Archive for category: Articles

Dollars & Cents

Categories: Articles

There’s nothing like a real-life success story to illustrate the bottom-line, dollars-and-cents value of staff phone skills training.

In this case, a physician group specialty practice more than doubled its new patient revenue by training their staff to more efficiently and more effectively answer the phone and convert callers into made and kept appointments.

There’s a lot to consider when it comes to capitalizing on physician advertising. There’s an up side and a downside, and the difference is in how the office is trained and prepared (or unprepared) to handle inbound calls. And frankly, nearly every practice has something to learn and much to be gained. Even when a practice does zero advertising, we see the same staggering new patient results.

Our President, Zac Wright, whose official job title is actually Difference Maker, provides the following numbers from this vein practice in a central time zone with four locations and an average case size of $2,900.00 per new patient. “Accounting for each location,” Zac reports, “they went from 185 new patients in September last year to 347 new patients in September this year.”

Doing the math, the new patient revenue more than doubled from about $536,500 per month to over $1,000,000. Zac—who is understandably diligent about tracking results—says that, “Overall, they realized an across the board increase of about 50 percent for all locations in the three months following training.”

So, you might ask, just how did they do that? The answer may be a bit of surprise.

The “Anti-Sales Philosophy”
Zac tells us “all we did was leverage their existing staff—their largest overhead expense, by the way—and turned them into revenue producers.” In other words, this practice didn’t change its personnel, and what’s surprising is that the training created “revenue producers” and “brand zealots” using an anti-sales philosophy.

“That’s right, anti-sales.” Zac says, “We never want the staff to sound like they are selling anything. In fact, they are not ‘selling.’ Training is about helping the patient appreciate the quality of care, understand what’s involved in treatment and the support that the office provides each patient. And they set an appointment for the prospective patient in an entirely new way… a patient-centric way.”

The core idea is that the patient can’t benefit from the services of the doctor or the practice over the phone. They can only help the patient once they come into the office, and a first appointment is the beginning of a process of caring for the individual. Onsite staff training—Patient-Centric Scheduling—works from the perspective of helping the patient and boosting revenues for the practice.

Connect with Zac to see how training your team is the proven, pragmatic, foundation for boosting your revenue. www.linkedin.com/pub/zac-wright/37/46a/3b0/

Zac Wright
Difference Maker
(Z) 470.255.2454
(O) 888.296.9545
(F) 866.356.0279
www.newpatientmd.com
Schedule time: https://www.timetrade.com/book/24PZJ

Steps to Increased Revenue When the Phone Rings

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For a doctor or office administrator, the first red-flag warning sign is when the office phone is ringing, but the inbound inquiry calls are not converting to new patient appointments. The practice was not prepared to handle the calls properly and opportunity was lost.

For one practice, with a typical case size of $2,200-$3,200, it was a huge problem. Fortunately, they saw the symptoms and acted quickly. Many healthcare advertisers—about 90 percent—lose money on the phone with advertising generated inquiries.

In fact, we encounter this problem so frequently that we use a comprehensive rating system to chart and report the effectiveness—or lack of it—in handling initial inquiry calls. We’ll gladly tell you more about how this works, but in outline form, successful practices train employees around a proven process from inquiry to new patient appointment.

There are five core components to the system that are critical for success. Think of these as stages in a process that begins when doctor advertising causes the phone to ring.

  1. EFFECTIVE GREETING: There’s a lot more to it than simply saying “hello.” The key component is “effective;” a call can easily be “DOA” without a proper start.
  2. INFORMATIVE ANSWERS: Surprisingly, staff members may not be prepared, and unscripted and incomplete answers to caller questions erode confidence.
  3. CONTROL OF THE CONVERSATION: A prospective patient probably does not know what to ask or how to progress to the next steps. Guiding the conversation delivers useful information and leads it in the direction of a first appointment.
  4. CAPTURE AN APPOINTMENT: Knowing when and how to “close” and set an appointment is a critical step. (Simply failing to offer an appointment is the number one killer of opportunity.)
  5. FOLLOW-UP: Questions about the patient and their needs and interests help secure the appointment or provide background for a subsequent follow-through with an unscheduled caller.

What’s the score in your medical practice? Are you using a systematic approach that includes these five components? If you are one of the many healthcare providers that is converting only one in ten prospective new patient callers, your physician marketing and advertising dollars are being squandered, and worse, your new business opportunity has the sound of a deeply annoying busy signal. www.linkedin.com/pub/zac-wright/37/46a/3b0/

Zac Wright
Difference Maker
(Z) 470.255.2454
(O) 888.296.9545
(F) 866.356.0279
www.newpatientmd.com
Schedule time: https://www.timetrade.com/book/24PZJ

Build Trust in You and Your Business Through Communities

Categories: Articles

BuildTrustThroughCommunities

Back in the old days of marketing – the 2000s – businesses pushed out a lot of messages to customers, clients and prospects. That approach doesn’t work as well anymore.

