costs, quality, and provider integration in the local health care marketplace what can research and...
TRANSCRIPT
Costs, Quality, and Provider Integration in the Local Health Care Marketplace
What Can Research and Recent Experience Tell State Policymakers?
February 16, 2011
Technical Issues• Audio problems: click on the phone icon at
the bottom of the attendee list, select the “call me” option and enter your phone number
• To dial in directly, the phone number and access code can be found by dragging your cursor to the top right corner of the screen
• Live technical assistance: 1-800 number listed in the “notes” box
• Questions may be submitted at any time during the presentation. To submit a question:
• Click in the dialog box below the Chat window on the left side of your screen
• Type your question and press enter or click on the arrow to the right of the dialog box
• Staff will direct your question to the appropriate speaker
• We will try to respond to as many questions as possible during the time allotted.
Submitting Questions
Costs, Quality, and Provider Integration in the Local Health Care Marketplace
What Can Recent Experience Tell State Policymakers?
February 16, 2011
Purpose of Webinar• Second meeting in series to provide
policymakers with insights from research and experience
• Intended for state policy officials• Hear from researchers and state officials
dealing with issues on the ground• Recent trends: rising insurance premiums,
shortages of primary care physicians, large number of hospital mergers, push toward integration through ACOs
Speaker Introductions• Martin Gaynor, Ph.D., Carnegie Mellon
University• Lawton Burns, Ph.D., Wharton School
of the University of Pennsylvannia• Christopher Koller, Health Insurance
Commissioner, State of Rhode Island• Glen Shor, Executive Director,
Massachusetts Health Connector
Submitting Questions• Questions may be submitted at any time
during the presentation. To submit a question: • Click in the dialog box below the Chat window
on the left side of your screen• Type your question and press enter or click
on the arrow to the right of the dialog box• Staff will direct your question to the
appropriate speaker• We will try to respond to as many questions
as possible during the time allotted.
Integration, Concentration, and Competition in the Provider
Marketplace:Research Insights for Policy
Martin GaynorE.J. Barone Professor of Economics and Health Policy
Heinz CollegeCarnegie Mellon University
Academy HealthInvitational Webinar for State Policymakers
February 18, 2011
Outline
1. Integration – Facts2. Impacts of Integration
a. Hospital Consolidationi. Efficienciesii. Harm to Competition
b. Physician-Hospital Integrationi. Efficienciesii. Harm to Competition
Integration -- Facts
1. There has been a great deal of provider integration over the last 15 years.
2. “Horizontal” – hospital mergers and acquisitions, system membership.
3. “Vertical” – hospital/physician integration.
Hospital Integration1. 1990s merger wave – 900+ deals from 1994-
2000.i. Many urban markets now dominated by 2-3 large
hospital systems -- 6-12 independent firms used to be typical.
ii. Proportion system members grew from 40% in 1985 to 60% in 2000.
iii. By 2003 ~90% of people in larger MSAs faced highly concentrated markets.
2. Trend has picked up again recently.
Hospital Mergers
139
11086 83
5838
59 51 57 58
230
260
305 310287
175
132118
101
56
236
88
249
149
0
50
100
150
200
250
300
350
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Number of Deals Number of Hospitals
Source: Irving Levin Associates, Inc., The Health Care Acquisition Report, Thirteenth Edition, 2008.
Hospital Systems
2,400
2,500
2,600
2,700
2,800
2000 2001 2002 2003 2004 2005 2006 2007
Hos
pita
ls
Number of Hospitals in Health Systems 2000 – 2007Source: American Hospital Association
Hospital-Physician Integration
1. Integration between physicians and hospitals grew rapidly from the late 1980s until the mid-1990s, declined, then ticked up.
