Worries Grow as Health Care Companies Send Jobs Overseas

Don Lee, Tribune Washington Bureau
Chattanooga Times Free Press (Tennessee)

WASHINGTON -- After years of shipping data-processing, accounting and other back-office work abroad, some health care companies are starting to shift clinical services and decision-making on medical care overseas, primarily to India and the Philippines.

Some of the jobs being sent abroad include so-called pre-service nursing, where nurses at insurance companies, for example, help assess patient needs and determine treatment methods.

Outsourcing such tasks goes beyond earlier steps by health care companies to farm out reading of X-rays and other diagnostic tests to health professionals overseas. Those previous efforts were often done out of necessity, to meet overnight demands, for instance.

But the latest outsourcing, which has contributed to the loss of hundreds of domestic health jobs, is done for financial reasons. And the outsourcing of nursing functions, in particular, may be the most novel - and possibly the most risky - of the jobs being shifted.

At the forefront of the trend is WellPoint Inc., one of the nation's largest health insurers and owner of Anthem Blue Cross, California's biggest for-profit medical insurer.

In 2010, WellPoint formed a separate business unit, Radiant Services, aimed at advancing outsourcing and other cost-saving strategies. WellPoint has eliminated hundreds of jobs in the U.S. over the last 18 months as it has moved jobs overseas, a company spokeswoman acknowledged.

The spokeswoman, Kristin Binns, said WellPoint's shifting of clinical jobs overseas was a small part of the outsourcing and being done through Radiant because it has the technical expertise and can ensure compliance with laws.

Nursing organizations, however, were cautious.

"It's obviously a very disturbing trend," said Chuck Idelson, a spokesman for the California Nurses Assn. "There are serious questions if you're talking about utilization reviews ... and making recommendations on procedures."

Nursing experts said there also may be licensing issues as states generally require certification for those practicing and dispensing health information.

Current and former Radiant executives declined to comment or weren't available.

It's not clear how many other U.S. health care companies have contracted with Radiant or other outsourcing specialists, but industry experts said companies were increasingly looking at more healthcare tasks that could be outsourced globally as they face greater cost pressures and sweeping changes in how they do business.

Aetna Inc. has an arrangement with EXL Service, a U.S.-based company with operations in Manila, to provide "targeted care-management support," spokeswoman Cynthia Michener said.

Health Net Inc., which is laying off dozens of information technology and accounting workers whose jobs are being sent to India, said its outsourcing has generally been confined to administrative and IT functions. UnitedHealth Group, the nation's largest health insurer, didn't respond to inquiries.

Outsourcing jobs out of the country has become a hot issue in the presidential campaign: President Barack Obama is pounding Republican challenger Mitt Romney for his private equity company's involvement with companies that sent jobs abroad.

Although such outsourcing has been going on for years, American manufacturers in recent years have brought some jobs back to the U.S. as labor costs have risen in China and elsewhere.

Some experts argued that sending jobs abroad could help U.S. companies by enabling them to tap global talent and efficiencies, making them more profitable. When U.S. companies are stronger, the thinking goes, it creates more opportunities for Americanworkers. Also, shifting operations to lower-wage countries can help consumers by holding down prices.

Outsourcing jobs to places such as the Philippines can save U.S. health care companies 30 percent in labor costs, according to experts. But the practice remains controversial, especially with the U.S. unemployment rate hovering above 8 percent.

Patient advocates worry about crucial decisions involving a patient's care being in the hands of foreign insurance adjusters. Analysts said there was another concern as well: patient privacy.

Even something as straightforward as medical transcription can raise questions, said Uwe Reinhardt, a healthcare economist at Princeton University. Over the last year, Iowa Health System and hospitals in Utah and Washington state have joined other medical centers that have outsourced the transcribing of doctors' notes and other records.

"Suppose I'm an AIDS patient," Reinhardt said. "That person in India would know - and (the information) could be valuable to someone.... For the U.S., there's nothing more personal than health care."

Dr. Kaveh Safavi, head of the North American health practice for Accenture, a major consulting and outsourcing company that has partnered with WellPoint's Radiant, said nearly all countries have laws for protecting patient privacy.

And to safeguard patients' records, he said, heath care companies store and maintain their records locally.

As for outsourcing services that are more clinical in nature, he said, "People are looking at all the tasks that can safely and responsibly be moved. It's still an emerging market. We're still trying to understand the market's tolerance for it."

