Companies Quietly Change Your Health Plans

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images-1A very quiet but profound shift is fundamentally reshaping how the Affordable Care Act health insurance program works for roughly 155 million employed Americans who receive coverage through their employers. 

A national survey of employer health benefits released in September 2016 shows how much deductibles — the health care costs that people must pay out of their own pockets before insurance kicks in — have increased. In 2016, 4 in 5 workers had a deductible as part of their individual coverage, averaging $1,478. During the past five years, deductibles have grown 10 times as fast as inflation and nearly six times as fast as wages, according to the new report.

For the first time, employer-sponsored health plans also reached a new benchmark: Half of all workers who receive insurance through their employers faced a deductible of at least $1,000 a year for individual coverage — up from just 10 percent of workers in 2006, according to the survey by the Kaiser Family Foundation and Health Research & Educational Trust. The average deductible for individuals in firms with fewer than 200 employees is $2,069.

“We’ve been so fixated on the Affordable Care Act, we’ve missed a gradual sea change in what health insurance is for most Americans,” said Drew Altman, president of the Kaiser Family Foundation. “It’s why, if we were ever to tell an average person that we’re living in a period of historic moderation in health care costs, they would probably think we’re out of our minds — because what they pay out of pocket has been going up over time… and that’s kind of the pain index for people.”

The Affordable Care Act included a cap on out-of-pocket spending for plans sold through the marketplaces and on the employer market. There has been a furor over the premium hikes and the stability of the marketplaces, where roughly 11 million Americans receive coverage. But far less attention has been paid to how deductibles are shaping the spending — and health — of the large number of Americans with employer-based insurance.

Reining in health care expenditures has become a major issue for large and small employers. The Kaiser data shows that while premium increases have moderated — with family premiums growing an average of three percent last year — many employers have increased their use of high-deductible plans, and the deductibles themselves have also skyrocketed. The effect of those high deductibles is mediated in some plans by employer contributions to health savings accounts. For example, once the employer contributions are taken into account, the proportion of workers facing at least a $1,000 deductible for single coverage drops from half to 38 percent.

Tom Delaney, senior manager of benefits for Epiq Systems, a Kansas City, Kansas-based firm that provides software engineering and development for the legal industry, said that in 2014 the company introduced a high-deductible plan alongside its more traditional offering. The new plan has an individual deductible of $1,500, with an out-of-pocket maximum of $3,000, and he said that more than a third of the company’s roughly 1,500 U.S. employees switched over — more than expected.

The appeal is that the employee’s share of the premiums are less for this plan — about $145 a month versus $200 a month on the more traditional option. But the company also wanted to incentivize employees to stay well. Epiq Systems, therefore, offers a $50 monthly discount to people in both plans if they participate in a wellness program that rewards people who take actions such as completing an on-site health screening, a coaching call with a nurse practitioner to review health history and a health risk assessment. Delaney said about two-thirds of the employees participate in the wellness program, which has been offered for three years.

“I actually think the bigger picture is learning how to be better consumers and better purchasers of health care,” he said, “just like when we go to the store, you look for the best sales, the best deals, the best quality — and you put that all together in terms of how we access health care.”

What do these new plans mean?

A separate study released earlier in 2016 found a markedly different pattern of health-care use between people on high-deductible plans, compared with traditional plans. That study by the Health Care Cost Institute, a nonprofit research organization, examined insurance-claims data from people covered by employer-sponsored insurance plans between 2010 and 2014. Over that five-year period, people on the high-deductible plans, also called consumer-driven health plans, used 10 percent fewer health-care services. But despite using fewer medical services overall, they personally paid more out-of-pocket costs each year. People on the high-deductible plans spent an average of $1,030 out of pocket on health care versus $687 by people in more traditional plans.

The idea behind these high-deductible plans is what economists call “skin in the game.” The hope is that people will cut back on unnecessary care if they are on the hook for more of the costs. But it’s unclear whether the deductibles simply prompt people to cut back on care across the board or to eliminate truly unnecessary tests, doctor visits and medication.

“In terms of watching for the future, I think we can see this lower utilization trend,”  said Amanda Frost, a senior researcher at the Health Care Cost Institute. “But given how new all of this is — the new prevalence of these plans, the newly identified reduction-in-service-use trend — I think it’s going to be interesting to watch and see what the health implications of this are.”

What employers are grappling with is how to rein in spending, which is increasing both for employers and employees. One way to do that is to shift some of the cost to employees.


At Civitan International, a Birmingham, Alabama, nonprofit that operates civic clubs aimed at helping individuals with disabilities, health-care costs have more than doubled over the past decade, according to Tom Stoves, director of finance. Every year, the board of the small, 15-person firm debates whether and how much of that cost to pass on to its employees.

About three or four years ago, Stoves said, Civitan shifted the balance so that employees paid 20 percent of the premium, instead of just 6 percent. He noted the plan is still quite generous compared with many other plans in the area; the monthly premium for an individual is $106.

Stoves said that the deductible rose 10 percent this past year, to $2,000 for an individual plan in 2016. To help defray the costs of that deductible, the company offers a supplemental benefit to people once they have paid the first $500 of their deductibles, allowing them to receive up to $750 toward deductible payments.

