Healthcare, Insurance

5 Takeaways From Payer Q2 Earnings Reports

Originally published on Healthcare Dive.

Second-quarter numbers for payers showed a steady engine that has withstood the strain of the past two years, most notably (the failed) Republican efforts to tear up the Affordable Care Act and other big moves from the Trump administration.

Insurers appear to have found stability and responded by expanding offerings, pulling back on others, moving into new subsectors and partnering with or gobbling up other companies.

Payer underwriting margins were strong overall with no apparent ramp up in underlying medical consumption, David Windley, managing director for healthcare equity research at Jefferies in Nashville, told Healthcare Dive.

“2Q is a critical quarter for (managed care organizations) because it is the point at which management has seen enough actual data on claims payments to assess product pricing and any unusual trends,” he said.

Here are five trends and highlights from payers’ earnings reports in the past few weeks.

1. Payers love Medicare Advantage

Payers remain bullish on Medicare Advantage. Not only are traditionally strong MA payers growing their offerings, but more minor players are also expanding in the market.

UnitedHealth Group and Humana continue to have the two largest MA member populations. UnitedHealth’s MA population increased 10.4% year-over-year after picking up 450,000 new members. UnitedHealth views MA as a significant growth area and company officials said its long-term group rate is about 8%.

Meanwhile, MA drove Humana’s second-quarter earnings, which included a 5% increase in quarterly consolidated revenues. In a move to boost its MA plans, Humana recently purchased a 40% share of Kindred at Home with the right to buy the remaining interest over time. The payer expects that adding Kindred will help with end-of-life costs.

Another insurer growing its MA footprint is WellCare Health Plans. Medicare premium revenue grew more than 17% for WellCare, which offers managed Medicaid, Medicare and Medicare pharmacy drug plans.

The company said the increase was related to buying Universal Americanand organic growth. The Tampa-based payer ended the quarter at about 510,000 Medicare members, which was a 5% increase year-over-year.

WellCare’s pending acquisition of Meridian Health Plan for $2.5 billion is also expected to grow membership in Illinois and Michigan, as well as pick up MeridianRX, its pharmacy benefit manager business. “It will position us for future growth opportunities in government-sponsored programs, and we expect the transaction to be accretive,” Kenneth Burdick, WellCare’s CEO, said during the company’s Q2 call.

Anthem also spoke positively about its MA business, reporting a 14% operating revenue increase in its government business for the quarter. That was thanks to purchasing Health Sun and America’s 1st Choice as well as growing its Medicare membership organically.

Medicare enrollment grew by 254,000 year-over-year and membership in Medicare Advantage Part D plans skyrocketed by 37%. Anthem finished the quarter with 933,000 Medicare Advantage Part D members.

Anthem CEO Gail Boudreaux said the company plans to build its membership further by increasing its county footprint while finding organic growth where it already operates. She added that the Blues payer has found that members in their commercial plans want to transition to its MA plans once they reach retirement age.

“We have a strong pipeline of commercial customers who want to stay Blue,” Boudreaux said.

2. The individual market isn’t so bad after all

The days of widespread double-digit premium increases and payers fleeing the ACA exchanges appear to be over — or at least on hold.

During second-quarter earnings calls, multiple payers spoke of the ACA exchanges positively. Centene, which expanded its ACA footprint to 16 states this year, pointed to the exchanges as a major reason for its quarterly revenue growth. The payer, which has a large managed Medicaid population, has found success in ACA plans.

Centene is also looking to add new states next and grow further in the states where it’s already located.

Another payer that focuses on at-risk populations traditionally, Molina Healthcare, said it has seen better-than-expected ACA plan membership and risk-adjusted revenue.

Molina CEO Joseph Zubretsky said the risk profile of its reduced membership is also better. Last year, Molina pulled out of Wisconsin and Utah. Now, the payer is contemplating a return to those states and expanding to North Carolina.

“The issues we had in Utah and Wisconsin were mostly related to a network that was too wide and too highly priced. And the team is working at developing a network that will support the prices that we file … We’re going to watch every bit of data emerge on 2018 to make sure we have this right and then we’ll make the call at that point,” Zubretsky said during the call.

Even Anthem, which pulled back on the ACA exchanges along with other big-name payers last year, is looking at potential minor county expansions for 2019. Boudreaux said the insurer isn’t considering significant expansion, but it may move to abutting counties while focusing on areas with current Anthem individual plans.

“I think you’ll see some county expansions, but I think more focused on the areas that we’ve been this year, so not a major rescaling, but we are pleased with the performance. And again, it is all about stability and more certainty around that marketplace. But again, this year was solid,” she said.

Despite the better-than-anticipated ACA numbers, not all payers are interested in returning to the exchanges. UnitedHealth Group ended the quarter with 60,000 fewer individual plan members than a year ago.

UnitedHealth Group CEO David Wichmann said the nation’s largest private payer, which has 480,000 individual plan members, will continue a “modest presence” in that market. “Nothing has fundamentally changed since we made our decision,” he said about the exchanges. “It was the right decision for us.”

3. Commercial market results fell for some big players

Multiple payers have seen a drop in their commercial membership over the past year. UnitedHealth Group, Anthem, Humana and Aetna all reported decreases.

UnitedHealth Group said more commercial plans are moving to risk-based contracting.

The payer’s risk-based offerings increased by 50,000 members, while fee-based products decreased by 60,000. That’s part of a trend that Wichmann predicted during the first-quarter call in April. Wichmann said half of Americans will get care from a physician with a value-based contract within a decade.

Meanwhile, two payers, Humana and Aetna, reported that what companies want from payers is changing, especially small businesses. They’re seeing small group companies moving to contracts to perform administrative duties only.

Humana’s administrative services only plans increased by 3% to 458,800 members. The payer said small group membership made up just 7% of group ASO membership a year ago and 12% at the end of 2017. It was 18% at the end of the second quarter.