2. Physician employment by hospitals has been increasing rapidly.
Physician-Hospital Trends
Percentage of Hospitals with Physician Affiliation, 1994-2007Source: American Hospital Association
0%
5%
10%
15%
20%
25%
30%
35%
94 95 97 98 99 00 01 02 03 04 05 06 07
Per
cent
age
of H
ospi
tals
Group Practice without Walls
Management Service Organization
IPA
Physician Hospital OrganizationEmployment
Hospital Integration -- Efficiencies1. Efficiency gains from integration.
a. There are potential gains from integration.i. Scale economies.ii. Eliminating duplication.
b. Savings realized only if facilities are truly combined.i. Consolidate services; close some facilities.ii. Ownership integration alone doesn’t lead to savings.
c. Evidence is mixed.i. Facility combining mergers result in significant savings.ii. Primary motivation for merger seems to be bargaining
power.
16
Hospital Integration -- Competition1. Harm to competition.
a. Fewer competitors; less pressure on price, quality.b. Evidence
i. Price – substantial increases due to consolidation– 5%+ in markets with many (120) hospitals (LA + Orange counties).– 50%+ in markets with few (3) hospitals (San Luis Obispo).
ii. Quality– Medicare – substantial increases in heart attack patient mortality
due to consolidation.– Private – mixed results.– On balance, evidence suggests that consolidation lowers quality.
» Evidence is less firm than for price.
Hospital-Physician Integration -- Efficiencies
1. Gains from coordination, collaboration, volume, information, assurance of supply, contracting costs.a. Physicians and hospitals coordinating on patient care –
lower costs, higher quality.b. Physicians and hospitals collaborating on activities to
reduce costs, increase quality (long term activities).c. Concentrate physicians’ patient volumes – improve
quality.d. Better information about doctors, patients.e. Assured supply – both ways.f. Reduced contracting costs.
Hospital-Physician Integration -- Efficiencies
1. Evidencea. Costs – No impact.b. Quality – Mixed results.c. IT linkages – Little impact.d. Clinical integration – little impact.
2. Bundled Paymenta. Seems to lower costs, improve quality.
3. Overall, few consistent effects of integration.a. Impact seems to depend a great deal on specific form of
integration.b. Most integration fails to align physician and hospital
incentives.c. Most integration focused on financial, not clinical factors.
Hospital-Physician Integration -- Competition
1. If both the hospital and physician markets are competitive, then integration can’t harm competition.
2. If not, then integration can be anticompetitive.a. Foreclose rival hospitals from physicians, or vice versa.b. Allow formerly independent firms to collude.c. Hospitals (doctors) may have to compete less strongly head to
head by integrating with different physicians (hospitals).d. If hospital market is less competitive than physician market,
then doctors may acquire market power by integrating with a hospital.
3. Integration often seems to be a strategy to increase bargaining power with insurers.
Hospital-Physician Integration –Competition
1. Evidence.a. Not a lot of research evidence.b. Doesn’t seem to be much impact on treatment,
outcomes, costs, or prices.c. Conflicting evidence on prices.
Antitrust Enforcement in the U.S. for Vertical Restraints in Health Care
1. There has been a lot of antitrust activity concerning physician-hospital relations in health care in the U.S.
2. The antitrust enforcement agencies have been concerned about integration.
3. Courts have not often found integration to be anticompetitive (but that could change).
22
Summary and Conclusions1. There has been a lot of integration over the past
15 years.2. There is potential for improved efficiency and
better quality through integration.3. Those potentials mostly seem to be unrealized.4. Hospital integration is often anticompetitive.5. Physician-hospital integration less clear, but
there seem to often be anticompetitive motives.
