How organizations can spend less on high-cost specialty drugs

The cost of specialty drugs continues to rise. In fact, it almost doubled from 2003 to 2014, according to a study from UNC-Chapel Hill. While less than 2 percent of the U.S. population used these drugs in 2015, research from pharmacy benefit manager Express Scripts shows they represent 37 percent of the nation’s drug spending.

By 2018, the figure is expected to reach 50 percent.

“Specialty drugs can cost several thousands of dollars for each prescription,” says Amber Hulme, Medical Mutual vice president of the Central Region. “And every year, costs go up, more drugs are released and organizations see their drug spend increase by 20 percent or more. That’s why it’s so important for them to take steps to control their own spending.”

Smart Business spoke with Hulme about the importance of having programs in place to control spending on these expensive, specialty drugs, and what steps organizations can take that will make the biggest impact.

What are specialty drugs?

Specialty drugs are often used to treat very rare or complex conditions that usually affect a very small portion of the population. They are typically biological drugs that are infused, injected or require special handling. Some common examples are those drugs used to treat cancer, multiple sclerosis, rheumatoid arthritis and AIDS/HIV.

What’s the best way for organizations to manage specialty drug costs?

First, make sure a specialty pharmacy is handling specialty drugs for your employees. Specialty pharmacies normally have the best pricing available. A retail pharmacy dispensing a specialty medication doesn’t have enough volume; they may only have one or two patients for certain conditions. A specialty pharmacy, on the other hand, might distribute these drugs across a much larger region and serve many more patients.

So it’s important for organizations to check with their insurance carrier or pharmacy benefit manager to see what specialty pharmacies are available in the pharmacy network. They should encourage — or even require — employees to use specialty pharmacies to help employees get the best possible prices for these expensive drugs.

What services do specialty pharmacies offer?

In addition to better pricing, specialty pharmacies do in-depth patient care and training. Clinicians will often train patients, for example, on how to administer medications that require self-injections. There’s also outreach to patients to make sure they are taking their medications.

One problem with specialty drugs is adherence. When employees take their medications properly, they’re more likely to be able to come to work, and less likely to need costly emergency room trips. This can make a big difference to an organization in terms of overall medical costs.

What other cost-saving measures are there?

Many organizations implement processes called ‘prior authorization’ and ‘step therapy.’ These two programs require that patients meet the appropriate criteria for the medication and first try a proven, but more affordable, drug before a more expensive alternative will be covered.

Another measure is to limit supplies of specialty drugs to 30 days. This helps avoid unnecessary costs that occur when a patient experiences intolerable side effects after the first few doses or the drug is no longer effective. Also, organizations with high employee turnover, for example, may not want to offer a three-month supply of a drug that costs thousands of dollars.

Anything else organizations should know about specialty drugs?

One development that could change the market is the use of ‘biosimilars,’ which are essentially generic alternatives to specialty drugs. It’s the same concept as traditional generics, where other manufacturers can sell the same drug for a lower price — potentially 15 to 20 percent less than the cost of the original drug.

So far, the U.S. Food and Drug Administration has only approved two biosimilar drugs, Zarxio (a drug used in cancer treatment) and Inflectra (a drug used for inflammatory conditions), but it is expected to approve others in the relatively near future.

Insights Health Care is brought to you by Medical Mutual

The importance of cost transparency in medical care

In health care, the consumer mentality continues to grow. Over half the respondents to Deloitte’s 2015 Survey of U.S. Health Care Consumers said they go online to research information about their medical needs. At the same time, only 30 percent of consumers are comparing prices before an appointment or procedure, according to a recent survey from HealthMine.

“Consumers definitely want cost transparency in medical care, but there’s still a disconnect that keeps some people from putting it into practice,” says Veronica Hawkins, Medical Mutual vice president of Government Accounts. “While more insurance carriers have introduced cost estimating tools, employees need to understand what the tools can do and how to use them effectively.”

Smart Business spoke with Hawkins about why cost transparency is so important, how cost comparison tools generally work and how much difference a little research with the right tools can make.

Why is cost transparency important?

With many employers moving to high-deductible health plans, employees are being asked to cover more of their medical expenses. To do that, they need to be able to evaluate their options and make the most informed decisions they can.

