originally appeared in The Wall Street Journal:
A increasing number of hospital systems are moving to start their own insurance plans, aiming to broaden their roles and prepare for the changes coming under the federal health-care overhaul.
Piedmont Healthcare and WellStar Health System, both in the Atlanta area, are set to announce a jointly owned insurance arm, with the goal of marketing coverage to employers and Medicare recipients in 2014. They also will consider selling coverage on a health exchange, one of the online insurance marketplaces required in each state by the health-overhaul law.
Piedmont and WellStar said their health plan would be built largely around their 10 hospitals and hundreds of affiliated doctors, and they will offer a competitive premium. We're broadening the reach of our delivery system, according to Piedmont's interim chief operating officer, who added that he expects the strategy to clearly have a positive impact on the quality of care.
In recent months, northern California's Sutter Health and New York's North Shore-Long Island Jewish Health System have said they would start selling health plans. A 2011 survey of 100 hospital leaders by health research firm Advisory Board Co. found that 20% of them intended to market an insurance plan. In 2010, around 10% of community hospitals owned, or were part of systems that owned, health plans, according to the American Hospital Association.
Typically, the new entrants will offer health-maintenance-organization-style plans that allow patients limited access to doctors and hospitals outside their network.
Some systems that have had limited insurance operations are expanding, including MedStar Health in the Baltimore-Washington area, which will add Medicare plans next year and is likely to have a plan on the Maryland health exchange, and Indiana University Health, which expects to start offering health plans to employers in 2013.
The moves reflect a broader blurring of the lines between those who provide health care and those who pay for it, as both sides increasingly aim to provide more efficient, seamless care. The hospital systems themselves are the product of a consolidation that brought together many hospitals and doctors.
Driving the trend is the mounting pressure to reduce costs, as well as the changes set to be unleashed by the health-care overhaul. In addition to adding coverage for millions of people, partly by expanding Medicaid, the federal-state health program for low-income Americans, the law will cut back on hospital payments by Medicare, the federal insurance program for the elderly. Some hospitals are starting their own plans for Medicaid recipients.
The hospitals expect to get a shrinking slice of reimbursements from the fees insurers and others pay for specific services. That payment system has been blamed for fueling rising health costs. Providers who depend solely on fee-for-service revenue will eventually have a slow death, according to the chief executive of North Shore-Long Island Jewish.
He said his hospital system intended to offer its own exchange plan, perhaps in 2014, the first year the health exchanges are supposed to be running. I want to go upstream as much as possible and take the premium dollar at the source, he said.
Because insurers pay claims for all doctor visits, lab tests and other care, they get a full view of their members. Hospital systems say they need direct access to that data, which they can get by offering their own plans, to manage patients better, avoiding duplication and detecting and treating problems early to head off pricey procedures later.
It's so much better for us to have, at least for a slice of our business, a total picture as to what's going on, according to a senior vice president at Sutter Health.
Still, most hospital systems have been stopping short of getting an insurance license, often taking more limited steps like striking reimbursement deals with insurers that reward them for providing more efficient care. Some are also forging partnerships with insurers that sometimes involve jointly selling a health plan built around the system.
Some hospital operators, including the University of Pittsburgh Medical Center and Intermountain Healthcare in Utah, long have had health plans. Others, including some health systems considering them now, have tried and failed with them in the past. The failures in part reflect the difficulties of reconciling conflicting interests: Hospitals typically make money when they fill their beds with patients, and health plans pay the bills for those admissions.
Another factor: Patients revolted against HMOs in the 1990s, when they were popular with employers, because they felt that HMOs limited their choices of providers and access to care.
The hospital systems may also create new fault lines as they compete against the other insurance companies that pay them, though their size and market power will make it tough for insurers to shut them out.
Aetna Inc.'s partnerships are lower cost, more flexible and more scalable for systems than building health plans from scratch, according to the chief executive of Aetna's Accountable Care Solutions business. Aetna's network includes providers who operate their own networks, but if a system became a significant competitor, competitive dynamics might push us…in a direction where we might not want to contract with them in a preferred state, or favor the system in Aetna's own plan designs.