Humana’s commercial membership dropped 5% to slightly more than 1 million members as it lost large group accounts in self-funded accounts, but more ASO plans partially offset the loss.

Not all payers are seeing commercial plan decreases. Cigna picked up 329,000 customers year-over-year and ended the quarter with 16.2 million enrollees. “All the indicators we’re seeing … continue to reinforce [that] we see a very attractive growth outlook in the commercial space in 2019,” Cigna CEO David Cordani said.

Cigna has focused more on commercial plans after CMS temporarily suspended the payer from offering MA plans. Cigna got the OK to sell those plans again last summer.

4. Payers are looking at public plan opportunities

While payers are seeing sagging commercial plan membership, they’re finding growth potential in managed Medicaid.

Centene recently purchased Fidelis Care for $3.75 billion, which gives the payer the fastest growing Medicaid managed care company in New York and second fastest in MA. Fidelis’ 1.6 million members are spread across the ACA, MA and Medicaid markets. Centene expects to see more than $11 billion in revenue from Fidelis.

WellCare’s purchase of Meridian will make it the largest Medicaid payer in membership in Michigan and Illinois, where it has 508,000 and 565,000 members, respectively. WellCare said the deal will put it in the leading market position for six states.

WellCare will also grow Medicaid membership after being the sole winner for Florida’s Children’s Medical Services contract. The company expects the contract will increase its Florida Medicaid annual revenue stream by $1.5 billion.

Molina picked up nearly 70,000 members in the second quarter after a recent statewide Illinois contract.

There are other Medicaid opportunities for payers too, as more states show an interest in expanding Medicaid. Boudreaux said Virginia’s upcoming Medicaid expansion brings 400,000 possible members. Maine voters also approved Medicaid expansion last year and a growing number of states are putting expansion on the ballot this fall.

However, it is not all positive news for Medicaid payers. Humana’s state-based contracts membership, which includes dual-eligibles, decreased by 13% year-over-year. The decrease came after the payer didn’t participate in Illinois’ Integrated Care program and a Medicaid membership drop in Florida. That said, Humana expects improved Medicaid membership next year after a new Florida contract.

5. Industry is in good financial shape

The second-quarter reports show that payers (and most healthcare companies, actually) are doing well financially. Axios reported that publicly-traded healthcare companies enjoyed billions of dollars of profits in the second quarter. In fact, they’re making more than in Q1, especially pharmaceutical companies. Those numbers don’t include nonprofit hospitals, which face their own challenges.

Two financial numbers that stand out are the revenue results for Aetna and Molina. Aetna stayed stagnant, but it’s also in the middle of the CVS Health merger. Plus, it enjoyed a nearly 8% profit margin in the quarter.

Molina, meanwhile, went through upheaval over the past year when it ousted CEO Mario Molina and CFO John Molina, the sons of the company’s founder. The payer also pulled back on the exchanges. Hence, the revenue drop.

Looking ahead to Q3, Windley expects more of the same for payers. He said insurance companies will begin to publicly discuss their 2019 plans during the third-quarter calls, including potential MA growth.

Here’s a breakdown of important metrics to show how payers did in the second quarter:


Revenues: $15.6 billion

Compared to 2Q 2017: No change

Profit: $1.2 billion

Net profit margin: 7.8%

Membership: 22 million



Revenues: $22.7 billion

Compared to 2Q 2017: Up 2.3%

Profit: $2.4 billion

Net profit margin: 5.2%

Membership: 39.5 million



Revenues: $14.2 billion

Compared to 2Q 2017: Up 19%

Profit: $300 million

Net profit margin: 2.1%

Membership: 12.8 million



Revenues: $11.5 billion

Compared to 2Q 2017: Up 10%

Profit: $193 million

Net profit margin: 1.4%

Membership: 16.2 million



Revenues: $14.3 billion

Compared to 2Q 2017: Up 5%

Profit: $193 million

Net profit margin: 1.4%

Membership: 16.6 million


Molina Healthcare

Revenues: $4.9 billion

Compared to 2Q 2017: Down 2.3%

Profit: $202 million

Net profit margin: 4.1%

Membership: 4.1 million


UnitedHealth Group

Revenues: $56.1 billion

Compared to 2Q 2017: Up 12.1%

Profit: $2.9 billion

Net profit margin: 5.2%

Membership: 48.8 million



Revenues: $4.61 billion

Compared to 2Q 2017: Up 7.4%

Profit: $172 million

Net profit margin: 3.9%

Membership: 4.4 million



Return of the House Call

Originally published in Healthcare Dive. 

The days of the kindly, silver-haired doctor with a small medical bag going house-to-house appeared dead and buried, but a new movement is taking shape to return the practice.

The resurgence has a key twist, however, with a heavy dose of 21-century technology.

Healthcare startups have cropped up to provide in-home medical services, including mobile urgent care and doctor appointments. But they’re not the only ones trying house calls. Established providers such as Johns Hopkins are getting into the act and Medicare is testing a home-based primary care model for high-cost chronically ill beneficiaries.

“We see (our house calls) as old-fashioned care with state-of-the-art technology,” Nick Desai, co-founder and CEO at Los Angeles-based Heal, a company that offers the service, told Healthcare Dive.

Mobile urgent care startups now dot the healthcare landscape and big-name private payers like UnitedHealthcare and Anthem, as well as Medicare and Medicaid, are contracting with mobile care companies.

Investors see potential and have put millions into mobile urgent care startup companies. Heal, which offers services in California, Washington, D.C. and northern Virginia, recently announced $20 million in additional funding to raise its total capital collected to more than $69 million.

Mobile care advocates like Desai say providing care in a person’s home is a better alternative than telemedicine or urgent care centers. Both of these avenues are an attempt to offer lower cost settings, but Desai said they are getting in the way of the direct primary care physician-patient connection.

