According to a nationwide survey by Mercer Health & Benefits, more employers are using consumer-driven health plans -- such as low-premium, high-deductible plans with health savings accounts -- and disease prevention programs as cost-management strategies. Six percent of employers offered consumer-driven plans in 2006, three times the percentage in 2005, the survey found. An additional 14% of employers said they plan to offer consumer-driven plans in 2007.

Employers preferred HSAs to health reimbursement accounts, which require an employer contribution. Six in 10 small employers offered a consumer-driven plan as their only insurance option, compared with one in 10 large employers. Small employers are showing a clear preference for HSAs, which don't require an employer contribution to the account. About one-quarter of employers offered preventive screenings in 2006. Among large employers, the percentage who offered preventive screenings has nearly doubled in the last three years.

(Los Angeles Times, 11/20).

All Maryland residents would be required to purchase health insurance under a draft plan outlined by the Maryland Health Care Commission. If enacted, the plan would make Maryland the second state after Massachusetts to require residents to obtain health insurance. The Residents could choose among different plans offered by insurers. Workers would keep the same coverage when switching employment. Employers would pay the majority of the costs, and each employer would be responsible for determining their contribution amount. The state would provide subsidies for low-income workers, according to the draft plan. The plan would not apply to large employers, though the size requirement has not been determined. Other details yet to be worked out -- the cost of subsidies, eligibility requirements and the penalties for those who do not purchase insurance.

The plan would not impose an employer mandate, but individual responsibility would put greater pressure on employers to contribute to health insurance coverage, according to commission Executive Director Rex Cowdry. Commission Chair Stephen Salamon said the draft plan is "a work in progress," but commission officials hope consultant studies and economic models will provide more details for the commission to propose a plan to the state Legislature in January 2007. Meanwhile, the Maryland Citizens' Health Initiative and MedChi, the state medical society, are promoting a plan that would increase cigarette taxes by one dollar per pack to generate an estimated $200 million annually. Those funds would be used to expand Medicaid coverage to more low-income adults and to subsidize small businesses that cannot afford coverage
(Salganik, Baltimore Sun, 11/17).

Democratic lawmakers are likely to provide new momentum for the generic drug agenda. They are expected to propose to increase restrictions on "authorized generic" medications. After medications lose patent protection, brand-name pharmaceutical companies in some cases continue to market the medications at full price and also allow generic pharmaceutical companies to market authorized generic versions of the treatments in exchange for a share of the revenue. Opponents maintain that authorized generic medications reduce market competition and lead to higher prices for consumers.

A proposal to increase restrictions on authorized generic medications, which might lead to lower drug costs and doesn't involve government-imposed price controls or the controversies surrounding imported medicines, likely would resonate with many lawmakers.

(Wilde Mathews, Wall Street Journal, 11/21)

Nearly 800 California residents were asked to design the best possible health plan for the uninsured, using a limited amount of dollars. The project used a game-like computer program called CHAT (Choosing Healthplans All Together) developed by University of Michigan and National Institutes of Health researchers.

Individually, and in small and large groups, the 798 participants picked from a range of options - including different coverage levels for preventive, chronic and last-hope care; different options for access to doctors; a variety of co-pays for appointments, hospital stays and ER visits; options for dental and vision care, different premium levels, and more.

In the end, the participants came to agreement on what to cover, what kinds of tradeoffs to make, and how much would be reasonable for participants to pay out of their own pockets. The result was a package that, for example, would pay for the least-expensive medicines first for chronic diseases like diabetes; give basic care for pregnancy, mental health, and rehabilitation; and cover only proven preventive tests and exams. But it wouldn't cover last-ditch catastrophic care, extraordinary end-of-life care, and conditions that interfere with quality of life but aren't seriously disabling.

The plan would cost two-thirds of the average cost for insurance plans in California. "They made many trade-offs to avoid saddling individuals with high co-pays and deductibles," says lead author Marge Ginsburg, executive director of SHD. "They also chose comprehensiveness of coverage over choice of doctor, and made a clear distinction between health care needs that are vital to basic living, and those that are less essential to productivity and longevity."