That means knowing how much a visit or a procedure is going to cost before they go — not after they get a bill. Most people don’t understand that costs can vary widely for medical services. They are surprised to learn costs can even be different for the same procedure, performed by the same provider at different locations.

How do cost comparison tools work?

Depending on the organization’s insurance carrier and the employee’s specific health plan, each tool will probably work a little differently. Price estimates are often available for everything from office visits to X-rays and surgical procedures. The estimates may factor in facility fees, as well as associated costs like consultations, outpatient visits, medications and rehab. That means the estimates should be pretty close to what the patient will have to pay — at least when there aren’t any complications.

What are some easy ways to save?

They are many services that can include facility charges. These extra charges come into play when you see a doctor at a facility he or she doesn’t own, like a hospital-owned clinic. In many cases, patients can pay much less by seeing the same doctor, and having the same treatment, at a different facility. To reduce the cost of those visits, it’s important for employees to know if facility charges will apply, and whether they can be avoided. These tools can help with that.

Should employees be looking at lab costs, too?

They absolutely should. Many people have their lab work done at the hospital or clinic where they see their doctor. But they have a choice. If their health plan has a cost comparison tool, employees can see how much a standalone option, like an independent lab, will charge for tests they might need. Price differences can be significant.

For example, hospital-based labs sometimes charge up to 70 times more than an independent lab for a simple blood test. If a doctor has an agreement with the lab, the patient may not even have to go to a different facility. A lab technician can pick up the sample from the doctor’s office. They’ll do the test, submit the claim and share the results with the doctor.

What other information is important?

Cost is obviously important, but it’s definitely not the only factor. More people are looking through reviews and ratings to help them make informed medical decisions.

That’s why Medical Mutual’s cost comparison tool, for example, includes patient satisfaction scores and quality ratings for doctors and hospitals in its network. It also includes specific information about the doctors themselves, like how long they have been practicing, where they went to medical school and what languages they speak.

Insights Health Care is brought to you by Medical Mutual

How organizations can benefit from self-funding employee health plans

How to fund health benefits is a major decision for any organization. There are two options — get fully insured through a health insurance carrier or fund it themselves. Until recently, self-funding was only considered for large organizations due to the potential risk involved, but that’s changing.

In fact, according to Pricewaterhouse Cooper’s 2015 Health and Well-being Touchstone Survey, 66 percent of employers with 500 to 1,000 employees are now self-funding their health benefits. That’s up 7 percent from the previous year and up 11 percent compared with 2013.

“Self-funding can be a very effective way for some businesses to control the cost of health care,” says Amber Hulme, Medical Mutual vice president of Central and Southern Ohio. “But it’s definitely not for everyone. Organizations need to evaluate their options carefully to make the right decision.”

Smart Business spoke with Hulme about the basics of self-funded health plans, how organizations might benefit from the approach, and what factors need to be considered before making a switch.

Why has self-funding grown recently?

A decade ago, self-funding was primarily utilized by employers with at least 500 employees. Now, more insurance carriers, including Medical Mutual, have introduced self-funded products for organizations with as few as 50 employees.

In 2018, many small businesses are scheduled to lose the transitional or ‘grandmothered’ status that has kept them exempt from some aspects of the Affordable Care Act. In preparation, even businesses with as few as 10 employees are evaluating the benefits of self-funding.

How does it generally work?

With self-funding, organizations budget for and pay the claims for all employees covered by the plan and any covered dependents, plus administrative fees. Most employers also pay for stop-loss insurance, which limits risk when one employee has a catastrophic claim, as well as when claims for the entire organization are higher than a set amount.

It’s basically the alternative to being fully insured, where the insurance carrier charges a premium and pays the claims — thereby assuming all the risk.

What are the benefits?

Organizations usually decide to be self-funded because it lets them predict costs based on their specific claims history and make any necessary adjustments. If claims are lower than expected, they can invest that money in the business or offer incentives for employee wellness. If claims are higher, their stop-loss insurance can cover it.

There also can be tax advantages to self-funding. Under health care reform, there are certain taxes related to risk that only apply to fully insured health plans. By moving to self-funding, organizations hope to eliminate some of those taxes from their budget.

When isn’t self-funding a good option?