Desai said the healthcare system isn’t going to be helped by “cramming more people into waiting rooms or further distancing doctors from patients.”

Healthcare companies that offer mobile care differ by where they see themselves in the system and who’s making the house calls.

Denver-based mobile urgent care provider DispatchHealth sees itself as supplementing care and as a partner for primary and specialty care. Meanwhile, Heal provides regular care, including primary care, prevention and pediatrics, as well as urgent care.

Johns Hopkins’ Hospital at Home treats patients with pneumonia, heart failure, chronic obstructive pulmonary disease and other conditions.

Home-based models “can be a versatile platform for creating an alternative to skilled-nursing-facility care after hospital discharge, a complement to early-discharge programs, and an option for post-surgical care. And technological advances, such as biometrically enhanced telehealth modalities, will make [them] more viable,”  Bruce Leff, professor of medicine at Johns Hopkins University School of Medicine, wrote in the New England Journal of Medicine.

Leff predicted that the move to value-based care will be a catalyst to “challenge the traditional, facility-based model.”

Longer, but fewer, patient visits

What house calls offer is convenience for the patient, and a potentially longer time with the doctor.   Heal said its average visit is 28 minutes, compared to the national average of 13 minutes.

However, the drawback for a mobile urgent care company is that a clinician sees fewer patients than in an office setting. That means fewer reimbursements. Lower overhead costs is one way to offset that.

Mapping out myriad appointments would be difficult for a human, but mobile care companies have technology that does the work for them. DispatchHealth screens patient appointment requests by using a risk stratification tool that analyzes a person’s age and chief complaint. The proprietary technology maps out the stops based on distance, traffic and a patient’s sickness.

CEO Mark Prather told Healthcare Dive its first market, Denver, has eight vehicles on the road and they can get to most calls within 20 to 25 minutes. “The computer does all that and optimizes all visits to get more visits out of calls per day,” he said.

Heal said it has also removed office-related healthcare costs from the equation. Desai said Heal’s technology platform automates the booking and billing process, which lowers healthcare operating costs and bureaucracy by 65%.

Dispatch expects to care for 55,000 patients this year, which it said would save about $80.8 million in medical costs, such as avoidable 911 transports, emergency room visits and hospitalizations. Heal has delivered more than 60,000 house calls since it launched in March 2015.

Mobile care models vary

Prather said DispatchHealth is designed as a “mobile ER to intervene on acute illnesses” that communicates with the patient’s regular care team. Founded in 2013, DispatchHealth operates in markets in Colorado, Virginia, Arizona, Nevada, Oklahoma and Texas and plans to expand to 10 markets by the end of the year.

A two-person medical team, which includes a medical technician and an ER-trained and board-certified nurse practitioner or physician assistant, go to homes and businesses. They usually arrive within an hour in a vehicle equipped with a certified lab, advanced formulary of medications, IVs and fluids.

Meanwhile, Heal sends a doctor and medical assistant to calls.

Desai said 80% of Heal’s calls are to patient homes. The company also provides employee healthcare. That’s about 15% of its business. The remaining visits are done in senior facilities.

Mobile urgent care is how Heal often acquires patients. Desai said 80% of its users first enter the system through mobile urgent care and then transition to Heal’s primary care, chronic disease management, wellness and pediatrics services.

Social determinants of health

Another potential benefit of mobile urgent care companies: helping providers find potential social determinants of health issues. Payers and providers increasingly see a link between SDOH and overall health outcomes. If a person doesn’t have a car, stable housing or regular nutrition, there’s a good chance they will wind up with health problems.

DispatchHealth includes a SDOH section of its patient report that reviews concerns with primary physicians.

By being in patient homes, mobile urgent care clinicians can spot potential issues, such as smoking, unsafe living conditions and medication issues. For instance, Desai said two-thirds of senior falls are related to medication-related dehydration. Being in the home allows the clinician to review all the medications and make sure they don’t conflict. Conflicting medication can lead to dizziness, falls and hospitalization.

Growth opportunities in senior population

The aging population may be one factor driving the trend.

A majority (60%) of DispatchHealth’s business is in the senior population, which may be redefining on-demand care. “We have a tremendous opportunity to address the healthcare needs in the aging population in a much smarter way,” Prather said.

The U.S. Census Bureau estimates that the country’s senior population will grow to 83.7 million by 2050, nearly doubling. An older population means more chronic illnesses and healthcare needs, leading to more hospitalizations and ER visits.

CMS also sees opportunities with house calls. It is testing primary care services at home through its Independence at Home demonstration. The second year of the program saved Medicare more than $10 million, an average of $1,010 per beneficiary.

Though mobile urgent care is becoming more common, Prather said hospitals shouldn’t worry that it will replace them. Mobile care will be supplemental. There will always be a place for hospitals, but they will increasingly focus on caring for the very ill. Healthcare will need to provide other types of care in lower cost settings, such as the home, he said.

“If you’re a hospital system, you’ve got to look at the landscape and see where it’s headed. It’s not more bricks and mortar,” Prather said.

Personal Finance, Real estate

How Much Money Do You Need in Your Emergency Home Repair Fund?

Originally published on

A home repair emergency fund can save you from financial disaster. While it’s easy to believe your house is in great shape, you never know when you’ll have to deal with an expensive plumbing bill or a flooded basement.

If you don’t have money set aside for repairs, you might be tempted to use your credit card. However, unless you’re able to pay them off immediately, charging costly home repairs is never a wise financial idea — it’ll accrue interest and leave you with an even larger bill later.

The better solution is to think ahead and create a home repair emergency fund.

What’s a home repair emergency fund?

A home repair emergency fund is money set aside to pay for unexpected home repairs—the cash you can grab at a moment’s notice. In other words, you don’t want to put that money into a long-term savings portfolio where you’ll face massive fees if you pull money out early.

