The Actuary October/November 2016

68 Pages·2016·8.54 MB·English

THE
VOLUME 13 ISSUE 5
OCT
16
NOV
20 A WHOLE NEW
WORLD OF DATA
Challenges and opportunities with
electronic health records
26 EXTRA COVERAGE
FUNDING PUBLIC
NECESSÁRIO
A regulatory impact assessment on
Brazilian individual health plans
HEALTH CARE
34 STABILIZING
A tale of two national health plans FORCES
A look at the ACA and Medicare Part D
premium stabilization programs
40 POSITIVE CHANGE
CMS incentivizes
value-based reimbursement
Back row (l to r): Steven Frost, Jennifer Hart, Jill Grayson, Claudine Cox, Lauren Lee, Jesse West,
Front row (l to r): Bonnie Ten-Pow, Barbara Roman, Aimee Kaye, Ted Jackness, Robyn Taylor, Patty Kent.
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THE
ASPECTS OF THE ACA
VOLUME 13 ISSUE 5
MARKETPLACE: READ THE
INTRODUCTION TO THE
COLLECTION OF ACA
EXCHANGE INITIATIVE
OCT
16 PROGRAM ARTICLES
NOV ON PAGE 33.
20 26 34 40
20 A WHOLE NEW WORLD OF DATA
Challenges and opportunities with electronic health records
By David Pierce and Ella Young
26 EXTRA COVERAGE NECESSÁRIO
A regulatory impact assessment on Brazilian individual
health plans
By Daniela R. Furtado de Mendonça
FEATURES 34 STABILIZING FORCES
The difference premium stabilization programs make in the
Affordable Care Act marketplaces and Medicare Part D
By Timothy Stoltzfus Jost
40 POSITIVE CHANGE
CMS incentivizes value-based reimbursement in a leery
U.S. health care market
By Marla Pantano
46 A TALE OF TWO NATIONAL
HEALTH PLANS
Learning opportunities in funding public health care
By Chris Pallot and Jennifer Gerstorff
52 BREAKING THE MOLD
Q&A with Prudential’s Christine Hofbeck
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CONTRIBUTING EDITORS
46 52
Richard Berger, FSA, EA, MAAA Albert Moore, ASA, MAAA
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Mark Birdsall, FSA, FCA, MAAA Jeffrey Schuman, FSA, MAAA
[email protected] [email protected]
Alan Cooke, FSA, FCIA, MAAA Achille Sime, FSA, CERA, MAAA, FIAF
[email protected] [email protected]
Carl Hansen, FSA, EA, FCA, MAAA Ksenia Whittal, FSA, MAAA
[email protected] [email protected]
Christine Hofbeck, FSA, MAAA Larry Zhao, FSA, CERA
[email protected] [email protected]
DEPARTMENTS
6 EDITORIAL Challenges and Opportunities in Health Care
10 LETTER FROM THE PRESIDENT Reflections
14 AROUND THE GLOBE International Cooperation: A roundup of news from the global community
16 NEW & NOTEWORTHY Looking Ahead: Your source for industry briefings and SOA news
58 TOOLBOX On the Move: Useful tools and resources for actuaries
60 INNOVATE Stages of Growth: How we got from 10 exams to here
64 RESEARCH Actuarial Research on General Insurance
66 TAKE CHARGE Information on Professional Development Opportunities
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EDITORIAL
CHALLENGES AND topic in any discussion. Nearly everyone seems to have an
opinion on what is missing, what could be better or what’s
working well, based on his or her understanding of and own
OPPORTUNITIES interactions with the system. While opinions vary, our goal
with The Actuary, as always, is to focus on the facts. As one of
my favorite sayings goes, “Facts do not require an opinion.”
IN HEALTH CARE
So, what are the facts? If we consider the United States
(please forgive my bias as an actuary practicing in the
United States), health care spending is a significant portion
BY KSENIA WHITTAL of the gross domestic product (GDP). It has been growing
faster than inflation in the last several decades, and now
he theme of this issue of The Actuary is health comprises 17 percent of the total GDP.
T
care. We all interact with the health care system Furthermore, health care is an industry with a unique set
in some way, even if some of us practice in other of challenges. First and foremost, the goods and services
actuarial disciplines. Health care is also a deeply the health care industry offers are not things consumers
personal issue, which can make it a controversial seek out of a want or a desire, but rather out of need.