Many of [the hospital systems] are also folks we do business with, according to Blue Shield of California's senior vice president for network management. There's a potential for that to be difficult.
Like insurers, which are building lower-cost narrow network plans for the exchanges, the hospital systems are betting that consumers will be willing to accept a smaller choice of health-care providers in return for the promise of smoothly integrated care and premiums that are likely to be lower. The hospital systems plan to build their coverage around their own networks, but may fill them out with other providers as well.
Hospital systems say their focus is on providing high-quality care, and they think that the better technology that helps them closely track patients will ensure they avoid some of the financial pitfalls of decades ago. Also, today there is financial urgency, according to the chief executive of Evolent Health, which is advising many hospital systems pursuing integrated operations, including Piedmont.
Piedmont and WellStar together have about 30% of the inpatient market share in the Atlanta area. Working together will spread out the fixed costs of starting a health plan, as well as offer greater reach in the combined network, according to the chief executive of WellStar.
Showing posts with label health care law. Show all posts
Showing posts with label health care law. Show all posts
17 December 2012
28 November 2012
Requirements of Health Care Reform Affirmed
story first appeared in Los Angeles Times
The Obama administration reaffirmed key requirements of the new healthcare law Tuesday, setting out how insurance companies will cover nearly all Americans, even if they are already ill, and provide plans with minimum benefits.
Consumer advocates, insurers and business groups were looking for signs the administration might try to modify some of the law's requirements as the federal government races to implement the legislation by the end of next year.
But the proposed rules issued Tuesday hew closely to the Affordable Care Act that President Obama signed in 2010. At the same time, administration officials restated their commitment to move rapidly ahead, despite continued resistance from some Republican governors.
Health and Human Services Secretary Kathleen Sebelius said this means that beginning in October next year, families and small-business owners everywhere will be able to shop for affordable, quality health coverage and entrepreneurs won't have to give up their chance at affordable health coverage to start a new business.
Under the law, Americans who are not covered through work will be able to comparison shop for health insurance in online markets, also known as exchanges, designed to mimic the shopping experience of popular travel sites.
These exchanges will be run by state governments, except in states that elect to leave the job to the federal government or to partner with Washington.
More than 15 states, mostly with GOP governors, have said they will not operate an exchange. Some governors have complained the federal government has put too many requirements on the exchanges.
In state and federally run exchanges, insurance companies will be prohibited from denying coverage to sick Americans. Insurers will no longer be able to charge more from women or customers with medical conditions.
And for the first time, insurers will have to cover 10 basic benefits, including hospitalizations, emergency care, newborn and maternity care, and prescription drugs.
The Obama administration has allowed each state to detail this set of benefits, allowing for some variations of drugs that might be covered, for example.
That worries many consumer advocates who would like to see a national standard for health insurance. Carl Schmid, deputy executive director of the AIDS Institute fears that leaving the decision up to the states of which drugs insurance plans must cover, many patients, particularly those with complex medical conditions, may not have the coverage they need.
But several leading consumer groups, including AARP, which represents older residents, and the American Cancer Society's Cancer Action Network, applauded the administration for retaining key protections in the law, including a requirement that insurers charge elderly consumers no more than three times as much as they charge young customers.
Insurers had pushed for more leeway to vary rates based on age, arguing that this was necessary to keep premiums affordable for younger, healthier customers.
Gary Cohen, who oversees insurance regulations at the Department of Health and Human Services, said the administration did not believe this was necessary to attract younger consumers, who will have access to a lower-priced health plan to cover catastrophic illness and also may qualify for new subsidies to offset their premiums.
The administration adjusted several rules to accommodate industry concerns, including allowing insurance companies to institute higher deductibles in plans they sell to small businesses and setting enrollment periods to prevent consumers from signing up for insurance only when they get sick.
The proposed new rules drew cautious praise from several leading industry representatives. Karen Ignagni, head of America's Health Insurance Plans, reiterated concerns that requirements still may force consumers to purchase coverage that is more costly than they have today.
The Obama administration reaffirmed key requirements of the new healthcare law Tuesday, setting out how insurance companies will cover nearly all Americans, even if they are already ill, and provide plans with minimum benefits.
