ZoomCare didn’t have a seat at Tuesday morning’s insurance executive roundtable, but Dr. David Sanders definitely had a presence. Early next year, it intends to aggressively offer health insurance benefits to large employers in Oregon. At a meeting sponsored by the Portland Business Journal, Sanders, the CEO and co-founder, is expected to discuss his innovative model to an overflow crowd at the Portland Hilton.
Yet Jack Friedman, who’s well known for speaking his mind, couldn’t hold himself back when asked about ZoomCare at the Tuesday event. He’s been urging Sanders to keep the insurance marketplace “stable” by accepting Medicare and Medicaid patients – something ZoomCare has yet to do.
“Dave’s a very smart fellow,” said Friedman, who is stepping down as CEO of Providence Health Plan next January. “I hope that you see ZoomCare playing in all the markets and not just ending up occupied by young mobile people. If Dave stays where the margins are higher, they may end up doing better than us.”
Another high ranking CEO, Ken Provencher of PacificSource, admitted he’d love to sit down with Sanders about why he’s so eager to get into the insurance business.
And, when it comes to the quality of medical care offered by ZoomCare, Dr. Ralph Prows, CEO of Oregon’s Health CO-OP is “anxious to see comparable quality data on the work they do. Until we see those measures, why should we assume their quality of care is good?”
Perhaps it’s just a coincidence, but Dr. John Santa mentioned he’s been called three times by ZoomCare, asking if he wanted to treat their patients. “But I’ve been out of practice since 2008,” said Santa, medical director of Consumer Reports who moderated the panel sponsored by the Oregon Coalition of Health Care Purchasers.
Meanwhile, ZoomCare has brought Denise Honzel on staff. She spent 25 years at Kaiser Permanente as health plan manager and vice president, and is helping the company submit its product designs, health plan benefits and rates to the Insurance Division.
Sanders, for his part, couldn’t have been more pleased when Friedman talked about changing the reimbursement model. Legislation backed by ZoomCare would allow insurance companies to bill for e-visits, a proposal favored by Sen. Laurie Monnes Anderson (D-Gresham), that will likely ride to victory next session.
“We’ve tried everything in how we pay in the Oregon market,” Friedman said. “It’s more important to think about what we’re going to pay for and not how to pay for it, and we need to be much more creative in paying for group and e-visits and giving primary care extenders a lot more opportunity to earn reasonable amounts of money. Often fee for service payments get in the way.”
Friedman also urged the provider community to become leaner by “giving us reducing pricing or opening up their capacity in more creative ways to take care of people.”
He also suggested expanding the primary care physician caseload from 1,700 to 2,200 patients by using mid-level providers more effectively and discouraging people with low acuity, such as head colds, from going to the doctor.
Quality rating are effective for primary care physicians, but not specialists as of yet, which Friedman called a “tricky job” because most measurements concern volume and efficiency rather than the appropriateness of healthcare at the front end or take into consideration the number of people moving into nursing homes or having outpatient therapy following a surgical procedure.
Hospitals Can Expect Less from Insurers
Turning to nonprofit hospitals, the days for their 6 percent margin are over, and a 2.5 to 3 percent margin is the “best hospitals can get,” Friedman said. “I don’t believe the hospital industry in general took commercial rates down low enough for the exchange market, which is subsidized,” adding that he’s had many frank and tense discussions with hospitals in his own network – Providence Health & Services – over this issue.
If he had his way, Friedman would take money out of the healthcare system – 5 or 6 points from the GDP -- and spend those dollars on primary education, more secure housing, better infrastructure and cheaper fresh food.
“If you want to achieve the Triple Aim, spending another dime on healthcare is a mortal sin,” he said, “and we should a figure out a way to defund the $70 billion of waste and put it toward our kids so they have a better future.”
Friedman is also uncomfortable with the amount of money being spent on administration rather than medical care, saying, “We have a mess here, and the public expects when they give a dollar worth of premium that somewhere close to 90 percent will be spent on healthcare and that wasn’t the case in 2014.”
He also complimented the work of the insurance brokerage community in helping pull off the exchange, despite the malfunctioning Cover Oregon, saying “they had to work their tail off to make this understandable to the clients and deserve a huge shout out.”
Oregon CO-OP Meets with Insurance Commissioner
But when it comes to the health insurance exchange, Prows with the CO-OP has experienced his own entanglement with Oregon’s Insurance Commissioner. Laura Cali rejected the CO-OP’s proposal to lower its individual rates by 21 percent, and instead approved a 9.9 percent decrease. Prows considered filing an appeal but with the current regulations that would have kicked him out of the health exchange this year since the judiciary process can take up to a year to resolve such issues. Instead, he accepted Cali’s decision, but since then has met with her to reach common ground.
Prows feels very optimistic about working together with Cali on a collaborative process to improve the rate review process by making the timeline less onerous and coming up with a rate band corridor which would allow insurance companies to have the final say on their premiums.
“Right now there’s a lot of pressure on the insurance commissioner and the actuaries to come to a conclusion and no effective way to appeal,” Prows said. “We want to help revise the process so there’s greater transparency between the health plan and the division going forward.”
Diane can be reached at [email protected].