In general, hospitals are moving more slowly than health insurers to send jobs overseas. But with financial pressures intensifying and the uptake of electronic record-keeping accelerating, analysts and industry people see more consolidation and outsourcing ahead.

"When you have people's medical, billing and other records kept electronically, then it opens it up to establishing a call center virtually anywhere," said Steve Trossman, a Los Angeles spokesman for the Service Employees International Union, which represents hospital workers. "There is no longer a reason for it to be physically in the same place as the paper records."

Moreover, the health care reform law could prod insurers to move more jobs to cheaper-wage countries. The new law requires companies to spend 80 percent to 85 percent of premiums on medical care, limiting the amount available for administrative expenses.

Few have been as aggressive as WellPoint, which made a profit of $2.65 billion last year on revenue of $60.7 billion. WellPoint's total employment at the end of last year was 37,700, down from 40,500 two years earlier.

In one of its recent efforts, WellPoint laid off pre-service nurses in Colorado and Nevada so the work could be done in Manila, according to a Labor Department filing by a WellPoint human resource manager in Denver. WellPoint spokeswoman Binns said none of the decisions that involve denial of procedures or treatment for patients is made overseas.

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Overall, Binns said, fewer than 2.5 percent of the 37,000 employees, or at most 925 workers, had lost jobs in the last 18 months as a result of work sent overseas. Only about 50 of those positions involved clinical management of care, she said.

WellPoint's "sourcing strategies have enabled us to make our services more effective, accessible and affordable to our customers, while allowing us to expand our programs and maintain our service levels," she said.

WellPoint's offshoring covers a wide range of departments and tasks involving claims, enrollment, billing, post-service clinical claims review, utilization management and pre-service nursing, according to filings made by company managers and state government officials. Both were helping secure federal trade-assistance benefits for WellPoint workers who have lost jobs because of outsourcing or import competition.

Shannon Cunningham of Columbus, Ohio, who processed medical claims for WellPoint, was laid off last month after a colleague went to the Philippines to train people to do her job.

Cunningham, 43, said she received eight weeks of severance pay. She and others working in medical claims earned $30,000 to $40,000 a year with health benefits, she said.

"I know other countries need work," said Cunningham, a company employee for three years. But "I just felt like it wasn't fair. We're having a rough time too."

 


OUTMATCHED

Fewer employers are offering a company match to their retirement benefits, a new study by the Society for Human Resource Management finds. About two-thirds of companies currently match their employees' contributions today, compared with 75 percent in 2008.


White House Tells States to Get On Board with Healthcare Reform

By Sam Baker

Source: thehill.com

The Obama administration is aggressively pushing states to implement the healthcare reform law now that the Supreme Court has upheld it.

In the two weeks since the court issued its decision, the Health and Human Services Department has pushed out new grants, new policies and a new rhetorical standby: It’s time to get onboard.

“The volume of activity has certainly gone up,” said Alan Weil, executive director of the National Academy for State Health Policy.

HHS has been steadfastly implementing the Affordable Care Act since President Obama signed it in 2010, and state outreach has always been part of that effort — the department has awarded hundreds of millions of dollars in implementation grants.

But some Republican governors dug in their heels against implementing at least the biggest pieces of a law they thought the Supreme Court might strike down. With that possibility out of the way, HHS is making another big push to bring states onboard.

"Now that the Supreme Court has issued a decision, we want to work with you to achieve our ultimate shared goal of ensuring that every American has access to affordable, quality healthcare," HHS Secretary Kathleen Sebelius wrote in a letter to governors this past Tuesday.

She has echoed that message several times since the court issued its historic 5-4 decision upholding most of the Affordable Care Act, and Obama sounded a similar theme when the ruling was announced.

The administration has matched it’s “let’s move on” rhetoric with policy.

The day after the Supreme Court announced its decision, HHS unveiled new funding opportunities designed to help states plan for their insurance exchanges. HHS officials said they expected to receive funding requests from states that had previously resisted the idea of an exchange.

“I think there will be some renewed, ‘Let’s at least figure out what this will look like,’” Weil said.

Exchanges are new, centralized marketplaces where individuals and small businesses will buy private insurance. The ACA calls on each state to set up its own exchange and authorizes a federally run fallback in any state that doesn’t act. Exchanges have to be up and running by 2014, so HHS has to certify in 2013 whether each state will be able to build its own.

Some Republican governors who said they were waiting for the Supreme Court are now saying they won’t implement the law until they see how November’s elections shake out and whether Republicans pick up enough seats to try to repeal the law.