Consumer advocates, insurers and business groups were looking for signs the administration might try to modify some of the law's requirements as the federal government races to implement the legislation by the end of next year.
But the proposed rules issued Tuesday hew closely to the Affordable Care Act that President Obama signed in 2010. At the same time, administration officials restated their commitment to move rapidly ahead, despite continued resistance from some Republican governors.
Health and Human Services Secretary Kathleen Sebelius said this means that beginning in October next year, families and small-business owners everywhere will be able to shop for affordable, quality health coverage and entrepreneurs won't have to give up their chance at affordable health coverage to start a new business.
Under the law, Americans who are not covered through work will be able to comparison shop for health insurance in online markets, also known as exchanges, designed to mimic the shopping experience of popular travel sites.
These exchanges will be run by state governments, except in states that elect to leave the job to the federal government or to partner with Washington.
More than 15 states, mostly with GOP governors, have said they will not operate an exchange. Some governors have complained the federal government has put too many requirements on the exchanges.
In state and federally run exchanges, insurance companies will be prohibited from denying coverage to sick Americans. Insurers will no longer be able to charge more from women or customers with medical conditions.
And for the first time, insurers will have to cover 10 basic benefits, including hospitalizations, emergency care, newborn and maternity care, and prescription drugs.
The Obama administration has allowed each state to detail this set of benefits, allowing for some variations of drugs that might be covered, for example.
That worries many consumer advocates who would like to see a national standard for health insurance. Carl Schmid, deputy executive director of the AIDS Institute fears that leaving the decision up to the states of which drugs insurance plans must cover, many patients, particularly those with complex medical conditions, may not have the coverage they need.
But several leading consumer groups, including AARP, which represents older residents, and the American Cancer Society's Cancer Action Network, applauded the administration for retaining key protections in the law, including a requirement that insurers charge elderly consumers no more than three times as much as they charge young customers.
Insurers had pushed for more leeway to vary rates based on age, arguing that this was necessary to keep premiums affordable for younger, healthier customers.
Gary Cohen, who oversees insurance regulations at the Department of Health and Human Services, said the administration did not believe this was necessary to attract younger consumers, who will have access to a lower-priced health plan to cover catastrophic illness and also may qualify for new subsidies to offset their premiums.
The administration adjusted several rules to accommodate industry concerns, including allowing insurance companies to institute higher deductibles in plans they sell to small businesses and setting enrollment periods to prevent consumers from signing up for insurance only when they get sick.
The proposed new rules drew cautious praise from several leading industry representatives. Karen Ignagni, head of America's Health Insurance Plans, reiterated concerns that requirements still may force consumers to purchase coverage that is more costly than they have today.
19 November 2012
Republican States Delaying Health Care Law Deadine
story first appeared on nytimes.com
The days since President Obama won re-election have been marked by tension and angst in Republican-led states like Iowa, where Gov. Terry Branstad has waited until the last minute to decide whether to create a crucial tool for people to get medical coverage under Mr. Obama’s health care law.
State Senator Jack Hatch, a Democrat who vented his frustration at a news conference here this week, said there had been a total blackout of information, and they they are behind schedule and at a disadvantage.
States are supposed to tell the Obama administration by Friday whether they want to create their own health insurance exchange — a deadline that many had bet might never come to pass, choosing to sit on their hands for months in the hope that Mitt Romney would win the presidency and the health care law would be repealed.
On Wednesday, they dug in their heels a little more. Leaders of the Republican Governors Association, gathering in Las Vegas for their annual meeting, wrote a letter to Mr. Obama requesting more time, more guidance and a meeting where the president and governors could talk.
Insurance exchanges — basically online markets where the uninsured can shop for private health insurance, often with federal subsidies to help pay — are considered critical to making the health care law work. So far, 17 states, most led by Democrats, and the District of Columbia have indicated they will create their own state-run exchanges.
The other options are setting up an exchange in partnership with the federal government, or simply letting the federal government do it.
Every state is supposed to have an exchange by Jan. 1, 2014, when the health care law will require most Americans to have insurance. The exchanges are supposed to be ready to start enrolling people in October 2013.