Lawton R. Burns-The Wharton School 24
Horizontal & Vertical Integration:Looking Under the Hood of Hospital-Hospital and
Hospital-Physician Relationships
Lawton Robert Burns, Ph.D., MBA
The James Joo-Jin Kim Professor
Professor of Health Care Management
The Wharton School
215-898-3711
Presentation to AcademyHealth Webinar
February 16, 2011
Lurking in the Background …
All Provider Arrangements
Scrutinized for Achieving
Three Policy Aims
Lawton R. Burns-The Wharton School 25
26
The Iron Triangle of Health Care
Cost Containment
High Quality Care
Patient Access
Need to Distinguish :
Horizontal Integration
Vertical Integration
Lawton R. Burns-The Wharton School 27
Lawton R. Burns-The Wharton School 28
Horizontal Integration of Hospitalsinto Hospital Systems
Corporate Parent
Hospital A Hospital B Hospital C
Lawton R. Burns-The Wharton School 29
Vertical Integration ofPhysicians and Hospitals
Physician OfficesAmbulatory CareOutpatient Care
Hospitals
Skilled Nursing FacilityPost-Acute Care
Input Markets
Output Markets
Lawton R. Burns-The Wharton School 30
Vertical Integrationof Providers and Insurers
HMOsPPOs
Suppliers
Buyers
HospitalsPhysicians
Lawton R. Burns-The Wharton School 31
Horizontal & Vertical Integration
Physician OfficesAmbulatory CareOutpatient Care
Hospital
Skilled Nursing FacilityPost-Acute Care
Hospital Hospital
HMO, PPO
A Look Under the Hood :
Horizontal Integration
Lawton R. Burns-The Wharton School 32
Lawton R. Burns-The Wharton School 33
Hospital Systems (theoretically)
Corporate Parent
Hospital A Hospital B Hospital C
34
Allegheny Health, Education and Research FoundationAHERF
Allegheny UniversityHospitals
Western Region
AlleghenyGeneralHospital
AlleghenyUniversityMedicalCenter
AlleghenyUniversityHospitalsSouthwest
AlleghenyUniversityHospitalsNorthwest
Allegheny Integrated
Health Group
Allegheny University ofthe Health Sciences
Allegheny University Hospitals
Eastern Region
AlleghenyUniversityHospitals
Allegheny UniversityHospitals
Centennial
AlleghenyUniversityHospitals
New Jersey
St. Christopher’sHospital
for Children
Allegheny University
Medical Centers,Allegheny Valley
Allegheny University
Medical Centers,
Canonsburg
Allegheny University
Medical Centers,
Forbes Regional
Allegheny University
Medical Centers,
Forbes Nursing Center
Allegheny University
Medical Centers,
Forbes Hospice
Ohio Valley Medical Center
East Ohio Regional Hospital
Peterson Rehabilitation Hospital
& Geriatric Center
MCP Hahnemann School
of Medicine
School of Health Professions
School of Public Health
Allegheny
University
Hospitals,
Hanemann
Allegheny
University
Hospitals, MCP
Allegheny
University
Hospitals,
Bucks County
Allegheny
University
Hospitals,,
Elkins Park
Allegheny
University
Hospitals,
Graduate
Allegheny University
Hospitals, City Avenue
Allegheny University
Hospitals, Parkview
Allegheny
University
Hospitals,
Rancocas
Three Types of IntegrationHealth Systems Integration Study
36
Two Issues:
Challenges of Multi-Unit Enterprises
Centrifugal Forces That
Thwart Hospital Systems
Lawton R. Burns-The Wharton School 37
38
A Look Under the Hood :
Vertical Integration
Lawton R. Burns-The Wharton School 39
Three Types of Hospital-Physician Integration
Non-economic Integration
Economic Integration
Clinical Integration
Physician Recruitment
Part-time Compensation Shared Risks Shared Gains Leases
ParticipatingBond
TransactionsService
Lines
EquityJoint
Ventures Employment
Outsourcing and Sale of
Service
• Location Assistance and Relocation Expense
• Start Up Support: e.g. Salary Guarantee
• Support for Group Practice Growth: Incubator Model, Temporary Employment
• Liability Coverage Assistance
• Medical Directorships
• Department and Program Chairs
• Management Contracts
• On-call Contracts
• Medical Executive Positions (CMO, VPMA)
• Professional Service Agreements
• Exclusive Coverage Contracts
• PHO/IPA Risk Contracts with Payers
• Bonus/ withhold Contracts with Employers