Homeowners don’t need to get too creative with an emergency fund, says Byron Ellis, managing director of United Capital Financial Advisers in The Woodlands, TX. A savings account in a local bank will suffice.

How much money should you save in your emergency fund?

Ellis suggests homeowners create a cash reserve of three to six months of living expenses. You cash reserve target should be about 1% to 3% of your home value. So, if your home is worth $500,000, Ellis suggests setting aside $5,000 to $15,000.

Of course, each situation is different. A homeowner with a new home with all new systems and appliances might not need to tap into a home repair emergency fund. Fixer-uppers and old homes, of course, will likely require that money sooner.

General emergency funds

In addition to a home repair emergency fund, it’s also wise to create two general emergency funds: an everyday emergency fund and a dire emergency fund. Everyday emergencies—such as needing a new boiler in your home—can cut into your monthly budget, so having some cash stowed away will allow you to still pay your rent or mortgage. Shoot for having about 10% of your annual wage in your everyday emergency savings account, says Robert Reed, a partner at Partnership Financial in Columbus, OH. If you’re self-employed, Reed says to put aside 20% of your yearly salary since the income is variable.

The second emergency fund — the dire emergency fund — is for life’s calamities that interrupt your income. It could be losing your job, falling ill and needing to take time off work, or dealing with a death in the family.

“Our concern when something catastrophic happens is that people could risk losing their home because all of a sudden they can’t make their mortgage payment,” Reed says.

Reed recommends working toward saving 20% of your mortgage balance for the dire emergency fund. Put aside money from each check and you’ll quickly begin to get closer to your goal. For instance, putting aside $25 every week will get you $1,300 in a year.

Use a savings or money market account for your emergency fund. You shouldn’t use a brokerage account since that fluctuates.

What to do if you don’t have an emergency fund

Let’s say your central air-conditioning system dies in the middle of summer and you desperately need to replace it, but you don’t have a home repair emergency fund. Where do you turn? Two options are a home equity loan and a home equity line of credit, or HELOC.

Both of these let you tap into the value of your home to cover costs. A major difference is that the home equity loan is a lump sum and you often have a fixed interest rate. HELOC is a line of credit that you can borrow. A HELOC lets you draw money from the account as much as you need up to the available maximum amount. Also, a HELOC usually has an adjustable interest rate.

You can think of a home equity loan as a way to pay for a significant renovation project, while a HELOC is more likely going to help you with smaller projects that crop up over time. You tap into the HELOC only if you need it.


Value-based Pay a Factor Pushing Docs to Hospital Work

Originally published on Healthcare Dive.

More physicians, especially young doctors, are turning to hospitals for employment rather than running their own practice, spurred by the rise of value-based payments and population health.

The trend can have the effect of raising costs, however, and there are signs it may be slowing.

A recent report from Avalere conducted for the Physician Advocacy Institute found a 100% increase in hospital-owned physician practices, as well as a 63% increase in the total number of physicians employed by hospitals between July 2012 and July 2016. There were 72,000 physician practices employed by hospitals in July 2016.

PAI CEO Robert Seligson said payment policies favor large systems and the current payer environment “stacks the deck against independent physicians” through “administrative and regulatory burdens.”

Patrick Padgett, executive vice president of the Kentucky Medical Association (KMA), has seen the trend in his state over the past decade. Most employment is through hospitals and hospital systems in Kentucky, especially in rural areas. He’s seen a similar trend of more physician-led practices employing doctors, such as multi-specialty practices, Padgett told Healthcare Dive.

Times have changed so much in Kentucky that the KMA stopped providing an annual seminar to new doctors on starting your own practice. Now, because nearly every new doctor is employed, the seminar focuses on employment contracting and personal finance education.

What’s causing more hospital-employed physicians?

Multiple factors are driving the trend. Payment policies are a major factor.

Population health and value-based care models are driving “more coordinated, integrated and consumer-centric healthcare delivery systems,” Katie Gilfillan, director of Healthcare Financial Management Association’s finance policy, physician and clinical practice, told Healthcare Dive.

As payers move to risk-based payments, reimbursements that reward value, quality and lowering costs are replacing fee-for-service payments.

However, hospitals have limited influence on costs and patient outcomes once the person leaves the facility. So, instead, hospitals are looking to scoop up physician practices as a way to stay connected to those patients when they’re not in the hospital.

Caroline Pearson, senior vice president at Avalere, told Healthcare Dive that this gives hospitals a better chance to manage care and reduce costs.

Another factor is connected to market share and payer negotiation leverage.

Physician groups are feeling the economic pressures of rising costs to deliver care, Gilfillan said. Smaller practices are increasingly looking to hospitals and larger physician-led practices, which they feel can influence care and share the burden of risk more than going it alone. Being part of a larger system can make former small practices more competitive with the ability to negotiate better rates.

Being part of an integrated system also reduces risk. Plus, it can lessen regulatory burdens put on medical practices, such as prior authorizations.

A recent American Medical Association survey found that medical practices average 29.1 prior authorization requests per week. Processing takes an average of 14.6 hours per week. About 34% of physicians said they rely on staff to work solely on data entry and other manual tasks connected to prior authorization. Instead, being part of a larger system brings with it a bigger staff to take over or at least spread around those types of tasks.

Costs associated with EHRs also play a role. “Many small practices simply could not afford installing and then maintaining such systems,” Padgett said.

And then there’s just personal preference. Going the employee route reduces operational and financial risks, which can be appealing to physicians, especially those new to the profession. Employment can also bring with it a more predictable schedule. The downsides, though, can be a lower salary and less control over practice designs and office management.

Many younger physicians are interested in practicing medicine and don’t want the hassle of running a practice or a small business.