Despite the unhappiness, there are indications that some Republican governors may be softening their opposition to the law. Gov. Rick Scott of Florida, a Republican who had been one of its toughest critics, signaled this week that he would be open to compromising.
And Governor McDonnell of Virginia — like Florida, a state Mr. Obama carried — noted that while his state had been the first to file suit seeking to block the law, it would comply with it.
But he said that the complexity of the law, and the lack of details from Washington, meant that “my best experts in Virginia, my doctors and others that are advising me on what to do, say they still can’t make a prudent call between a state or federal exchange because we don’t have all the answers.”
Others are facing intense, sometimes conflicting pressures from state legislators and interest groups. In Wisconsin, health care providers and business groups are lobbying Gov. Scott Walker to create a state exchange, while Tea Party groups are warning him not to.
At the Republican governors meeting in Las Vegas, Mr. Walker said in an interview that he would prefer a state-based program, but that he doubted that the federal government would allow him to shape it as he saw fit.
He said that he would not disclose his decision until Friday, but added, “Why do I want to take on the potential risk to my taxpayers if I don’t really have any true authority about what’s going to happen?”
Republicans who support state-run exchanges say they are embracing a fundamental conservative belief: that states should make their own decisions rather than cede control to the federal government. But others argue that deferring to the federal government is a shrewder move; that way, they say, it will not be their fault if anything goes wrong.
The days since President Obama won re-election have been marked by tension and angst in Republican-led states like Iowa, where Gov. Terry Branstad has waited until the last minute to decide whether to create a crucial tool for people to get medical coverage under Mr. Obama’s health care law.
State Senator Jack Hatch, a Democrat who vented his frustration at a news conference here this week, said there had been a total blackout of information, and they they are behind schedule and at a disadvantage.
States are supposed to tell the Obama administration by Friday whether they want to create their own health insurance exchange — a deadline that many had bet might never come to pass, choosing to sit on their hands for months in the hope that Mitt Romney would win the presidency and the health care law would be repealed.
On Wednesday, they dug in their heels a little more. Leaders of the Republican Governors Association, gathering in Las Vegas for their annual meeting, wrote a letter to Mr. Obama requesting more time, more guidance and a meeting where the president and governors could talk.
Insurance exchanges — basically online markets where the uninsured can shop for private health insurance, often with federal subsidies to help pay — are considered critical to making the health care law work. So far, 17 states, most led by Democrats, and the District of Columbia have indicated they will create their own state-run exchanges.
The other options are setting up an exchange in partnership with the federal government, or simply letting the federal government do it.
Every state is supposed to have an exchange by Jan. 1, 2014, when the health care law will require most Americans to have insurance. The exchanges are supposed to be ready to start enrolling people in October 2013.
Despite the unhappiness, there are indications that some Republican governors may be softening their opposition to the law. Gov. Rick Scott of Florida, a Republican who had been one of its toughest critics, signaled this week that he would be open to compromising.
And Governor McDonnell of Virginia — like Florida, a state Mr. Obama carried — noted that while his state had been the first to file suit seeking to block the law, it would comply with it.
But he said that the complexity of the law, and the lack of details from Washington, meant that “my best experts in Virginia, my doctors and others that are advising me on what to do, say they still can’t make a prudent call between a state or federal exchange because we don’t have all the answers.”
Others are facing intense, sometimes conflicting pressures from state legislators and interest groups. In Wisconsin, health care providers and business groups are lobbying Gov. Scott Walker to create a state exchange, while Tea Party groups are warning him not to.
At the Republican governors meeting in Las Vegas, Mr. Walker said in an interview that he would prefer a state-based program, but that he doubted that the federal government would allow him to shape it as he saw fit.
He said that he would not disclose his decision until Friday, but added, “Why do I want to take on the potential risk to my taxpayers if I don’t really have any true authority about what’s going to happen?”
Republicans who support state-run exchanges say they are embracing a fundamental conservative belief: that states should make their own decisions rather than cede control to the federal government. But others argue that deferring to the federal government is a shrewder move; that way, they say, it will not be their fault if anything goes wrong.
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