• Pay-for- Performance Contracts
• Payer “Guarantees”
• Physician Hospital Organization (PHO)
• Management Services Organizations (MSO)
• Independent Practitioner Association (IPA)
• Supply Chain Management Programs
• DRG – Specific Bundled Payments
• Hospital Provision of In-kind Services for Cost Savings
• Equipment Leases
• Time-share Leases
• Block Leases
• Subordinated Debt Issued to Physicians
• Centers of Excellence
• Clinical Institutes
• Patient Unit Model
• Ambulatory Surgery Centers
• Diagnostic Imaging Centers
• Hospital-in-a-Hospital
• Procedure Labs
• Medical Office Buildings
• Specialty Hospitals
• Retail Clinics
• Product Line Centers
• Practice Acquisition
• Salaried Employment
• Foundation Model
• Hospitalists
• Inter-entity Transfers and Funds Flow Model
• Syndicate Hospital Ownership and Management to Physicians
Economic Integration of Physicians & Hospitals
Clinical Integration Components
Guidelines, pathways, protocolsa) developmentb) implementation
Physician & episode profiling Physician performance feedback Physician credentialing Common patient identifier Disease registry Case management Medical management committee Disease management Demand management Clinical information systems Patient self-management skills
and education
Quality improvement steering councils
Continuous quality improvementa) inpatient
b) outpatient Clinical service lines
a) inpatient
b) outpatient
Thank you for listening
Lawton R. Burns-The Wharton School 48
Promoting Delivery System Reform
in Rhode Island’s Commercial Insurance Market
Academy Health WebinarFebruary 17, 2011
Christopher F. Koller
Overview
- Office charge and overview
- Rate review in Rhode Island
- Affordability standards for health plans
Office of the Health Insurance Commissioner
Charge: Enforced via:
Guard Solvency of Insurers •Financial Exams
Consumer Protection •Contracts Review•Complaints
Ensure Fair Treatment of Providers
•Complaints•Provider Survey
See system as a whole and direct health plans towards policies that promote system improvement
•Reports •Comprehensive, simultaneous and transparent rate review;•Conditions for insurers
OHIC Strategy: Rate Review = Lever
Coordinate existing rate review authority using new review standards:•Standardized underwriting rules in small group market (2000 Legislation)
•Approved rate manual for large groups on file with Office
•Annual review of rate factors (“inflation”) to be used by plans in rate manuals – for small and large group – for all rates the following calendar year.
•Public information and meetings.
•Final Decision by OHIC
•2010 process details: here
Result – Shifts Policy and Decision Focus from Cost Shifting Cost Reduction
Annual Inflation rates of 11+%
OHIC Affordability Standards
• Articulate the “policies to improve the system” expected of commercial health insurers in RI
• Developed by OHIC’s Health Insurance Advisory Council in 2008/2009
• Apply only to commercial insurers (fully insured business)
• Focus on System Affordability (not Quality or Access)
– Priority Issue
– Standards must be within the control of health plans
OHIC Affordability Standards
Health plans must focus on payment reform, starting with primary care. Specifically*:
1)Increase the portion of their medical expenses spent on primary care by one percentage point per year for 5 years (2010 to 2014)
2)Support RI’s statewide all payer medical home project.
3)Align incentives across insurers to promote adoption of electronic medical records.
4)Participate in hospital payment reform efforts
*Additional details here.
56
Accountability:
•Failure to meet standards = negative rate factor review consideration
•Applies for fully insured commercial business only – 40% of state population and one third of spend.
OHIC Affordability Standards
Why Primary Care?
• Literature suggests efficiency and quality of health care systems may be linked to strong primary care presence.
