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Clinical Laboratories and Pathology Groups

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Clinical Laboratories and Pathology Groups

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Even Higher-Income Americans are Frustrated with High Health Insurance Costs; Many Drop Coverage and Switch to Concierge Care; Clinical Laboratories May Be Affected by Trend

From reduced medical laboratory test ordering to dealing with high-deductible health plans (HDHPs), clinical laboratories and anatomic pathology groups are impacted daily by rising healthcare costs. Until now, however, one demographic was not affected—affluent Americans. But that is no longer the case.

According to Bloomberg, thousands of people—some earning more than $125,000 a year—are now foregoing health insurance altogether and instead choosing concierge medicine because it costs less.

“We’re not poor people, but we can’t afford health insurance,” Mimi Owens, a resident of Harahan, La., told Bloomberg.

Priced Out of the Market

Bloomberg also reported on a Marion, N. C., family whose monthly insurance premium of $1,691 in 2017—triple their house mortgage payment—was increasing to $1,813 in 2018. The couple, who had no children and an income of $127,000 from a small IT business plus a physical therapy job, had a $5,000 deductible. However, their total annual insurance investment after premiums was about $30,000, and that was before any healthcare claims.

They decided, instead, to purchase care through a membership in a physician practice.

“Self-employed people are being priced out of the market,” Donna Harper, an insurance agent in Crystal Lake, Ill., told Fierce Healthcare. The self-employed business owner reportedly had to cancel her Blue Cross Blue Shield (BCBS) plan because the premiums totaled $11,000 annually with a $6,000 per year deductible.

“I haven’t been in the hospital for 40 years, so I’m going to roll the dice,” she stated.

Increasingly, this is the choice many people with higher incomes are making and it is impacting both the healthcare and health plan industries.

Huge Deductibles, Skyrocketing Premiums!

Regardless of whether people purchase their health coverage through the Affordable Care Act (ACA) Health Exchanges or their employers, deductibles can be as high as $5,000/year for individuals and $10,000/year for family coverage, or more.

And, in 2017, annual premiums for workers averaged $18,764, a Kaiser Employer Survey reported.

According to CNN Money, ACA premiums for silver plans in 2018 were 37% higher than the previous year, and the average increase for all health exchange plans since 2017 was 24% nationwide.

And, while financial assistance is available, people making more than 400% over the Federal Poverty Level will not qualify for premium subsidies from the ACA, according to

Lots of “Essential” Services, But Narrow Networks

Critics of the ACA point out that one of the reasons Health Exchange plans are so expensive is because every plan is required to have “essential health benefits” that many enrollees to not need or want. For example, a childless couple in their 50s has to pay for an ACA plan that includes services such as maternity, newborn, and pediatric care.

Another cause for sky rocketing costs are the ACA’s limited number of health plans in many regions. In fact, according to Bloomberg, half of the counties in the US—which together cover 30% of all Americans—have just one insurance company available to the Health Exchange customers.

Uninsured Rate Edges Up in 2017

So, it may come as no surprise that after declining over recent years, the uninsured rate noted at 2017 year-end actually increased by 1.3%, which translates to 3.2-million Americans, a Gallup and Sharecare analysis found (see image below).

That report attributes the uptick in the uninsured population, the largest since ACA’s start, to:

  • Health insurance companies pulling out of the ACA exchanges;
  • Costs for remaining insurance plans too high for consumers to bear; and,
  • Those Americans who earn too much for federal subsidies opting to go without health insurance.

Concierge Care Instead of Health Insurance

Many people do not have health insurance, but that does not mean they are without healthcare. For example, the N.C. couple named in the Bloomberg article decided to pay $198 a month (instead of the $1,813 annual premium) for private membership (AKA, concierge care) in a doctor’s office practice. The fee gives them unlimited office visits, discounts on prescription drugs, and lab tests.

The Detroit News, in its report on the launch of University of Michigan Medicine’s Victors Care in April, called membership-based practice programs a “revolutionary shift in medicine.” Victors Care plans, which start at $225 a month, reportedly give people unlimited office visits. (See Dark Daily, “Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories,” April 23, 2018.)

And HealthLeaders Media noted that about 34% of medical practices surveyed indicated that within three years they may add a membership-based payment model.