While you still need to push out information to introduce yourself and feed the marketplace as well as the search engines, it’s the conversations in the communities of your customers and clients that help people trust in your business. The community dynamic is something you need to understand and embrace as part of your Continuous Improvement Process.

Technology has always played a major role in how businesses communicate, starting with newspapers and magazines. But readers had to take the word of reporters and editors that they printed as the truth. By the 1950s, TV had become commonplace in most homes, and people could say: “I know it’s true because I saw it on TV.”

The Internet opened more direct communications channels for businesses to reach customers. You could publish websites, blogs, newsletters and even news releases. You don’t have an editor from a news outlet as a gatekeeper. You could start Facebook pages and invite friends (who may or may not be customers or clients) to “like” your business.

The common denominator is that you, the business, pushed out all of this information (and opinion) to your market. People sarcastically started to say: “I know it’s true because I saw it on the Internet.”

The problems with past tactics are:

  • Lack of trust of the message
  • Lack of trust of the messenger
  • Not what I need or care about
  • Can’t find your message among the clutter and noise

Today, it’s about communities that build trust in your business and its brand – everything you stand for. In 2014, communities are built on people who know and trust you and your business:

  • Brand advocates
  • Influencers
  • Community members

One way to tap into a community is through LinkedIn groups, where your claims are subject to comment among the group. When people without a stake in your business comment favorably about it or about your message, it gives you credibility. That leads to trust.

Because technology evolves at breakneck speed, your Continuous Improvement Process requires close, regular attention to new developments.

That’s where we come in. Yes, this is about pushing out a message to your company advocates and your community.  When you have the need for marketing solutions but not the time to design and implement them, Niche Labs can your trusted advisor. We are a full-service agency for businesses that don’t have a CMO or VP of Marketing or don’t have enough website development and digital/ direct marketing resources (people or time). 

We can work with you to:

  • Conduct a marketing assessment of your company and its market.
  • Find new customers by increasing website traffic through communities
  • Strengthen your online presence with a new, high quality e-Commerce website or by improving an existing website
  • Engage your new and existing customers with community-building activities

For more tips and insights about digital marketing advancements, connect with us on Facebook, LinkedIn or Twitter or subscribe to our monthly newsletter to read summaries of our weekly posts.

To speak with our team, please Email us at sales@nichelabs.com, call 888.978.9254, or if you are mobile, visit us on your smartphone.  Let’s build a community together.

Provided by Hal Schlenger of NicheLabs,
(770-335-0077 or hschlenger@nichelabs.com)

Lease Language… The Devil is in the Details

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The focus of most medical lease negotiations is on the business terms and while they are certainly critically important, after coming to agreement on business terms you should not forget to spend the time necessary to negotiate a good lease document. 70 to 80% of any lease document will probably never be used. Most of the language in a lease is like an insurance policy, it is only important if there is an event that invokes it. Many of the non monetary issues are given only cursory attention during the negotiation process.

Among the issues which should be considered are:

Use – Most tenants pay very little attention to the use provision but you should make sure in deciding on the description that it is sufficiently broad to cover all of the things you currently do as well as future services that you may offer as your practice and medicine continue to change. You should also try to keep the use sufficiently broad to allow flexibility in the event you should need or want to sublease in the future.

Permitted and Restricted Uses – Particularly in buildings on hospital campuses but also in buildings which may now have or have in the past had tenants which were owned by hospitals you need to pay particular attention to the Permitted and Restricted Use paragraph. Hospitals in an attempt to drive ancillary services to the hospital have put a range of restrictions on tenants of Medical Office Buildings (MOBs) which they have touched by the hospital either as a tenant or a building owner. Make sure that you will not be restricted from offering a service which may now or in the future be important to your practice. The areas they tend to restrict include imaging services, laboratory services, physical therapy and some types of procedures. Ultrasound, for example, is a procedure which is generally restricted by hospitals but is also frequently used in the normal course of diagnosis by a wide range of specialties. Failing to address any such service which is a restricted use puts you at risk of being declared in default in the future. Also remember that just because the landlord chooses not declare you in default when they discover the violation does not mean they won’t choose to declare you in default at some point in the future.

Damage & Destruction – This paragraph covers damage to the premises which is either partial or total as the result of fire, water damage, acts of nature or terrorism. It is important to remember that this is an issue which effects both the Landlord and the Tenant. There are no winners in negotiating this paragraph, rather it is everyone’s intent that they just survive such an event. The language covering both partial and total damage should specify a reasonable time for reconstruction. Notice of the Landlord’s intent should ideally be given within 30 days but certainly no more than 60 days after the event. This paragraph should also discuss what happens if the Landlord gives notice to the tenant of its intent to reconstruct the space within a certain timeframe and doesn’t follow thru.

