Nursing
e-Newsletter
Intelligence Unit Special Reports Special Events Subscribe Sponsored Departments Follow Us

Twitter Facebook LinkedIn RSS

Less Than 1% of Health Plan Premiums Spent on Quality

John Commins, for HealthLeaders Media, March 22, 2013

In the individual market, 8% of nonprofit plans owed consumer rebates, compared to 47% of for-profit insurers, while 7% of provider-sponsored plans in the individual market owed rebates compared to 40% of non-provider sponsored plans, the report said.

Nonprofit and provider-sponsored plans were more likely than for-profit and non-provider-sponsored plans to meet the health reform law's medical loss ratio requirement that they spend at least 80% to 85% percent of premiums on medical claims and quality improvement, the report said.

McCue says publicly traded insurers have the added pressure of answering to stockholders.
"Mostly they are going to try to target that as much as they can to generate some kind of profit. However a not-for-profit plan will generate some return but they are not driven by their stockholders," he says.

"If you think about the mission or goal of a publicly traded firm that is to maximize stockholder wealth. They try to appease stockholders. Not-for-profits have their mission, although profit is not the primary motive so more of those dollars may be paid out into medical expenses."

The report suggests that costs and benefits are more important to consumers shopping for health insurance coverage than are issues such as quality of care, which means that health insurers are not incentivized to invest in quality improvement initiatives.
"Some consumers, because of the fact that they are going to be mandated to buy insurance,  are going to be very cost-driven initially," McCue says. "But once they become part of a health plan and utilize the providers of that plan then quality may become an issue to them."


John Commins is a senior editor with HealthLeaders Media.

1 | 2 | 3

Comments are moderated. Please be patient.