Roughly 7 out of 10 Americans own smartphones, a fact that’s changing the way employees and others use their health benefits.  In 2015, Pew Research Center found that more than half of smartphone owners have used their phone to get health information and do online banking.

That’s just the beginning.

There are more than 40,000 health-related software apps for smartphones and tablets, according to Harvard Health, with thousands more under development. Here’s a look at five trends with the potential to transform healthcare through this ubiquitous technology.

Trend #1: Improved access with do-it-yourself medicine.

Patients are taking “center stage” in their health for the first time with the help of digital technology, cloud computing and medicalized smartphones, according to The Wall Street Journal. Patients can use smart phones to take their blood pressure, do an electrocardiogram, check children for ear infections and even test their own blood.

While hospitals, medical offices and laboratories aren’t going to become obsolete, smartphones are changing the interaction by making patients less dependent on the slow-moving wheels of traditional medicine.

Trend #2: Early intervention to catch small problems before they become health crises.

Preventive care is important because of its ability to screen for potential health issues so patients can be treated in the early stages of disease – for better health outcomes and lower costs.

Some new smartphone apps go beyond prevention to pre-empt illnesses. For example, asthma attacks could be prevented with comprehensive data on air quality, pollen count, physical activity and vital signs including lung function, which can be checked through a smartphone microphone. Similar technology could save lives (and money) by preventing heart failure, seizures, and autoimmune disease attacks.

Beyond physical health, Soma Analytics is developing a smartphone app to monitor mental health by identifying behavioral changes like subtle shifts in the tone of voice, the ability to absorb information and sleep quality.

Trend #3: Leveraging telemedicine to control chronic conditions.

With 86 percent of healthcare spending devoted to patients with one or more chronic conditions, there is a significant push to help patients keep their conditions under control.

Telemedicine is making an impact by allowing doctors and nurses to use smartphones, high-resolution cameras and computers to diagnose, treat and monitor patients with conditions like heart failure, stroke, diabetes and more. Studies show significant cost reductions and improved health.

Last year, more than 15 million Americans benefitted from virtual medical care, according to the American Telemedicine Association. Experts expect this number to increase 30 percent in 2016 as nearly three of four large companies offer telemedicine as part of their employee benefit plan.

Trend #4: Engaging patients with anytime, anywhere access.

Everywhere you look, people are staring at their smartphones. So it’s logical that smartphone apps can help people become more engaged in their health.

Insurance companies are taking note. For example, the United HealthCare Health4Me app not only provides a mobile ID card, it also lets members view claims, search for in-network doctors and compare prices for medical tests and services.

More opportunities are on the horizon: More than half of health care app developers say they’re working on apps to help people improve health conditions.

Trend #5: Encouraging day-in and day-out wellness.

There are more than 165,000 health apps available though the Apple iTunes and Android app stores, with roughly 75 percent of them devoted to wellness or fitness.

Employers are getting on the bandwagon, using mobile apps to keep employees informed, inspired, and engaged in workplace wellness.

This is the perfect time for employers to promote wellness and fitness apps to employees: Encourage employees use smartphone apps to take control of holiday eating. And then, once January arrives, promote apps that motivate employees to keep their New Year’s resolutions.

Woody Allen famously quipped that 80 percent of success is showing up. But most employers would disagree. Not only must employees show up, they need to be fully engaged in their work to contribute to their company’s success.

Unfortunately, that’s not always the case.

Researchers say that presenteeism – being on the job but not fully functioning – is a costlier problem than employee absenteeism. In fact, it may cost U.S. businesses 10 times more than absenteeism, perhaps as much as $1,500 billion per year, according to a GCC Insights Report by Global Corporate Challenge. Similarly, the Towers Watson 2014 Global Benefits Attitudes Survey found that employees worldwide lose almost 11 days of productivity each year.

Clearly, reducing presenteeism can provide savvy employers with a competitive advantage.

