Health

Creating Customer Value From Life Insurance’s Billion-Dollar Health Records Business

Who runs one of the world’s largest personal health records businesses? Today the life insurance industry spends over $1 billion annually on the routine chore of creating and compiling the exams, lab tests, and attending physician statements (APSs) required to underwrite the 10 million plus life insurance applications submitted in the United States. Unlike most health records, these documents and files tend to be imaged or otherwise organized into digital formats to drive down the cost of the underwriting process.
What if this routine expense could be transformed into a value added service that customers appreciate and look forward to receiving? And what if the value of this service shifted the customer’s perspective to the point that they didn’t really mind the wait for their policy to be underwritten?

The Microeconomics of Personalized Medicine (McKinsey Quarterly)

Personalized medicine promises to increase the quality of clinical care and, in some cases, to decrease health care costs. The biggest hurdles are economic, not scientific.

How Health Care Costs Contribute To Income Disparity In The United States

Recent trends in health care costs, health care coverage, and household income have contributed to growing disparities between different income groups in the United States.

Health Microinsurance: Healthcare And Incidence Rate Questionnaire

In order to launch new health microinsurance products, actuaries and other healthcare professionals will be involved at the pricing stage as technical advisors. This Milliman paper provides technical advisors with some guidelines and a tool for collecting healthcare pricing data where none exists or where what exists is unreliable. These tools are provided to the reader as a set of appendices.

What Employers Want from Health Insurers in 2010

This PricewaterhouseCoopers report addresses how employers’ satisfaction with health insurers has eroded over the past year. Employers’ expectations of their health insurers continue to change. While many studies examine the relationship between employees and their employer-sponsored benefits, less is known about employers and what they want from health insurance carriers. Employers want insurers to evolve their consultative relationship by helping them engage their employees, manage costs and cut waste. These expectations provide health insurers with new opportunities to offer more value to their employer customers.

Critical Issues in Health Reform: Actuarial Perspectives from the Academy’s Health Practice Council

Actuaries bring a crucial and unique perspective to the health care reform dialogue. The role of the American Academy of Actuaries' Health Practice Council is to bring that actuarial perspective to the attention and aid of policymakers through the introduction of a new series of policy statements: Critical Issues in Health Reform. On this page you’ll find links to each of those informative statements, as well as other thought-provoking pieces on the wide-ranging subject of health care reform.

Contingencies: Healthcare Reform - Learning From Others: Germany

Compared to Americans, German citizens enjoy broader health care benefits at lower cost. Could such a system work in the US?

Majority of Young Adults, the Largest Group of Uninsured, Support Health Reform

This Commonwealth Fund survey finds an overwhelming majority of young adults think it is important for Congress and the President to pass health reform legislation. The survey found that nearly half—45 percent—or approximately 20 million young adults between the ages of 19 and 29 were uninsured at some time during the past year.

Obama To Ask For Federal Health Rate Approval Authority

President Obama is about to unveil a health bill proposal that could give federal regulators the authority to regulate health insurance rates.
The rate regulation provision is part of a proposal that the Obama administration has drafted in an effort to “bridge the gap” between the House and Senate health bills. A copy of the proposal has been obtained by National Underwriter.

Impact of an Aging Population on Medical and Pharmaceuticals Spending

Statistics show an encouraging pattern of increased life expectancy that will trigger increased consumption patterns in the population for medical services and pharmaceuticals, says this Milliman Pharmaco-Actuarial Advisor article.

Health Reform in the States

Although the health care debate has slowed on a national level, many states are discussing universal coverage plans for their residents. To date, three states have passed some form of universal coverage plans, while many others have plans in the works. The article presents a summary in table form of the states that are working toward reform, along with a brief description of their efforts.

HHS, AHIP Trade Fire On Health Costs

In an effort to get its healthcare reform legislation back on track, the Obama administration today issued a report maintaining that insurer premiums will continue to skyrocket without reform.

America’s Health Insurance Plans reacted swiftly.

New US rules set parity for mental health care

Employer-provided group health plans must offer the same level of coverage for mental illness and drug abuse treatment as other ailments according to new federal law.

Adverse Selection and the Individual Mandate

Several of the reform bills in Congress share a common theme: A move away from the rating and underwriting techniques that are used to manage adverse selection, and a move toward an individual mandate where all people are required to obtain health insurance. This paper by Thomas D. Snook and Ronald G. Harris will focus on these reforms, and how adverse selection will impact premiums rates in the post-reform world.

LBA - It's Not Just for Underwriting

Lifestyle Based Analytics can be used for a variety of decision-making behaviors and events in healthcare.

