Managed Healthcare Executive - October 2008 - (Page 16)

Industry 2009 State of the COST CONTROL Plan, believe cost shifting goes on at a ton believes that part of the reason larger industry level as well. respondents are skeptical of mandat“Everyone wants someone else to ed coverage is because many could help solve their nancial problem,” she have too narrow of an idea of what says. “The states or the feds want to “mandated” means. make Medicare cuts to providers, and “It starts with quality health insurproviders want health plans to make ance being accessible to all people at up the loss of revenue. It’s happening an a ordable price,” he says. more and more. Instead of meaningful Consider the early results in Massconversation, everyone’s scrambling to achusetts, as reported in the New York stay alive in the way that they’ve always Times in August: the number of unbeen doing business.” insured dropped to the lowest rate in Chapin says cost shifting will only the nation, and there has also been a become more prevalent as healthcare decrease in the number of individuals dollars become more scarce. using hospital emergency rooms and community health centers for routine MANDATED COVERAGE care. The cost of uncompensated care Although it is often talked about, dropped from $166 million in the rst mandated coverage ranked third quarter of scal year 2007 to $98 milamong the cost-containment strate- lion in the rst quarter of 2008. gies for 2009, with just 13.3% agree“Insurance is more a ordable when more ing that it would be helpful. Knowl- people have it,” says Knowlton. MHE ESPITE THE relatively small impact that consumer cost-sharing strategies have had in corralling healthcare costs, optimism remains high. The challenge for health plans will be to create value as opposed to simply adding costs. “In other words, there’s going to be both a carrot and a stick, rather than just a stick,” says Roy Schoenberg, MD, CEO of American Well, an online healthcare marketplace. “[There must be] meaningful incentives for consumers to take part in this cost sharing. The only question is, how overt will the government and health plans be in making that happen?” The implication behind the cost sharing is the establishment of a partnership. If health plans win, members have to tangibly feel that they are winning as well. Members who are involved and choose care settings appropriate for their needs should be rewarded in a tangible way, Schoenberg says. David Knowlton, president and CEO of the New Jersey Health Care Quality Institute, and a director of the HealthWell Foundation, a non-pro t organization that provides nancial assistance to individuals, says that consumer cost sharing is short-term and, as research has proven, inspires patients to go without needed care. For example, a high copayment on atorvastatin could deter a patient from lling the prescription and therefore, he or she may not control cholesterol levels well enough, says Knowlton. The health plan will end up paying for charges related to a resulting heart attack, however, the plan might not recognize the connection. “They may say, ‘Look at all the money we saved with the high copayment,’ but I think what’s more likely to control healthcare costs is managing chronic disease,” Knowlton says. Others, such as Georganne Chapin, president and CEO of Hudson Health 16 OCTOBER 2008 D Strategies Most Likely to Control Costs 29.3% 21.7% 13.3% 10.2% 9.1% 7.3% Consumer cost sharing Employee/ member rewards Mandated coverage EMRs/ health IT Provider rewards for quality Provider report cards for consumers Source: Managed Healthcare Executive Reader Survey, 2008

Table of Contents Feed for the Digital Edition of Managed Healthcare Executive - October 2008

Managed Healthcare Executive - October 2008 For Your Benefit Editorial Advisors Contents News Analysis State Report Politics &�Policy Healthcare Reform Trends in 2009 Cost Control Strategies Predicted Premium Increase Top Challenges in 2009 IT System Integration Technology Innovation Disease Management Health Management Pharmacy Best Practices Technology Desktop Resource Ad/Edit Index Managed Care Outlook Statement of Ownership

Managed Healthcare Executive - October 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.