Dr. James Mumper, MD (left), founder and chief medical officer of PartnerMD, a concierge care practice in Richmond, Va., treats Howard Cobb (right), who has been Mumper’s patient for 14 years. (Photo copyright: Richmond Magazine/Jay Paul.)

For the doctor’s part, concierge medicine has appeal. Physician want to spend more time with their patients and have fewer patients, noted the Richmond Times-Dispatch.

“So much of being a good primary care physician is listening and having time to listen,” stated Jim Mumper, MD, Chief Medical Officer, PartnerMD, a concierge medical practice he helped start in Richmond, Va. “This model allows the physicians to do the things that cause them to want to go to medical school and do all the training and all the sleepless nights—to feel at the end of the day that they’ve really helped a lot of people.”

Clearly, the healthcare and health insurance industries are under enormous pressure to address rising costs and evolve to better business models. Clinical laboratories are necessarily along for that ride, and in many ways, must be ready to react quickly to changes coming from both marketplaces.

 —Donna Marie Pocius

Related Information:

Why Some Americans are Risking It and Skipping Health Insurance

Plans with More Restrictive Networks Comprise 73% of Exchange Market

Millions More Americans Were Uninsured in 2017

2017 Employer Health Benefits Survey

Premiums for the Benchmark Silver Obamacare Plan Will Soar 37%, on Average, for 2018, According to Federal Data

US Uninsured Rate at 12.2% in Fourth Quarter 2017

University of Michigan Fuels Debate on Retainer-Based Health Care

34% of Medical Practice Models Considering Membership Practice Models

A Different Kind of Practice

Back to the Future of Healthcare with A Higher Price Tag: Concierge Medicine Offers Patients Unique Care

Some Hospitals Launch Concierge Care Clinics to Raise Revenue, Generating both Controversy and Opportunity for Medical Laboratories

Healthcare Consumers Opting for Lowest Cost Plans on Obamacare Exchanges, Putting Additional Pressures on Marketplace Insurers

Price transparency trend is altering decision-making in many aspects of healthcare and providing lesson for medical laboratory executives

Medical laboratory executives are well aware that price transparency is an increasingly powerful trend in healthcare. Now, as consumers increasingly opt for lower-cost options when making healthcare decisions, the 2010 Affordable Care Act (ACA) provides a notable example of this new reality, with consumers making cost, not choice, their top concern when selecting health plans through the federal health insurance marketplace exchanges.

A recent New York Times article reported that millions of people purchasing insurance in ACA marketplaces are motivated by how little they can pay in premiums, not the size of the physician and hospital networks, or an insurer’s reputation.

This economic reality may help explain why cost containment is a focus of healthcare reform bills currently under discussion in Congress. Whether you agree or disagree with the American Health Care Act (HR1628), the Republican Party’s plan to repeal and replace the ACA, it should be viewed in this broader context: Healthcare consumers are avoiding higher-priced healthcare plans in droves, and millions of younger Americans are finding the cost of coverage a barrier to entry. This is the challenge facing politicians of both parties, whether they will admit it publicly or not.

Obamacare Enrollee Numbers Dropping

A 2015 report by the Office of the Assistant Secretary for Planning and Evaluation in the Department of Health and Human Services, found that “the premium is the most important factor in consumers’ decision-making when shopping for insurance.” In 2014, 64% of people shopping in the marketplaces choose the lowest cost or second lowest cost plan in their metal tier, while 48% did so in 2015.

Perhaps more significantly, millions of people fewer than expected have enrolled in Obamacare. A CNN Money report noted that 10.3-million people enrolled in an ACA marketplace as of mid-March 2017, down from the 12.2-million who signed up for coverage when enrollment ended on January 31.

Mark T. Bertolini (left), Chief Executive of Aetna, and Joseph R. Swedish (right), Anthem’s Chief Executive, testified before a House committee hearing last fall. Major insurers are struggling to find a business model that works in the marketplaces created by the federal healthcare law. (Caption and photo copyright: New York Times/Jacquelyn Martin/Associated Press.)

