Editor's Memo

Insurers Struggle To Adapt To Health Care Reform

John Marcille

The Affordable Care Act really is turbocharging change in the managed care industry. Let’s leave aside the election because I believe that there is only a slight possibility that the law will be repealed.

In our cover story about new bundled payment programs, Michael Bailit, the founder of Bailit Health Purchasing, rightly says that the ACA greatly encourages insurer experimentation with new payment methods. He concludes that “bundled payment is an incremental step toward more payment reform.”

Insurers will find that taking incremental steps will be a luxury they’ll covet when it comes to health insurance exchanges. Time is short, and many of the rules aren’t known. The consulting firm PricewaterhouseCoopers released a study this month pointing out that by this time next year, about 12 million people will begin buying their insurance through states exchanges.

In the study — “Health Insurance Exchanges: Long on Options, Short on Time” —Kim Jacobs of UPMC Health Plan points out that “This is the largest open enrollment in our careers.”

What to expect? “Consumers care about price, and with all else being equal price will win — and that’s where health plans will start competing on the exchanges,” says the study.

“Insurance companies must determine how to price at the different levels of plans laid out in the ACA — bronze, silver, gold, and platinum — each having cost-sharing percentages. Some plans will price low to attract new customers, while some may price higher to join the game without initially attracting only the sickest, costliest patients.”

How successful the business side is in designing these plans for the individual market will have a big effect on what is expected of clinical executives.

Ready or not, here it comes.

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