Managed Care - August 2012 - (Page 17)

a professor at the Washington and Lee University School of Law. “Congress concluded that the large employer market is working well and didn’t need to be fixed,” he says. “So for now, the public exchanges are not intended to serve large businesses. It’s not until 2017 that the public exchanges can extend to larger businesses.” One other difference is that unlike public exchanges, which have some reinsurance and other mechanisms that Congress added to protect them against financial failure if payments greatly exceeded income, the private exchanges have no such protections. For insurers, private exchanges offer an opportunity to test the concept in action. An example of an exchange for small employers is BlueKC, which Blue Cross Blue Shield of Kansas City started in January to learn what it could about this new method of selling insurance. (See “Lessons Learned From Starting an Exchange” on page 18.) For employers, private exchanges mean they can change how they pay for health care. About half of large employers have said in recent surveys that they will switch to a defined contribution approach to health benefits. Currently, most employers use a defined benefit approach, meaning they define the benefits for employees and then contract with health plans to deliver those benefits. Under a defined contribution (DC) approach, the employer sets a fixed dollar amount for employees who then buy health insurance up to that amount or pay more out of pocket if the plan they choose is more costly. Concerns raised A survey last year by Aon Hewitt, a benefit consultant, shows that within five years, 44 percent of 562 responding companies would prefer a corporate exchange and a DC approach. A survey done this spring by J.D. Power & Associates shows that 47 percent of responding employers definitely or probably will switch to a DC approach although no time frame was specified. (See “Survey Shows O How medical directors can use exchanges to their advantage at enrollment. That way we can use disease management programs more efficiently to manage risk upfront. “We can no longer wait until the claims come in to identify these people,” Rowe says. “We need to take steps on the front end with health risk assessments to get people engaged.” Pharmacy directors Health plans might enroll these same consumers and dependents anyway, but when health plans in exchanges compete on price, premiums will be lower. “We’re getting these patients now, but all the healthy people won’t be paying us 10 percent to 15 percent in higher premiums anymore,” Rowe explains. Pharmacy directors face similar challenges. “The price of the pharmacy component will be part of the overall premium, which means the pharmacy benefit will need to be integrated closely with the medical benefit,” Sperling advises. “Pharmacy programs will need to show that they can increase adherence and lower utilization of emergency room visits and hospital inpatient stays because when you do that you reduce the overall cost of care. Ultimately, lower costs will affect the premium. “Whether the plan is on a corporate exchange or a state exchange, what will be important to pharmacy directors will be integration, formularies, and risk management,” he adds. “In either case, you need to be a risk bearing entity to play.” — Joseph Burns ne change coming as a result of the Affordable Care Act is that health plans will find it will no longer be sufficient simply to cite platitudes about the cost-lowering and quality-improving benefits of disease management initiatives. When consumers begin buying health care on public and private insurance exchanges, medical directors will arguably need advice from actuaries and risk managers on how to structure care management programs to maximize return on investment, says Ken Sperling, national health exchange strategy leader for the benefit consultant Aon Hewitt. “For care management programs, the buyer will be the underwriter,” Sperling says. “The underwriter will have to agree to a premium discount for these programs, meaning medical directors will need to persuade the underwriters that the care management programs actually will reduce costs.” High-cost patients Ron Rowe, vice president for individual and small group sales for Blue Cross Blue Shield of Kansas City, agrees, saying he believes medical directors will be pressured to identify high-cost patients when they enroll through health insurance exchanges. “The whole issue of adverse risk means we need to know what types of people are going into which plans sooner rather than later,” he says. “For example, if people with diabetes are enrolling in our plans, we need to know that. This is a concept called onboarding in which we need to identify the people at risk AUGUST 2012 / MANAGED CARE 17

Table of Contents for the Digital Edition of Managed Care - August 2012

Managed Care - August 2012
Editor’s Memo
Contents
Legislation & Regulation
News & Commentary
Medication Management
Evidence Review
Compensation Monitor
Private Exchanges: Practice Makes Perfect
Hospitals and Providers Ganging Up on Plans?
Q&A: Kaiser Permanente’s Sharon Levine, MD
God Save the Health Care System!
Future Points to Greater PBM/Plan Cooperation
Formulary Files
Plan Watch
Tomorrow’s Medicine
Outlook

Managed Care - August 2012

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