The CHAT game is designed so that individuals progress from designing a plan on their own, to working in small groups, and then to a larger group. A number of sessions lasting two and a half hours, and each involving 10 to 12 people, were held in 2005 and 2006. Half of participants were from Sacramento County. The participants varied in age, economic and educational background, and insurance status, though they were not fully representative of the California population.

Published in the November issue of the journal Health Affairs

The total number of Health Savings Accounts (HSAs), which allow consumers to set aside money tax-free for medical expenses, is expected to grow to about 3.6 million with $5 billion in combined deposits, compared with 1.1 million accounts with deposits totaling $1.2 billion at the end of 2005. As a result, the number of banks that offer health savings accounts has more than tripled since the end of 2005. Nearly 1,100 banks now offer HSAs.

The abundance of new HSA offerings is triggering competition that is helping to push fees lower and expanding the options for consumers to invest their savings. HSAs typically accrue interest, but banks increasingly are offering other investment options. Bank of America this week is expected to announce plans to introduce a new credit card in partnership with major health plans that will allow holders to earn rewards points that convert to cash for their HSAs. In January 2007, customers will be able to invest their HSA balances in mutual funds offered by the Bank of America's Columbia Management arm. In addition, JP Morgan Chase later this month will begin allowing individuals to enroll in HSAs online, rather than solely through their employers. The bank also offers mutual fund investments to its HSA holders.

(Carrns, Wall Street Journal, 11/14).

Some estimates of the total cost of healthcare for illegal immigrants in the United States have exceeded $50 billion annually. Such numbers have been used in the debate over illegal immigration. According to a study released by the Rand Corp. and published in the November/December edition of the journal Health Affairs, the nationwide cost of healthcare for illegal immigrants between the ages of 18 and 64 at $1.1 billion in 2000 — or about $11 per household. The Rand figures do not include costs for children and the elderly. Also, the data were collected in 2000, and the number of illegal immigrant has swelled in the five years since then, and so have healthcare costs.

However, in the midst of the current debate over illegal immigration, it is helpful to have some authorative date to use in the discussion. Let's say they are wrong and have understated these costs by $1 billion — which is a lot — I'd still say that these are relatively small aggregate costs for the nation.

See story in Los Angeles Times, Illegal immigrants' healthcare bill is tallied

In San Francisco, the Golden Gate Restaurant Association has sued to block the city's plan to provide health care coverage to uninsured residents, saying federal law prohibits local governments from requiring employers to pay for insurance. The ordinance, scheduled to take effect next July, requires that businesses with 20 or more employees pay for their staff's health coverage.

"Health care is everyone's responsibility, not just the employers'," the association's executive director, Kevin Westlye, said in a statement. He said his group has tried for a year to find an alternative to employer funding.

The ordinance is designed to cover 82,000 uninsured San Franciscans and is expected to cost $200 million a year. Costs will be paid by employers and taxes.

See full story in Forbes, Restaurant Assoc. Sues Over Health Care

Toyota will build a $9 million medical clinic for employees and their families at its new San Antonio truck factory. The clinic will provide primary care including eye care, dental services, pediatrics, laboratory tests and physical therapy. The decision to offer more comprehensive services onsite means the company likely will spend more for primary care and prescription drugs, but the additional costs should be offset by a drop in more expensive hospitalizations and specialty care. Toyota will measure the success of the clinic by monitoring employees' health indicators, such as smoking cessation rates and blood pressure levels, and by tracking expenses. Toyota will not require employees to use the clinic but will charge higher copayments and deductibles for workers who seek care elsewhere.

See full story in Detroit News, Toyota's health cost cure: A clinic at the plant site.

Florida's Medically Needy Program covers the cost of medical services for residents whose incomes are too high to qualify for Medicaid but whose medical expenses represent a substantial share of their incomes. This year Medicare assumed responsibility for prescription drug coverage for individuals in the medically needy program, as a result, most will no longer qualify as medically needy - a real Catch 22.

