At least not ONLY about enrollment.
What’s missing from the reporting on and discussions about how many and who and where they signed up for health insurance is a much more important issue – what are the health plans doing to improve health and control cost?
You wouldn’t know that from the press or pundits.
The are fighting the proverbial last war, and are not thinking about what it will take to succeed in this one. Amidst all the back-and-forth about young invincibles and risk corridors and subsidies is this reality; the basis for health plans’ financial success has changed – dramatically.
Health plans will no longer succeed by underwriting; that’s dead. Yes, pricing is critical, but it can’t be used to drive demographics and enrollment, and neither can benefit design.
These tools – benefit design and underwriting – had been the fundamental business drivers for decades. Now, they no longer exist.
They have been replaced by population health management.
Going forward, health plans’ success will be driven by much-improved, streamlined, integrated health care delivery systems focusing on population health management.
This means identifying those members with chronic health conditions and reaching out – assertively and proactively – to those members. It means keeping them healthy; the annual cost of an asthmatic that has an acute episode is 20x more than one who doesn’t. Hypertension, diabetes, depression, COPD are all major contributors to health costs, and those health plans that get their members to higher health status will win.
They will have lower total medical costs, and will be able to offer lower premiums, which will drive more enrollment, including enrollment of younger, healthier (that means cheaper) members.
The “how” to do this is incredibly complex, requiring multiple stakeholders to completely change their thinking and success criteria and financial orientation. To wit:
- Docs will no longer be motivated to admit/treat/prescribe, but rather to work with patients to get those patients to “do the right thing”
- Hospitals will want fewer transplants/surgeries/ER admits
- Medical people will run insurers and health plans
- In some markets, health plans all become appendages of delivery systems, while the big national players will continue their efforts to partner with local health care delivery systems.
- Expect much faster and deeper adoption of evidence-based medical guidelines as health plans and their provider partners rely on science to drive improved outcomes.
- Some smart health plans may actually figure out how to market themselves. Seriously, it is possible! Yep, after many, many years of underinvesting in marketing, branding, positioning, health plans are going to spend tens of millions in an effort to brand themselves and achieve “mind share” among consumers.
- Employer involvement in arranging for employee health benefits will diminish – a lot.
This is already happening – it isn’t pretty, there are lots of starts, stops, and dead-ends, plans will fail and providers go belly-up, but the market will determine the winners. Notably, this wouldn’t have happened without guaranteed enrollment and pre-set benefit plans.
What does this mean for you?
The current flattening of health care trend will continue due to this transformation.
With clear boundaries set by Obamacare, health plans will succeed – or not – based on their ability to do what they should have been doing all along – deliver the best outcomes for the lowest cost.