Those numbers fall short of recent federal government projections for Obamacare and are dramatically less than original estimates. A 2015 report from Congressional Budget Office (CBO) projected marketplace enrollment would increase to 15-million in 2017, before rising to between 18-million and 19-million people a year from 2018 to 2026.

Shortly after Congress passed the ACA, the CBO projected that by 2016, 32-million people would gain healthcare coverage overall.

As a New York Times article pointed out, not only are young and healthy people selecting the cheapest ACA marketplace plans, but also many are opting to risk tax penalties and go without healthcare coverage.

“The unexpected laser focus on price has contributed to hundreds of millions of dollars in losses among the country’s top insurers, as fewer healthy people than expected have signed up,” the New York Times article noted.

ACA Marketplace Unsustainable, Says Anthem Chief Executive

Healthy younger people were expected to join the ranks of the insured and provide an essential counter balance that would offset insurers’ cost of care for newly insured unhealthy people. That prediction also has failed to materialize, forcing major insurance companies to re-evaluate their role in the marketplace or to exit Obamacare completely.

“The marketplace has been and continues to be unsustainable,” stated Joseph R. Swedish, Chairman, President and Chief Executive of Anthem, a Blue Cross and Blue Shield company, in the New York Times article.

In a CNN Money article, Anthem announced it would not participate in Ohio’s Obamacare exchange in 2018 and added that it was evaluating its participation in all 14 states where it currently offers plans.

“A stable insurance market is dependent on products that create value for consumers through the broad spreading of risk and a known set of conditions upon which rates can be developed,” Anthem stated in a press statement. “Today, planning and pricing for ACA-compliant health plans has become increasingly difficult due to the shrinking individual market as well as continual changes in federal operations, rules, and guidance.”

Inaccurate CBO Predictions Impact Clinical Laboratories and Pathology Groups

Anthem is not the only large insurer losing money selling insurance in the marketplaces. Humana and Aetna also this year scaled back their involvement with Obamacare, with Aetna citing $430-million in losses selling insurance to individuals since January 2014.

“Providing affordable, high-quality healthcare options to consumers is not possible without a balanced risk pool,” Aetna Chairman and CEO Mark T. Bertolini declared in an Aetna statement.

How this plays out may matter a great deal to the nation’s clinical laboratories and anatomic pathology practices. As noted above, in 2010, at the time that the Affordable Care Act was passed, the Congressional Budget Office estimated that as many as 32-million additional people would have health insurance in 2016 because of the ACA. The reality is much different. Less than a third of that number have health insurance policies because of the Affordable Care Act.

Pathologists and medical laboratory managers may want to consider how wrong that 2010 CBO estimate of coverage was. If the CBO’s estimate could be off by 66% in 2016, how reliable are CBO estimates when the federal agency scores the various “repeal and replace” bills that Republicans have proposed during the current Congress?

—Andrea Downing Peck

Related Information:

Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026

Cost, Not Choice, Is Top Concern of Health Insurance Customers

Health Plan Choice and Premiums in the 2016 Health Insurance Marketplace

CBO’s Analysis of the Major Health Care Legislation Enacted in March 2010

Obamacare Enrollment Slides to 10.3 Million

Anthem Statement on Individual Market Participation in Ohio

Aetna to Narrow Individual Public Exchange Participation

Startup Oscar Health Finds Big Partners in Ohio’s Cleveland Clinic and Nashville’s Humana Inc.

Two different deals aim to bring a new style of healthcare insurance to individuals and small businesses

Designed to be a new model for health insurance, the much-watched Oscar Health (Oscar), founded in 2012, has just inked deals with both the Cleveland Clinic and Humana, Inc. What makes Oscar worth watching by pathologists and clinical laboratory managers is that the innovative insurer was founded and is run by Gen X and Gen Y (Millennial) executives.

Oscar Health is billed by its Millennial cofounders as a new type of health insurance—one that “curates” or coordinates members’ care with the help of health information technology (HIT) on the Internet, a smartphone app, and personalized services by concierge teams. So, it is interesting for pathologists and medical laboratory leaders to note that New York-based Oscar is partnering, through two different deals, with well-established Cleveland Clinic and rival Humana to enter the Ohio and Tennessee healthcare markets.