See story in South Florida Sun-Sentinal, 'Catch-22' in U.S. rules could be costly for thousands with chronic illnesses

Dave and Darlene Henderson bought Mega Life health insurance through the National Association of Self-Employed (NASE). For $400 a month, the couple said, the Mega Life agent told them that they could have a catastrophic group health insurance policy that would cover 80 percent to 100 percent of their hospital costs up to $1 million.

In 2001, Darlene Henderson became ill with breast cancer. David was later felled by an aortic aneurysm the size of a baseball and needed emergency surgery.Those medical misfortunes left the Hendersons with more than $210,000 in medical and hospital bills. Mega Life covered $33,428 of the Hendersons' bills. The couple were left stunned and quivering when they learned they still owed more than $180,000.

The Hendersons asserted their agent didn't emphasize or explain critical information:

1. There was no cap on their out-of-pocket expenses with Mega Life, unlike traditional health insurance, and
2. Their benefits had daily maximums far below the average cost of modern-day medical procedures and hospital stays.

A Nevada County Superior Court judge has dismissed a lawsuit filed by the Hendersons. Judge Albert P. Dover rejected the claims, saying they received exactly the benefits they signed up for when they bought a policy from Mega Life and Health Insurance Co.. Dover suggested consumers must read the fine print before they buy any insurance policies.

The California Foundation of Taxpayer and Consumer Rights has denounced Mega Life policies as "skeletal." The group said Mega Life's policies are so technical and riddled with jargon that the Hendersons were unlikely to have understood its limits if they had read it.

For more on NASE and Mega Life check out The Rip Off Report

Aetna said its fraud-detection software helped it prevent more than $89 million in fraudulent reimbursements from being paid last year, compared with $15 million it was able to recover after fraudulent payments were already made. Companies are able to save far more money by detecting fraud before claims are paid than recovering the money after the fact. Mike Stergio of Aetna noted that the majority of medical providers are honest. "The hard part is finding [fraudulent providers] among all these good people and at the same time not branding everyone out there as bad".

Fraud accounts for an estimated 3% to 10% of the $2 trillion spent annually on health care in the U.S. Companies have developed software that detects suspicious patterns in claims data. A method called "spider-webbing" finds one common denominator and follows the thread. Red flags indicating possible fraud include medical providers charging more than peers; providers who administer more tests or procedures per patient; providers who conduct medically unlikely procedures; providers who bill for more expensive procedures and equipment when there are cheaper options; and patients who travel long distances for treatment.

See full story in USA, Computer programs help flag insurance fraud before payment

U.K. doctors Hangwi Tang and Jennifer Hwee Kwoon Ng find that their patients often use the popular Google Internet search engine to try to diagnose their own illnesses.

They wondered if it works.

To test the strategy, they took advantage of a feature in The New England Journal of Medicine. Every week, the journal offers doctors the chance to hone their diagnostic skills by presenting a puzzling case history.

So Tang and Ng gave Google a chance to solve 26 of the puzzles.

The two doctors selected three to five search terms for each case history. They then typed them into Google and looked over the first five pages of search results for a diagnosis.

Google came up with the correct diagnosis 58% of the time, Tang and Ng report in the current online issue of BMJ, formerly the British Medical Journal.

"Our study suggests that in difficult diagnostic cases, it is often useful to 'google' for a diagnosis," the researchers conclude.

The catch: Tang and Ng are doctors, and their combined expertise was needed to choose the most likely search result.

"Patients doing a Google search may find the search less efficient and be less likely to reach the correct diagnosis," they note. "We believe that Google searches by a 'human expert', a doctor, have a better yield."

A new accounting rule requires State and local governments to calculate the total value of the health benefits they have promised to retirees. The rule, imposed by the Governmental Accounting Standards Board, goes into effect in July 2007 and will require public agencies to report the current and future costs of health care and other benefits -- such as dental, vision and life insurance -- for the nation's estimated 24.5 million public employees. Under the rules, public agencies must pay their liabilities over a 30-year period. If state officials choose not to earmark funds to cover the payments each year, the liabilities will count against the state's net assets.