Assignment & Subletting- It is important to remember that there is a difference in an assignment and a sublease. In a sublease the tenant brings in a subtenant to share the space or take over the space entirely but in a sublease the original tenant remains liable for the obligations of the lease most notably the monetary obligations. In a true assignment the original tenant is allowed to assign all of it’s rights and obligations including monetary obligations to a substitute tenant. Most Landlords are reluctant to allow for an assignment of a lease because just like a bank they want to keep as much collateral or as many guarantors backing the payment of rent as possible. The landlord should however be willing to allow a sublease provided they approval the substitute tenant’s financials and use of the space. The landlord’s approval should be qualified to say that their approval shall not be unreasonably withheld, restricted or conditioned.

On your next lease hopefully you will spend the necessary time and attention on these and the other non monetary points in the lease to insure that if one of these items occurs that your practice will be able to survive it. The business points are an early measure of negotiating success but careful negotiation of the lease language may ultimately be more indicative of a truly successful lease.

Provided by Stan Sharp, President of HealthOne Realty Advisors.
(770-578-4996 or
ssharp@healthonerealty.com)

Document Management Solutions: Reducing Paper

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Running a business office often equates to paper usage mounting up and HIPAA security procedures being compromised. Within many medical offices across the country, documents are printed freely, correspondence continues in the hard copy paper format and many internal documents will still be printed without security measures in place as opposed to being distributed digitally and securely. It doesn’t matter how many members of staff individually attempt to cut down on paper usage, it still seems inevitable that stacks of paper cover every flat surface. To truly devote resources to cutting down on print and paper usage and in turn drive down print costs, it is important to implement a culture of change from the top downwards, and until this takes place, many offices continue to be strewn with papers, and important space continues to be inhabited by filing structures.

Cost of storage
The cost associated with filing papers and storage might not be obvious enough to immediately strike you, however storing and retrieving multiple documents is a much greater inconvenience in modern times than newer, more streamlined electronic options. Storage cabinets, files and print costs all add up, and can have a substantial impact on your bottom line while drastically having a negative impact on efficiency.

Employee time
While it may be an expense to establish a paperless office that relies on a digital system which you’ll need to implement through staff training, in the long run it will work out as a much more cost and time effective strategy. One of the biggest costs associated with a paper filing system is largely hidden from view; the cost of your employees’ time. The more time your staff spend trawling documents for items they require the less time they have to spend on tasks that really contribute to the practice as a whole. The higher the salary of a person looking for a document, the more it’s costing you.

Internal communication
One way of cutting down on storage needs is to make sure your organization truly utilizes digital life. Emails are a great form of communication, and although many of us have an inbox that is inundated with messages, there’s no need to print out reams of correspondence. Many people turn to printing out a hard copy when their inbox gets overwhelmingly full, in an effort to make sure important conversations aren’t misplaced or deleted. However, in the thriving digital workplace there is no need to print out documents simply for them to be read once and then thrown away. Rather than turning to print, opt to employ a thorough filing system with your emails. It’s important to categorize your incoming correspondence to make sure you know where it is. While it might seem simple, it is an easy step to reduce costs.

The more frequent use of tablet and mobile devices in the modern workplace now means print technologies are required at a much smaller frequency. Many staff are beginning to see the value in bringing their own device (BYOD); however even if staff manage to utilize this in a way which helps to eradicate printing, there are still practices like record keeping that require documents in hard copy form.

In the modern workplace, high print costs are an unnecessary expenditure, so if you’re interested in getting greener and reducing print costs, please email rsimons@edgeatl.com.
Rich Simons is the head of Strategy and Managed Print division for EDGE Business Systems. He helps improve efficiencies for medical practices providing analysis, customization and recommendations to create an efficient work environment for all document processes. Feel free to connect at rsimons@edgeatl.com.

Provided by Rich Simons, PE, Vice President of Sales, EDGE Business Systems
(404-304-5177 or rsimons@edgeatl.com)

Financial Wellness is Sponsor Focus

Categories: Articles

Aon Hewitt’s 2014 Hot Topics in Retirement survey found that retirement plan sponsors will continue to emphasize the overall financial wellness of employees this year.

Advice options expected to grow

Nearly half (44%) of responding employers currently make investment advice available to employees, and an additional 14% are very or somewhat likely to add this service this year.

About one-third (35%) of companies offer access to third-party advisors by phone. Another 14% are somewhat or very likely to provide this support in 2014.

Almost one-quarter (23%) make in-person meetings with financial advisors available. About 10% of employers are very or somewhat likely to offer this support during this year.

Other support is or will be offered

About 25% of companies say they are very likely to offer budgeting advice to employees so that they can handle expected expenses and still have money for savings.