In its Physician Practice Benchmark Survey in 2016, the AMA found that two-thirds of physicians under 40 were employees in 2016. That’s compared to about half in 2012. The share of employees among physicians 40 and older also increased in that time, but the increase was more modest.

What does the hospital-employed physician trend mean for costs?

A potential downside to the trend: rising costs.

Pearson said that’s because physicians employed by hospitals are more likely to perform procedures within the hospital setting, which are more expensive than at a lower-cost setting. “This can drive up costs,” she said.

An Avalere study in 2017 showed hospital-employed physicians increased Medicare costs for four services by $3.1 billion between 2012 and 2015. That study, also for the PAI, revealed that Medicare paid $2.7 billion more for four specific cardiology, orthopedic and gastroenterology services in hospital outpatient settings rather than in an independent physician’s office. Medicare beneficiaries spent $411 million more in out-of-pocket costs for those services compared to what they would have spent in an independent physician’s office, according to the report.

Given the trend toward hospital-employed physicians, Pearson expects payers will make changes. One way they may address these issues is through care payment site neutralization. For instance, insurers may pay more for complicated procedures and less for less complicated procedures rather than pay by care setting.

Is the hospital-employed physician trend slowing?

Though Avalere shows a doubling of hospital-employed physicians, the AMA said its numbers show that the trend is actually slowing. Physicians working for a hospital or in a practice with some ownership remained steady in 2014 and 2016 at 32.8%, according to the AMA.

Nevertheless, the group’s Physician Practice Benchmark Survey in 2016 marked the first time physician practice owners were not a majority portion of physicians since the organization began documenting practice arrangements. It found that more than half of physicians continue providing care in smaller practices (10 or fewer physicians). However, there is a gradual shifting toward larger practices.

Though the AMA said there is movement away from physician-led practices, Pearson wonders whether that will change. Physicians have increasingly led accountable care organizations and multi-specialty practices are willing to accept risk.

Physicians not affiliated with hospitals may see long-term savings if they assume risk and manage population health in the same way as a hospital in an ACO, she said.

“I think the pendulum may swing back to physician-led models,” Pearson said.

Gilfillan said there’s also a growing need for physicians in leadership positions, especially those who can “connect the clinical goals to the financial goals of the health system,” as well as running a “financially sustainable healthcare system.”

Future of hospital-employed physicians

More physicians are employed by hospitals than a decade ago, but is this a short-term trend or now a healthcare industry norm?

“I think it will continue to increase because there are a lot of drivers supporting that trend,” Pearson said.

That said, Pearson expects payers will change policies, such as payment incentives, which now push doctors into hospital-employed situations. Those changes will slow the trend curve. Also, eventually hospitals will run out of physicians interested in a hospital-employed situation, though new doctors prefer employment arrangements.

Something else to watch are proposed megamergers, which Padgett said seem to go against the hospital-employed physician trend.

“Recently proposed mergers, such as Humana/Walmart and CVS/Aetna, seem to be counting on more people getting their healthcare at store-based clinics. But the trend toward integrated care through a health system/clinic, along with technology changes, seem to be working against that trend. Unless they align with organizations that can provide different kinds of care through different specialists, I’m not sure how that will work out for them,” he said.

Real estate

4 Most Common Reasons Why Your Home Insurance Company Will Drop Your Coverage

Originally posted on

Homeowners usually see their payment to their home insurance company as a necessary evil. The coverage they offer helps protect your home, belongings, and investment, but those payments can hit your wallet hard.

Shelling out thousands of dollars on an insurance policy may feel like a large financial burden, but did you know that your insurance company can choose to drop or not renew your policy? Circumstances like not paying your premiums, violating the terms of the policy, or committing fraud will obviously jeopardize your coverage, but your company can also drop coverage if it believes you and your property are too risky to insure. In these cases, an insurer may cancel, and you could have a hard time finding another company to protect your property.

Insurers may also decide to not renew your policy for many reasons that don’t ever cross your mind. Consider these common yet unapparent circumstances that could threaten your policy.

Real estate

Common Reasons Why Property Taxes Increase

Originally published on

Homeownership is one of life’s great highlights, but ask homeowners about paying property tax and they’ll tell you it’s one of their least favorite responsibilities. But as much of a downer as they are, property taxes are vital for funding schools, libraries, police departments, fire departments, and public works like roads and parks.

Savvy homeowners and prudent buyers are probably aware of the property tax rates in their area, but they may not understand the factors that can drive their property tax rates up. We’re here to help! (With the understanding part, that is.)

So when tax season rolls around, if you find yourself having to shell out more than you did last year, one of these five reasons might be to blame.

1. Home improvements

Renovating a bathroom or kitchen can revitalize a home and add to its worth, but it’s also the most common reason why your property taxes rise, says David Rae, a certified financial planner and president and founder of DRM Wealth Management in Los Angeles. Why? Improving your home makes it more valuable. That, in turn, increases your property taxes.

Converting a walk-up attic or basement into a livable space is also likely to trigger an automatic reassessment, says Rita Patriarca, a Realtor® with Re/Max Encore in Wilmington, MA.

Rae suggests that homeowners run the numbers first. Calculate how much the work will cost you, how much the renovation can add to your property’s value, and whether you can afford a higher tax bill. If you find that the cost of the work is likely to leave you with too little money to pay your higher taxes, Rae recommends holding off and saving more money before you do the work.

Although your tax bill will go up when you renovate, the good news is that you will directly benefit from the update in the form of a brand-new amenity in your home. That’s not the case in some of the scenarios that we describe below.

2. Revaluation

Communities and counties periodically reevaluate properties. During these revaluations, government officials or hired appraisers review all real property to figure out its current assessed value. Revaluations are needed to make sure that the tax burden is spread equitably and accurately among the area’s homeowners.