Little, if any, money has been set aside to fulfill these obligations - about $1.4 trillion in retiree health benefits. Some local governments will find that their tax bases have eroded too much to fully fund the health benefits they have promised.

See New York Times Story, Once Safe, Public Pensions Are Now Facing Cuts

Last year, Ford spent $3.5 billion on health benefits for 590,000 employees, retirees and dependents, and health care costs for the company have increased by 67% since 2000. In a move to stop the bleeding, Ford announced:

Starting January 1, 2008, Ford salaried retirees will no longer get health benefits. Instead Ford will provide salaried retirees who qualify for Medicare and eligible spouses and domestic partners with $1,800 annual stipends to pay for supplemental health care, dental and vision costs. Ford will place the stipends in health retirement accounts. By switching to a defined contribution plan, Ford avoids further increases in health benefit costs.

In addition, Ford on June 1, 2007, plans to increase health insurance premiums for most active salaried employees by about 30% and end their merit pay increases.

See story in Detroit News, Ford retirees face tough medicine

Starting this fall, UnitedHealthcare's SecureHorizons Medicare managed-care plans will be marketed in more than 700 Wal-Mart stores in 30 states just before the Nov. 15 start of the seven-week open enrollment period for Medicare managed-care and prescription-drug plans.

Humana also has a marketing partnership with the giant retailer. Wal-Mart helped Humana sell 3.5 million drug plans -- second only to UnitedHealth's 4.5 million -- and double enrollment in its Medicare Advantage managed-care plans. Humana markets both its drug plan and Medicare Advantage Plan.

The deal gives Wal-Mart partnerships with the two largest Medicare Advantage providers. UnitedHealth has more than 1.4 million people in those plans, and Humana about 1 million.

See full story at courier-journal.com
Humana not alone at Wal-Mart, UnitedHealth sells Medicare plansThe Courier-Journal

Employers are getting the upper hand on health insurance costs, mostly by asking employees to pay more of the cost. In the third quarter, benefit costs rose between 3.3% and 4.9% depending on whose numbers you use, but either way it's the lowest gain in the last 5 years. But the tighter labor market is also causing companies to to increase pay. Salaries grew by 3.2% from a year ago. The average employee will loose about 16% of his/her pay increase to higher health insurance costs.

Employers have been "willing to allow more compensation gains to filter into take home pay", according to Morgan Stanley chief U.S. economist Richard Berner. Meanwhile overall inflation is also slowing down. The combination of improving income gains and slower inflation will translate into higher real wages.

BusinessWeek, Nov 13, 2006 - A Bigger Burden, But a Bigger Paycheck

More than 150,000 Americans undergo spinal fusions for lower back pain each year. The process involves using bone grafts with or without surgical implants to fuse two or more vertebrae. Among Medicare recipients, spinal fusion surgeries quadrupled to a rate of 12 per 10,000 in 2003 from 3 per 10,000 in 1992, according to a report last month from researchers at Dartmouth Medical School.

Recent European studies have raised questions about the benefits of spinal fusion in general.
A head-to-head study in Britain last year found spinal surgery offered no clear advantages over intensive rehabilitation therapy for patients with chronic lower back pain. This year, a Norwegian study found spinal fusion was no better than physical therapy in patients who had undergone previous back surgery.

In the latest report, researchers from the University of Washington, found that two years after surgery, about 60% of patients remained disabled. The high rate of long-term disability in all of the patients suggested that spinal fusion was of little benefit.

See Los Angeles Times story, Spinal surgery devices questioned

Both U.S. and international studies show that the more a healthcare system relies on primary care, the better the outcomes and the lower the cost. But American medicine is heavy on specialists and getting heavier. In just the last eight years, the number of graduates of U.S. medical schools choosing careers in family practice and adult primary care has plummeted by more than half.

