Congress is likely to pursue tax reform in the coming session. In the meantime, health plans are focusing on employer and consumer education.
Health plans are increasingly portrayed as villains for raising premiums and deductibles, and pulling out of markets where they can't succeed, but they are mostly staying above the political fray and focusing on education of employers and consumers, industry insiders say.
Until they get a better idea of how Congress might change the healthcare laws that control their business, health plans and employers are focusing on the consumer side of things by trying to educate employers and individuals about their health and healthcare costs, says Chris Byrd.
Byrd is executive vice president of WEX Health, a payments technology company that serves 225,000 employer groups and 24 million consumers through its customers, which include Cigna, Blue Cross Blue Shield, and Anthem.
Congress is likely to focus on tax reform in the coming months rather than tilting at the healthcare windmill again, Byrd says. Health plans may still see incremental changes from tax reform, though.
"There is a lot of healthcare in tax reform because of a lot of healthcare and health benefits have tax aspects to them," Byrd says.
"There's a whole underlying tax structure for employee health insurance where employees are not taxed on the benefits and employers can deduct the amount of the benefits they're paying for, so employer-provided health insurance is intractably bound up in tax law. There will be opportunities to move on some elements of a healthcare reform bill if it had passed, such as raising the contribution levels allowed in HSAs and reform of the medical device tax."
In the meantime, health plans are trying to cut costs and increase quality of care for consumers despite the challenges they're facing, he says.
WEX Health uses data analytics to help employers and consumers better understand how they are spending their healthcare dollars.
"Employers can see how employees are spending the money in their health savings accounts or flexible spending accounts, to help reimbursement arrangements," Byrd explains.
"With consumers, we are giving them more actionable prompts, such as alerting them that they've reached the point with the HSA when they can invest, explaining why they should do that and how it helps them save for retirement. Employers and those who service them in the health plan industry are focused on that because the trend is inexorable, with more and more employers moving to higher deductibles and more consumer engagement."
Paying for Value
To help be proactive in actually addressing the cost of care, health plans are focusing their efforts on paying for performance or outcomes versus volume, says Theresa Stenger, an employee benefits consultant with Trion Group.
"The market is shifting from fee-for-service models with the goal of having provider contracts that incent adherence and improved overall health of attributed members," she says.
"This is not just limited to the medical care provided by a doctor or facility. More and more medical carriers and pharmacy benefit managers are entering into value-based contracting for the prescription drug spend, where contract value is dictated by specific measures like lower hospital admission rates. "
Carriers are also looking for creative ways to address emerging cost drivers like increased behavioral health spend by leveraging telemedicine to deliver a cost effective solution that also helps address the overall lack of access issue, Stenger says.
"In addition, Medical carriers have to always be vigilant in understanding and identifying potential wastage or fraud to help eliminate or reduce the exposure for their entire book of business," she says.
Gregory A. Freeman is a contributing writer for HealthLeaders.