As Dark Daily reported in a previous e-briefing, Oscar aims to leverage sophisticated technology solutions and data to challenge complexity and costs associated with traditional healthcare insurance. An approach no doubt driven by the modern thinking of the company’s young founders. We alerted lab leaders that the insurance startup could be the latest example of technology’s power in the hands of Gen Y and Gen X entrepreneurs.

And while Oscar has reportedly experienced financial challenges, it is moving forward with the widely publicized new partnerships, as well as additional plans to expand insurance coverage in more states. Therefore, it’s important for clinical laboratory professionals to follow Oscar, which soon could be a healthcare payer of clinical laboratory and anatomic pathology services in more regions of the country.

Why Is Oscar Teaming Up with Cleveland Clinic, Humana?

In short, Cleveland Clinic is making its debut into the health insurance market with Oscar. And Oscar is moving into Ohio on the coat tails of this nationally prominent healthcare provider. The co-branded Cleveland Clinic/Oscar Health insurance plan will be offered to northeast Ohio residents in the fall for coverage effective Jan. 1, according to a Cleveland Clinic news release.

“This is a rare opportunity to work with the Cleveland Clinic to deliver the simpler, better, and affordable healthcare experience that consumers want,” said Mario Schlosser, Oscar’s Chief Executive Officer and cofounder in the news release.


Josh Kushner (left) and Mario Schlosser (right) cofounded Oscar Health, a New York-based health insurer that employs computer technologies, a mobile app, and concierge-style healthcare teams to provide members with a modern health plan experience and easy access to quality healthcare providers. (Photo copyright: Los Angeles Times.)

The coverage will be sold on and off the Ohio Affordable Care Act state exchange. Here’s what consumers will receive, noted statements by the Cleveland Clinic and Oscar Health:

  • Access to primary care providers affiliated with the Cleveland Clinic, and an Oscar Health concierge team (a nurse and three care guides) that can refer patients based on their needs to other providers in the care continuum;
  • Virtual care visits enabled by Cleveland Clinic Express Care Online and Oscar’s Virtual Visits;
  • Smartphone technology to make it possible for members to explore their health needs, find options, and review costs.

“We are looking to build a new relationship among payers, providers, and patients. This relationship goes beyond the traditional approach of getting sick and seeing the doctor,” noted Brian Donley, MD, Cleveland Clinic’s Chief of Staff.

In an article on the partnership, Forbes suggested that narrow healthcare networks like the Cleveland Clinic/Oscar model might be just what the ACA exchanges need to remain operational.

However, a Business Insider article suggests that Oscar—already active in New York, Texas, and California health exchanges—could be adversely affected by a successful replacement of the ACA, currently being debated by Congressional lawmakers.

Nevertheless, Alan Warren, PhD, Oscar’s Chief Technology Officer, told Business Insider that the Cleveland Clinic/Oscar Health insurance plan would go forward even if Obamacare did not.

Formal Rival Humana Now Oscar’s Partner in Small Business Insurance

Meanwhile, the partnership with Humana takes Oscar, which launched Oscar for Business in April, 2017, further into the small business health insurance market. Humana and Oscar will sell commercial health insurance to small businesses in a nine-county Nashville, Tenn., area effective in the fall, according to a joint Oscar/Humana news release.

“The individual market was a good starting point. But it was clear from the beginning that the majority of insurance in the US is delivered through employers,” Schlosser stated in a New York Times article.

As to who does what, Beth Bierbower, Humana’s Group and Specialty Segment President, explained in an article in the Tennessean that Humana will contract with hospitals and doctors for small business insurance, while Oscar’s technology solutions will help small businesses and their employees manage healthcare benefits and gain access to providers. “These people [at Oscar] are on to something,” she noted. “They are doing something a little different. Maybe this is a situation where one plus one, together, might equal three.”

Future Growth Planned by Oscar

The New York Times called Nashville “a new step for Oscar,” and noted that it follows Oscar’s recent loss of $25.8 million during the first three months of 2017—47% less than Oscar lost during the same period in 2016. Since its inception, however, Oscar has raised $350 million in investment capital, much of it from Silicon Valley investors.

Also, Oscar’s small-business health insurance plans, which started in the spring in New York, might launch in New Jersey and California as well, an Oscar spokesperson stated in a Modern Healthcare article that also reported on Oscar’s intent to increase individual plans sold in the ACA Marketplace from three states to six in 2018.