Self-funding introduces more risk, so it’s usually geared toward organizations with more predictable claims. That’s why organizations need to be familiar with their claims history and understand the overall health of their employees when they are making this decision. If the population is relatively unhealthy, for example, self-funding might be a challenge.

Another important factor to think about is their financial flexibility. Some organizations simply don’t have the cash flow available to cover unexpected claims if they come up. Others may need to know their costs ahead of time, and prefer the predictability of being fully insured.

What other factors should be considered?

Self-funding isn’t a short-term solution. It requires a full commitment and a long-term strategy. To actually control costs through self-funding, organizations need to manage their claims effectively. That means committing to keeping their employees healthy through wellness and disease management programs, as well as negotiating with health care providers.

It’s also critical for organizations to know exactly what’s in their contract — and to work with an insurance carrier or a third-party administrator they can trust.

Insights Health Care is brought to you by Medical Mutual

How fitness trackers can motivate employees to be more active

Fitness trackers are popular tools for consumers to monitor their physical activity. According to the Health Enhancement Research Organization, almost half of employers have introduced some version of the device into their wellness program — from simple pedometers to more advanced options.

By 2018, ABI Research predicts that employees will use more than 13 million devices as part of a workplace wellness program.

“Incorporating fitness trackers into a wellness program is a good way to create a long-term culture of health within an organization,” says Veronica Hawkins, Medical Mutual vice president of Government Accounts. “They can help employees stay healthy, plus counteract rising health care costs.”

Smart Business spoke with Hawkins about the benefits of integrating fitness trackers into an employee wellness program, how to encourage participation and why many workers have already embraced the devices as part of their daily physical activity — both at work and at home.

Why are fitness trackers getting so popular?

They can be very useful tools to help people manage their lifestyle. Walking is one of the best ways to get and stay fit, but most people don’t know how much they actually do in a day.

While pedometers served that purpose in the past, the new devices can do a lot more. They typically show your progress in real time, on a smartphone, tablet or computer. So it’s easier, and more fun, for users to track their progress to meet their goals — and eventually, to set new ones.

How can organizations take advantage?

Fitness trackers can usually be integrated into an existing wellness program, where there are multiple opportunities for employees to earn wellness incentives. Through various challenges, employees log data and receive messaging about their progress from their employer as well as the vendor. Employees start connecting online with co-workers, often leading to friendly competition that drives engagement.

Some organizations may even pay for the devices to encourage employees to get started.

What about incentives?

There are definitely a variety of strategies organizations can use, but it really depends on what’s going to motivate their particular employees. Some organizations might offer a day off for meeting a weekly or monthly step goal, or give out monetary incentives like gift cards.

Medical Mutual, which introduced the devices to its wellness program two years ago, contributes money into employee health savings accounts for meeting various step goals.

What else can make the process successful?

The goal of introducing fitness trackers to a wellness program is to help employees reach their fitness goals. But it’s also to affect real behavioral changes that become part of their life style.

To do that, organizations just need to make their programs fun and engaging. Simplicity is also important. The easier it is for employees to participate, the more sustainable any behavioral changes will be.

Are there common obstacles?

With the popularity of fitness trackers, employees are often excited to participate. But there can be concerns about privacy and sharing information with employers. It’s important to be clear with employees that the information is being used to benefit them, not penalize them. And, that only information relevant to the program, like total steps, will be tracked.

There are usually consent agreements employees have to sign to share their data, so they have a choice. But in most cases, this issue isn’t a significant barrier.

What are the first steps?

If organizations want to invest in fitness trackers for their wellness program, it’s a good idea to start with their insurance carrier. Many already have direct partnerships with companies that either make or distribute some type of wearable activity tracking device. There are usually opportunities for discounts, as well as additional benefits.

Insights Health Care is brought to you by Medical Mutual

Why HSAs have become a valuable tool in retirement planning

Health savings accounts (HSAs) have become a popular way to pay for health care. And thanks to a growing understanding of their tax benefits, they are also starting to be seen as a worthwhile addition to any retirement plan.

According to a report from HSA consulting firm Devenir, more than $24 billion was deposited into HSAs in the United States in 2014 — up $5 billion from the previous year. In the same time, the number of actual accounts rose 22 percent to almost 17 million.