Aon Hewitt’s report is at http://tinyurl.com/2014HotTopics.

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
Kmotion, Inc., P.O. Box 1456, Tualatin, OR 97062; 877-306-5055; www.kmotion.com
© 2014 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.

Provided by Jay W. Cohen, MPA, CPA, CFP®, of Monterey Wealth
(404-201-2284 or jay.cohen@lpl.com)

Providers Should Expect Patient Questions about new Medicare Data

Categories: Articles

On April 9th, 2014, CMS publicly released data on the amount Medicare paid individual physicians in 2012. The data can be broken down by CPT code so the public can see exactly how many of each procedure a physician billed Medicare for and what they billed and were paid for those procedures. The data does not contain any reference to a providers cost for performing those procedures or the quality of care that was delivered. However, now that the information is in the public domain and easy to access, practices and their providers that perform services to Medicare patients should expect to get questions about this data.
Linked Copy

The data can be access at
http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Physician-and-Other-Supplier.html.

Note that the data is in very large Excel files and will take some time to download. The files are broken by last name. Here is a alternate link that is a searchable database.
http://www.nytimes.com/interactive/2014/04/09/health/medicare-doctor-database.html?_r=0

Provided by Bart Segal, who can be reached at 770-579-0719 or
bsegal@trimedsolutions.net.
www.trimedsolutions.net

Everything (And More) You Always Wanted to Know About Exchanges/Marketplaces

Categories: Articles

Everything (And More) You Always Wanted to Know About Exchanges/Marketplaces

Before we talk about Exchanges and Marketplaces, it is helpful to look at where we have been and gain some perspective. The key question to ponder before you read any further – Why do employers provide group health insurance for their employees? Employers let their employees do everything else….employers pay their employees a salary, and employees go out and buys their own mortgage, car, TV, choose their own investments, etc….SO WHY DOES THE EMPLOYER CHOOSE THEIR HEALTH INSURANCE FOR THEM AND THEIR FAMILY?

Background

Most of us are familiar with Healthcare.gov (Federal or State Government Insurance Marketplaces/Exchanges) that rolled out October 1, 2013 with many malfunctions and was built for Americans to purchase health insurance. Meanwhile, there have been lots of conjecture, lots of buzz, myths, along with news stories about the so called “private exchanges” making them a very hot and often misunderstood topic.

Most recently, when Walgreen Co. announced in September 2013 that it was moving its 160,000 active employees to Aon, a fully insured private exchange, large employers took notice. Petco and Sears along with others also implemented private exchanges. Wall Street responded as well, sending the stock price of Benefitfocus, which provides the technology platform for a private exchange, up 102 percent from $26 to $53 in one day. Later in 2013, Towers Watson acquired Liazon on November 22, 2013 for $215 million because they were a leader in developing and delivering private benefit exchanges.

Most private exchanges, however, have been in existence for a number of years and are hardly new, pre-dating the enactment of the Patient Protection and Affordable Care Act (hereinafter referred to as the “new health care reform law”) serving group retirees and the individual market for years. Due to the combination of the Affordable Care Act insurance coverage mandates, the allure of a defined contribution model to cap costs and large, well-known companies signaling the OK to make the move is shifting the benefits landscape.

What is the difference between a Public and Private Exchange?

There are significant differences between the public and private exchanges. While the highly publicized public exchanges are government entities (either federal or state-run including the Small Business Health Options called SHOP Exchange), the private exchanges are run by private companies. Public exchanges offer medical, dental and/or vision insurance while private exchanges offer medical, dental, vision and other insurance products like life, home, automobile, and pet.

Public exchange consumers are primarily individuals buying insurance on their own and small businesses with up to 100 employees (federal subsidies are available to individuals with household incomes up to 400 percent of the federal poverty level who are not eligible for employer coverage).

Private exchange consumers are active employees and retirees of the sponsoring organization, and their dependents.

What is a Private Exchange?

A private exchange is a technology-enabled marketplace – an online or cloud based solution – that does exactly what you currently do for your employees but on a technology platform used for buying and selling health insurance policies. At its core, a private exchange is a private business – typically operated by consultants, brokers, or insurers – that sells insurance products to health care consumers through an on-line product. What makes private exchanges unique is their ability to enable the health care consumer to shop from among a wide-variety of major medical health plans and supplemental insurance products (e.g., hospitalization, disease, disability, or dental coverage) through the use of creative, interactive technology. There are two distribution models:

Single Carrier: Employer/facilitator selects one plan; enrollees access all available plans from the single carrier. As an example, an employer may only want to offer Blue Cross Blue Shield to its employees. BCBS may then offer several plan options.

Multicarrier: Enrollees access all available plans from all carriers. The user interface is similar to online comparison-shopping websites like Travelocity, where consumers choose a plan based on side-by-side comparisons. This is more of the “wild west,” with insurance companies competing side by side for member enrollment.