It’s important to note that presenteeism can be triggered by a number of underlying health issues that aren’t serious enough to keep an employee at home, but zap energy levels and the ability to concentrate. By encouraging employees to utilize their health benefits, employers can tackle many of the root causes. Here’s how:

  1. Flu shots. Most health plans provide annual flu vaccinations at no cost to the employee or other beneficiaries. If employees can avoid influenza, they won’t come to work coughing, sneezing and feeling miserable. And they won’t exacerbate the issue by spreading germs through the workplace.
  2. Annual checkups. A no-cost annual checkup can motivate employees to take charge of their health. If stress, sleepless nights or stomach issues are problematic, they can get to the root of the problem and develop solutions.
  3. Prescription coverage. Allergies, asthma, migraines and other headaches, back pain, arthritis and gastrointestinal issues like irritable bowel syndrome (IBS) or gastroesophageal reflux disease (GERD) top the list of presenteeism causes. Often, pharmaceutical solutions can help relieve the symptoms. Be sure employees understand their plan, including step therapy programs, as they seek the most effective treatments.
  4. Chronic condition management. Obesity, heart disease, arthritis, type 2 diabetes and other chronic conditions affect about half of adults, and they’re clearly linked to productivity ups-and-downs. For example, Type 2 diabetes may account for nearly 20 percent of presenteeism in the workplace. Most health plans include disease management programs to help employees control their symptoms and feel their best.
  5. Mental health coverage. Nearly 7 of 100 adults fight depression and 18 of 100 adults have anxiety disorders, both of which can affect on-the-job productivity. Employers would be wise to publicize resources available through their health plan.
  6. Wellness emphasis. There’s a direct link between effective wellness programs and reduced presenteeism, according to “What’s the hard return on employee wellness programs?” published in Harvard Business Review. Wellness programs not only address health risks, they can also help employees deal productively with stress, which can be a major on-the-job distraction.

The right corporate culture is key in the battle against presenteeism. Suggestions include ensuring that sick employees aren’t penalized for taking time off and providing flexible work environments that allow telecommuting when health is compromised. In addition, training managers to recognize signals that indicate high levels of stress or mental health issues equips them to support employees appropriately and reduce the stigma of seeking help.

Imagine a doctor’s office so efficient that the waiting room is empty. Imagine treatment time (and costs) being slashed. Imagine healthier, more productive employees.

In healthcare, this is dubbed the Triple Aim. It’s an approach that focuses on improving the patient experience, reducing costs and improving population health. This framework was developed by the Institute for Healthcare Improvement, whose former leader, Donald Berwick, MD, famously noted that 20 – 30 percent of health spending is “waste” with no benefit for patients because of overtreatment, failure to coordinate care, administrative complexity and fraud.

Although many outside of the industry are not familiar with the Triwwple Aim, it’s making a significant impact on the way healthcare is delivered:

  • A common lexicon. The Triple Aim has been adopted by hospitals and health systems as a framework for implementing major improvements.
  • Lean practices. Healthcare providers are using a version of the Toyota Production System to implement “lean” processes by eliminating activities that don’t add value or cause delays in patient care.
  • Triple Aim concepts have been embraced by the Centers for Medicare and Medicaid Services Innovation Center, which is using $10 billion in funding from Congress to fix what’s broken in healthcare with demonstrations and pilot programs.
  • Standard practices. Evidence-based medicine is becoming more prominent in healthcare, with standardization of treatment based on clinical research.

Employers becoming more engaged

Historically, employers have had little ability to influence how healthcare is delivered. That’s changing as companies like Coca Cola, IBM and American Express use their purchasing power and expertise in supply chain management to improve quality, remove waste and reduce costs. Formed in early 2016, the Health Transformation Alliance is a coalition of 20-plus employers (with 4 million covered lives) that aims to drive meaningful change by engaging local health systems.

It’s been proven to work. According to Harvard Business Review, an Intel-led effort in Portland, Oregon, chose uncomplicated, lower-back pain as one of its initial priorities in conjunction with a local healthcare system. Recognizing that most of these patients have good outcomes with physical therapy, back-pain patients were screened, and then quickly began physical therapy treatment. The result: Most showed improvement in about three weeks. In contrast, the traditional approach includes treatment delays, hi-tech imaging, specialist visits and then physical therapy, a process that typically takes nearly two months with added worry for the patient, added expense and identical outcomes.