Lorrie Beaumont, appraiser and owner of LB Appraisal Associates in Westwood, MA, says revaluations are the second most common reason that property tax bills increase.

During the evaluation, an expert will take into account a home’s location, size, and type, and any changes since the last evaluation. The expert will also review home sales and valuations in the neighborhood, changes in the economy and housing market, and any changes in the area that may have improved or reduced a home’s value. Even if the assessor doesn’t enter your home, he or she will review permits to see whether you have undertaken any improvements. So, if you’ve renovated or expanded your kitchen, you can expect higher taxes.

A revaluation doesn’t automatically mean that your taxes will go up, though. For instance, let’s say there’s been a lot of building in your community lately. Having more taxpayers in your community may help offset a tax bill increase.

3. Nearby home sales

If your neighbors sell their homes for more than the asking price, your property taxes may rise. That’s the unfortunate fact, but it’s out of your hands.

Home sales affect what other houses in a neighborhood are worth. While that’s great for your property’s value when you decide to sell, it means a higher tax bill in the meantime.

Rae points out that, for you, this is the least advantageous way your tax bill can increase, because you’re not actually benefiting from living in a nicer home. Instead, you will be paying higher taxes because your neighbors made out like bandits!

4. New schools

Building a new school is great for students and teachers, and for the community overall. However, it will come with a hefty price tag that is likely to entail higher property taxes.

There are two reasons why property taxes can increase after the construction of new schools:

  • Communities and counties often increase taxes to help pay for school projects.
  • A new school will bring new families to town, which will make your community a more desirable location. The hotter market and the greater competition for homes are likely to lead to bidding wars and higher property values. And, of course, higher property values mean higher taxes.

5. Higher government budgets

One of the main reserves on which cities and counties draw to fund their budgets is the property tax. If government employees are owed a raise, or other budgetary needs increase, the residents’ taxes may need to be increased to help foot the bill.

But rest assured that a community can’t raise taxes at whim: There are limits that require voters’ approval. For instance, Proposition 13 in California and Proposition 2½ in Massachusetts limit how much property taxes can increase.

Still, that doesn’t mean your property taxes won’t go up each year. These limits just put a cap on the increases unless the community votes to raise taxes even higher that year.

Ways to protect yourself against property tax increases

So how can you, as a homeowner, push back and lower your rates (or, at the very least, make sure they don’t reach stratospheric heights)?

One way is to appeal your home’s property assessment, Rae says. Research home sales around you and look for similar homes that are selling for less. “Most municipalities have a process to contest your property tax bill,” says Rae. “I’ve contested the value of my home in the past, and the assessor shaved $150,000 off the taxable value of the home. Definitely worth the effort.”

You should also make sure your property records reflect the property’s amenities accurately, Beaumont notes. “I have seen many instances where records say you have more bedrooms or bathrooms than you actually have, or additional living area that doesn’t exist,” she says. If you do find mistakes, notify the assessor’s office and have the record corrected.

Real estate

Supreme Court Decision Creates More Housing Benefits for Same-Sex Couples

Originally published on

The Supreme Court’s decision in Obergefell v. Hodges in June 2015 opened the way for same-sex marriage in the remaining states that did not allow it.

The ruling has been met with enthusiasm by not only same-sex couples and supporters, but real estate experts who believe the decision will help spark newly married same-sex couples to enter the housing market.

One reason for this optimism came in a recent joint survey by Better Homes and Gardens Real Estate and the National Association of Gay and Lesbian Real Estate Professions. The survey found that:

  • 90 percent of LGBT homeowners already see homeownership as a good investment
  • 81 percent of LGBT non-homeowners believed the ruling will make them feel more financially protected and confident

Same-sex marriage legalization will especially help couples in the areas of VA mortgages and property-ownership status.

The VA recognizes same-sex marriage of all veterans

Chris Birk, director of education at Veterans United Home Loans in Columbia, Missouri, says the VA loan process has been “more onerous and expensive” for same-sex couples.

Before the recent ruling, the VA has allowed veterans and service members to have a co-borrower who isn’t a spouse or qualified veteran, but the joint loans for same-sex couples covered only the qualified veteran’s portion of the loan amount.

“That left applicants on a joint VA loan – who were not considered spouses – with the need for a 12.5 percent down payment. Most VA buyers make no down payments, which is a significant benefit of this historic home loan program,” says Birk.

After the Supreme Court struck down the Defense of Marriage Act in June 2013, the Department of Veterans Affairs announced it would begin reviewing applications on a case-by-case basis “to determine whether same-sex married couples could proceed in the same manner as opposite-sex couples.”

In the wake of the Supreme Court’s decision in June, the VA announced that it will “recognize the same-sex marriage of all veterans, where the veteran or the veteran’s spouse resided anywhere in the United States or its territories at the time of the marriage or at the time of application for benefits,” says Birk.

“Given that, I think we’ll see more same-sex married veterans and service members look into the VA loan, which is arguably the most powerful loan product on the market,” he says.

Same-sex couples granted full ownership status

Another benefit of the Supreme Court decision will be the way married borrowers typically take title of property, says David Brennan, senior vice president at Cape Cod Five Cents Savings Bank in Barnstable, Massachusetts.

Same-sex couples will now be able to both have “tenancy by entirety” ownership status. This is the strongest form of ownership and means that a spouse automatically takes ownership in the event of the other spouse’s death.

“In many states where same-sex marriages were not allowed or recognized, there were limitations as to the legal types of property ownership status afforded to married couples. The ownership status of ‘tenancy by entirety’ is the most common way married couples take ownership of their property due to its legal advantages and protection for both owners. This form of title ownership, where offered, will now be available to same-sex married couples in all states,” says Brennan.

What will it mean to home buying?

For some real estate experts, the Supreme Court’s decision was deeply personal. Thom Schoepfer, a senior broker-associate and top agent in closed sales at William Raveis in Chatham, Massachusetts, and his partner bought their first home in New York in the early-1980s for $10,000.

