Some 300 brokers, carrier representatives and others packed the Lloyd Center DoubleTree for the Portland Association of Health Underwriters CEO Forum Roundtable on Wednesday to hear predictions from industry leaders.
Between 14 and 16 insurers now divide up a commercial pool of just 2.4 million Oregonians not covered by Medicare, Medicaid or other programs.
“A crowded market creates significant challenges if you’re committed to having your premiums be more than your claims,” said Ken Provencher, president and CEO of PacificSource Health Plans.
“You have to have enough healthy people to pay for the unhealthy,” said Angela Dowling, president of Regence BlueCross BlueShield of Oregon. “It’s a math equation.”
But the CEOs agreed competition can be good and none of them said it keeps them awake at night.
For Tandy Kooch-Cleaver, CEO of the Northwest region of UnitedHealthcare, her main worry is the Oct. 1, 2016, phase-out of transitional relief for small groups, comprised of two to 50 employees. “Since 2013, 40 percent of our business sits in that pool,” she said. When the relief ends, she believes many employers may feel sticker shock and opt out of providing healthcare coverage for their employees and their families.
That could be good for the individual market, moving a healthier population into the risk pool, Dowling said. Or it could be what she called a “tipping mechanism.”
“We may get to single-payer because we can’t sustain those two challenges ahead,” Dowling said of the pressure on the individual market and the end of relief for small groups.
“The individual market is teetering,” agreed Andy McCulloch, president of Kaiser Foundation Hospitals and Health Plan of the Northwest KP. But a lack of primary care providers statewide is his top concern.
“Profound political dysfunction” with no willingness to discuss solvable problems is the biggest concern voiced by Dr. George Brown, M.D., president and CEO, of Legacy
Health. Brown was among the only people in the room not directly connected to an insurance company – and that could change soon.
Brown said Legacy’s proposed integration with PacificSource will help manage care, especially for the minority of patients who drive most of the costs. All agreed mergers, acquisitions and strategic partnerships will continue.
“It’s imperative to know who our patients are,” Brown said. But without integration, no payer was willing to share patient data or enter capitation, which is “not a future-looking arrangement,” he said.
Capitation – a payment arrangement that gives providers a set amount for each enrollee whether or not that person seeks care -- is “where we’re headed and where we’re going to have to learn to exist,” Brown said.
He believes Legacy’s integration with PacificSource will lower administrative costs.
Brown said the cost to interface with insurance runs to $18,000 per doctor per year. And it’s “very irritating to providers” when a doctor’s office must call an insurance company for pre-approvals only to discover the night before a scheduled surgery – and sometimes the morning of the surgery—that the procedure is not covered.
Integration of providers and payers, Brown said, provides an “opportunity for savings.”
Kaiser’s McCulloch agreed. “We don’t have that cost. We pay for evidence-based therapy.”
“Insurance companies don’t do medical management because they have nothing else to do,” said Phil Jackson, CEO of Oregon’s Health CO-OP.
“This is something the insurers have had to do to protect themselves but it creates barriers to care,” Brown countered.
Dowling believes insurance involvement can sometimes improve care. She shared this story: A woman was about to get back surgery for the fourth time when Regency Blue Cross Blue Shield insisted on physical therapy instead, which worked. Dowling then added that providers sometimes don’t understand costs.
When Dowling’s son needed a prescription for three to six months for a minor issue his doctor prescribed a medication that cost more than $600 a month,” she said. She asked if there was an alternative and there was – costing $21 a month and it worked. “She just didn’t know,” Dowling said of the doctor.
Jan Johnson can be reached at [email protected]