The Intel-led project measured success with the following questions:

  • Did patients receive evidence-based care for treatment?
  • Were patients satisfied?
  • Did patients have same-day access to care?
  • Was there a rapid return to function?
  • Was the care affordable and were savings achieved?

This kind of transformation might occur on a larger scale as more employers get involved.

“Employers are the ‘sleeping giant’ in healthcare …,” said Health Transformation Alliance Vice Chairman Glenn Steele, MD, the former CEO of Geisinger Health System. “If they act together, they can successfully deliver higher quality results at better costs for employees.”

It’s the time of year when the cost of health care – and the cost of health insurance – is a hot topic of conversation. Many of America’s 170 million workers will see cost increases in their open enrollment packets this fall, and those shopping on their states’ health insurance marketplace may be in for “sticker shock.”

The Patient Protection and Affordable Care Act is commonly called the Affordable Care Act (ACA). But that may be a misnomer. Even Mark Dayton, Minnesota’s liberal, Obamacare-supporting governor, recently said the law is “no longer affordable.”

Consider these facts to draw your own conclusion:

  1. More people have coverage. Today 20 million people have health insurance who didn’t have it before. Also, health insurers cannot deny coverage to individuals based on pre-existing conditions, like asthma or diabetes. And women cannot be charged extra based on gender.
  2. Health care costs keep rising. The cost of care for a typical American family of four has tripled since 2001, according to the Milliman Medical Index, although the rate of increase has slowed this year to 4.7 percent. Mercer also reports that employees’ health benefit costs (after employers make benefit changes) will grow 4 percent in 2017, which is well above inflation but not as high as previous years. For those on shopping on the exchange, price jumps are more extreme with a weighted average increase of 9 percent for the lowest cost silver plans, and rate increases of 30 percent or more for plans in some states.
  3. Innovations are underway. Health reform has been a catalyst for a significant amount of activity to change the fundamentals of health care delivery, from storefront health clinics to quality initiatives, accountable care organizations, bundled payments and more. So far there hasn’t been as much financial impact as hoped, but these may be steps in the right direction.
  4. Medicare’s donut hole is shrinking. Medicare Part D has a coverage gap, often called the donut hole, which requires beneficiaries to pay for drugs after reaching their plan’s initial coverage limit. For 2016, the gap begins at $3,310 and ends when beneficiaries spend a total of $4,850. Health care reform promises to shrink the donut hole year-by-year and close it in 2020.
  5. Out-of-pocket costs keep growing. Less generous insurance coverage over the past decade has increased typical employees’ out-of-pocket costs by 77 percent, according to the Kaiser Family Foundation. Among marketplace enrollees, 25 percent reported that their coverage was unaffordable when premiums, deductibles and out-of-pocket costs were considered.
  6. People still have unmanageable medical expenses. A Kaiser/New York Times survey found that one in five working-age Americans with health insurance reported problems paying their medical bills.
  7. Premium limits exist. The Affordable Care Act (ACA) restricts how insurers can vary premiums with a limit of a ratio of three to one. In other words, the premium for a 64 year-old is three times the premium for a 21 year-old. In the past, premium variations based on age were typically about five to one.
  8. Prescription costs are through-the-roof. According to Business Insider, we just experienced the largest rise prescription costs in 24 years, and nearly 8 out of 10 Americans say that prescription costs are unreasonable, according to a recent Kaiser Family Foundation poll.
  9. Preventive care is “free.” The ACA requires most health plans to provide a variety of preventive health services, like colonoscopy screening, well-child visits, flu shots, and more, without cost-sharing by enrollees. In theory, this should catch small problems before they become worse create a healthier population.

The future of the health reform is uncertain as we approach the November election, but it’s a safe bet that the topic will continue to receive a lot of attention in the upcoming year.

Healthcare exchanges: Incredible shrinking options and what it means

Employer-sponsored health plans cover more than half of the non-elderly population of the U.S. according to the Kaiser Family Foundation, but millions of Americans will be shopping individually for 2017 coverage when open enrollment begins on November 1.