Whether there will be multiple carriers on all private group exchanges is a mixed bag. From a medical standpoint, fully insured plans will likely only have one carrier option, though there’s some flexibility with self-funded plans to offer multiple carriers. On the smaller end of the employer spectrum, we suspect most exchanges will stick with one carrier for now.

Many in the industry, including brokers, are still trying to “sweat out” the definition of a private exchange. One thing I am certain of what a private exchange/marketplace is not. A single carrier can’t offer an online marketplace because that’s not a marketplace. When a carrier will coexist with their competitors, then I will acknowledge that is a marketplace, but if I am limited to one vendor then I would not call it a marketplace — it’s not a supermarket, I don’t have five brands of cereal available.

Types of Private Exchanges

There are two primary private exchange models:

Individual Market Segment: Competes against public individual exchanges that offer significant subsidies. Growth opportunities are questionable.

Group Market Segment: Greater flexibility and ability to offer ancillary products. No subsidies on the public group exchange to compete with. Appear poised to grow rapidly.

Tax Treatment of Employer and Employee Premium Contributions on Exchanges

A GROUP Private Exchange’s tax implications will work the same way they do today from the employee’s perspective and the Private
INDIVIDUAL Exchange’s tax implications will work very differently than the Group Private Exchange:


 

Private Exchanges Use a Defined Contribution Approach

The private exchange model deploys a defined contribution approach in which employers provide a fixed contribution with employees paying more or less for their share of the total premium depending
on the level of coverage they choose. This is very different than the defined benefit model most employers have used for years – pay a fixed percentage of the premiums.

Many of you may recall the retirement plan revolution that took place in the early 90’s with defined benefits becoming legacy plans and employers shifting to defined contribution plans i.e. 401(k) plans with employers agreeing to match dollars the employees contribute only; otherwise, no employer contribution was available. Through this approach, an employer can cap or de-link their future medical insurance costs it will pay for health plan coverage for its employees making it easier to plan their budget forecasting. At the same time, exchanges typically offer employees more plan choices than their employers previously provided enabling employees to right size their coverage – choosing what coverages are right for their needs and budgets.

Because defined contribution will not slow down the cost of insurance, employers will be faced with potentially having to raise their contribution or pass the increases on to be shouldered entirely by their employees. This will not work without the employers shielding some of the increase from the employees. This method while more innovative will not get employer and employees off the health insurance escalator that is becoming steeper year by year.

Why are Insurers hesitant to participate in SHOP and Small Group Private Exchanges?1

While most health insurers are flocking to the large group private exchanges, many of these same carriers have been hesitant (to put it kindly) to participate in government subsidized exchanges, individual and small group. Why – if there are a large number of new customers where the government is paying a large percentage of the premiums – wouldn’t all major insurers want to participate?

Didn’t all the major cellular providers jump to participate in the government subsidized Lifeline program?i Like the Lifeline program, funded by the Universal Service Fundi fee added to the bill of

paying wireless customers, a risk corridor is being applied to carriers in and outside of the government exchangesiii to offset the possible adverse risk selection in government exchanges. However, unlike the Lifeline program, insurers have to provide “unlimited minutes” to all consumers at a predetermined cost. Not knowing if only those who will use unlimited minutes are going to sign up, insurers are justifiably concerned.

According to a white paper in 2011 by the NAIC on adverse selection and health insurance exchanges, there are several areas of concern for insurers participating in public exchanges, such as permitted variation between the plans offered in versus outside of the public exchanges and ability of an individual to choose a lower benefit plan when healthy but move to a higher level benefit plan when sickiv. Even though there are mechanisms to minimize the risk of adverse selection between the small group public subsidized market and the private market, one fear is that the public exchange market may become “the equivalent of a state high risk pool.”

However, many of these concerns do not apply to the small group private exchange market. Insureds/Employees in private group exchanges are not eligible for tax credits, so there is minimal risk of adverse selection from subsidized individuals selecting the richest plan because they have little “skin in the game.” Further, unlike, their government counterparts, private market small exchanges do not have to offer the richer Silver and Gold plans (70 percent and 80 percent actuarial value respectively) nor do they have to offer employee choice within a tier. Lastly, small group private exchanges, unlike their large group counterparts, can still impose certain participation and contribution requirements.

Large groups certainly have a reduced risk of adverse selection when compared to small group plans. However, with the full implementation of ACA, small group insurers must now consider all small groups to be member of a single risk pool.v The single risk pool requirement, along with the factors noted above, will spread the risk and minimize adverse selection in the small group market. So why aren’t insurers willing to join small group private exchanges? Aren’t small groups in a community rating environment a de facto large group? As such, why aren’t insurers willing to offer their small group plans, alongside with other insurers, to any willing private exchange?

