Expect more insurance drama
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If you think Pittsburgh's health insurance landscape has changed dramatically in the last year, you ain't seen nothing yet, according to six of the region's top insurance executives.
Expect more friction between physicians and health plans as insurers try to wring what they call unnecessary procedures, scans and surgeries out of the system. Expect consumers to pay more in the form of co-pays and deductibles, so that they have "more skin in the game." Expect the payments insurers make to doctors and hospitals to be less tied to volume of care and more to quality of care.
And expect employers to be increasingly aggressive when it comes to asking workers to lose weight, quit smoking and bring down cholesterol levels.
"It rests, in large part, in your hands," Brian McGarry, president of national accounts at Aetna, told the local business executives gathered Tuesday by the Pittsburgh Business Group on Health for its annual health care executives forum.
Employers are going to have to "start turning up the heat a little bit" on employees, building outcomes-based incentives into health coverage, in an effort to bend the curve on ever-rising health costs, Mr. McGarry said.
Officials from Highmark Inc., UPMC Health Plan, Cigna, UnitedHealthcare and HealthAmerica (soon to go by the name of its parent company, Coventry) also attended Tuesday's gathering. Many of their remarks touched on the same points -- big change is in store for a region that has, by and large, been resistant to it.
"The days of unit cost battles -- [by] 2014, they'll largely be gone," said Vincent Sobocinski, a general manager with Cigna. Instead, insurers and hospitals will be negotiating reimbursements based on "episodes" of care -- the entire cost of, say, a knee reconstruction, rather than billing separately for the orthopedic surgery, the anaesthesia and other units of care.
The carrier executives also were asked to assess the suddenly competitive nature of the Pittsburgh market, brought on by UPMC's move to sign new, broader deals with each of the non-Highmark health insurers.
David Fields, president and CEO of HealthAmerica, said the wide-open UPMC network has led to "the mother of all price wars" among insurers jockeying for business accounts, especially "small" accounts with two to 49 employees. He relayed the story of a 14-person account lured away from HealthAmerica by a rival offering a lower price -- not only lower than what the company had paid for health care in 2011, but also lower than it had paid dating back to 1998.
"We have suspended reality in terms of what health care costs are in the marketplace," he said.
First Published February 8, 2012 12:00 am