“Saying you’re going to wait is, in effect, making a decision,” Weil said. “If the calendar has made up your mind, then you have made up your mind.”

Although some red-state delays are pure politics, Weil said many states were legitimately leery of stepping up to such a massive undertaking when there seemed to be a good chance the Supreme Court would render all of that effort moot.

Waiting for the court “wasn’t a crazy thing to do,” he said. He expects some of those states to apply for new grant money and look more seriously at what a state-run exchange would entail.

“Gambling on the outcome of an election is a real gamble,” he said. “And so I think there are a lot of states that are realizing that with only one hurdle left, there’s a very real chance this law is going to be around. They are renewing their efforts to figure out what it means for them.”

HHS is trying to make that process easy. Federal officials made it abundantly clear at the outset that they want each state to set up its own exchange, which most policy experts agree would be better than a federal exchange.

The department said last year, in its first proposed rules on exchanges, that it would certify state-based exchanges after 2014, in case states weren’t ready on time but could get there eventually.

Weil was surprised by that policy at the time. But it’s consistent, he said, with HHS’s announcement after the Supreme Court ruling that states could receive exchange planning grants through the end of 2014. Many observers assumed planning grants would be cut off at the beginning of the year.

HHS also made a point last week to explicitly remind states that planning grants are for planning — states don’t have to set up an exchange just because they took federal planning money, and they don’t have to pay the money back if they ultimately decide to let the federal government handle their exchanges.

“We expect that, as states study their options, they will recognize that this is a good deal,” Medicare Administrator Marilyn Tavenner said in a letter to Republican governors.

While the Supreme Court cleared away one major area of uncertainty, it also raised a new question for states to answer: Do they want to participate in the healthcare law’s Medicaid expansion?

As written, states would have had to participate or give up all of their federal Medicaid funding. But the Supreme Court said that setup was unconstitutional and states must have the right to opt out of the expansion while keeping the rest of their programs intact.

The quickest decisions came from Republican governors with an eye for the national stage, including Texas’s Rick Perry and Louisiana’s Bobby Jindal, who lumped Medicaid and the exchanges together and said they wouldn’t do anything to implement “ObamaCare.”

The practical considerations between the two programs, though, are very different. (For example, there is no federal fallback for states that don’t accept the Medicaid expansion.) And though states had time to at least think about exchanges while they waited for the Supreme Court, the Medicaid decision is altogether new.

“On exchanges, states have been thinking about it and following this whole discussion. (Medicaid) was like dropped out of the sky,” Weil said. “No one has spent the last year thinking about whether or not they wanted to do the Medicaid expansion.”

 


IS IT WORKING?

Having trouble figuring the return on investment (ROI) from your wellness program? A report by HRmorning suggests examining these five factors:

  • Sick days
  • Stress
  • Presenteeism
  • Health care utilization
  • Employee satisfaction

A solid program will decrease the first four of the above items and bump up the last, the report noted. The report noted that a $3 to $4 return for every $1 spent on wellness is a common benchmark for wellness ROI.


PPACA Ruling Answers Some Questions, Leaves Others Hanging

The wait is over -- sort of.

Companies that had been delaying action on the Patient Protection and Affordable Care Act (PPACA) should now start making plans to comply, experts say. Yet while the Supreme Court's 5-4 ruling in June preserved the law, the full impact of PPACA's regulations remains to be seen.

For now, employers should prepare to meet the most immediate requirements, according to the law firm Morgan Lewis. In a recent web posting, the firm notes that companies should pay attention to the provisions that apply in 2012 and 2013, including:

  • Reporting medical coverage value on 2012 W-2s
  • Preparing to receive and properly distribute any medical loss ratio rebates
  • Preparing to provide a summary of benefits and coverage in their 2013 enrollment packet
  • Finishing updates to their summary plan description for any plan design changes from PPACA in 2011 and 2012
  • Implementing an annual $2,500 cap on health care spending account contributions (beginning with 2013 plan years)
  • Preparing for the patient-centered outcomes fee due in July 2013 ($1 per covered life for 2012. Insurers will remit the fee for fully insured plans; self-insured plans will pay it directly.)

Some other requirements, however, are far from crystal clear, according to a report in Business Insurance. For instance, the "pay or play" provision in the law requires employers with 50 or more workers that don't offer coverage to full-time employees to pay a penalty of $2,000 per worker. But the government has yet to clarify if the full fee would apply if employers mistakenly misclassify employees. Current regulations also fail to explain how the law applies to employees whose hours fluctuate weekly or monthly.