New CIGNA Study Uncovers Relationship of Disabilities to Total Benefits Costs

CIGNA has released the findings of a new study that reveal an unmistakable trend: Integrating disability with health care programs has the potential to lower employers' total benefits costs and help disabled employees get back to work sooner and stay at work. As a result of the positive results found in the study, CIGNA is lowering its prices on disability benefits purchased with CIGNA medical coverage.

More Than Half of Americans Do Not Take Prescription Medicines as Instructed, Pointing to Growing Public Health Problem

A new omnibus survey released today by the National Council on Patient Information and Education (NCPIE) and Prescription Solutions, a leading pharmacy benefit management organization and a UnitedHealth Group company and recently appointed to the NCPIE Board of Directors, finds that 54% of Americans say they do not consistently take prescriptions as instructed even though 87% believe prescription medicines are important to their health – pointing to a growing public health problem.

Visions for the Future of the U.S. Health Care System

Essays on healthcare reform from the Society of Actuaries.

The Other Side Of The Coin

In today’s health care arena in the United States, two seemingly inexorable, and conflicting, forces seem to be on a collision course. Politically, the cry is for universal insurance coverage, or more accurately access, for health care. Economically, the common perception is that health care in the United States costs too much and doesn’t necessarily deliver as much bang for the buck as it should considering the price. Reconciling these forces seems at best difficult and at worst impossible, but there is a way.

SOA Essay: Can We Capture Potential Health Care Savings Without A Federal Takeover?

Most proposals for reforming the U.S. health care system of today focus on reducing the high cost of care. The standard thought process assumes that reducing costs will increase access to care by improving the affordability of health care and perhaps funding more care for the uninsured. An endless number of proposals focus on this issue. In fact, most of today’s initiatives are based upon lowering costs and/or “bending the trend.” Too few proposals address the core of this essay, “How do we capture those savings?”

SOA Reinsurance Section Newsletter - September 2009

The September 2009 issue looks at:

  • Life Reinsurance Data from The Munich American Survey By David M. Bruggeman
  • What Reinsurers and Cedants Can Learn from Uncle Rex and the Bulls By Rick Flaspöhler
  • Reinsurance Modernization – A New World ViewBy Daniel W. Krane and Elizabeth A. Diffley
  • Life Reinsurance: Capacity and Concentration of Risk Survey Analysis By William J. Briggs, Gaetano Geretto and Robert B. Lau
  • Enhancing the Benefit: How quality successful limited-benefit health plans answered the demand for a more robust product By Curt A. Wieden
  • American Academy of Actuaries Stop Loss Risk-Based Capital Work Group is Reviewing the Potential Need for Changes in the RBC FactorsBy Michael L. Frank

Milliman: The rise and risks of medical tourism

The term 'medical tourism' seems to be cropping up everywhere these days. From trade and business journals to the popular press, traveling to another country specifically to obtain medical care is a significant new trend. In this challenging economy, where the cost of healthcare continues to spiral up and hundreds of thousands have lost their health insurance along with their jobs, it's not surprising to see keen interest in less expensive resources, especially because the savings are often substantial.

New Data Shows Population Health Management Reduces Health Risks and Costs

The old adage that "a company's employees are its most valuable assets" is truer than ever. Trends including globalization, changing workforce demographics and the increasing expense associated with recruiting and training skilled workers are contributing to a worldwide human capital shortage. During an economic recession, it's even more crucial for companies to manage health risks effectively for better outcomes, lower costs and higher productivity from a healthier workforce.

Baucus Framework for Comprehensive Health Reform

Among the components of the Baucus plan for healthcare reform: Interstate Sale of Insurance: Starting in 2015, states may form “health care choice compacts” to allow for the purchase of non-group health insurance across state lines. Insurers selling policies through a compact would only be subject to the laws and regulations of the state where the policy is written or issued. More on the Baucus plan...

QuickStats: Avg Annual Rate of Health-Care Visits for Asthma Among Persons with Current Asthma, by Type of Visit, Black/White Race, and Age Group -- US, 2004-2006

The data is presented by Type of Visit, Black/White Race, and Age Group.

Average Number of Illness or Injury Bed Days* During the Preceding 12 Months Among Adults Aged ≥18 Years, by Age Group -- National Health Interview Survey, US, 2007

QuickStats from the CDC's Morbidity and Mortality Weekly Report.

Influenza A(H1N1) and pandemics

The Influenza A(H1N1) outbreak in Mexico and other parts of the world is clearly cause for concern, not least for those communities already directly affected. One of Swiss Re’s leading pandemic experts, Bob Howe, answers some key questions.

CDC - Influenza (Flu) U.S. Map, Summary

Weekly update on seasonal influenza. For H1N1 related news, visit http://www.cdc.gov/swineflu/.