“HSAs are a great way to supplement retirement savings, but the concept is still new for some employees,” says Amber Hulme, Medical Mutual vice president, Central and Southern Ohio. “That’s why it’s important for employees to understand how HSAs works, so they can take full advantage.”

Smart Business spoke with Hulme about how HSAs work, why they are getting so popular and what makes them such a valuable tool for employees trying to plan for retirement.

What are the basics of an HSA?

HSAs can be used with certain types of high-deductible health plans. The IRS has rules for which plans qualify. For 2016, plans need to have a deductible of at least $1,300 for individuals and $2,600 for families.

The IRS also limits how much money can be contributed to an HSA per year — $3,350 for a single person, $6,750 for a family. Employees who are 55 or older can contribute an extra $1,000 each year.

Why are they getting so popular?

The biggest reason is the tax advantages. When employees open an HSA, they can defer money from their paycheck into their account tax-free. That also applies to any contributions their employer makes. The money can then be used to pay for approved medical expenses without paying taxes. Any money left over stays in the account, earning interest tax-free.

Eventually, employees can use the money they have accumulated to invest in stocks, bonds or mutual funds. Any profits, whether from dividends or capital gains, are nontaxable. HSA administrators might have rules about minimum balance before investments are allowed, but it’s usually not more than $2,000.

How do HSAs work in retirement?

HSA funds can always be used, tax-free, to pay for approved medical expenses. When employees turn 65, they aren’t subject to the early withdrawal penalty, which is usually around 20 percent. So they can choose to spend the money on other things, like travel, and only pay the taxes.

If they enroll in Medicare, no more contributions are allowed, but the money in the HSA can be used to pay the premiums — with no penalty and no taxes.
Medicare Supplemental (Medigap) policies have different rules, so that option isn’t available.

What are good ways to encourage employees to use their HSA?

Employer contributions are a great way to drive employee participation and gain acceptance in HSAs. That’s especially true for employees who are transitioning from a more traditional type of health coverage to a high-deductible plan.

Otherwise, employees just need to understand how HSAs work and all of the financial benefits they can offer. That’s why education is so important. The organization’s insurance carrier or HSA administrator can provide a wealth of resources to help make sure employees use their accounts as effectively as possible.

Are any other important trends developing?

Traditionally, HSAs have been accessed separately from a member’s health plan, either through a bank or another type of financial institution. But as consumers take more control of their health care, they want more connectivity and ease of use.

In response, many insurance carriers, including Medical Mutual, are moving toward platforms that let members review their HSAs and claims information in one place. This integration will help consumers be more engaged in their health care costs, and more empowered in their retirement planning.

Insights Health Care is brought to you by Medical Mutual

How to help employees manage their chronic health conditions

Chronic diseases are almost as costly as they are common. According to the Centers for Disease Control and Prevention (CDC), half of U.S. adults have at least one chronic condition, while almost one-third have two or more. And treatment of those conditions accounts for more than 80 percent of our health care spending.

“These conditions are some of the most costly causes of death in this country, but many are very preventable,” says Veronica Hawkins, Medical Mutual vice president of Government Accounts. “Fortunately, there are plenty of programs consumers can use that give them the tools, the education and the encouragement they need to really improve their quality of life.”

Smart Business spoke with Hawkins about the types of programs being offered in the market to help people manage their chronic health conditions, and how organizations can benefit as well — by increasing productivity in the workplace and reducing their health care costs.

What types of conditions are considered ‘chronic’?

The basic definition focuses on non-contagious diseases that have a long duration and generally slow progression. Some examples are cardiovascular diseases, diabetes and chronic respiratory diseases like chronic obstructed pulmonary disease (COPD) and asthma. In most cases, depression also falls into this category.

What is disease management?

It refers to ongoing care to help people with one or more chronic conditions. The idea is to prevent or minimize their effects through integrated care.

Many organizations today offer some type of disease management program to help their employees have a better quality of life. Plus, when employees don’t need to visit the emergency room or be admitted to the hospital as often, health care costs go down and productivity goes up.

How do the programs work?

Disease management is included with most fully insured plans. Self-funded employers, which pay their own claims, would likely have to buy into it. The cost structure, obviously, varies among carriers, but it is usually built in to either the employer’s premium or administrative costs.