Since the option to provide pre-tax dollars for individual insurance through an HRA, Section 125 plan or PRA has been closed, employers have little option but to consider employer-sponsored coverage. Further, because small employers are not subject to a penalty for failing to provide “affordable” coverage, employers can set the minimum contribution required by the carrier to the lowest cost Bronze plan, allowing employees whose income may qualify them for subsidies, based on the Silver plan, to obtain coverage through government exchanges, while providing employees pre-tax dollars for other qualified benefits. This is a win-win for small employers if managed correctly: tax-free income for employees for premiums for those that do not qualify for government subsidies and an opportunity for employers to set the contribution to allow employees that qualify to still obtain subsidies. Insurers will gain by keeping insureds while avoiding government exchanges.

Administration and compliance help are the missing link for small businesses moving to a defined contribution model. While many of these employers see the benefit of continuing coverage, they are desperately looking for a solution to provide coverage while minimizing their involvement and the increased administrative and compliance burdens. Hence the intrinsic value of a private exchange – a “place” for small employers to outsource not just “a defined contribution” but plan selection, notices, enrollments, administration and government compliance.

Will private exchanges step up to the plate to help small employers by offering multi-carrier exchanges where employees select the carrier and plan that works best for them? In spite of the single risk pool and commoditization of products in the small group market, the answer right now seems to be “not yet” – but shifts in employer demands may soon change their mind.

Private Exchanges are Gaining Steam

Several analysts have weighed in with prognostications of how the private exchanges will play out:

  • 24 percent of employers will offer benefits on a private exchange in the next five years. (NBGH/Towers Watson)
     
  • 70-80 percent of employers prefer private over public platform. (Booz Allen)
     
  • 44 percent believe private exchanges will be preferred way of purchasing. (Aon)
     
  • 1 in 4 consumers will receive employer health benefits through insurance exchanges within five years. (Accenture)
     
  • The number of consumers expected to enroll in private exchanges will reach 40 million by 2018, surpassing the 31 million individuals likely to enroll in state-funded public exchanges. (Accenture)
     
  • 95 percent of employers said they would continue to offer health care in
    the next three to five years, 33 percent may use a private exchange to
    provide the benefit up from 5 percent currently – a survey released earlier
    this month by Aon Plc, the London-based insurance broker

Why Would Employers Consider a Private Exchange?

There are four reasons employers would make the move to a private exchange, and the first and most prominent reason is to cap costs and take variability out of the budget process. Making a move to an exchange:

  • Shifts from a defined benefits to a defined contribution model, which caps its health care costs at a desired threshold and improves control of future liabilities.
     
  • Avoids excise tax on high-cost coverage (Cadillac tax), which starts in 2018. This is a nondeductible 40 percent excise tax on the portions of health coverage costs that exceed $10,200 per year for single coverage and $27,500 for family coverage. Mercer estimates that 40 percent of companies will pay this tax on at least one plan if they don’t change the current benefit design.
     
  • Simplifies benefits distribution and administration, freeing up HR resources to focus on other mission-critical tasks.
     
  • Provides potentially more benefit choices for employees and illustrates cost transparency. Employers can choose from a menu of insurance carriers, which would help service a geographically diverse employee base.

Questions Employers Must Ask Themselves About a Private Exchange

Before moving to a private exchange, employers need to assess the opportunity by asking these questions:

  • What are our peers and competitors doing? Are there indications that our industry is leaning toward a defined contribution model?
     
  • What criteria would we look for in an exchange? What’s important to the business and our employees?
     
  • Are our current plan offerings and provider networks similar to what is offered on an exchange? Would there be a big gap we may need to address?
     
  • Will we get plan selection data from the exchange in a timely fashion?
     
  • How would moving employees into a private exchange affect company culture? Would we create recruitment and retention challenges?
     
  • What kind of online decision making tools to aid employees with their decisions will be available?
     
  • Will there be any benefit education meetings face-to-face or all online with no human interaction?
     
  • What kind of support will employees get? Is there a way we can “test drive” the quality of the exchange’s web services and/or call center?

Private exchanges appear poised for further growth. The question is how quickly will employers migrate. It’s one of many questions in this changing, dynamic health care market.

Additional Employer Issues that Private Exchanges Create

  • Plan participant communications. Private exchanges add a new layer of complexity for employees and retirees, in terms of benefit offerings and the selection process, while a shift to an exchange model will raise questions and concerns among affected participants. Communications need to be crystal-clear and employees must be able to articulate basic elements of the plan before roll-out.
     
  • Who owns compliance? Employers need clarity around who owns the various documents required by Employee Retirement Income Security Act and the Affordable Care Act, including the Summary Plan Description and the Summary of Benefits and Coverage.
     