• Deficiencies of FFS payment, RBRVS calculation and private negotiation
• Pipeline issues
• Tremendous leverage – 20% increase in PCP expenses for 1% of premium
• Health plan leaders acknowledged primary care need
58
Where is RI on Spend Target?
OHIC holds quarterly update meetings with each health plan; highlights described below:
October 2009
April 2010
October 2010
Ongoing
Health plans reported 2008 Actual Primary care spend OHIC Set 2010 targets based on 2008 reported actuals Health plans submitted 2010 primary care spend plans
Health plans reported 2009 Actual Primary Care Spend OHIC revised 2010 targets based on 2009 reported actuals
Reviewed 2010 YTD Actual primary care spend Health plans proposed 2011 primary care spend plans
Quarterly Monitoring of spend amounts and categories System evaluation: ED visits, hospital admits/readmits, primary
care staff
Work supported by RWJ/SCI and Federal Grants
59
By the Numbers: Overall 2008A 2009A 2010A 2010F 2011FActual Actual Actual Forecast Forecast
Base Year 1st 6 monthsTotal Medical Spend ($M) 823$ 866$ 396$ 793$ 868$ Total Primary Care Spend 47$ 56$ 28$ 55$ 68$ % Primary Care 5.7% 6.5% 6.9% 7.0% 7.9%
vs. Targeted PC% 5.7% 6.2% 6.7% 6.7% 7.7%
Primary Care Spend Detail 47$ 56$ 28$ 55$ 68$ FFS Payments 44$ 51$ 23$ 46$ 51$ Medical Home (CSI)* 0$ 1$ 1$ 1$ 2$ Medical Home (Other) -$ -$ 3$ 5$ 8$ EHRgrant program -$ 0$ 0$ 1$ 2$ Loan Forgiveness -$ 1$ -$ -$ -$ Other Allowable 3$ 4$ 1$ 1$ 5$
% Primary Care Spend Detail 5.7% 6.5% 6.9% 7.0% 7.9%FFS Payments 5.3% 5.8% 5.8% 5.8% 5.9%Medical Home (CSI)* 0.0% 0.1% 0.2% 0.2% 0.2%Medical Home (Other) 0.0% 0.0% 0.7% 0.7% 1.0%EHRgrant program 0.0% 0.0% 0.1% 0.1% 0.2%Loan Forgiveness 0.0% 0.1% 0.0% 0.0% 0.0%Other Allowable 0.4% 0.5% 0.2% 0.2% 0.6%
FFS as % of Total PC Spend 92% 90% 84% 84% 75%
60
By the Numbers: Carrier focus
BCBSRI UHCNE Tufts
PC Spend Levels2008 Actual2010 Actual YTD2011 Forecast
5.8%6.8%7.8%
5.5%6.3%7.5%
7.7% (2009)
9.0% (2010)
How they are getting there (distribution of extra spend)
FFS Improvements 6% 55% 60%
Medical Home (CSI & Proprietary) 69% 25% 8%
EMR subsidy 12% 3% 33%
Other 13% 17% 0%
2008 (Base Year) vs. 2011 Primary Care Spend
61
Enrollment Impacts
% Fully Insured 66% 66% 65% 61% 61% 60%
Total Commercial Enrollment (Self Insured + Fully Insured) of Rhode Island Residents
• Commercial enrollment declines have limited impact of affordability stds
62
Primary Care Spend: Assessment
The affordability standards are working
Carriers are on target to increase primary care spend from 5.7% to 6.7% of total medical spend
However, the drop in enrollment due to economic decline and lower rates of medical inflation reduced impact of this spend
Eight percent decline in fully insured enrollment since base year (2008)
Carriers tended to focus investments on top priority categories – and dropped lower priorities.
Two top priorities: Medical Homes and FFS improvements
Carrier priorities were quite different
BCBSRI: major bet on their proprietary Medical Home initiative United: major investment in FFS fee improvements
Implications
• Hitting first year targets is critical – both for credibility/momentum AND for longer term success. 2011’s target is much more achievable if we hit 2010…
• Effect of Affordability Standards: Additional $17.3 M in 2011 to Primary Care (7.7% vs 5.7%)
Primary Care Spend: Assessment
Why Hospital Payment Reform?