WHO | World Health Organization

You can check out the latest on the global spread of influenza here.

SCENARIOS: What the new swine flu might do

Although it is not yet a pandemic -- a global epidemic of a new and serious disease -- it could quickly start one. Here are a few ways the situation could develop.

Swiss Re: Swine flu and pandemics

The swine flu outbreak in Mexico and other parts of the world is clearly cause for concern, not least for those communities already directly affected. According to the World Health Organisation (WHO) there is a significant increase in risk of a pandemic, but this does not necessarily mean that a pandemic is a foregone conclusion."

Ageing Health Costs

Presentation at Institute of Actuaries Australia 2009. (Audio, slides and synopsis available.)

Pardon me, Rush, but what's your expertise in the medical records technology arena again?

Despite what Rush Limbaugh would have us believe, the movement toward electronic medical records is not about some Orwellian plot. Hospitals' Electronic Wasteland looks at stimulus funds aiming to change a system largely devoid of in-depth electronic record keeping.

Systemic Risk in the Health Insurance Industry

Current instability in the financial markets has many wondering if a systemic failure could happen in other industries. American International Group’s (AIG) difficulties shifted the spotlight toward the insurance arena. Those that wish to see the insurance industry regulated on a national level are using the current economic crisis as an opportunity to revisit insurance reform legislation. Just last week, Therese Vaughan, chief executive officer of the National Association of Insurance Commissioners (NAIC), gave testimony before the U.S.

New Study: 60 Million Americans Lack Access to Basic Medical Care

On Tuesday, March 24, at 9:30 a.m. EDT, health professionals from across the country will share their experiences and discuss a new report on the startling numbers of people struggling without access to basic health care during these tough economic times.

Health Insurance in France

From the March 2009 issue of Gen Re's Risk Insights.

Risk Communication - The Illusion of Certainty

How do we picture probability? How can a patient deciding on a course of drugs be expected to translate “a 7% chance of dying” or “a 20% likelihood of negative side-effects” into a meaningful image?

New Study Shows Health Care Costs Put U.S. Workers at Significant Disadvantage Compared with Global Competitors

According to the Business Roundtable Health Care Value Comparability Study, a new measure of the “value” (cost and performance) of the U.S. health care system relative to our competitors’ systems on a weighted scale, the workers and employers of the United States face a 23% “value gap” relative to five leading economic competitors and a 46% “value gap” compared with emerging competitors.

Personalized Medicine's Bitter Pill

Drugs tailored to an individual's genetic makeup promise to be safer and more effective, but they raise tricky economic and ethical questions.

Improving Prescription Drug Risk Assessment Tools

Assessment tools that assign risk scores to insureds—or potential insureds—based on their prescription histories are increasingly used by actuaries and others within health insurance organizations to assess future health risk.

MGH to use genetics to personalize cancer care

Cancer doctors at Massachusetts General Hospital plan within a year to read the genetic fingerprints of nearly all new patients' tumors, a novel strategy designed to customize treatment.

A Prescription for Healthier Medical Care Decisions: Begin by Defining 'Risk' - Knowledge@Wharton

'Risk' is a term that comes up frequently when people discuss medicine and health: What's my risk of heart attack? Breast cancer? What's my risk of dying from a complication of surgery? Or having a dangerous reaction to a drug?

But according to Mark V. Pauly, Wharton professor of health care systems, consumers don't necessarily use that term in the same way that medical and insurance experts do -- which is a potential pitfall that can lead to less than optimal health care decisions and faulty policymaking.

Cost-effective Medical Treatment: Putting an Updated Dollar Value on Human Life - Knowledge@Wharton

A thorny question lies at the heart of meaningful health care reform. How much is human life worth?

Research from Wharton and Stanford based on Medicare kidney dialysis data shows that the average figure -- $129,090 per additional year of quality life -- is higher than prior studies have shown. Perhaps more important, the study also puts a value on the cost-effectiveness of treatment across percentiles of the entire dialysis population in an attempt to develop a benchmark for health care coverage decisions.

Institute Sees More Americans Losing Insurance

More Americans will lose their health insurance as the economy weakens, health care becomes more expensive and fewer employers offer coverage, the U.S. Institute of Medicine said in a report on Tuesday.

Health Spending Takes Rising Share Of U.S. Economy

Health spending will hit $2.5 trillion this year, devouring 17.6 percent of the economy, as the White House and Congress consider major changes to the healthcare system, U.S. government economists said on Tuesday.

The Centers for Medicare and Medicaid Services, known as CMS, forecast that the share of the economy devoted to health spending will jump a full percentage point from 2008. That would mark the biggest one-year increase recorded since the government began tracking the data in 1960.