About one-third of medical spending is now devoted to services that don't appear to improve health or the quality of care and may make things worse. This means that the U.S. is wasting more than $650 billion a year on unnecessary and often harmful care. The facts show that these enormous expenditures may be buying us the best amenities in medical care — but not the best health.

Even though Americans spend twice as much per person on healthcare as the other 21 wealthiest countries, data from the World Health Organization show that we live the shortest amount of time in good health — 2 1/2 years less than the average in the other countries (69.3 versus 71.8 years).

From LA Times OpEd Piece, November 3, 2006 Healthcare Code Blue By John Abramson, a clinical instructor at Harvard Medical School, and the author of "Overdosed America."

A Kaiser Family Foundation study found that higher coinsurance rates (e.g. you pay 20% of medical expenses or more):

1. Do not have adverse consequences for individuals of average health and income when compared with a plan with no coinsurance.
2. Reduce use of health services and health care spending.
3. No Coinsurance plans benefited the health of high-risk people, especially those with low incomes.

The Role of Consumer Copayments for Health Care: Lessons From the RAND Health Insurance Experiment and Beyond," Kaiser Family Foundation: The report by Jonathan Gruber of the Massachusetts Institute of Technology reviews data from the RAND Health Insurance Experiment to offer insights into current health policy debates about appropriate levels of cost sharing. The RAND experiment, conducted in the 1970s, randomly assigned families to health plans with different ranges of coinsurance and followed them for three to five years to determine how coinsurance levels affected their health and use of medical services.

Medicare beneficiaries now have access to a new online resource to evaluate their prescription drug plan choices for 2007. By visiting http://www.healthdecisions.org/guide, beneficiaries can work through an interactive prescription drug plan guide to determine which type of drug plan best meets their individual needs. The guide provides clear and concise information to help seniors and their loved ones evaluate their current prescription drug plan and make decisions about future coverage.

America's Health Insurance Plans (AHIP), the National Association of Chain Drug Stores (NACDS), and the National Community Pharmacists Association (NCPA) launched this interactive online guide as part of an ongoing national campaign to educate seniors about their prescription drug plan choices.

People with HIV can get 24 extra years of life from modern treatments at a total cost of $618,900 in 2004 dollars. Initially, monthly treatment costs about $2,100. The cost of drugs is nearly three-fourths of the lifetime expense. Unfortunately, 25% of people with HIV don't find out until their immune system collapses. The cost of treatment started at this late stage averages $4,700 per month. That's because hospital costs rise to almost half the lifetime expense. Of course, the least expensive option would be to prevent the estimated 40,000 new HIV infections that occur each year in the U.S.

That finding comes from a Cornell/Johns Hopkins/Harvard/Boston University research team that analyzed the costs and benefits of modern HIV treatment. Schackman and colleagues report their findings in the November issue of Medical Care.

Young people aged 15 to 24 get about half of the world's new HIV infections. We often blame them for being ignorant, for their notoriously bad judgment, and for their impulsivity. Or we let them off the hook for lack of access to condoms and lack of sex education.

Yet it's found that social influences are what really determine young people's sexual behavior. These influences fall into seven key themes. And the same themes are seen in every culture in the world. The themes are:

Young people decide whether to have risky sex based on whether they see their partner as "clean" or "unclean." This determination is largely based on social position and behavior perceived as socially appropriate.

The nature of a young person's sexual partnership influences not just their condom use, but their sexual behavior in general.

Condoms are stigmatizing and associated with a lack of trust.

Gender stereotypes determine social expectations and behavior. For example, men are expected to be sexually experienced while women are expected to be innocent -- yet women also are expected to be responsible for pregnancy prevention.

Society offers both penalties and rewards for sex. For example, an unmarried pregnancy can stigmatize a woman -- yet it can also offer escape from her parents' home.

Reputations and social displays of sexual activity or sexual abstinence are important.

The finding comes from an analysis of more than 250 studies of teen and young-adult sexual behavior by Cicely Marston, PhD, and Eleanor King, MSc, of the London School of Hygiene and Tropical Medicine. The study appears in the Nov. 4 issue of The Lancet.