In most cases, insurance carriers work with an outside vendor that uses claims information to identify members who might benefit from the program. They do outreach to identify members who want to participate, and those who do are usually assigned a health coach. The health coach educates the member on his or her condition and develops a plan to make changes that will improve their overall health.

The programs send educational materials to members even if they haven’t opted in — unless, of course, they decline to participate.

What else might be involved?

A member might use the program to better understand his or her medications or get counseling to quit smoking or lose weight. Depression screening is also very common.

Depending on the needs of the members, many programs offer counseling, home visits, 24-hour call centers and appointment reminder systems. Others allow members to receive their diabetic testing supplies, like a diabetes monitor or test strips, for no additional out-of-pocket cost. There is usually quite a bit of customization, so each member gets the help that he or she needs.

How can organizations get more employees to participate?

Engagement is obviously the most important part of a disease management program — and the biggest challenge. Monetary incentives are relatively common, depending on how the program is set up, either by the carrier, employer or program vendor. For example, participants might get a gift card for completing their first year in a program.

Obviously, each organization is different and the needs of individual members will vary. It takes time and expertise to find the right approach. But it can definitely be worthwhile.

Organization leaders should talk to their insurance carrier if they are interested in implementing a disease management program, or simply want to get more of their employees to participate in the one they already have.

Insights Health Care is brought to you by Medical Mutual

How to reduce health care spending with HMOs

Health maintenance organizations (HMOs) are making a comeback. The plans have grown steadily in popularity since 2014, as the changes brought about by the Affordable Care Act have taken effect. Some studies have even shown that HMOs now account for more than one-third of all health insurance plans. Just a few years ago, it was less than 10 percent.

“More consumers today don’t have a strong preference about the doctor they see for things like minor illnesses,” says Amber Hulme, Medical Mutual vice president, Central and Southern Ohio. “For those types of consumers, HMOs offer a less expensive health insurance option, and their employer saves money in the process.”

Smart Business spoke with Hulme about how HMOs work, what makes the HMO plans currently on the market different from their predecessors and how organizations can save money on health care by offering an HMO option to their employees.

What is an HMO?

HMOs are a type of health insurance plan that offer access to a narrow network of doctors and hospitals. When members go out of network, the plan might not cover the services they receive and they could be responsible for the full cost. The specific rules for an HMO can vary from carrier to carrier.

How is an HMO different from a traditional plan?

The type of plan many people are used to is called a preferred provider organization (PPO) plan. With a PPO plan, members have the freedom to choose any doctor or hospital in the network. If they receive medical services from a doctor who is not in network, the services are usually still covered — they just have to pay a higher share of the medical costs.

An HMO is a less expensive option, but members do lose some of the flexibility of a PPO plan. HMOs don’t generally cover out-of-network care except in the case of an emergency. If a member gets medical services from a doctor not in the network, they normally are responsible for all the costs for those services.

What are the main advantages of an HMO?

With HMOs, the first advantage you usually hear about is cost. Insurance carriers can negotiate rates with providers differently for an HMO, which allows them to charge lower premiums. The deductibles are typically lower than comparable PPO plans, as well.

Another big advantage of an HMO involves the quality of care. With an HMO’s narrow network, care can be more coordinated and, in many cases, that integration can help make the outcomes better. Organizations pay less, while employees see a number of benefits in terms of how their care is managed.

How have HMOs evolved from what was available in the past?

The overall structure is similar, but there are some important differences to keep in mind. Many HMOs now offer some benefits for care received outside of the HMO’s network or service area. And in most cases, referral from a primary care physician (PCP) is no longer required to see a specialist. However, it’s still recommended that members choose a PCP to make sure they get the care they need. When PCPs coordinate care with specialists, it actually relieves some of the burden on the patient and more consumers are seeing that as a benefit.

How should organizations decide if this option makes sense for them?

With an HMO, access to care is one of the most important factors. HMOs are often a better option for organizations that have a limited number of office locations, where access to care isn’t an issue. If your employees live in localized areas, an HMO can definitely be a good option. In rural areas, it might be less practical.

Organizations should talk to their insurance carrier to evaluate whether an HMO makes sense for their employees.

Insights Health Care is brought to you by Medical Mutual

How new drug coverage programs can help control costs, keep employees safe

The concern over the cost and safety of compound drugs is growing. According to a report from Towers Watson, 39 percent of employers have already excluded certain compound drugs from their benefits, while another 24 percent expect to do so by 2018. Many pharmacy benefit managers, which work with insurance companies, have done the same.