Continued on page 8
6 The Actuary theactuarymagazine.org
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EDITORIAL
Continued from page 6
Hence, most consumers Some of the emerging
are not thrilled to need or health care system changes
use health care services. My are coming from within
husband works in hospital the industry. David Pierce
administration, and he has and Ella Young investigate
commented that pretty much the challenges and oppor-
the only department in which tunities for actuaries using
you find “happy” customers electronic health record
is the maternity unit. Other- (EHR) data in their
wise, the last place any of us analytical work. Pierce
wants to be is in a hospital focuses on issues that
or doctor’s office. Which are front and center for
leads to the next anomalous actuaries practicing in the
fact about this industry: The United States, and Young
demand for acute health care services is largely inelastic. comments on issues facing Canadian actuaries working
Further, unlike most of the goods and services we purchase, with this additional data source. Interesting parallels and
most health care consumers are not able to make indepen- differences between the experiences in the two countries
dent, well-informed choices regarding what type of care and are worth noting.
services would benefit them the most. We rely on health care There are two more feature articles in this issue that also
professionals to advise us and then deliver the needed care for compare and contrast different topics. The piece by Tim
which they get paid. And, finally, health care consumers are Jost tackles the premium stabilization programs introduced
generally not health care payers (the government or insurance as part of the Affordable Care Act (ACA), and contrasts
companies are); hence, the consumers in this situation are these to similar well-established programs used in the
insulated from the true cost of the care they receive. This is all Medicare Part D market. The similarities and differences
very different from purchasing an airplane ticket, for example, are striking and thought-provoking. The other article by
where the consumer is the decision maker, payer and con- Chris Pallot and Jennifer Gerstorff provides a comparison
sumer of the service. of the U.K.’s National Health Service, a public health care
You can imagine the tricky position in which most health system, and the publicly funded Medicaid program in the
care providers find themselves in this environment, as they United States. This comparison encourages actuaries to
juggle new regulatory demands, new data, more technology look beyond national borders for solutions and to learn
and directives to bend the infamous cost curve, all while from global experiences.
attempting to improve quality and patient satisfaction. The Finally, in an article by Daniela R. Furtado de Mendonça,
role of regulators is no more enviable—they must balance the author shares the struggles and challenges actuaries
budgets, the interests of consumers and the incentives of and other stakeholders are facing in the Brazilian health
multiple stakeholders within the industry. care market.
Not surprisingly, a lot is happening in the United States I hope this October/November 2016 issue of The Actuary
to amend, reform, complicate (unfortunately) and improve will provide you with a diverse sampling of the current
the health care industry—from how insurers operate to how issues in the health care industry in various parts of the
providers are compensated. In this issue, Marla Pantano looks world. Happy reading!
at health care and provider reimbursement in the United
States through both provider and payer lenses, as the sys-
tem moves away from the traditional fee-for-service (FFS)
reimbursement to mandatory alternative payment models.
Ksenia Whittal, FSA, MAAA, is a
The Medicare Access and CHIP Reauthorization Act of 2015
consulting actuary with Milliman in
(MACRA) regulation will drive not only a significant change
Denver.
in both the delivery and financing of health care, but also a
shift of risk from payers to the provider community. [email protected]
8 The Actuary theactuarymagazine.org
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BY CRAIG W. REYNOLDS
Craig W. Reynolds, FSA,
MAAA, is president of the
Society of Actuaries.
from the PRESIDENT
[email protected]
Twitter: @CraigWReynolds
O
O
RY W LinkedIn: LinkedIn.com
R
KE /company/craig-reynolds
Ref lections
s my term as Society the relevance of our credential in a Our members want the actuarial
A
of Actuaries (SOA) changing world. organizations to work together better.
president winds down, Sometimes we had to think about We have made substantial progress
I would like to take the credential protection in unusual contexts. on this issue. I have regular and
opportunity to look back One example was our decision to sign a cordial communications with my
and evaluate how things have gone. public letter calling on North Carolina counterparts at the American Academy
In my inaugural speech I identified to repeal House Bill 2 (HB2). I heard of Actuaries (the Academy), the
five key goals, each of which are from many of you who voiced strong Casualty Actuarial Society (CAS), the
addressed here: feelings on both sides of this topic. The Canadian Institute of Actuaries (CIA),
Board felt it was important to sign this the Conference of Consulting Actuaries
MAINTAIN THE VALUE letter because HB2 rolled back discrim- (CCA) and the American College of
OF OUR CREDENTIAL ination protections for many of our Pension Actuaries (ACOPA).
Our desire to maintain or enhance the members, allowing employers to fire or We consult each other on issues
value of the credential underlies every refuse to hire our members on the basis that impact the profession, including
decision the SOA makes. We under- of gender identity or sexual orientation. the new International Association of
stand your credential is one of your Protecting our members’ right to work Actuaries (IAA) educational syllabus,
most valuable assets. is one of our most important responsi- exam changes, diversity in the profes-
One key tactic we focused on was bilities. Without that, what value would sion and public relations. We do not
the enhancement of the Associate our credential have? always agree on every aspect of these
of the Society of Actuaries (ASA) issues, but we evaluate and consider
curriculum to increase our focus on STRENGTHEN RELATIONSHIPS the impact on each organization in
short-term insurance coverages and WITH OTHER ORGANIZATIONS every decision we make, with a goal of
substantially expand our predictive During my campaign and on many making the whole profession stronger.
analytics content. This action was Listening Tour visits as president, I We are working together more effec-
motivated by our desire to maintain heard your messages loud and clear: tively than we have in many years.
Continued on page 12
10 The Actuary theactuarymagazine.org