  • Monitoring private exchange vendor performance. Employers will need to be fully educated on the defined contribution approach and have both an efficient RFP process for private exchange vendors and a robust supplier management system to monitor vendor performance.
     
  • Data consistency from employer to private exchange to payer and back. All players in the benefits management data lifecycle – employers, private exchange vendors and payers alike – will need solutions to ensure consistent plan data, including cost-sharing information.

Conclusion

Private exchanges appear poised for further growth. International management consulting company, Oliver Wyman, predicts that 40 million Americans will receive health insurance through private exchanges by 2018. The question is how quickly will employers migrate. It’s one of many questions in this changing, dynamic health care market. Exchanges, whether public or private, are not a magic bullet for the ever-increasing health care costs. It is unrealistic to believe that this will be a linear model like the CBO predicts. From my viewpoint, The Affordable Care Act will continue to be a wild ride as we are left with an incredibly complicated set of rules, taxes, exceptions, and more twists and turns than the lines at Disney World. My quote below reveals the biggest issue that ACA did not address which will continue to cause skyrocketing health insurance increases for all Americans:

I have evaluated many of the “private exchanges” offered by many different vendors, and we have established a “private exchange” that will facilitate the defined contribution administration details and give employees the opportunity through you (or as individuals) to elect the plan design they feel best meets their unique needs and budgets. This may or not be attractive for your use, but in a word, we will be ready to support whatever direction we agree is best for you and your employees.

1 Communities: Regulatory & Compliance – Why Health Insurers are Leery of Playing in SHOP or Small Group Private Exchanges – The Institute for HealthCare Consumerism –
http://www.theihcc.com/en/communities/policy_legislation/why-health-insurers-are-leery-of-playing-in-shop-o_hratemh0.html
i The Lifeline program provides qualified low-income Americans with a prepaid wireless service plan. See
http://www.fcc.gov/lifeline
ii http://www.usac.org/about/default.aspx
iii
http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2012/rwjf72568
iv http://www.naic.org/store/free/ASE-OP.pdf
v http://www.ofr.gov/OFRUpload/OFRData/2013-25326_PI.pdf 

About the Author: Carl C. Schuessler, DHP, DIA, GBDS is the Managing Principal of BenefitStrategies, LLC. an Insurance and Employee Benefits Brokerage and Consulting firm. We specialize in Insurance, Risk Management and Employee Benefit Consulting. BenefitStrategies helps improve your cash flow, save money and retain top talent with well-structured employee benefit and financial planning solutions. With more than 20 years of experience in employee and executive benefits consulting and financial planning experience, he guides large firms, privately held companies and executives through the challenges of evaluating planning opportunities. We pride ourselves on our ability to be creative in designing innovative, optimum plans and helping companies and individuals make the most of their financial resources.

For more information:
Carl C. Schuessler, Jr., DHP, DIA, GBDS
Managing Principal
BenefitStrategies, LLC. • 2776 Ridge Valley Rd. • Bldg. 100, Site. 150 • Atlanta, GA 30327
Direct (404) 941-5519 • Mobile (404) 277-7852 • Fax (928) 833-2265
carl@benefitstrategiesllc.com

5 Things a Health Insurance Exchange Won’t Accomplish

Categories: Articles

With the arrival of Federal, State and Private Health Insurance Exchanges, people expect many things to come.  Here is a list of things that Health Insurance Exchanges will NOT accomplish:

  1. Lower Healthcare Costs—healthcare costs have been rising for those with insurance already.   The general consensus from Warren Buffett to healthcare policy experts is that Health Reform, Obamacare, and The Affordable Care Act (ACA) will not lower healthcare costs.
  2. Fix the Moral Hazard that exists when people consume healthcare—the Moral Hazard is that people do not measure value (price and quality) well when someone else (i.e. insurance) is paying the bills.  A better way of saying this is below:

    MANAGED CARE HAS BECOME PRE-PAID HEALTH CAREAll anyone knows about their insurance is three things:

      1. Their copay to see a doctor
      2. Their copay to fill a prescription
      3. Their payroll deduction for insurance premiums

     

    AS A RESULT, WE HAVE BECOME CO-PAY JUNKIES!

      1. Disconnect between employees’ out of pocket costs for their health care and the real costs of those services.
      2. No incentive for employees to understand or care about the costs of their health care
      3. Employees are motivated to utilize their health plan lavishly in order to maximize their perception of the benefits provided by their employer.

    We must convert everyone from Healthcare Users to Healthcare Consumers!

  3. Remove the Externality that exists in healthcare—an Externality is when the decisions of one person affect another person without that effect being taken into account.  For example, playing loud rock music affecting a neighbor, or in Healthcare the doctor and patient being wasteful and as a result causing everyone’s insurance premiums to rise.  It is critical to educate employees that their medical purchasing decisions have a direct impact on their peers’ future premiums.
  4. Decrease the Confusion in Healthcare—if anything, an online Health Insurance Exchange may increase confusion.  The fine print of health insurance policies, the foreign medical terminology used by doctors, and the cryptic codes used in medical billing require healthcare consumers to have expert, personal guidance—not a website of choices.
     