The IRS and other agencies are expected to release more guidance in the coming months, which should clear up some questions for employers. Yet the federal government itself and many states likely won't be able to meet all the deadlines on actions required to actually implement many of the major provisions, which start in 2014, according to Kaiser Health News.

The biggest stumbling block will be setting up the health care exchanges -- online marketplaces where some businesses and consumers will shop for coverage.

"Except in a few states, it's impossible to do this in the time allowed -- it's going to have to slip," said Joseph Antos of the American Enterprise Institute in the KHN report.

Even if some states are able to establish exchanges on time, the federal government's exchange -- which states can opt to use instead of creating their own -- likely won't be up and running anytime soon, said Cheryl Smith of Leavitt Partners.

"The 2014 start is untenable for federally compliant exchanges," Smith told KHN. "They have to verify income, they have to verify residency, they have to verify citizenship, and do all that through different federal agencies. Before [federal subsidies] can flow, every one of those things has to be done."

Some experts say that, barring a major political change in Washington, employers will be coping with PPACA in the years to come. Still, nothing can be ruled out until after the November elections, others note.

"Other chapters in the political front [regarding PPACA] have yet to be written," Dave Guilmette of Cigna Corp. told Business Insurance.

 


Why is Engaging Employees on Wellness so Hard?

by: Helen Box-Farnen
Source: eba.benefitnews.com

Employee engagement is the goal of just about every wellness and health management program. You need to engage employees to be more active, eat better, get more sleep.  … You get the idea.

So why is engaging employees so hard? Maybe it’s because we haven’t really thought about it from the perspective of the employee – the end-user of the wellness initiative. According to research from a partnership of Aon Hewitt and The Futures Company, most people fall into discrete attitudinal segments that influence how they think and feel about wellness.

The folks in the C-Suite and most in leadership fall into a category that embraces a sense of control and responsibility when it comes to their health. And, they see wellness as part of the solution to important business problems: lowering costs and increasing productivity.

The average worker, on the other hand, has a completely different mindset. Here are a few of the attitudes that define nearly half of the U.S. population:

  • Time-starved
  • Seeks entertainment
  • Family-oriented
  • Stressed
  • Likes high-tech media and social networking
  • Interested in group activities and competition
  • Wants to look and feel good
  • Wants recognition for their accomplishments
  • Trusts friends and family as information sources

In addition, while you might appreciate a lot of detail, the people you need to engage are not information-junkies. Try this approach with your clients and see if it doesn’t engage more of their workforce:

  • Make it entertaining and create some buzz: To get employees’ attention, it needs to be fun, hip, humorous, and exciting.
  • Appeal to what’s important to me: Tell employees how it will help them look good, feel good, and be more confident.
  • Make it easy: Today’s workers are stressed and starved for time, so it needs to be simple and uncomplicated.
  • Make me feel part of a community: Family and friends are important, and people like to feel connected to others.

Whether you are advising a client about products and services that will help them engage employees in wellness behaviors or you’re a benefits executive needing to achieve business objectives through improved health, wellness, and benefits consumerism, being successful might mean stepping outside of your own attitudes. Instead of approaching wellness as a way to solve the company’s issues – sell it to employees as a way to solve their issues. In other words, if you make it about them, you might just get what you need.


LEVEL WELLNESS

A recent survey by the Society of Human Resource Management found that 61 percent of companies are offering some sort of wellness initiative this year, up only slightly from 58 percent in 2008. Although wellness adoption by employers seems to have leveled off in the past few years, the elements of the programs have changed. For instance, 45 percent of polled employers said their program includes health and lifestyle coaching, compared with 33 percent in 2008.


Companies Look to Pharmacy Benefits for Savings

Employers increasingly are putting prescription drugs -- specifically their plan designs and providers -- under the microscope in hopes of spotting more health care savings.

Following a trend among health care plans, more prescription drug plans are shifting to a "value-based" model, according to Lauren Flynn Kelly, a blogger with AIS Health. In a recent post, Kelly highlighted one particular eight-tier formula that assigned clinical and financial values to drugs on each tier and included only a few lower-cost generics on its first tier.

Ritu Malhotra of The Segal Co. noted that this type of plan design promotes the use of generics -- particularly the lower-cost generic options.