112%
127%
167%
113%121%
79%
100% 104%
126%
96%106%
116%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Rhode Island
Miriam Kent County St. Joseph Women & Infants
Roger Williams
South County
Memorial Newport Westerly Landmark Average
CY 2008 BCBSRI & United Inpatient Med Surg Payments Indexed to Medicare
• Current private negotiation model appears to reward size –NOT quality or efficiency
Because Change is Challenging
•Very significant cross subsidies between payers (Medicaid, Medicare and Commercial). Payment pressures from public payers increasing
•Margins are thin – financial stakes of miscalculation are huge.
•OHIC surveys of health plans show little payment innovation and small portion of payments to hospitals for any kind of incentives.
Why Hospital Payment Reform?
OHIC Conditions on Health Plan Contracts with Hospitals
• Articulates required elements in health plan contracts with hospitals.
• Promulgated as an order in 2010 as part of rate factor review process
• Goals:- act on Affordability Standards
- encourage payment reform by insurers
- limit financial risk with change for hospitals
- increase transparency and public accountability for what are seen as largely public assets (hospitals); some with significant market power.
- create a conversation
- revisit regularly
Health Plan Conditions - Overview
• Apply to Commercial Contracts only (no Medicare or Medicaid)
• Apply to contracts renegotiated between 7/2010 and 6/2010 (revisited in Spring 2011) –estimated that 6 contracts are effected
• Apply to Health Plans – not hospitals. Tied to rate factor review
Health Plan Conditions - Overview
1. Units of Service – pay for IP and OP services using units service that encourage efficient resource use (e.g. Medicare DRGs and APG’s – same as RI Medicaid - or more innovative)
2. Rates of Increase – Medicare CPI (same standard as Medicaid in RI)
3. Quality Incentives – mutually agreed to quality incentives based on nationally accepted measures worth at least an additional 2% of revenue
Health Plan Conditions - Overview
4. Administrative Simplification – terms that define mutually agreed to obligations.
5. Care coordination – terms that promote and measure improved clinical communications
6. Transparency for these six terms.
• Consequences for health plans if they cannot be met, in spite of best efforts
• Length of time for implementation by hospitals and health plans
• Process for promulgation and authority of OHIC to set terms
• Does not move system fast enough and does not reduce cost increases
• Preserves current inequities in system.
• Extent of coordination with other public payers.
Health Plan Conditions - Concerns
Health Plans Report:
•Most contracts do not expire during this period (multi year)
•has changed conversations with hospitals significantly: general acceptance; some resistance – particularly on rates of increase
•Support from other stakeholders
Health Plan Conditions – Effect to Date
• Only one contract closed – Lifespan and BCBSRI signed one year extension that BCBSRI attests meets the conditions. Significant accomplishment for both parties.
• Second system has taken OHIC to court over its authority to enforce.
• Support from businesses.
• OHIC will examine all contracts more fully and disseminate findings.
Health Plan Conditions – Effect to Date
73
Update: Other Affordability Standards
• Rhode Island’s all payor medical home project (CSI)- Expansion in place. Initiative is well established. - No requirements in Affordability Standards for 2011 and beyond.
• Electronic Medical Records- Health Plans have incentive programs in place. - Report flat take up. - Will improve coordination with Medicare and Medicaid work on meaningful use.
