Telemedicine is gaining ground, as more people get used to the idea of receiving health care via video or phone.

For employers, the main appeal of telemedicine is that it can reduce the time employees miss from work driving to and from appointments and sitting in doctors’ offices. But telemedicine consultations also can save money because they replace expensive emergency and urgent care visits. And, for employees in rural or remote areas, telemedicine enables employers to give them access to specialists and other care providers that might not be available to them in any other way.

However, legislative and legal hurdles exist that must be overcome before telemedicine can become commonplace.

For a recent article on the Society for Human Resource Management (SHRM) website, Dr. Allan Khoury, senior consultant at Towers Watson, explained these hurdles. Central among them is the problem of interstate licensure. Physicians currently must be licensed in each state where they practice and many states require that physicians be licensed in states where they provide telemedicine as well. This licensing issue would make telemedicine consultations impossible except when the physician and the patient are in the same state.

Another barrier is that some states require that an in-person visit precede telemedicine consultations. This defeats the purpose of telemedicine as a means to treat people who cannot get to a doctor’s office that would provide the care they need.

Telemedicine also raises questions about privacy and security law setting because of the sensitive nature of the personal health data generated, transmitted and stored.

Despite these issues, according Towers Watson research, 36% of employers already offer telemedicine as a part of health benefits; by 2017, that number could grow to two thirds.

As Dr. Khoury explains, “Telemedicine is a great triage service, has low costs and is an employee-pleaser.”

To read the complete article, click here.

The Department of Health and Human Services (HHS) announced in March that it will roll out a new accountable care organization (ACO) initiative called the Next Generation ACO Model, in January 2016. The new initiative improves on the existing Pioneer ACO Model and the Medicare Shared Savings Program by setting more predictable financial targets. This will give providers and beneficiaries to offer coordinated care and achieve the highest quality standards of care.

The goal of the new model is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries. A significant focus of the new model will be telehealth: participating organizations will be asked to provide access to both telehealth and home visits.

Medicare ACOs are comprised of groups of doctors, hospitals, and other health care providers and suppliers who come together voluntarily to provide coordinated, high-quality care at lower costs to their Original Medicare patients.
The Centers for Medicare and Medicaid Services (CMS) anticipates that 15 to 20 ACOs will participate in the new model. While it is unknown what kind of savings the new model will generate, savings from the Pioneer model could be a good indicator. In early May, it was revealed that the Pioneer ACO Model had generated approximately $384 million in Medicare savings in just two years. According to the CMS, the Next Generation ACO model could be a source of even more potential savings.

For other recent OneExchange posts on ACOs, see below:

Top Performing ACOs Save — and Share — Millions

New ACO Rule To Delay Penalties

Confident that onsite or near-site health centers improve the health and productivity of their employees, nearly four in 10 (38%) employers that already have one or more plan to add new centers in the next two years.

This is according to the Towers Watson 2015 Employer-Sponsored Health Care Centers Survey of 120 employers, the majority of whom have onsite or near-site health facilities with the remaining planning to.

Onsite health centers are one way employers seek to improve employees’ access to health services and reduce health care costs. They also have the potential to improve employee productivity, by reducing the time employees spend driving to doctors appointments and sitting in offsite waiting rooms.

Onsite centers provide variety of services, including immunizations, care for acute conditions like upper respiratory and urinary tract infections, and blood draws. Many offer wellness services (86%) and lifestyle coaching (63%) to make behavioral changes. Half offer some kind of pharmacy services as well.

Looking to the future, 66% of employers surveyed plan to expand or enhance the services they already offer by 2018. Changes ahead include increased telemedicine services, outsourcing to vendors, and calculating health center ROI.

To read the press release announcing the availability of the full survey report, click here.

The U.S. Food and Drug Administration (FDA) announced on March 6th that it has approved Zarxio, an immune system booster for patients receiving chemotherapy that has the distinction of being the first “biosimilar” to be approved for use in the United States.

What exactly is a “biosimilar,” and why is this development important to employers? Biosimilar drugs mimic biologic drugs, which are derived from living organisms such as humans, animals, microorganisms or yeast – but they do it at a lower cost.

By way of analogy, think of the difference between a name brand drug and a generic. Name brand drugs are invented first and when they lose their patents, generics follow, usually at lower prices. Examples of name brand drugs that now have generics include Lipitor, a cholesterol fighter, and Nexium, used to treat acid reflux. While there may be minor differences in how the name brand and generic are made, the FDA requires that they have the “same active ingredient, strength, dosage form, and route of administration as the brand name product.”