“Despite not being approved by the Food and Drug Administration (FDA), many compound drugs are in high demand, and costs have skyrocketed in the last few years,” says Veronica Hawkins, Medical Mutual Vice President of Government Accounts. “Unfortunately, it is more difficult than ever for patients, and employers, to know which ones are safe and effective.”

Smart Business spoke with Hawkins about compound drugs, their financial impact and how to help employees avoid high-priced medications that are often unnecessary or dangerous — or both.

What are compound drugs?

To make a compound drug, a licensed pharmacist has to combine, mix or alter the ingredients of a medication. There are a variety of examples on the market today, but the most common are topical pain treatments, such as ointments, creams and powders.

Unfortunately, certain compound drugs are unproven, as well as overpriced. That’s why insurance companies and pharmacy benefit managers have stopped covering many of the ingredients used to make them.

Why is this issue important?

First, the FDA does not verify the quality, safety or effectiveness of any compound drugs. Many have been shown to be clinically unnecessary or even dangerous. Second, many employers have suffered financially from the excessive costs of some compound drugs. A gram of a bulk powder or cream, which hasn’t been proven to be safe or effective, can cost hundreds or even thousands of dollars.

Has the situation gotten worse?

Absolutely. According to Express Scripts, the pharmacy benefit manager for Medical Mutual, the average per patient cost for a compound drug increased from $90 to $1,100 between 2012 and 2014. And it’s gone up since then. As a result, most pharmacy benefit managers have eliminated or reduced coverage for many ingredients used to make compound drugs.

Are all compound drugs dangerous or ineffective?

No, certainly not. There are reputable pharmacies, which compound prescriptions that may be unavailable commercially. For example, employees might need a crushed or liquefied form of a drug if they have difficulty swallowing pills. It’s also common for many pediatric drugs.

However, other pharmacies charge inflated prices for compound drugs that don’t provide additional clinical value over more affordable and FDA-approved alternatives. Those are the ones that are currently creating problems for many employers.

What can organizations do?

One of the best ways organizations can avoid problems with compound drugs is to let their insurance company manage their coverage for them.

Many insurance carriers, including Medical Mutual, allow clients to participate in compound management programs. In these programs, the carrier excludes compound drugs or ingredients that have been determined to be unsafe or unnecessary. The compounds that are found to be reputable stay covered.

In these types of programs, many of the drugs that are excluded are also excessively overpriced. In most cases, organizations will see their compound drug claims dramatically reduced. Of course, employees need to know what’s going on, so the insurance company will notify its members before a claim is denied.

What else is important to keep in mind?

Education is important, too. Employees should know enough to question their doctor when they get a new prescription. They can also ask their doctor to send prior authorization to their insurance carrier to find out if the drug is covered ahead of time.

The most important thing is to keep employees safe from unproven medications that, in many cases, do more harm than good. And that, in turn, will help prevent excessive and unnecessary costs.

Insights Health Care is brought to you by Medical Mutual

How to help employees use their preventive health benefits correctly

Most organizations agree that preventive care is vital to help keep their employees healthy. And for those that follow the rules of health care reform, services that qualify as preventive are available to employees at no cost. However, there is still a lot of misunderstanding about what services are preventive.

“Doctors only bill visits as preventive if they meet certain criteria, but the average person doesn’t know what that involves,” says Amber Hulme, Medical Mutual Vice President, Central and Southern Ohio. “As a result, organizations might see employees skip preventive visits, not knowing they’re free, or get charged for a visit they thought was preventive.”

Smart Business spoke with Hulme about how to distinguish between preventive services and other medical care, why the difference is important, and how organizations can address misconceptions that might be preventing their employees from properly using the benefits available to them.

What services are considered preventive?

Essentially, preventive services are those performed for patients who don’t already have symptoms, injuries or other health problems. The physician decides what tests or screenings are right for the patient based on their age, gender, overall health status, personal health history, current health and other factors.

A visit can include a physical exam, immunizations, lab work and possibly X-rays. The goal is to keep patients healthy through early diagnosis.

How is diagnostic or medical care different?