“Seeing equality reign in 50 states is a dream,” says Thom Schoepfer, a senior broker-associate and top agent in closed sales at William Raveis in Chatham, Massachusetts, on Cape Cod. “I’m so thankful. Home is part of the American dream and continues to be for people of all stripes,”

Schoepfer and his partner – who have been together all of their adult lives and first bought a home together in New York in the early-1980s – have witnessed gay and lesbian couples go from the fringes of society into the mainstream.

So while Schoepfer doesn’t expect the Supreme Court’s decision to have much of an impact on his area, where same-gender couples have been buying homes Cape-wide, especially in communities with top school districts and low property taxes, he does expect a greater impact “nationally and regionally.”

Teresa Boardman, Realtor at Boardman Realty in St. Paul, Minnesota, isn’t so sure that legalization will flood the housing market with same-sex couples. Boardman says unmarried couples (same-sex and otherwise) have been able to buy homes before the Supreme Court’s decision.

“There are several groups in our society that have always been allowed to marry, but have low homeownership rates. The lack of a good job and a good credit rating holds people back from homeownership as does piles of student debt. Homeownership is lower in Minnesota today than it was in 2005 because of the crash of the housing market and the great recession. The ability to marry just doesn’t seem to have an impact on homeownership,” says Boardman.

Tough to gauge the impact

It’s difficult to gauge how same-sex marriage has affected home sales in the states that had already legalized same-sex marriage. Massachusetts was the first state to legalize same-sex marriage in 2004, for instance, but the Massachusetts Association of Realtors has not collected data concerning sexual preference of homebuyers.

Yes, there was a spike in home sales in Massachusetts that year, but it also coincided with the height of the housing bubble so you can’t say for sure whether same-sex marriage played a large part in the spike.

We’ll have a better idea next year. Adam DeSanctis, economic issues media manager at the National Association of Realtors in Washington, D.C., says the NAR will begin collecting data about same-sex married couples in its 2015 Profile of Home Buyers and Sellers.

Real estate

3 Reasons You Shouldn’t Wait to Refinance Your Mortgage

Originally posted on

Refinance applications are down to 2009 levels as mortgage rates have shot up past 4 percent again. Homeowners may have been scared away by recent rate increases, but now is still a good time to see whether a refinance would work for you.

Here are three reasons that you shouldn’t wait to refinance your mortgage:

No. 1: You can still take advantage of historically low mortgage rates

Mortgage rates are no longer below 4 percent, but they are still historically low. Homeowners waiting to see whether rates will drop below 4 percent again may have a long wait.

Brian Koss, executive vice president of Mortgage Network in Danvers, Massachusetts, says you shouldn’t expect a return of the sub-4 percent mortgage rates. All of the signs (a healthier U.S. economy and higher international interest rates, for instance) are pointing to higher mortgage rates.

Koss expects mortgage rates to increase in the near term, but doesn’t expect a huge jump. In fact, we may see a slight dip, but more likely a slight increase.

“Fundamentally, (the signs) are pointing to higher rates, but still in the very tight range compared to where we have been in the past,” says Koss.

Trying to time the mortgage dips is an imperfect science, but the clues show that another increase could happen later this year when the Federal Reserve may raise interest rates. The Federal Reserve does not directly set mortgage rates, but its actions can create a ripple effect on rates. On the other hand,the financial situation in Greece could shake financial markets and cause a rate decrease.

Koss warned against trying to time the next possible dip.

“Trying to time it perfectly doesn’t work,” he says.

Given the current climate, Koss suggests those ready to refinance start the process now and ask a trusted lender to lock in a low rate while you’re going through the process. Remember that rates can fluctuate at any time and often change multiple times a day.

Any rate decrease will be a “panic event” and not a “fundamental move,” he said, so you’ll want a trusted lender prepared to lock in a low rate for you.

Keith Gumbinger, vice president of in Riverdale, New Jersey, said, “Mortgage rates rise and fall for a lot of reasons. You can look for clues about what will happen by following economic reports, such as the statements of the Federal Reserve after their meetings every six weeks and the monthly employment report that comes out on the first Friday of every month. Rates will rise or fall depending on those reports and generally follow along with the fluctuations of 10-year Treasury bills. You can also follow mortgage rates through sites like”

No. 2: You could save more than $200 a month

More than 6 million borrowers could benefit and qualify for refinancing, according to a recent Black Knight Financial Services Mortgage Monitor Report.

Nearly 3 million borrowers in a traditional refinance and 300,000 of the HARP-eligible population “could save at least $200 per month,” according to the report. Fourteen percent in traditional refinancing and 23 percent in HARP-eligible populations could save $400 or more, according to the report.

U.S. homeowners could save $1.5 billion each month if all eligible candidates refinanced.

To show the importance of low interest rates, Black Knight Financial Services Mortgage Monitor Report suggested that an increase of half a percentage point would cause 42 percent of borrowers (2.6 million people) to fall out of the “refinanceable population.”

Check out our Refinance Calculator to see how much you could save.

No. 3: You may be eligible for HARP

The Federal Housing Finance Agency (FHFA) announced this year it is extending the Home Affordable Refinance Program (HARP) through September 2017.

The program was created in March 2009 and geared to homeowners who are underwater but current on mortgage payments.

More than 3 million homeowners have refinanced through HARP. More than 600,000 eligible Americans have until September 30, 2017 to take advantage of this program.

To qualify for the low interest-rate program, mortgages must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

Real estate

Lack of Storage Forces Homeowners to Find Creative Solutions

Originally published on HSH.

Homeownership can be one of the most fulfilling (and frustrating) endeavors in a person’s life.

