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Health Plans: A Familiar Debate

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Health insurance executives understand there is great growth potential in the individual insurance market, but many of them still haven't made the investments to take advantage of the opportunity.

Just about 36% of the health plan leaders responding to the HealthLeaders Media Industry Survey 2010 said they planned to invest in the individual market, the top response as a way to deal with the erosion of the employer-based health insurance market. Despite that, more than 62% also said their company has not invested more resources at this point.

Vince Ashton, executive director of HealthPass, a New York-based health insurance exchange with five health insurers, says he's surprised somewhat by the results, but suggests the respondents may not have invested because of some states' individual market regulations. In New York, for instance, Ashton says the individual market has very high premiums because of community rating and standardized health plans. This means only the rich and sick can afford or are interested in individual insurance, he says.

Another area of potential growth is in physician relations. One difference from last year's health plan survey was how respondents answered the question "In the next three years, which one of the following could bring about the most improvement in payer relationships with physicians?" Last year, the top choice by health plan respondents was pay-for-performance (29%). In the physicians' portion of last year's survey, however, 51% of doctors answered that higher reimbursements would best improve relations.

Though one-quarter of health plan respondents pointed to pay for performance as a way to improve relations in the 2010 survey, that was third, behind speeding up processing, fixing, and paying claims (31%) and increasing reimbursement rates (29%).

"I don't know if speeding up processing and fixing claims is where the problems lie realistically," says Ashton. "To me, the only way to fix the way things are going is taking a hard look at how people are compensated and make sure their goals are aligned with the person they are treating."

But Bob Stone, cofounder and executive vice president of Franklin, TN-based population health management company Healthways, says health plans understand that administrative costs, such as processing claims, are hurting providers. Speeding up processing is an infrastructure issue for providers and insurers are working to standardize processing to remove paperwork headaches, he says.

Health plan respondents in the 2010 survey were largely pleased with their work. Nearly 85% of respondents were either satisfied or very satisfied with their jobs and 82% said they would encourage their children to enter a healthcare career. Both figures are in line with last year's results.

Health plan respondents, however, were not as positive about other stakeholders. More than three of four respondents thought negatively about drug makers and congressional Republicans, while more than half of respondents disapproved of President Barack Obama, congressional Democrats, HHS Secretary Kathleen Sebelius, physician industry leadership, device makers, and even health plan leadership.

Stone says the negative stakeholder results are not surprising and reflect the same divisions in health reform. "The inescapable conclusion is that not everybody is right. My concern is that everybody's wrong to one extent or another," says Stone.

Ashton says health reform disagreements point to the uneasiness in healthcare. "I think everyone knows and feels that problem. They are waiting for someone to come up with the solution, but not any of the solutions is what everybody wants to hear," says Ashton. "Everyone think it's great to have health reform until the point that it affects what they are doing."

Les Masterson

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