National attention on affordability standards:
• “Rhode Island’s Novel Experiment To Rebuild Primary Care From The Insurance Side” Health Affairs May 2010 29:5 941-947
• Governing Magazine - February 2011
74
Metrics are important:In process but not there yet
1. Primary Care Spend Percentage -- Target vs. Actual
2. All-Payor Medical Home Initiative (CSI)-- Number of sites-- Total spend
3. EMR Incentive-- Participating primary care providers-- Bonus payments ($)
1. Primary Care Physician Satisfaction-- Annual survey-source: OHIC survey
2. Primary Care Supply-- Primary care provider count-- Primary care share (PC/total providers)source: Department of Health licensure
3. System Efficiency Improvements-- Hospital Use (Total, ACS)-- Re-hospitalization-- ER Use (Total, Preventable/Avoidable, ACS)
source: Health Plan self report. Eventually All payer Data base
4. Total Medical Trend
source: rate filings
Process Measures Outcome Measures
Role of Evaluation
• No third party evaluator of this work
• As implementer, tension between monitoring and evaluation
• No doubt we got it wrong – but goal is culture change, not the exact intervention.
• Anticipate many mid-course changes
OHIC Rate Review – Areas for Improvement
• Engaging consumers and businesses
• Coordinating with other state levers: licensing, provider regulation, public employees and Medicaid.
• Data reporting and monitoring
• Institutionalization: Move these standards from guidance to regulations.
Provider Networks and the Health Connector
Academy Health Webinar: Costs, Quality and Provider Integration in the Local Health Care Marketplace
Glen ShorExecutive DirectorHealth Connector
February 16, 2011
78
Key Considerations –Provider Networks
Provider networks are a key area of competition among health insurance plans
Most health plans in Massachusetts, for both commercial and subsidized products, have very broad networks with virtually all providers
Experimentation with limited networks has emerged in recent years
• Recent state legislation (Chapter 288) includes a provision requiring health insurance carriers to offer a limited or tiered network plan that is 12% less expensive than a comparable broad network plan
• Some carriers in Massachusetts have started to introduce both limited and tiered networks as an alternative to broad network plans
Exchanges have a role to play in promoting innovation while ensuring the quality and affordability of insurance products and a level playing field for competition among health plans
79
Connector Experience – Commonwealth Care
Commonwealth Care (CommCare) is a subsidized health insurance program for adults who have incomes up to 300% FPL (and no access to affordable ESI)
Most participating health plans have similar broad networks
A lower-cost health plan with a limited network started to participate in CommCare two years ago
• Broad network of PCPs and Community Health Centers, limited network of hospitals (40%)
• Excludes majority of large Integrated Delivery Networks (IDNs) in the market
• Materially lower cost structure
The Health Connector’s approach:
• Require that all health plans, including the limited network MCO, meet network adequacy standards
• Ensure quality of care and member satisfaction – current membership is satisfied with and understands limited networks, and there is no evidence that care is deficient
• Apply risk adjustment to mitigate adverse risk selection
• Promote competition among MCOs to deliver cost-effective, comprehensive and reliable coverage
80
Connector Experience – Commonwealth Choice
Commonwealth Choice (CommChoice) is an unsubsidized health insurance exchange for individuals earning > 300% of FPL and small businesses with 1-50 employees
Plans from 7 health insurance carriers are offered through CommChoice
Plan benefit designs are standardized (Gold, Silver, Bronze, Young Adult Plans)
Network differences among carriers may lead to adverse risk selection
Until risk adjustment in an unsubsidized environment can be established, need to require broad networks to ensure level playing field
Similar to our approach on CommCare, we do encourage carriers to experiment with limited networks
A provider search tool to help shoppers make purchasing decisions with information on network configuration is currently being developed
Submitting Questions• To submit a question: • Click in the dialog box below the Chat window
on the left side of your screen• Type your question and press enter or click
on the arrow to the right of the dialog box• Staff will direct your question to the
appropriate speaker• We will try to respond to as many questions
as possible during the time allotted.
Thank You for Participating! • Please take a few moments to fill out a
brief evaluation:• https://www.surveymonkey.com/s/
8ZFC2K6 • We will also send a follow up email with
the survey link. • We will release a related issue brief on
the topic in a few weeks.