Presentation on theme: "National Healthcare Reform"— Presentation transcript:
1National Healthcare Reform Impact on Vision ProvidersNovember 2010
2Reform in ReviewPresident signed H.R into law on March 23rd. (Patient Protection and Affordable Care Act - PPACA)President signed H.R into law on March 30th. (Healthcare and Education Reconciliation Act)Parts of legislation scheduled to roll out yearly between 2010 and 2019.
3Reform in Review What is included What is not included Coverage ExpansionCoverage expansion to 32M additional $940B est.Individual MandateRequires all citizens have health insurance beginning 2014Employer ResponsibilitiesNo employer mandate for employer w/under 200 employees but…Employers w/+50 employees assessed a penalty if any employees receive premium credit through an exchangeMust auto enroll employees who do not select or opt outDelivery System ReformsRevenue ProvisionsWhat is not includedCost containmentEmployer MandatesTort Reform/Liability ProtectionIndividual MandateFinancial penalty starts at $95 per person in 2014 and rises to $750 per person by 2016Penalties will be indexed for inflation after 2016.Employer ResponsibilitiesSurvey by Crain Communications shows that about 8% of employers currently offering coverage will discontinue and send employees to the exchanges.Cost ContainmentCMS’ chief actuary believes that national health expenditures will increase from 17% of GDP to 21 % under the new law.Tort ReformCongressional Budget Office estimates that if reform similar to Texas was passed would save more than $54 Billion over 10 yearsMostly due to reduction of defensive medicine
4Coverage Expansions Public Program Expansions Medicaid eligibility up to 133% of FPLStates prohibited from reducing current benefit levels to offset cost of additional membersHigh risk poolsMedicare “Improvements”Plug donut hole in Part DState Exchanges
5State Exchanges Stand alone vision not a mandated inclusion Probable that they may be included at state’s optionSeparate exchanges for individuals and employer groupsAdministration must be self sustaining thru state “assessments”Standard sets of benefitsStates taking the position that they can include other coverage unless Fed specifically disallows.
6Delivery System Reforms Requirements for TransparencyHealthcare costsMedical loss ratio85% for large group/80% for small group and individualReporting begins 2010/Rebates begin 2011Premium reviewAdministrative simplificationDevelopment and use of uniform explanation of coverage documentsDevelopment of standardized definitions
7Delivery System Reforms Consumer protectionsChoice of primary care providerMandatory coverage of ER visits w/out prior authorizationFederally defined “minimum qualified” coverage (Sept provisions)No cost sharing for preventive servicesNo denial of coverage based on pre-existing conditionsNo life time or annual limitsExtend dependent coverage to age 26
8Revenue ProvisionsReduce pharma payments & increase access to genericsReduce Medicare/Medicaid fraudReduce hospital readmissions through bundled payments under MedicareAssessments on RX drug manufacturers, medical device manufactures, health insurance companies, and diagnostic labsExpand P4P programsExcise tax on “Cadillac” health plans (2018)Medicare surtax on “upper income” citizens (2013)Additional penalties on non-medical HSA/HRA withdrawals (2011)Increase threshold for itemized medical deductions from 7.5% to 10% of income (2013)Sin taxes (indoor tanning 2010)Reduce Medicare Advantage funding
10Impact on VisionProvider non-discrimination provision (Section 2706)Enhanced vision coverage through “pediatric vision exam requirement” (2014)Vision exam but not eyewear will be a mandate coverage for children under 182.3% medical device tax beginning 2013Specifically excludes eyeglass and contact lensesValue of stand alone vision plans not included in calculation of “Cadillac” coverage (2018)Dilate optometric scope of practiceScope of PracticePredicted shortage of GPs and InternestsIf 30 Mill new members are added to the health system, it will require 15,000 more GPs. Currently only about 1,000 GPs graduate annually.Optometrists one of groups target to help fill gaps