Health care “is definitely growing, and it’s growing faster than some of our other line items of expenses,” Stoves said. “Our board is pretty appreciative of the employee that we have … and they want to provide this benefit as long as they can. For the employees, it’s a good morale boost to have reasonable health-care costs.”


Alzheimer’s Patients and Pretend Play

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dollsVivian, 88, holds a baby doll at Sunrise Senior Living in Beverly Hills, California. Some memory care and nursing homes are using a technique called doll therapy to ease anxiety among their residents with dementia.

Sitting beside a neatly made crib, 88-year-old Vivian held up a baby doll dressed in puppy dog pajamas. “Hello gorgeous,” she said, laughing. “You’re so cute.”

Vivian, who has Alzheimer’s disease, lives on a secure memory floor of a home for seniors. Nearly every day, she visits the dolls in the home’s pretend nursery. Sometimes she changes their clothes or lays them down for a nap. One morning, she sang to them: You are my sunshine, my only sunshine. You make me happy when skies are gray.

No one knows whether she believes she is holding a doll or a real baby. What the staff at Sunrise Senior Living do know is that Vivian — who can get agitated and aggressive — is always calm when caring for the dolls.

Nursing homes and other senior facilities nationwide are using a controversial technique called doll therapy to ease anxiety among their residents with dementia. Senior care providers and experts say the dolls are an alternative to medication and help draw in elderly people who are no longer able to participate in many activities.

“Many people with Alzheimer’s are bored and may become depressed or agitated or unhappy because they aren’t engaged,” said Ruth Drew, director of family and information services at the Alzheimer’s Association.

Caregivers are not trying to make their residents believe the dolls are real infants, and they do not want to infantilize the seniors, Drew said. They are just “trying to meet them where they are and communicate with them in a way that makes sense to them.”

Other senior facilities that use the dolls include On Lok Lifeways in San Francisco and the Los Angeles Jewish Home in the LA suburb of Reseda. Some, including Texas-based Belmont Village Senior Living, eschew them, arguing that it can be demeaning for seniors to play with dolls.

“They are adults and we want to treat them like adults,” said Stephanie Zeverino, who works in community relations at Belmont Village Senior Living Westwood. “These are very well-educated residents.”

The facility prefers other types of therapy, including art and music, she said. And staff members there work with residents to play brain games that promote critical thinking.

“We want to provide a sense of dignity,” Zeverino said.

Studies on doll therapy are limited, but some research has shown it can reduce the need for medications, diminish anxiety and improve communication, according to Gary Mitchell, a nurse specialist at Four Seasons Health Care in the United Kingdom who has authored a new book about doll therapy.

However, Mitchell acknowledged it is possible that doll therapy, because it can infantilize adults, “perpetuates a lot of stigma with dementia care that we are trying to get away from.”

Some families worry about their relatives being laughed at when they engage in doll therapy, Mitchell noted. He said he understands those concerns, and even shared them when he worked at a senior residential center. But when one resident requested that he allow her to continue caring for a doll, he soon saw the positive impact of the therapy.

Mitchell said it can be very beneficial for some people — especially those who may get easily distressed or pace obsessively. “Having the doll … offers them an anchor or a sense of attachment in a time of uncertainty,” he said. “A lot of people associate the doll with their younger days and having to care for people.”

At Sunrise Beverly Hills, the nursery is set up like a baby’s room. A stuffed bear rests inside the wooden crib. On a shelf above are framed photos of Vivian and a few other women who regularly interact with the dolls. A few bottles, a swaddling blanket, a Dr. Seuss book and diapers sit on a nearby changing table.

The nursery is just one of several areas in the Sunrise centers designed to engage residents, said Rita Altman, senior vice president of memory care for Sunrise, which has facilities in the United States, Canada and the United Kingdom. There are also art centers, offices, gardens and kitchens where residents may find familiar objects from their past.

Altman said the nurseries tend to attract residents who have an instinct to care for babies. Some people, she said, may not be able to talk anymore but still find a sense of security with the dolls. “You can read it in their body language when they pick up the doll,” she said.

Sunrise caregivers also use the dolls to spark conversations by asking questions: How many children do you have? Was your first baby a boy or a girl? What are the best things about being a mom?

The executive director of the Beverly Hills facility, Jason Malone, said he was skeptical about the use of dolls when he first heard about them.

“I almost felt like we were being deceitful,” he said. “It didn’t feel like it was real.”

But he quickly changed his mind when he realized that staff could use the dolls respectfully.

“We don’t want to confuse treating our seniors as children,” Malone said. “That’s not what this activity is truly about.”

Vivian began caring for the dolls soon after moving into the facility. When asked what she likes about the dolls, she said, “I love babies. I have some very nice ones back where I live now.”

Vivian’s daughter, Carol, said her mother raised three children and volunteered extensively in Colorado and Mexico before being diagnosed with Alzheimer’s about five years ago. Carol said she doesn’t see any downside to her mother caring for the dolls. It is a “creative way of dealing with her where she is now,” she said.