A biologic and a biosimilar have roughly the same relationship, although a generic is basically a copy of a brand name drug whereas, according to the FDA, a biosimilar drug “is highly similar to an FDA-approved biological product… and has no clinically meaningful differences in terms of safety and effectiveness…”

It’s much more difficult to replicate a biologic drug than a traditional name brand medication, however. A recent Kaiser Health News article uses the analogy of trying to recreate a favorite cocktail (the generic drug) versus trying to recreate a favorite glass of wine (the biosimilar). The latter process is much more nuanced and complicated.

That is one reason why the approval of Zarxio, which is a biosimilar for Neupogen, is so significant. Another is that biosimilars, like generics, are likely to be less expensive than their biologic counterparts. Neupogen, for example, can cost more than $3,500 per year.

Pricing for Zarxio will not be announced until the drug comes to market, which hinges on the outcome of a lawsuit filed against its manufacturer, Sandoz, in a federal appeals court by Amgen, the maker of Neupogen. Zarxio is currently sold in 40 countries, but its sale in the United States is blocked at least until oral arguments are heard in the case, which are scheduled for June 3rd. Resolution could take longer.

Regardless of the outcome of this lawsuit, biosimilars are expected to have a huge impact on U.S. employers, the pharmacy benefit managers that advise them on how to manage the increasingly high cost of prescription drugs, and American consumers who now use expensive name brand biologics. Global biosimilar sales are projected to hit $17 billion to $20 billion per year by 2020. A RAND Corporation analysis estimates that introducing competing biosimilar drugs for illnesses such as cancer and rheumatoid arthritis could reduce spending on biologics in the United States by $44 billion over the next decade.

With numerous biosimilars in the pipeline awaiting FDA approval, it’s likely that we’ll soon see a number of these lower-cost drugs on the market – to the benefit of both employers who sponsor prescription drug benefits and the people who use them.

Precision medicine made it onto the public’s radar on January 20th of this year when President Obama announced during his State of the Union address that he intended to make it a priority in the coming year. Ten days later, he formally unveiled the “Precision Medicine Initiative,” putting $215 million in federal funding towards a variety of strategies intended to get away from what the Administration calls a “one size fits all” style of medicine.

The National Academy of Sciences defines “precision medicine” as “the use of genomic, epigenomic, exposure, and other data to define individual patterns of disease, potentially leading to better individual treatment.” Also known as personalized medicine, precision medicine now is used primarily for the treatment of cancer.

While cancer treatments have long varied based on the type of cancer a person has – breast, lung, colon and so on – precision medicine enables physicians to take into consideration the molecular and genetic makeup of an individual patient’s tumor. This has spawned new medications such as Herceptin trastuzumab (Herceptin) for breast cancer. Having this information also can make a profound difference in treatment decisions physicians make.

Emily Whitehead, who is featured on the website, is a great example of an individual who has benefited from precision medicine. Emily was diagnosed with leukemia at age 6, yet was declared cancer-free just 28 days later. Her treatment included a procedure in which Emily’s own white blood cells, which play a key role in immunity, were collected from her blood and altered to recognize a protein found only on the surface of leukemia cells. The cells were then infused back into Emily’s blood, where they circulated throughout her body finding and destroying her leukemia. Science magazine declared this procedure a 2013 Breakthrough of the Year.

In the future, precision medicine also will be used to treat other types of illnesses, not just cancer. In fact, any condition that has a genetic or hereditary component – including mental illnesses – could benefit from this approach.

Some experts suggest that the buzz around precision medicine is getting ahead of the science, but that remains to be seen.

Precision medicine may be the medicine of the future, but not necessarily the distant future.

Towers Watson announced today that it has acquired Acclaris, a provider of software-as-a-service (SaaS)-based technology and services for consumer-driven health plan and reimbursement accounts, including health savings accounts (HSAs), health reimbursement arrangements (HRAs) and other consumer-directed accounts.

The acquisition enhances our position as a leading benefits administrator and private benefit exchange provider. By 2017, Towers Watson research shows that approximately 50% of employers could offer account-based health plans (ABHPs) as their only option – with about 20% already doing so in 2015.

Acclaris’s scalable platform offers integrated technology and services to support account-based benefits. As of March 2015, Acclaris supports 1.4 million accounts across all account-based benefit types and works with 6,000 employers, including more than 40 Fortune 500 companies.

Jim Foreman, managing director of Towers Watson’s Exchange Solutions unit had this to say:

Going forward, Towers Watson and Acclaris will enable clients of any size to offer health benefits in new and cost-effective ways. Acclaris stands out from the competition for its operational efficiency, and its scalable and configurable SaaS-based technology and service delivery.