Many of these shoppers will be disappointed with their lack of choices as insurers are fleeing the public exchange market. For example, Aetna will be in four states instead of 15, UnitedHealth will be in three states instead of 34, and Humana has cut plans by 88 percent.

In fact, as of early October, there are five states with only one company offering health insurance through their Affordable Care Act (ACA) exchanges, according to Business Insider. They include South Carolina, Alabama, Alaska, Oklahoma and Wyoming. And they could be joined by others.

Large losses by major insurers account for the lack of choice: When Aetna dropped approximately 80 percent of exchange policies, the company linked the decision to a loss of $20 million in pretax dollars in the second quarter on its exchange plans. This is a common theme. Many insurance companies have struggled with enrollees who were sicker and older than expected, coupled with a dearth of young and healthy enrollees who could hypothetically offset the losses.

According to one estimate, exchange plans lost an average of $1,000 per enrollee.

Here’s what to expect in the weeks and months ahead:

  • More talk about a public option. The need for health coverage and the lack of choice is adding fuel to the fire on this topic.
  • Increased premiums. The complete numbers are not in yet, but the Kaiser Family Foundation reports that the cost of the second-lowest silver plan in major population areas will increase by a weighted average of 9% in 2017. (There’s a lot of premium variation across markets – from a 13 percent drop in some to a 25 percent increase in others.)
  • A brighter spotlight on subsidies. More than 85 percent of those buying coverage on the exchange are eligible for financial assistance, but another 2.5 million who shop outside the exchange are “leaving money on the table” according to a recent report from the Department of Health & Human Services.
  • Possible penalty forgiveness. A new bill was introduced in September 2017 that would exempt people from penalties if they live in a county with one or no options for coverage. If it passes, this bill could impact nearly one-third of U.S. counties in 2017.
  • Greater awareness of private exchanges. For businesses, private health insurance exchanges continue to grow, although not as quickly as forecasted. In 2016, approximately 8 million people were enrolled through private changes, according to Forbes. Recent growth has come primarily from mid-size companies with 100 to 2,500 employees, although some large employers including Walgreens and Sears have jumped on the bandwagon.

How do ACA exchange premiums compare with employer plans? A report released this fall by the Urban Institute claims that premiums in health insurance exchanges are lower than comparable premiums for employer-sponsored plans.

“We find that nationally, nongroup marketplace premiums are 10 percent lower than the average employee-sponsored insurance premium, after the adjustments …(with) more than ¾ of states and more than 80 percent of metropolitan areas having lower marketplace than employer premiums,” according to the report.

The devil is in the details. Critics say the report compares premiums for the second-lowest-cost silver plans to premiums for the more comprehensive, employer-sponsored insurance.

Diabetes: Four steps to protect employers’ bottom line

One of the biggest health challenges facing employers today is diabetes. It’s a problem that’s destined to get more expensive as an increasing number of U.S. employees develop the chronic condition.

Diabetes is a significant drain on the nation’s businesses: The total cost of diabetes was $245 billion in 2012, which is the last time figures were published by the American Diabetes Association. This included $176 billion in direct medical costs and $69 billion in reduced productivity.

Another costly impact of diabetes is presenteeism, in which an employee shows up for work but is less productive due to an illness or a lack of motivation. According to National Medical Systems, Type 2 diabetes accounts for nearly 20 percent of presenteeism in the workplace.

At the individual level, those with diagnosed diabetes incur medical expenses of about $13,700 per year, which is 2.3 times higher than expenditures would be without diabetes. The disease is the 7th leading cause of death in the U.S., affecting 7.6 percent of non-Hispanic whites, 12.8 percent of Hispanics, and 13.2 percent of non-Hispanic blacks.

In practical terms, a typical company with 1,000 employees has 20 employees with known diabetes, four employees who have it but haven’t been diagnosed, and another 70 employees with prediabetes.

According to an article published by the Society for Human Resources Management (SHRM), ineffective diabetes management programs frustrate employers who recognize the problem but haven’t seen effective solutions.