  5. Decrease Out-of-Pocket Expenses for Healthcare Consumers—According to an article in Forbes, the average premium for a silver plan will be $328 per month with deductibles ranging from $1,500 to $5,000.  The article goes on to say that the deductibles will be more than twice the average deductible in employer-sponsored coverage.

 

SUMMARY

So when considering a present-day Health Insurance Exchange, keep in mind you will NOT:

  1. Lower costs
  2. Correct the skewed incentives
  3. Align behavior
  4. Reduce confusion
  5. Decrease employee out-of-pocket cost.

Now, could Health Insurance Exchanges be fixed over time?  Yes, but not in their current incarnation.

“Nobody spends somebody else’s money as wisely or as frugally as he spends his own.”
Milton Friedman
Economist and recipient of the 1976 Nobel Memorial Prize for economic science

About the Author:  Carl C. Schuessler, DHP, DIA, GBDS is the Managing Principal of BenefitStrategies, LLC. an Insurance and Employee Benefits Brokerage and Consulting firm. We specialize in Insurance, Risk Management and Employee Benefit Consulting.  BenefitStrategies helps improve your cash flow, save money and retain top talent with well-structured employee benefit and financial planning solutions.  With more than 20 years of experience in employee and executive benefits consulting and financial planning experience, he guides large firms, privately held companies and executives through the challenges of evaluating planning opportunities.  We pride ourselves on our ability to be creative in designing innovative, optimum plans and helping companies and individuals make the most of their financial resources.

For more information:

Carl C. Schuessler, Jr., DHP, DIA, GBDS

Managing Principal

BenefitStrategies, LLC. • 2776 Ridge Valley Rd. • Bldg. 100, Site. 150 • Atlanta, GA 30327

Direct (404) 941-5519 • Mobile (404) 277-7852 • Fax (928) 833-2265
carl@benefitstrategiesllc.com

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Managed Print Services – A New Year’s Resolution for Your Office

Categories: Articles

With the start of a new year in progress, it is the perfect time to look into how your business can improve. Resolutions don’t have to simply be personal aims, and with savings to be made and efficiency to be improved, these resolutions can have a real impact on your business.

 

Effective Document Management

In an office, there can be hundreds of company files used on a daily basis which, if left unmanaged can become a real pain, not to mention the security problems an unmanaged system creates. With a system such as eCopy, you have a mechanism for all notes and work to be stored on a firm’s central servers, providing the ability to convert scanned documents into a searchable and editable format for improved archiving, document retrieval, and productivity.

Document security is a vital aspect of company life, and through taking measures like implementing a pull-print environment, each print job has to be authorized at the device, reducing the potential for sensitive documents to be forgotten about and left on the printer, and the ability to print securely to share workgroup devices.

Systems such as Equitrac utilize ‘anytime anywhere’ software which includes mobility features; with the ability to securely print to a user’s terminal of choice across a firm’s corporate network. Flexibility is also a key aspect to the solution and with additional Airprint technology implemented; staff are able to print directly to networked devices using tablets or smartphones.

 

Managed print services

In the business world, printing is essential, there’s no avoiding racking up some costs when it comes to getting a hard copy of some documents. Spending too much on printing is easily avoidable though.

On unmanaged systems, it is estimated that a number in the range of 20% of printed work is forgotten, lost or trashed unread. How many times have you headed over to the printer, only to have to rifle your way through dozens of sheets waiting to be collected? For many mid-sized businesses, this adds up to vast amounts of wasted paper and more importantly, costly ink. This is clearly a huge area in which you can make potential savings. Smart printing systems provide pull-print functionalities so that all documents are either retrieved or not output at all.

 

Print fleet

If your company is behind the times when it comes to your print devices, then you might want to think about swiftly addressing that point. You may assume that using personal printers or old models are a better option for your business, however in terms of costs and security this is not the case. Using an outdated print fleet not only raises the cost of printing per sheet, but also means the solutions identified above aren’t available.

Primarily, your business should conduct a detailed site audit, identifying which devices are unnecessary and inefficient, and where there are opportunities to save costs.

It is often beneficial to replace all desktop printers with shared workgroup Multi-Functional-Devices (MFD), which can significantly reduce power consumption and save on costs. MFDs can also be set up to reduce paper output, color and toner usage and expenditure.

 

Rich Simons heads the Sales and Managed Print division for EDGE Business Systems.  He helps improve efficiencies for medical practices providing analysis, customization and recommendations to create an efficient work environment for all document processes.  Feel free to connect at rsimons@edgeatl.com.     

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