We believe this combination will allow us to offer the end-to-end process for both traditional benefits administration and private benefit exchange solutions, and to deliver a seamless experience for our employer-clients, an exceptional experience for consumers and high-quality customer support for both.”

Read the full announcement of the Acclaris acquisition here.

Towers Watson is very proud to be named by the International Association of Outsourcing Professionals® as Leader on the 2015 Global Outsourcing 100® list again in 2015 – the fifth year in a row.

Towers Watson is a global outsourcing leader

These results from our employer clients and their employees support the strength of the program

In 2014, Towers Watson jumped 50 places to earn a 21st-place ranking on the list of 100. This year, to reflect a new emphasis on innovation and social responsibility, rather than a numbered rank, companies are being judged across four categories.

Under the new system, Towers Watson was also named one of the Best Leaders in Revenue Growth, one of the Best Leaders in Employee Growth. Towers Watson also earned a distinguished star rating for programs for innovation.

These results from our employer clients and their employees support the strength of the program:

  • Our outsourcing services have a 99% annual client retention rate.
  • 9 out of 10 clients extend their engagement with us beyond the initial contract.
  • 98% of the individuals served are satisfied with our customer service.

Key factors in our recognition include:

  • OneExchange, Towers Watson’s industry-leading private exchange, which serves all workforce populations
  • A newly redesigned employee experience in our benefits administration system, which makes it easier for people to select and evaluate benefits when enrolling as well as access their data on demand.

Tony DeNucci, managing director, Benefits Administration Outsourcing, for Towers Watson had this to say of the recognition: “Towers Watson is honored to be recognized for innovation and growth. We are proud to serve the employees, retirees and family members of the world’s finest companies, providing them with innovative benefit solutions, accurate benefits administration and an exceptional customer experience.”

Download a copy of Towers Watson’s global outsourcing services infographic here.

Read the full announcement here.

The Congressional Budget Office (CBO) recently released updated estimates indicating that 7 million fewer people will have employer-sponsored insurance in coming years. Some Patient Protection and Affordable Care Act (PPACA) critics responded by speculating that the employer mandate to provide health coverage to full-time employees (those working more than 30 hours a week) will cause more employers to “do the math” and decide it’s less expensive to pay the penalty than to pay for the coverage.

John Barkett, Director of Health Policy Affairs for Exchange Solutions at Towers Watson, weighed in on the topic, noting that the flaw in the argument is that it assumes employers make decisions about employee benefits based strictly on cost. Said Barkett in a recent article he wrote for The Institute for Healthcare Consumerism (IHC), “This is simply not true.”

Barkett also pointed out that the trend of fewer people receiving health insurance from their employers is not “new” since the ACA. A 2013 study from the Robert Wood Johnson Foundation reported on declining scope of employer-sponsored health benefits over the past decade – prior to the passage of the health care reform law.

For Barkett’s complete analysis, read his article in the IHC.

On The Public Exchanges

April 22, 2015

A look back at open enrollment, and a look forward at the individual mandate

Given the rocky rollout of the federally managed and state-run health insurance exchanges in their first year, it’s safe to say that both advocates and critics held their collective breath as the second open enrollment period began on October 1, 2014.

Overall, second year enrollments went much more smoothly than the first. Some states did have glitches, but by and large technology was not the issue.

The individual mandate and its associated tax penalty was, however. Specifically, exchanges became concerned that not enough people were aware of the tax implications of not having purchased health care coverage for the plan year 2015.

The penalty, also called the “Shared Responsibility Payment,” is either 1% of annual income or $95 for the 2014 plan year (whichever is higher). In 2015, it goes up to 2% of yearly income or $325.

So, on February 20, 2015 the Centers for Medicare and Medicaid Services (CMS) announced a “special enrollment period” for those enrolling on the federally managed exchange, which covers 35 states and the District of Columbia. It will end on April 30th.

To be eligible, individuals would have to “attest that they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment [February 15, 2015] in connection with preparing their 2014 taxes.”

After the CMS announcement, six of the state-run exchanges followed suit with special enrollment periods of their own. Just three states — Colorado, Idaho and Massachusetts — did not enact special enrollment periods.

Arguably, the most anticipated number at the end of this enrollment period will not be the final enrollment count, but rather the number of individuals who get hit with the penalty. Unlike final enrollment numbers — for which hopes are high — hopes for the tax penalty is that numbers are low.

So otherwise, how did public exchanges fare?

Amidst all the turmoil of shifting deadlines and the looming threat of tax penalties, public exchanges actually performed pretty well during the original enrollment period — although some did better than others.