What to do? Employers can minimize diabetes’ impact on their businesses by prioritizing treatment and prevention. Here’s how:

  1. Choose the right health plan. Not only should employers’ benefit plans help with supplies like test strips, meters and insulin, they should also utilize case managers who can help members prevent, or treat, complications. Ask potential carriers for comprehensive data and results before choosing a plan.
  1. Engage employees. Give employees a tangible reason to manage disease with a consumer-engaged health plan that rewards them for monitoring their A1c levels and addressing risk factors like obesity, inactivity, blood pressure and cholesterol. These plans motivate compliance with the “carrot” of saving money on premiums and out-of-pocket costs.
  1. Rethink primary care. Leverage the growing emphasis on patient-centered medical homes, which use a team-based approach to provide continuous, comprehensive medical care to maximize patients’ health. Innovative employers, like BMW, are even developing onsite primary care facilities at their workplace to make it easier for employees to monitor their health and control chronic diseases. 
  1. Test. Act. Perhaps the biggest opportunity to control costs is by helping those with prediabetes understand their risks and avoid developing diabetes. Today, 9 in 10 people with prediabetes don’t know they have it. The American Diabetes Association and the Centers for Disease Control and Prevention (CDC) have joined forces to encourage employers implement a diabetes prevention program. Their helpful website includes a savings calculator for tallying the potential impact of the program.

Focusing on diabetes management and prevention means healthier employees, better productivity and lower medical costs, which all adds up to an improved bottom line.

What’s next in women’s preventive coverage?

Since August 2012, roughly 55 million American women have been eligible for no-cost coverage for preventive health care including mammograms, screenings for cervical cancer, prenatal care and contraceptive methods.

The contraceptive mandate of the Affordable Care Act has saved birth-control users $1.4 billion according to the Huffington Post. And it’s helped to prevent unintended pregnancies, which costs American taxpayers $21 billion a year, based on a report in the Washington Post.

This issue has been controversial from the start, as exemplified by the Hobby Lobby lawsuit, and the controversy is likely to continue into the future as the topic makes headlines again.

Expect changes

There’s a process underway – the Women’s Preventive Services Initiative (WPSI) – to update the services provided under the Women’s Health Amendment. A panel led by the American College of Obstetricians and Gynecologists released draft updates on September 1, with a public comment period underway throughout the month.

The following changes have been recommended:

  • Formalize federal guidance. There’s been a significant amount of guidance and clarification offered over the past few years, which could be formalized through this process. Examples include details like device removal, follow-up care and services including anesthesia and ultrasounds when used for certain birth control methods.
  • Cover over-the-counter methods. Currently only prescribed contraceptive methods are covered by insurance, so women pay out-of-pocket for over-the-counter contraceptive supplies like emergency contraception, female condoms and spermicides. This shift will be especially important if oral contraceptive products are approved for over-the-counter sales, which is already a reality in Oregon and California.
  • Cover a full-year supply of contraceptives at one time. Research shows that many women can’t (or don’t) obtain monthly refills in a timely manner. Experts say providing an entire year’s supply is cost-effective and improves adherence.
  • Correct the “double standard.” Today 18 contraceptive methods used by women are covered, but no-cost coverage is not available for vasectomies and male condoms. This may change. Already, Illinois, Maryland and Vermont have enacted laws to cover vasectomies without patient cost-sharing.

The panel is also accepting new recommendations, and experts are weighing in with their opinions. After the draft recommendation is removed from the public comment page, WPSI will consider comments and finalize the document.

It’s political

November’s election is sure to lead to additional changes depending on who wins the presidency and which party controls Congress.

Recently Republican nominee Donald Trump caused a stir during his appearance on “The Dr. Oz Show” by stating that birth control should be available to women without a prescription. Although the statement was intended to gain favor with women voters, there was a quick backlash. Women’s advocates note that this switch would raise out-of-pocket costs because insurance doesn’t cover over-the-counter products.

Democratic Party nominee Hillary Clinton has been a long-time advocate of women’s birth control, and has generally garnered more confidence among those who support the Affordable Care Act and want to see it continue.

Although change occurs slowly in Washington D.C., payers and employers can expect shifts in the Women’s Health Amendment in the year ahead.

Mental health matters: Three reasons behavioral health should be on your radar

Thanks to the Mental Health Parity and Addiction Equity Act, which was passed in 2008, all employer benefit plans include behavioral health coverage. And it’s included on all plans offered on the health care marketplace.

