Frank Diamond

Officials at Horizon Blue Cross Blue Shield of New Jersey think that they might have found a niche customer base. The public health insurance exchanges opening in October will include the Small Business Health Options Program (SHOP) through which companies with 50 or fewer employees can obtain coverage from participating health insurers. New Jersey’s exchange will be run by the federal government.

While Horizon will participate in SHOP, it has also developed a private exchange for mid-sized businesses that want to offer an online menu of defined contribution coverage.

The product, Horizon Select, is being rolled out this summer, tailored for companies with 51 to about 400 employees, says Christopher M. Lepre, senior vice president for market business units. “The private exchange is a response to employers who have told us that they’re looking for alternatives to the standard health insurance model.”

Horizon spokesman Thomas Vincz says, “It’s a private online marketplace, in the sense that public exchanges are also online marketplaces. The difference is that it is private and between the employer and employee and Horizon.”

Under the traditional model, employers charge their employees a set amount, usually 20% to 30% of the total premium, says Vincz. “It’s a defined benefit model,” he says. “Fundamental to the private exchange is a defined contribution approach to benefits.”

Defined amount

Theoretically, employers contribute a defined amount to each employee’s benefits and the workers can then use that money to choose their coverage in the private marketplace created under Horizon Select.

“A private exchange allows more customization of benefits, so employees often find more choices than what they would have under a traditional benefit plan,” says Vincz.

Horizon hopes to have 15 to 25 employers sign up for Horizon Select in the initial year, then to expand it. The gradual approach, says Lepre, should help ensure a smooth transition at a time when the market will be adjusting to the many changes in the Affordable Care Act.

“This is new and different; we want to make sure we execute fully for our customers.”

Wellness will be a big part of making Horizon Select work, says Vincz. “There’s a growing appetite among businesses for health and wellness products, and our own clinician executives are focused heavily on health and wellness — both for our own employees and our 3.6 million members. Hence, the products that will be offered through the private exchange will give more tools and options that help members manage their individual health and wellness needs.”

Wholesale to retail

Lepre points out that the exchanges reflect a shift in the insurance marketplace from wholesale, in which employees receive coverage through their employer, to retail, in which consumers buy directly from, and interact with, insurance carriers.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.