11Impact on Vision Limit on FSA contribution (2013) OTC products no longer an allowable expense for HSA or FSA spending (2011)Contact lenses, solutions, readers, and refractive surgery still allowedLimit on FSA contribution (2013)SCHIP programs maintained thru 2019Exchanges and “Cadillac” tax likely to accelerate adoption of HDHPsHDHP members w/ HSA, HRA or limited FSA show higher than average rate of vision care useAccelerated health plan consolidationReduced vision coverage under Medicare Advantage plansHSA/HRA/FSAHSA – money belongs to employee. IRS defines what qualifies.HRA – money belongs to employer. Employer can define what qualifiesLimited FSA – Coupled with HSA or HRA; can be used on dental and vision onlyFSA Changes/Limits33 Million workers had FSAs in 201060% of FSA accounts were exhausted by end of AprilPromote use of FSA $s earlier in year – don’t wait until end of year!!!In 2013 limit will be $2,500. Currently no legal limit. Limits set by employers.Accelerated ConsolidationLarger organizations better able to drive efficiency2011 changes in capital gains taxExamples: United’s purchase of Health Net and Principal Financial’s heath businessCould result in downward pressure on reimbursement $s.Medicare Advantage PlansAdvantage HMO plans likely to surviveMost PPO and PFFS plans will suffer
12Medicare Advantage Enhancements Share of Medicare Advantage Plans with Selected Extra Benefits 2010Vision exams - 86%Hearing tests - 65%Worldwide coverage - 62%Preventive dental - 55%Extra podiatry benefits - 47%Extra chiropractic benefits - 34%Some transportation - 14%Part B premium rebate - 6%Source: Medicare Advantage 2010 Data Spotlight, Kaiser Family Foundation
13Accountable Care Organizations Medicare demo projectIn 2012 providers will be allowed to organized as ACOsMust be led by physicians or hospitalsMust manage full spectrum of care“Accountable” for the overall cost and quality of care for a defined patient populationMust follow clinical guidelines and have quality measured continuouslyMust provide care across all care settings
14Accountable Care Organizations Four organization modelsNetworkOrganized Medical GroupHospitalCollaborativeTwo reimbursement modelsTotal risk modelShared savings model
15Accountable Care Organizations Key strategiesIntegrate care management and engage patientIdentify preventable eventsReconfigure care to reduce, waste, and harm to patientAnticipate impacts includeAccelerate hospitals’ employment of physiciansAccelerate clinical integrationReduce private practice delivery options
16Impact on ECP as Small Employer Small Business Tax Credit35% tax credit of health care premiumsFewer than 25 employeesAverage wages of less than $50KEmployer must pay 50% or greater of employee only premium costCan include cost of dental and vision premiumsAvailable 2010 thru 2013Advise to talk with a benefits consultantWellness Program GrantsFewer than 100 employeesProgram must not have existed prior to 3/23/10Small Business Tax CreditGenerating increase of small businesses offering insurance – 59% in 2011 vs. 46% in 2010Wellness GrantsHHS to award up to $200 million for a five year period beginning 2011.
17Impact on ECP as Small Employer Exchanges (2014)Small Business Health Options Program (SHOP)Run by stateAvailable to employers with up to 100 FT employeesAfter 2017 may also be opened to larger employers
18Impact on ECP as Small Employer 1099 Filing Requirement (2012)Must file a 1099 form with IRS for any vendor from whom you purchase property or services worth $600 or more during the calendar yearProjected to raise $17.1 Bill over 10 years
19What Next? – Implementation! Varying interpretationsPromulgation of rules through multiple agenciesStakeholder advocacy will continue at federal and state agency levelPublic comment periodsQuestion of agency authority to addressItems beyond agency authority will require additional legislation to fixCompliance enforcementEnforcementHHS currently envisions enforcement being handled at the state level. However, states do not normally have authority to enforce federal legislation.2010 Election ResultsUnlikely to repeal law – Obama veto powerMost difficult to roll back portions already enactedCan Federal Level -Require hearingsStall funding to HHSState Level –Limit scope of exchangesImpede expansion of MedicaidJoin legal challenges
202010 Elections Impact? Total repeal unlikely Federal Level Action Obama veto powerPortions already enactedFederal Level ActionRequire multiple hearingsStall fundingAdjustments1099 requirementDefinition of grandfathered plansDelay Medicare Advantage cutsState Level ActionLimit scope of exchangesImpede expansion of MedicaidDrop out of Federal Medicaid/SCHIP programJoin legal challenges
21Prepare Now! Stay alert to developments nationally and locally Contact local ASOs and other integrated care organizations for inclusionExpress opinions and concerns to your elected representativesWork with industry advocacy groupsAdvocacy is Key to Promote Quality Vision CareIf you don’t tell your story,someone else will tell it for you!