But the discussion about behavioral health coverage is far from over.

You can expect to hear a lot more about it in the months and years ahead, with a growing emphasis on access to care. Here’s why:


Reason #1: It’s linked to population health.

The current emphasis on population health has health care providers looking for ways to achieve better patient outcomes and rein in costs. It turns out that behavioral health may be a key factor.

Why? Behavioral health patients have higher-than-average rates of ER visits, hospitalizations and readmissions, according to a recent article in Health Leaders Media.

Better coordination between hospitals and community-based care could make a difference. That’s why smart health care organizations and employers groups are emphasizing behavioral health more than in the past.

What’s next? The U.S. Preventive Services Task Force has recommended that primary care providers screen patients for mental health concerns like sleep patterns, depression and anxiety in the same way they screen for high blood pressure and chronic disease symptoms.


Reason #2: The numbers support it.

Shocking events like Robin Williams’ apparent suicide and school shootings are raising awareness of behavioral health nationally, and raising questions about the personal and financial impact.

Nearly 20 percent of U.S. adults have some form of mental disorder, and nearly nine percent have a substance abuse disorder, according to a Substance Abuse and Mental Health Services Administration survey. Of course, there’s also a lot of overlap, with individuals having both a mental illness and substance abuse issues.

And the World Health Organization has predicted that depression could become the second leading cause of death and disability by 2020. (It’s currently fourth).

The financial impact is startling: A Harvard Health newsletter reported that the indirect costs of mental health disorders — particularly lost productivity — exceed companies’ spending on direct costs, such as health insurance contributions and pharmacy expenses.

Case in point: An estimated $22.8 billion was spent on depression treatment in 2009, and lost productivity cost an additional estimated $23 billion in 2011, according to an independent body appointed by the Department of Health and Human Services.


Reason #3: Politicians are getting involved.

There’s bipartisan support for behavioral health care improvement in Washington D.C. In September, the Helping Families in Mental Health Crisis Act was passed in the House of Representatives by an overwhelming vote of 422-2. It’s headed to the Senate next.

The bill was designed to increase mental health support for the more than 11 million Americans with severe schizophrenia, bipolar disorder and major depression. This would include providing psychiatric bed space so people can receive evidence-based care and appointing a federal assistant secretary to oversee mental health issues, which could lead to better coordination and funding.

On the campaign trail, presidential candidate Hillary Clinton has pledged to hold a White House conference on mental health during her first year in office if she’s elected. Her goal is to fully integrate mental health services into the nation’s health-care system.


What does all of this mean for employers? Hopefully it’s a step in the right direction. Studies cited by Harvard suggest that money spent on mental health care may represent an investment that will pay off in healthier employees and improved financial results.

The individual mandate: Can it survive the election?

A major goal of the Affordable Care Act is to lower the uninsured rate by expanding coverage options and reducing costs. Both the employer mandate and the individual mandate are intended to ensure that carriers have enough healthy members to offset the cost of older, sicker people in their plans.

Both mandates are enforced with a play-or-pay approach. While employers are balking at the paperwork, they’re generally playing along, although the true test will come in 2020 when the excise tax goes into effect.

But individuals are a different story. Many say that paying the penalty of $695 per adult or 2.5% of household income is more affordable than purchasing coverage. In particular, young, healthy adults are spurning coverage altogether, according to Forbes. And last fall, the Kaiser Family Foundation reported that half of the uninsured who were eligible for subsidized coverage refused to purchase it.

The result? Both large and small insurers are losing money on certain exchange plans at an unsustainable rate. And they’re taking the logical step of withdrawing from counties where their losses are the significant, or they’re limiting their offerings to plans that are financially sustainable.

So what’s next?

With an election just around the corner, all things health care — including the individual mandate — are up for debate and options are being explored.

If Hillary Clinton becomes president, expect the mandate to continue in some form. Given her history of support for health reform, she could even find new ways to work with Republicans to fix the most broken parts of the bill, according to Bloomberg News.

