sickness allocation of health spend.   Our company's big data analytics warehouse now incorporates 47 million lives and case studies using clinical algorithms tied to one's metabolic  risk factors to help us better illustrate the trade-offs between a "pay a little now versus a lot later" approach to health plan sponsorship.

The Preventive Economy will also change the way these services are delivered. Think of the full-service gas and repair stations as the doctor's offices of today compared to the Jiffy Lube's in healthcare emerging for tomorrow. Accountable care, patient centered medical homes, retail pharmacy, telehealth and consumer directed models of preventive maintenance and diagnostic care are coming to the rescue to shore up the scarcity of primary care and nurse practitioners.   The preventive economy foreshadows these services will be in strong demand to address the scarcity of supply needed for the coming age boom.

So as you evaluate next year's healthcare spend make sure you are investing more than low single digits towards preventive maintenance to avoid your engine light coming on ... because establishing a healthy lifestyle of keystone habits is the closest thing you'll find to an 80 year bumper to bumper warranty.