A.M. Best Completes Review of Health Insurer Public Data Ratings

A.M. Best Co. recently completed its annual review of public data (pd) financial strength ratings (FSRs) for health maintenance organizations (HMOs). A.M. Best has upgraded the FSRs of 21 HMOs, downgraded 19 HMO FSRs, affirmed 107 HMO FSRs and assigned seven HMO FSRs.

Cost trends for chronic-condition cohorts with Medicare benefits

Conventional wisdom holds that the cost of chronic care is a major factor in the rising overall cost of healthcare. This makes sense intuitively. But what does the data say?

Our analysis of chronic and non-chronic Medicare populations turns conventional wisdom on its head. On a per-patient basis, we found that non-chronic patients have a higher rate of healthcare cost increase than do those with chronic conditions.

Health Underwriter Acquisition and Retention Issues

Presentation by Kathy Thomas at the SOA Individual and Small Group Health Insurance Underwriting Seminar, September 2008.

Data Analysis

Presentation by Valerie Lendt at the SOA Individual and Small Group Health Insurance Underwriting Seminar, September 2008.

Predictive Modeling in Underwriting: Panacea or Sham?

Presentation by Tia Sawhney at the September 2008 SOA Individual and Small Group Health Insurance Underwriting Seminar.

Pricing Health Coverage

Presentation at the SOA Annual Meeting & Exhibit, October 2008.

SOA Reinsurance Section August '08 Newsletter

  • Life Reinsurance Data From The Munich American Survey
  • Longevity: Mortality Improvement
  • Solvency II—What It Means For Reinsurers
  • Limited Medical Benefit Plans—What Insurance Companies, Employers And Reinsurers Need To Know
  • Update In The Employer Stop Loss Medical Insurance Market
  • Reinsurance Execs Predict Capital Channels Will Blur
  • STOLI Poses Danger To Industry, Reinsurers Warned

...and more.

How can individual health plans use adverse selection to their advantage?

Without underwriting, individual coverage applicants on average cost 40% more than applicants for small group coverage. While the individual market provides insurers more opportunities to take rating actions and to improve their competitive positions, it also presents more risks than group insurance since individual health insurance applicants are collectively less healthy and have greater variance in their claim costs than applicants in other markets. For these reasons, the individual market is especially susceptible to adverse selection.

Risk Talk on pandemic preparedness in the 21st century

January 2008 – Infectious disease specialists agree that it cannot be predicted when the next influenza pandemic will occur. However, since documentation began in the 16th century, the world has witnessed an average of three global outbreaks of influenza per century. The 20th century has seen three such pandemics. The first and most devastating pandemic, known as ‘Spanish Flu’

Life and health trends in the 21st century

June 2008 – Around 70 representatives of primary insurance companies from all over Europe, and some from further afield, came together on 23 – 24 June 2008 at the Swiss Re Centre for Global Dialogue for a packed agenda of presentations, discussions and networking. Leading expert key note speakers addressed delegates, together with senior management from Swiss Re. All were focused on a single theme – growth opportunities, together with their accompanying risks, for life and health insurance markets in Europe.

A Healthy Future? Risks and Opportunities Facing the Health Discipline

A discussion of the risks and opportunities that face the health discipline.

The Six Million Dollar Man

According to a recent Associated Press review of agency programs, the Environmental Protection Agency (EPA) values an American life at $6.9 million-a figure that environmental advocates point out is actually 11% lower than it was five years ago.

Cost-effective Medical Treatment: Putting an Updated Dollar Value on Human Life - Knowledge@Wharton

A thorny question lies at the heart of meaningful health care reform. How much is human life worth?

What employers think about consumer-directed health plans

Executives should treat them as programs, not products. Article from the McKinsey Quarterly (registration required - free).

An Actuary Weighs the Candidates’ Health Reform Proposals

The latest issue of Contingencies presents a look at the healthcare proposals of Barack Obama and John McCain. This piece focuses on a few aspects of the candidates' plans.

Letter to America's Health Insurance Plans

Attached is a letter that Tia Goss Sawhney wrote to America's Health Insurance Plans regarding research reports that they published in 2007 and 2005. For reasons detailed in the letter, Sawhney feels that the reports do not give our government leaders and members of the public the quality information that they need as we engage in healthcare debate.

2008 Health Care Cost Survey Reveals High-Performers Gain Advantage

Double-digit health care cost increases may have tapered off, but some organizations continue to struggle with high premiums, low employee engagement and mixed employee response to account-based health plans. Other organizations, however, are gaining competitive advantage by managing their programs aggressively — with a focus on the causes that drive ongoing cost increases.

Check out what high-performing companies are doing to get employee buy-in and improve their bottom line.

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