Presidential candidate Donald Trump has been very clear on his stance. If he keeps his pledge, the mandate will go the way of the dinosaur because his administration will ask Congress for a repeal of the Affordable Care Act on the first day he’s in office.

Other Republicans are considering less dramatic approaches to weaken the mandate.

  • In early September, a new bill was introduced that would exempt people from the individual mandate if they live in a county with one or no options for coverage. The bill, which was introduced by Sen. John McCain (R-Arizona) and co-sponsor Sen. Ron Johnson (R-Wisconsin), could impact nearly one-third of counties in 2017 based on information from the Kaiser Family Foundation.
  • The “World’s Greatest Healthcare Plan Act of 2016” is new legislation introduced by Pete Sessions, a Texas Republican who runs the influential House Rules Committee, and Senator Bill Cassidy (R-Louisiana). This would eliminate both the individual mandate and the employer mandate.
  • Then there’s the “Obamacare Tax Relief and Consumer Choice Act of 2016,” introduced by Senators Tom Cotton (R-Arkansas), Kelly Ayotte (R-New Hampshire), John McCain (R-Arizona), James Lankford (R- Oklahoma), Ron Johnson (R- Wisconsin), and Richard Burr (R- North Carolina). This would suspend the individual mandate when health insurance premiums rise, thus “providing relief to people who can’t afford Obamacare deductibles.”

There’s an old saying, “The only constant is change.” It’s as true today as it was in 500 B.C. when Heraclitus first introduced it.

What’s in a name? The ABCs of provider payment reform.

Historically, the U.S. health care system has included misaligned incentives that reward doctors and hospitals based on quantity instead of quality.

That’s all changing as payers move away from fee-for-service toward performance-based reimbursement. This transition been accelerated by the Affordable Care Act, and new payment models are being tested across the country with support from the Medicare and Medicaid Innovation Center.

The Harvard Business Review notes that this new “value agenda” is intended to fix health care with a shift from a supply-driven system to patient-centered care. And it changes everything: It changes the way care is delivered. It changes the way results are measured. It changes reimbursement strategies.

And it introduces a whole new vocabulary into our lexicon.

It’s easy to get lost in the new lingo, so here’s an overview of the buzzwords being used in the health payment arena today.

Accountable care organizations (ACOs). These organizations are groups of doctors, hospitals, and other health care providers who work together to coordinate care and manage chronic disease. They are “accountable” to patients and payers for the cost and quality of care. ACOs are paid a set amount for each patient enrolled, which creates a shared-risk mechanism. Insurance companies are working hand-in-hand with hospital systems to create this transformation.

Alternative payment models. This umbrella term describes the move away from payments based on the quantity of medical procedures to payment based on the quality of care. This includes accountable care organizations, bundled payments and other quality-based reimbursement models.

Bundled payments.  A single payment that groups together services from multiple providers during a single episode of care. The American Medical Association uses this example: If a patient has cardiac bypass surgery, instead of paying the hospital, surgeon and anesthesiologist separately, the payer makes a single payment.

Consumer-driven health care. From a broad perspective, this refers to engaging and empowering beneficiaries in the delivery of health care services and benefits. This can take the form of consumer-driven plans, like high deductible health plans and health savings accounts. It also can provide more direct incentives. For example, some plans encourage beneficiaries to use transparency tools, and then rewards them for checking prices and/or for choosing less costly care options.    

Managed care. The concept of managed care goes back the Health Maintenance Organization Act of 1973 and the transition to HMOs. More than 40 years later, the approach continues to reduce unnecessary costs and improve the quality of care.

Population health. This moves the focus from the health of individuals to improving the health of an entire population by attacking chronic diseases and promoting healthy lifestyles. It encompasses a broad range of factors and conditions that influence health, and it aims to reduce health inequities among population sub-groups.

Value-based care reimbursement. Payers are driving this switch to a value-based reimbursement structure with a population health approach. The goal is to achieve better clinical outcomes across the community while lowering the total cost of care.

These shifts are keeping providers on their toes as they make fundamental changes that impact the delivery of care as well as back-office workflows and internal systems.

The bottom line? As value-based care becomes the norm, payers may be able to spend less overall, controlling the cost of care for employer groups and individuals while improving health outcomes.