22Prepare Now! Consult with your business professionals AccountantBenefits consultantUpdate your practiceDelegate to staff so you can practice to the full scope of licensureAdopt an EHRDevelop an effective, professional web siteAlign with strong business partners such as EssilorEHRNeeded for efficient co-managementNeed for ACO or other integrated model participationPrices have come down
23The Essilor Partnership Essilor and IHMS Commitment - Supporting the Eye Care ProfessionalGrow Your BusinessEmployer strategyOther strategiesRun Your BusinessProvide Managed Care expertise
24Essilor’s Traditional Focus LABECPs/RetailersCONSUMERSLike most lens manufacturers, our traditional focus was on the lab and ECPsLENSFRAMES
25Dental/Vision Plan Combo Expanded ViewLarge Self-FundedMedium/Small(Broker)EMPLOYER/PURCHASERBusiness Coalition/AffiliationsGovernmentHealth Insurers( HMO / PPO )Consumers: Members & WorkersVision PlanDental/Vision Plan ComboWe recognized we needed to dilate our scope of influence because decisions regarding vision were being made “upstream” where we had no “voice”.So Essilor made a commitment to invest in a new division that had the expertise to go “upstream” and influence decision makers at a whole new level. But we had to create a value proposition with these new players…we had to create a mutual purpose between employers and the eye care professional. That mutual purpose is reducing overall health care utilization by positioning the eye exam as an innovative wellness tactic.LABECPsLENSFRAMES
27Employer Program What They Want? Reduced healthcare costs 99.4% of top decision makers are concerned with the impact of health care costs (2010 UBA Employer Opinion Survey)Tactics employedMinimize employee health riskShift costs to employee80% will spend money on health promotion and wellness in 2011Majority express frustration with the ROIDesire to increase employee engagement ratesSo What?Opportunity to leverage Vision Care as a program that:Increases employee engagement,Improves health outcomesReduces healthcare utilizationWe’ve spent the past 2.5 years in the “customer development” process surveying and researching what employers want and need.Every employer is now in the “healthcare” business because it impacts their bottom line and top line so significantly.We were tasked with creating a mutual purpose that would engage and energize the employer to work with ECPs and to rethink their current process as it relates to health and wellness.So here is what we found…Employers want reduced healthcare utilization,they want early intervention so their employees are less sick,they want support from suppliers---they don’t just want to purchase a vision care plan service,they want administrative support to frequently engage employees and to implement programs that will increase utilization of preventive care services.80% of employers surveyed will be purchasing a wellness program in 2011…even though they find it hard to develop a solid ROI.Employers also want help increasing employee engagement in prevention and wellness programs…We have found that positioning the the eye exam as an innovative wellness tactic can do just that…Government data indicates that 3.6 times more people get an eye exam each year than a general medical exam…99 million people visited the eye doctor in 2006…So what does that mean?M.Barnwell200827
28What is the Employer Program? A strategy that ties the eye exam to reduced health care costs and risksProvides frequent and direct messaging to large pools of peopleGrows utilization of eye exam and hardwareDISCUSS “HOW” IF NECESSARYHOW:We use the same metrics mainstream health care uses. We collect administrative, clinical and financial metrics. As an example: document ECP referrals to primary care;Employer arena is important…46% of US Adults obtain health insurance through EmployersThe market is changing at an exponential rate…we need to evolve and leverage…What does it provide? Frequent and directed eye health messaging with incentives, but it also repositions the eye exam under wellness and prevention.So what are some of the tactics Essilor is employing now to grow the vision care market and promote the independent optometric community?M.Barnwell200828
29Health Fair Program 2008-2009 100 Events Attended 200k+ Employees Impacted10 Trade Shows Attended 100KOne of the tactics in the employer program is direct to employee messaging…Over the past 2 yearsparticipated in over 150 health fairs within major employers across the US.Impacted over 200K people.Goal to drive employees to the ECP and fill the exam lane with educated consumers.We welcome partnering with area ECPs in these events…
30Vision Wellness Brochures What:A set of 6 topical (vision-related) information sheets you can use to build interest and initiate a dialogue on vision coverage with a target employerTopics:Vision & the Aging WorkforceVision for a Healthy WorkplaceEye Safety at Work and PlayThe Road to Better HealthVision Disorders in ChildrenComputer Vision SyndromeAnother tactic is Broker educationWe have created a Vision Wellness Brochure that speak to 6 general topics and the solutions that Vision Care Plans can offer through Essilor.Each piece has 2-side to it. On the front side it talks about the issue. On the back side, it talks about case study that substantiate the benefit of the solution.