“I always describe my mother as being … very similar [to] many of my young grandchildren in her cognitive skills,” Carol added.

For some residents, including 87-year-old Marilou, holding the dolls is one of the only times she interacts with the staff. Marilou is confined to a wheelchair and rarely speaks. She sleeps much of the day.

There is not much [Marilou] can participate in,” said Vladimir Kaplun, former coordinator of the secure memory floor. “When she spends some time with the dolls, she wakes up and she brightens up.”

On a recent day, caregiver Jessica Butler sat next to Marilou, who held a doll against her chest and patted her on the back. She kissed the doll twice.

“The baby is beautiful like you,” Butler said.

“It’s a boy,” Marilou said. “Five months.”

“Is the baby five months?” Butler asked. “You’re doing a good job holding the baby.”

Caring for the dolls is second nature to Marilou, who made a career of being a mom to five children and was involved with the PTA, Girl Scouts and other activities, according to her daughter, Ellen.

Ellen said it’s been difficult to watch the decline of her mother, who hasn’t called her by name in over a year. Watching her with the dolls helps, she said.

“To see the light in her eyes when she has a baby doll in her arms, I don’t care if it’s real or if it’s pretending,” she said. “If that gives her comfort, I am A-OK with it.”

Life Insurance Denied?

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lady-at-table-frustratedThis story is told by an intern and then a doctor who spent over 35 years around medical records with a never ceasing amazement of how frequently people are shocked about the data found in their medical records. 

Be it a prescription never filled, a physician’s comment never broached with the patient, a procedure recommended but never discussed, a diagnosis made without patient acknowledgement, or an error made in the transcription process, millions of Americans are detrimentally affected each year because of inaccurate medical record keeping and documentation.

Medical Errors Aplenty

Regretfully, such mistakes (the term “mistakes” because people should never accuse anyone of endangering a patient’s life) do cause catastrophic events in the lives of millions. Be it a minor mistake [such as inaccurate data about one’s height, weight or date of visit] or a major mistake [such as an organ removal, amputation or family history data] these mistakes should be promptly addressed and corrected in a person’s medical records.

According to many news articles, 12 million Americans (or 1 in every 20 patients) are misdiagnosed every year. How much of this misdiagnosis is based on errant information in medical records is unknown. But the rate is significant enough that people — notably applicants for a life insurance policy — should not rest until they have rectified such inaccuracies.

When the doctor recently visited a local hospital’s emergency room for a deep cut in his leg, he requested his medical records to see what had been recorded. Here is what was discovered:

  1. He was given an injection of lidocaine.
  2. He was given a complete level 3 physical exam.
  3. He was bandaged and the bleeding was controlled.

The problem: None of this was accurate. He had bandaged and controlled the bleeding before he drove to the emergency room; if he hadn’t he would have bled to death (he cut an artery in his leg). Additionally, no medical person touched him in the emergency room, so how could it have been recorded that he was given and completed a level 3 exam or an injection of lidocaine?

He ended up leaving the emergency room after several hours of waiting. But to submit a bill, hospital staff had to document in the medical record that they had followed through with something. However, when he challenged the medical record, staff made corrections and reduced his bill accordingly.

This should be warning to people that things get documented in their medical records without their knowledge or consent (especially if there is a third party payor involved) more frequently than they would like to contemplate. Yes, we all want to trust our doctors and healthcare providers, but they are human. And humans make mistakes.

So people should never believe that all their medical records are accurate until the documents have been reviewed. Then do not rest until the records are accurate.

Three Very Good Reasons for Checking

Verifying the accuracy of medical records can:

  1. Save people’s lives;
  2. Save them money; and (not least)
  3. Keep them from being denied life insurance coverage.

Yes, medical record mistakes can be life-threatening, but even if not, such errors are (more often than not) detrimental to people’s pocket books and their ability to get the life insurance coverage they deserve and need.

According to the story, the doctor’s medical records, once corrected, saved him nearly $1,000. Many people have saved money on life insurance premiums by getting their medical records corrected. And some have gone from a denial of life insurance coverage to full coverage.

People’s medical records are a third party witness for them or against them — especially if there are legal questions about their healthcare. And so it is imperative they know what has been documented in their records.

And, by the way, do not think that the Health Information Portability and Accountability Act (HIPAA) does anything to prevent such mistakes from happening or always protect people.  HIPAA provides insurance carriers and government facilities with the ability to collect information they need to advance the Patient Protection and Affordability Care Act (ACA).

Of course, we all know now how effective the Patient Protection and Affordability Care Act is, with nearly 50 percent of co-ops failing and even more of them subject to failure.

It is not unusual for a person applying for life insurance to find out for the first time about what is contained in their medical records. They should not apply for life insurance coverage only to make sure their medical records are 100 percent correct. They should simply ask for copies of their records whenever they visit their healthcare provider.

If they do not recognize or understand what is documented in their medical records, then should persist in getting clarification until they are comfortable with the information, because the documentation is about them. It’s their life, their money and their health. If they don’t do this, nobody will — and that could be devastating.