Basically, if a patient goes to the doctor to diagnose, monitor or treat a specific illness, injury or a chronic health condition, it’s probably not going to qualify as a preventive visit.

Plus, any related services a patient might receive, including exams and blood tests, would likely be considered medical care, as opposed to preventive care.

Why does the difference matter?

Unless a plan was grandfathered under health care reform, many preventive services have to be available to employees at no cost. However, what is considered preventive isn’t always clear. Many lab tests and other procedures, for example, are only covered based on why and how frequently they are done.

Depending on the circumstances, the same test or service can be billed as preventive or diagnostic, or as routine care for a chronic condition. Even during a preventive visit, patients may have to pay a copay or coinsurance if the doctor ends up performing services that aren’t considered preventive.

It can definitely be confusing, but really it’s based on how providers submit the claims.

How would this actually work? Can you give an example?

Sure. Let’s say a person goes to the doctor to get a preventive colonoscopy. This person hasn’t had any problems in the past, but the doctor finds a polyp during the exam and proceeds to remove it. That’s still preventive. The follow-up colonoscopy, however, is going to be considered a medical procedure in terms of how the billing works. That’s because a problem has already been identified.

Another common example is a routine mammogram, which is preventive for women age 55 and older. But if a woman finds a lump in her breast and decides to get a mammogram, it would not be considered preventive because the symptom already existed. The same goes for women who have been diagnosed or received treatment in the past. Their mammograms would fall under routine chronic care.

What should employees be encouraged to do?

Organizations should make sure employees are familiar with how preventive care works under their benefits plan. Their insurance carriers can provide a list of all the preventive services available.

It’s also important to encourage employees to ask their questions when they go to the doctor, such as why a test or service is being ordered. That will help employees make sure they know how they will be charged and still get the care they need.

Insights Health Care is brought to you by Medical Mutual

The appreciation is mutual: Building customer loyalty through a grass-roots customer loyalty campaign

 Just a few short years ago, while analyzing the highly competitive Ohio health insurance market, trying to find a game-changing way Medical Mutual could differentiate itself in the highly competitive and crowded marketplace, the light went on.

I knew that Medical Mutual had something none of our competitors had — a 2,400-person sales force, our entire employee-population, all living and working in Ohio.

So, I started thinking about a customer loyalty program. What if we could prove to companies doing business in Ohio that there was enormous added value to being a Medical Mutual customer?

And, what if, we could encourage employees to shop with those businesses that offered retail products?

I knew that if a program could be developed to answer those questions, then Medical Mutual would be unique in the health insurance market.

Building appreciation

Playing off the company name, the moniker Mutual Appreciation was born. Soon, the IT team was developing a database allowing employees to log their purchases and receipts on a website.

A mobile app soon followed, enabling employees to log a purchase and instantly locate a retail customer. The app also included a map showing them how to get there.

Employees were soon logging their purchases on home computers, as well as at the office or on the go.

One question remained: How would we encourage our 2,400 Ohio employees to participate? What if we offered them cash prizes and gift cards for attaining a certain dollar level? As a leader, I knew I had to build excitement, keep the momentum strong and identify other ways to encourage employees to participate.

Rewarding employees for their participation worked liked a charm. The buzz among Medical Mutual employees was huge. The competition became fierce.

Businesses have been quick to recognize the value and impact of Mutual Appreciation. Leadership recently led employees in a Mutual Appreciation cash mob at a Northeast Ohio restaurant chain and helped a local grocery store with a charity shopping spree, which benefitted its regional food bank partner.

Demonstrating loyalty

We are able to craft reports for our business customers to demonstrate loyalty, and being able to track employees’ buying power effectively communicates the results and benefits of Mutual Appreciation directly to those customers.

To date, Medical Mutual employees have spent $50 million doing business with our business customers. This year alone, nearly $13 million has been driven through the doors of Medical Mutual’s business and retail customers. During November’s Small Business Saturday, employees spent nearly $80,000 in one day with smaller business customers.

From the beginning, it was clear that as the number of purchases grew, so too would the impact on the customer’s bottom lines. That’s a powerful message.

The bottom line is everybody wins — local businesses, the local economy, Medical Mutual’s employees and our company. Now that’s mutual appreciation.

Rick Chiricosta is chairman, president and CEO of Medical Mutual of Ohio. Visit