31VisionSavesMoney.com CUSTOM Logo educating the employer benefit manager:providing tools for Brokers to use as they work with employers.This micro site provides a tutorial with an incentive for brokers to use with benefit managers. The tutorial provides a question answer format that ties the value of vision to over all healthcare. Example: Where do employers spend more money? Eye and vision disorders, Breast cancer, Lung cancer or HIV? The answer is Eye and vision disorders.
32Think About Your EyesDirect to consumer messaging – importance of comprehensive eye examsTV, radio, online and social media communications2 year campaignFocused on nine cities – New York, Los Angeles, Chicago, Denver, Atlanta, Houston, Sacramento, Cincinnati, and PortlandTo date has generated more than million impressions.Educating the general consumer:In partnership with the Foundation for Eye Health Awareness, VSP Global and Luxottica GroupAdds encourage consumers to visit thinkaboutyoureyes.com to learn more about healthy vision and to schedule an eye exam using the eyecare professional locator tool.
33Think About Your Eyes Events New York – May 24-30, 2010Chicago – July 19-25, 2010
34Essilor Vision Foundation A public charity whose mission is to eliminate poor vision and its lifelong consequences starting with childrenProvides free eye exams and new prescription eyewear through in-school and partnership programs to children who cannot get them otherwiseEducates parents, teachers, caregivers, and community leaders to be aware of the implications of poor vision and watch for signs of vision problems in childrenEducates children on importance of vision care and proper care for eyewear
35Hot Off the Presses 62% higher “A Path to Wellness” – A white paper by KDD Health SolutionsAnalyzed 3 years of medical claims for a company of 10,000 employees & dependentsBut of all the messaging tactics we developed, we recognized that nothing would be more important in getting the attention of the CFO or the benefit manager than creating a correlation between the eye exam, the eye doctor and reduced healthcare costs…So in 2008, we began analyzing claims data from a large employer with 10,000 covered lives…we focused on the high risk population of individuals with diabetes and hypertension. Historically, these folks have extremely high utilization of healthcare resources…What we found was very interesting…those high risk individuals not having an eye exam cost 62% more than those high risk individuals who did have an eye exam…Now granted, this is correlation not causation. But the fact is that people getting an eye exam were less sick and spent less time in the hospital. This could be for several reasons: It could just be that those getting an eye exam take better care of themselves—or very likely, those getting an eye exam were referred for additional care—by their ECP—and got early interventional preventive care.We know one thing for sure. The eye exam is a marker for better health status.Our next steps include trying to prove “causation” but that will require at least 100K lives….62% higher
36Strategies For Sustainable Environment Assistance to Run Your Business thru:Managed Care Plan ExpertiseWebinar TrainingSo, We have been discussing one strategy to grow your business—the employer program…We also have a strategy to help you Run your business…This strategy includes extensive understanding of the various vision care plans and how to enhance profitability through our webinar training programs
37Run Your Business Practice Assessment Development to: Increase Capture Rate and TrafficReaching out to new customersInternet presenceRetaining current customersIncrease Practice ProfitabilityDispensing techniquesStaff training on plansPricing strategyFrame board optimizationReportTrend AnalysisSpecifically, we provide a practice assessment that will do the following…
38ConclusionManaged care will continue to be highly important to independent optometryHealthcare reform will keep things “exciting” for the foreseeable futureRecommendation: Find the right advisors to partner with during this turbulent time, and STICK WITH THEM.
39For more information please contact your Essilor Sales Rep or: Matt SwartzDistrict Sales Manager(480)For more information please contact your Essilor Sales Rep or:Ken Allmer(801)Terri Nesrsta(214)