Insurers will lead the way to lower healthcare costs
Sitting in a regional meeting for Aetna recently gave me time to reflect on bigger thoughts about how to tackle healthcare in the United States. In seeking solutions to the healthcare crisis, politicians have a different focus than insurers. Access is the politician’s biggest concern — how to address the needs of the greatest number of their constituency with the least friction possible. And in politics the squeaky wheel always gets the greatest attention. Unfortunately, this approach only ends up resembling that of The Gang That Couldn’t Shoot Straight since this top-down approach completely misses the concern about affordability. Special interests and sorrowful personal stories trump (no pun intended) cost efficiencies. Ironically, as we witnessed during the ACA debate, politicians look to point fingers and the obvious direction was at the insurance carriers.
Health insurance carriers, in contrast, concern themselves most with cost considerations in order to remain competitive in the marketplace. This bottom-up view uses clinically-based analytics to improve patient experience and reduce costs by employing the latest medical trends and emergent technologies.
Aetna, as an example, organizes medical management around 10 clinical teams that account for the greatest amount of costs. For example: oncological which accounts for 7.9% of overall costs, gastroenterology at 10.1%, orthopedics at 13%, cardiology at 8.9%, etc. These teams look for the best practices to lower claim costs while improving outcomes.
Developing well-established guidelines for care considerations, the insurance carriers are seeking to align the providers. The shift to pay-for-performance contracting moves the discussion in a very positive direction. Providers don’t like to be told what to do, but with aligned financial incentives they will be more receptive to suggestions.
Aetna is helping to lead the way with personalizing care delivery by merging of technologies. They add functionality, like drug reminders, to increase prescription adherence and add appointment settings and reminders to doctor search features. They are also finding ways to integrate wellness and reward systems into the mix to increase health activation and literacy.
I am convinced that a government-led solution will not work. In seeking the next iteration of healthcare the Trump administration should try to mend fences after the breakup of Aetna-Humana and Cigna-Anthem. In its first healthcare rule, the Trump administration has introduced changes which offer some compromise to insurers, in hopes of keeping them from withdrawing from the public marketplace altogether, by reducing anti-selection.
A key change shortens the enrollment period, which will now start on Nov. 1 and end on Dec. 15 — half the previous timeframe. Stricter verification will be required for qualifying events, which allow mid-year coverage elections. The Department of Health and Human Services had proposed requiring documentation for approximately 50% of late entrants, but under these new rules all new entrants will need to provide suitable evidence of a qualifying event.
In addition, health plans will be given more flexibility in creating new products. These new products will not need to be tested for network breadth and can be offered at levels other than the metal levels previously allowed. Insurers can now refuse to offer coverage for individuals whose coverage was cancelled for non-payment.
These changes are a start, but will likely not be enough. Humana has announced that they too will not be participating in the 2018 exchange market. Republicans will need to act fast. The clock is ticking.