Clinical Laboratories Benefit from Increased Consumer Access to Health Providers

Could Oscar succeed with its new Cleveland Clinic and Humana partners? Possibly. Both deals are pending regulatory approval as of this writing.

In any case, the whole idea of making insurance more palatable for consumers is something clinical laboratories, which are gateways to healthcare, should applaud and support. It is good to know that insurers like Oscar are using technology and personal outreach to ease consumers’ access to providers and help them explore options and costs.

—Donna Marie Pocius

Related Information:

Cleveland Clinic, Oscar Health to Offer Individual Health Insurance Plans in Northeast Ohio

Introducing Cleveland Clinic Oscar Health Plans

Oscar Health Partners with Cleveland Clinic on Obamacare Exchange

Oscar Health Partners with Cleveland Clinic

Oscar Health to Join Human in Small-Business Venture

Humana Oscar Health Pilot Small Business Insurance Partnership in Nashville

Oscar and Humana Team up to Sell Small-Business Plans

Insurance Start-Up Oscar Seeks to Shake Up Healthcare Through Its App

Gen Y Entrepreneurs Launch Oscar, A Consumer-Friendly Health Insurance Company in Bid to Disrupt Traditional Health Insurers



Kaiser Family Foundation Estimates Approximately 16% of US Population Uninsurable under Pre-ACA Underwriting Standards

As the latest attempts to replace the Affordable Care Act (ACA) generate increased debate over protections for pre-existing conditions, Kaiser Family Foundation highlights that using pre-ACA underwriting guidelines would result in an estimated 52-million Americans unable to obtain coverage

With the American Health Care Act (AHCA) clearing the House on the way to the Senate, the public and media are scrutinizing key points. One highly-contested topic is insurance availability for people with pre-existing conditions.

Unfortunately, as most pathologists and medical laboratory managers know, media coverage—whether from the left or the right—tends to play up points that are sensational and resonate with their core audiences, but often fail to provide a full and accurate picture of the subject being covered. Thus, it is refreshing when useful information and insights about aspects of healthcare in America are presented in a fair and measured way.

Biased media coverage is certainly true on the issue of health insurance coverage for individuals who are considered to have pre-existing conditions. However, as a December 2016 Kaiser Family Foundation (KFF) study highlights, protections for pre-existing conditions were not always guaranteed. In fact, if insurers currently used the medical underwriting practices in place prior to implementation of the Patient Protection and Affordable Care Act or ACA (also known as Obamacare), the study estimates that 52-million adults under the age of 65 would likely be denied coverage on the individual market.

According to US Census Bureau figures, at the start of 2017 there were 324-million Americans. Using KFF’s figures, this means that 16% of the population are considered to have pre-existing conditions.

Who is Impacted by the Individual Market?

KFF was quick to point out that many of the 52-million people with pre-existing conditions have always qualified for insurance through their employer or a public program such as Medicaid. The foundation’s estimates show that in 2015, only 8% of the non-elderly population relied on individual market insurance plans, such as those plans offered on the ACA healthcare exchange.

 graph above shows the percentage of American’s with pre-existing conditions who “most likely” would have been denied insurance in the Individual Marketplace

The graph above shows the percentage of American’s with pre-existing conditions who “most likely” would have been denied insurance in the Individual Marketplace prior to the Affordable Care Act (ACA). According to the Kaiser Family Foundation (KFF), while the proposed American Health Care Act (AHCA) does not enable insurance companies to deny coverage for these conditions, coverage premiums could increase if a state seeks a community rating waiver. (Image copyright: Kaiser Family Foundation.)

For many patients, obtaining health insurance through individual plans is often temporary and driven by a life event, such as job loss, divorce, marriage, or reaching the threshold of an age bracket for coverage through other programs. However, for some individuals—such as the self-employed, low wage earners, or early retirees—the individual market is the only option for obtaining health insurance. For this population, pre-ACA underwriting made coverage difficult to obtain and more expensive for patients with pre-existing conditions.