There are the joys of painting a room or growing vegetables in a garden. But owning a home is not all tomatoes and zucchini. There are a lot of frustrations too. conducted a survey of 1,001 Americans about their biggest annoyances regarding their homes. We gave respondents a list of possible issues and asked them to choose the top five annoyances and rank them from 1 to 5.

The top home-related annoyances were “lack of storage” (67 percent of respondents put it as one of their five top annoyances), which barely edged out “too much maintenance” (66 percent) with “too small” coming in third (52 percent).

Paul G. Wyman, president of The Wyman Group, a real estate company in Kokomo, Indiana, says lack of storage has become a bigger issue over the past decade not because of larger families, but instead people want more room for their stuff.

“Storage is absolutely something people ask us about nowadays. Some older homes lack the storage needed and a lot of newer homes have taken that into consideration,” says Wyman.

People are finding creative solutions to gain storage space. Homeowners are putting closets under stairwells, building larger pantries and using more attic and basement space for storage, he says.

Wyman gives the example of a home he recently visited in which the homeowner finished three-quarters of the basement and left the other one-quarter unfinished for storage. In years past, the homeowner would have likely finished the whole basement for more living area.

“Some people are intentionally making storage spaces in their homes now,” says Wyman.

Maintenance bigger concern for homeowners

Not surprisingly, our survey found that “maintenance” is a bigger program for owners while renters chose” too small.”  Maintenance becomes more of a problem with longevity, according to our survey.

“This seems to be more of a concern for the aging Baby Boomer generation. They don’t want to mow the lawn anymore or keep up with home improvement projects,” says Kimberly O’Neil Mara, CPA, Realtor at Century 21 Spindler & O’Neil Associates in North Reading, Massachusetts. “Often these empty nesters are selling their big homes and downsizing to more manageable homes or even condos where they can just lock the door and head south for the winter any time they want to do so.”

Lack of storage biggest issue for most regions

When breaking it out by region, all regions pointed to lack of storage as the biggest home annoyance except the Northeast, which picked too much maintenance.

The brutal winters, especially the 2014-2015 winter that saw record snowfalls in Northeast cities, coupled with the hot and humid summers make home maintenance a bigger problem there than in regions that don’t see such weather extremes. Plus, older housing stock likely plays a role in the maintenance headache of the Northeast.

Last winter, parts of the Northeast dealt with ice dams on roofs because of the heavy snowfall in a short period of time.  The ice dams caused external and internal damage to homes.

Wyman says it’s important to create a continuous maintenance program. Staying on top of regular home maintenance allows the home to maintain its value and the homeowners won’t be hit for a larger repair bill later.

Know what you really want before you buy

Repeat homebuyers may have more financial flexibility and know more about their own needs/wants than first-time homebuyers. A key to happy homeownership is knowing what bothers you and what you can handle.

“The real key is for the potential homebuyer to clearly define and understand what is really important to them prior to the purchase,” says John Mijac, sales manager at Long Realty Company in Tucson, Arizona. “Part of that may be discovering that what they thought was important is not material at all. It is easy for a potential homeowner, just going into the process, to believe that a pool or a fancy kitchen is the most important thing, when in reality it is a quiet neighborhood or perhaps room and storage in the house.”

Real estate

Noisy Neighbors Causing Headaches

Originally published on HSH.

Problems with neighbors can often destroy a person’s quality of life.

Slamming car doors, barking dogs, overgrown trees hanging over your roof. These are all minor in the big scheme of things, but can drive you crazy.

There are many instances in which people finally snap and wind up in the local police log, but usually these frustrations are suffered in silence. That doesn’t make the problems any less impactful to quality of life. surveyed 1,001 Americans about their biggest annoyances about their neighbors. We gave respondents a list of possible annoyances and asked them to choose the top five and rank them from 1 to 5.

We found that “noisy neighbors” (63 percent ranked it in their top five) edged out “too close” (61 percent) as the biggest neighbor annoyances. Both owners and renters chose noisy neighbors as their biggest complaint.

“Your neighbors want you to know a secret: Since you can’t move your house further away, you can at least try to keep the noise down to a respectful level – and that includes your kids, your vehicles and your pets too,” says Keith Gumbinger, vice president of in Riverdale, New Jersey.

Kimberly O’Neil Mara, CPA, Realtor at Century 21 Spindler & O’Neil Associates in North Reading, Massachusetts, says noisy neighbors are more concerning for people looking to buy a condo rather than a single-family home. She says she advises condo buyers to find out what type of insulation was used in the floors, ceilings and floors.

“I also suggest checking with the management company/association about rules and regulations. Some have quiet hours, others require a certain percentage of floors to be carpeted to minimize hearing clanking shoes and especially heeled boots of your neighbors simply walking above you,” says O’Neil Mara.

It seems that noise is a problem from the start for many. “Noisy neighbors” were the biggest annoyance for those surveyed who have lived in their homes from 1 to 10 years. That frustration appears to subside with time. The top annoyance for those who have lived in their homes 10 years or more is homes being “too close.”

“You can know a lot about your home and neighborhood before you buy, but you can’t know everything, such as whether they are night owls or not, or have choppers stored in the garage they ride on weekends. You often don’t learn these things until you’ve lived there for at least a while, and you may have to learn to live with some of them,” says Gumbinger.

Regionally, all areas chose “noisy” as the biggest annoyance except for the Northeast, which picked “too close.” Noise and being too close often go hand-in-hand, but Northeast respondents chose too close likely because parts of the Northeast have some of the highest population density in the nation.

Great fences make great neighbors

When it comes to how to resolve noisy neighbors and homes being too close, O’Neil Mara gives people the old advice about fences and neighbors.

“If that is an issue, I always refer to the old saying ‘great fences make great neighbors’ and suggest installing one as soon as they move into the house. It is always much less awkward to do so as part of your original plan than it is to do once you get to know your neighbors and then decide to fence them out,” she says.