As of this writing, Maryland doubled its enrollment compared to the last open enrollment period and California was on track to reach its goal of enrolling 500,000 people. Some states’ enrollment periods were uneventful, with a steady tick upward of enrollment numbers to levels that, while not staggering, surpassed the first open enrollment period. For states that implemented special enrollment periods, enrollment figures will continue to climb.

Some exchanges were plagued by issues beyond enrollment — including financial and technical issues, as well as staff turnover. Iowa saw one of its health insurance options, a co-op called CoOpportunity Health, fail due to having an insurer pool that was larger and sicker than anticipated, resulting in more risk than it could afford to bear. Colorado and Minnesota both experienced financial shortfalls and received $322,000 and $34 million respectively to fix their online enrollment portals. Executive directors of some state-run exchanges, including Massachusetts and Vermont, resigned and were replaced.

Despite these difficulties, the overall outcome on the public exchanges has been mostly positive this year. According to a recent Gallup poll, another 3.6 million adults have been added to the rolls of the insured during the latest enrollment period – which means that nearly 9 in 10 Americans now have insurance.

Joe Murad, Managing Director with Ex

For highlights of my perspectives in articles and other forums, see me on Twitter at #TWJoeMurad

This post is part of our Exchange Innovator Series featuring leading private exchange, health care reform and Medicare experts from Towers Watson.

I’m Joe Murad, managing director with Exchange Solutions for Towers Watson. I oversee our individual exchange solutions that serve Medicare-eligible and pre-65 retirees, part-time employees and their families.

Every day, my goal is to figure out how we can leverage our position as a technology leader to connect employers and the consumers they represent with better value while selecting health insurance. Our mission is to create cost savings for our employer-clients and provide our individual consumers with improved choice and control over their health benefits.

My health insurance roots

I grew up in Silicon Valley, surrounded by technology, innovation and disruptive market forces. Of the four start-ups I’m fortunate to have been a part of – my last two have been in the health insurance space – but I got my start in the world of relational databases.

It’s very typical of Valley ventures that innovation comes from outside an industry – from those who are not entrenched in industry thinking. Given my tech and my health insurance experience, I’m now one of the few people in our industry who has brought technological advancements to health care twice.

Joe Murad, Managing Director with Exchange Solutions

Skiing with the kids in North Lake Tahoe

I helped found the nation’s first private Medicare exchange start-up a decade ago. Today I continue to apply that expertise to help employers leverage opportunities in the individual market made possible by health care reform.

It was true then and remains true today that health insurance – the largest sector of the nation’s largest industry (health care) – is burdened by inefficiencies, making it ripe for innovation and change.

The evolution of private exchanges

Private exchanges emerged as a result of three factors coming together at just the right time. The first was the idea of managed competition in health care, pioneered by Alain Enthoven in the 1970s. We were very fortunate to work closely with Alain early on as we were designing our private Medicare exchange.

The second factor was health care reform – which took the form of the Medicare Modernization Act in 2003 and now the Patient Protection and Affordable Care Act (PPACA, aka the ACA) of 2010 – both of which created a viable individual market for health insurance, first in the Medicare world and now in the pre-65 world.

Joe Murad, Managing Director with Exchange Solutions

On the beach

The third factor is powerful platforms for consumer technology, which emerged in other industries – think of Amazon and Travelocity – and which we applied to health insurance.

Today my focus is on helping employers provide quality health benefits at a lower cost and to empower consumers with more choice and control over their health benefits. I also believe that over time our exchange model will drive more consumerism in health care – which will lead to a more efficient and effective health care industry.

Where I see health insurance going

On the Medicare exchange side, the market has hit its stride in the private sector. Two years ago when IBM announced moving to OneExchange for its retirees, the whole nation sat up and took notice of the exchange concept. It was no longer seen as a nascent technology play – it’s now understood as a practicable strategy that crosses all industries and company sizes. We are also seeing strong uptake in the traditionally conservative public sector.

As we move forward, the next logical frontier is how to make health insurance more reflective of the voluntary insurance and employment markets, which have become more personalized and portable in recent years.

If you think about all the other insurance coverage people have access to – auto, home, life – and combine that with the leading retirement savings programs – 401ks and IRAs – these are portable, individual plans and accounts that aren’t tied to where someone works. Why should health insurance be any different?

In the past, because employers were the purchasers of health insurance, they made all the decisions. With exchange technology enabling employers to offer retirees and employees more choice and control of their own health coverage decisions, it raises the question: Why can’t employees take the coverage they’ve chose for themselves when they move to another job? The law isn’t there yet but the consumer mindset is. If health reform catches up to that thinking, we will be there to provide the business model and technical solutions to enable it.


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