Pre-Existing Conditions Cover More than Just Conditions

Study authors also note that the estimate of 52-million individuals considered to have pre-existing conditions is conservative due to other factors considered in the underwriting process. Insurance companies also based denial and uprating on a range of other factors—such as:

  • Prescription medication;
  • Doctor visits or procedures;
  • Mental health conditions; and
  • Family history.

They list a table of 30 conditions, including pregnancy and eating disorders, that might qualify as a pre-existing condition along with a list of 40 medications that might also result in a denial of coverage.

Despite the already growing list of reasons for insurance denials, there’s yet another list with job occupations that might result in ineligibility. This means that even healthy individuals could find themselves without coverage due to how they earn their income.

Neither medications nor professions were considered in KFF’s estimates due to a lack of data.

Uncertainty and Instability in Individual Market Pricing

A 2001 KFF report showed yet another hurdle faced by enrollees in the individual market.

In this KFF study, researchers created seven hypothetical applicants and compared their conditions to the underwriting practices at major insurance companies. Even if applicants cleared the underwriting process, the premiums offered by the various insurance companies differed greatly. Prices for each applicant fluctuated between hundreds and thousands of dollars per month when coverage was available. Benefits changed between plans as well, with many plans exempting coverage for pre-existing conditions.

Even with insurance, coverage for maternity care, prescriptions, or mental health fell behind the options available through most group plans. Yet, these conditions are some that might facilitate the events mentioned in the 2016 study for entering the individual market.

In the study’s conclusion, the authors found, “Insurance carriers seek to avoid covering people who have pre-existing medical conditions, and when they offer coverage, often impose limitations on the coverage they sell. This can price insurance out of the reach of many consumers in poor health or create significant gaps in coverage that could result in being underinsured.”

Decreased Demand for Clinical Laboratory Tests

Both studies show similarities to many of the concerns cited for the new AHCA. Time Magazine recently published a list of pre-existing conditions under the new proposal. The list bears striking similarity to the list offered in the 2016 KFF study. Speaking with Time, Cynthia Cox, Associate Director at KFF said, “There are plenty of other conditions, even acne or high blood pressure, that could have gotten people denied from some insurers, but accepted and charged a higher premium by other insurers.”

If fewer people can access affordable preventative care, prescriptions, and medical laboratory services, disease diagnosis is delayed. In a 2013 KFF study into the impact a lack of insurance has on healthcare, study authors noted, “Consequently, uninsured patients have increased risk being diagnosed in later stages of diseases, including cancer, and have higher mortality rates than those with insurance.”

Supporters of the proposed AHCA legislation are quick to point out that it does not eliminate protections for people with pre-existing conditions. It simply provides a process for state governments to provide an alternative solution to the federal framework and regulations.

Regardless of the outcome, KFF’s studies make it clear that a decrease in access to insurance means patients skip medical procedures they do not see as essential or cannot afford. This could result in decreased demand for screening and prevention diagnostics, such as those offered by pathology groups and clinical laboratories.

—Jon Stone

Related Information:

An Estimated 52 Million Adults Have Pre-existing Conditions That Would Make Them Uninsurable Pre-Obamacare

50 Health Issues That Count as a Pre-existing Condition

The Uninsured a Primer 2013 – 4: How Does Lack of Insurance Affect Access to Health Care? 

How Accessible Is Individual Health Insurance for Consumers in Less-Than-Perfect Health?

GOP Health Bill Leaves Many ‘Pre-existing Condition’ Protections Up to States

Key Facts About the Uninsured Population

Gaps in Coverage Among People with Pre-Existing Conditions


Aetna CEO Declares Affordable Care Act in ‘Death Spiral’ in a Speech of Interest to Pathologists and Medical Laboratory Professionals

Aetna’s CEO Mark Bertolini highlights how the current system increases costs for both insurers and consumers

At the moment, probably no issue is more politicized than that of the Affordable Care Act (ACA), often called Obamacare. Because it controls the design of health insurance coverage, it also influences the way health plans pay hospitals, physicians, clinical laboratories, and anatomic pathology groups.

However, understanding the truth about what is working and what is not with the Affordable Care Act is a complex undertaking. That is because both the advocates and critics of this law are engaged in highly-partisan rhetoric, despite the fact that most have no intimate knowledge of how healthcare works in the United States. (more…)