"I think the value part of the value-based plan design is that those drugs are effective and much more cost-effective and could potentially result in a savings on the medical side if patients are more adherent," Malhotra notes in the AIS Health post.

Patient adherence is a primary goal of value-based plans, Kelly wrote. Unfortunately for employers, it's an area where the statistics remain grim. A recent poll by Express Scripts Inc. found that non-adherence cost the nation about $317.4 billion in 2011 in treatment -- that's not counting lost productivity and other costs that can occur when patients don't follow their prescribed drug regimen, according to a report in Employee Benefit News.

While adherence remains a constant obstacle, recent moves in the pharmacy benefit marketplace may create alternative opportunities for lower costs and stronger benefits, an online Workforce report suggests.

Express Scripts' $29 billion purchase of Medco Health Solutions could shake up the pharmacy benefit management (PBM) landscape, potentially creating a polarization between big PBMs that offer the best costs and smaller PBMs that can offer more services, F. Randy Vogenberg of the Institute for Integrated Healthcare told Workforce.

Linda Cahn, founder of Pharmacy Benefits Consultants, suggests that the merger may prompt some employers to start shopping for better deals.

"I think people are aware that changing PBMs can save them large amounts of money, and they are also aware that marketplace developments create further incentives to conduct [request for proposals]," Cahn told Workforce.

Most employers, however, likely won't make any sudden moves with their PBMs at renewal time later this year.

"Change creates controversy, and employers are not looking for controversy," Vogenberg said.


Kaiser Health Tracking Poll: Early Reaction to Supreme Court Decision on the ACA

This poll fielded following the Supreme Court’s decision upholding the heart of the Affordable Care Act (ACA) finds a majority of Americans (56 percent) now say they would like to see the law’s detractors stop their efforts to block its implementation and move on to other national problems.

Democrats overwhelmingly say opponents should move on to other issues (82 percent), as do half (51 percent) of independents and a quarter (26 percent) of Republicans.  But, seven in ten Republicans (69 percent) say they want to see efforts to stop the law continue, a view shared by 41 percent of independents and 14 percent of Democrats.

The public is also divided in its emotional reaction to the decision, with similar shares reporting being angry (17 percent) and enthusiastic (18 percent).  Negative emotions run highest among Republicans who support the Tea Party movement, with 49 percent of this group saying they are angry at the decision.

Solid majorities of voters of every political stripe say the decision won’t impact whether or not they vote this November – though Republicans are more likely than Democrats (31 percent compared to 18 percent) to say the result makes them more likely to turn out.

The poll is the latest in a series designed and analyzed by the Foundation's public opinion research team.

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Information provided by the Public Opinion and Survey Research Program
Publication Number: 8329
Publish Date: 20-07-0212


When You Eat Matters

By Dr. Ann Kulze, M.D.

Evidence is quickly mounting that when you eat and the timing of your meals may be as important as what and how much you eat. In a fascinating new laboratory study, scientists found that lab rats that consumed high fat food over a restricted period of 8 hours a day gained significantly less weight and showed far superior metabolic health relative to an identical group of rats that consumed the same amount of high fat food calories over a 24 hour period of time. According to the study's lead author, it appears "every organ has a clock" and that there are times when they work at optimal capacity and other times when they operate more sluggishly.  Like our hunter-gatherer ancestors likely ate, this study suggests  that discrete meal times (not random munching) and protracted periods of no food intake over a 24 hour cycle (like from dusk to dawn) are best for metabolic health and weight control. I am currently working hard to eat my dinner before the sun goes down to optimize my metabolic machinery (5).

 

Even more, a large, first-of-its-kind study in human subjects was just published that supports the critical importance of regular meals, especially BREAKFAST! and refraining from grazing or snacking during the day. The objective of the study was to determine the associations between skipping breakfast, eating frequently, snacking, and the risk of weight gain and type 2 diabetes. Over 51,000 adult males were followed over a 30 year period of time to gather the relevant information for this evaluation. The conclusions of this landmark study were as follows:

  • Regular consumption of breakfast was associated with a reduced risk of type 2 diabetes independent of body weight. (Somehow eating breakfast protects metabolic health.)
  • Eating 2 or less meals a day was associated with a greater risk of obesity and type 2 diabetes.
  • Eating > 4 times daily or snacking was associated with an increased risk of weight gain and type 2 diabetes. (6)

 

Bottom line: For optimal weight control and metabolic health - eat breakfast, lunch, and dinner and no more than 1 daily snack.