Susan is a freelance writer based in Denver

Susan Schooleman

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As the industry moves toward a retail environment, the importance of becoming member-centric can't be understated. Health plan members will be demanding more for their money and will be particularly sensitive to the levels of service a plan provides.  

As of January 2011, 11.4 million Americans were enrolled in consumer-directed health plans (CDHPs)-a 14% increase over 2010, according to the Department of Health and Human Services. In fact, according to RAND, 17% of those with employer coverage chose a CDHP in 2011. 

Being member-centric can improve members' plan loyalty, health engagement and treatment adherence. The more engaged members are with their care, the healthier they remain, which staves off costs downstream.   

Exchanges under the Patient Protection Affordable Care Act (PPACA) will facilitate a retail shopping experience for individuals and families who will have their choice of plans. Of the 32 million individuals expected to gain insurance coverage, 24 million will come through the exchanges, according to a 2011 Congressional Budget Office projection. It will be fairly easy for an individual to move to another plan in the exchange if he or she is dissatisfied. 

Today's projections vary on how much traffic will come through the exchanges but there's a clear need for new marketing strategies for health plans. 

"We were already going down that path regardless of reform and exchanges," says Matt Manders, president of Regional and Operations for Cigna. "What reform and exchanges do is just put a further emphasis on the fact that going down this path is even more important tomorrow than we thought it was." 

Plans must have a variety of tools prepared to serve members over the next decade. 

What members say about a plan drives the plan's credibility and trustworthiness. For example, uncensored member comments posted and resolved via Facebook and Twitter are becoming common for some plans. 

Case in point: Aetna CEO Mark Bertolini recently helped a college student with cancer who was complaining on Twitter that he had reached the lifetime limit on his Aetna plan and was going to have to sell T-shirts to pay for his treatment. Bertolini saw the Tweet and prompted plan teams to contact the member by phone and resolve the issue, which touched off a media storm.  

That same day, Aetna contacted the school and its legal team to discuss the student-plan offering. Eventually, Aetna and the plan sponsor negotiated a way to pay for the member's treatment. 

Social media will become a significant touchpoint for all health plans in the next year leading up to the expected enrollment increases. Cigna, for example, reports an average of 170 inquiries per month coming in from social media.  

Articles

As the industry moves toward a retail environment, the importance of becoming member-centric can't be understated.

How to be member-centric

 the need for implantable medical devices (IMDs) is on the rise, driven by an aging population and people remaining active longer. Utilization of devices for knee, hip, heart and spine surgeries also drives up costs.  

Kevin J. Bozic, MD, who chairs the Council on Research Equality for the American Academy of Orthopaedic Surgeons, and serves as professor/ vice chair for the Department of Orthopaedic Surgery, has studied IMDs. 

Instead, the council's study, presented at a professional meeting, points to huge variability in the cost of implants that cannot be explained with data, he says. 

"Our conclusion is there are likely other factors that are influencing the cost of the device, and my personal feeling is that the relationship and alignment between the hospital and the physician who's doing the procedure is an important factor in determining implant price in orthopaedics," Dr. Bozic says. 

The Government Accountability Office (GAO) drew a similar conclusion in its January 2012 report on Medicare costs and implantable medical devices. The GAO found Medicare expenditures for IMD hospital procedures increased from $16 billion to $20 billion from 2004 through 2009, driven in a large part by the high costs of IMDs. The report found that "the cost of IMDs can be the most expensive part of an inpatient hospital stay or outpatient procedure."  

Health plans have begun to create cost-control programs of their own to manage IMDs. Most aim to provide member incentives to choose care at an effective, efficient provider facility. 

Jeff Kamil, MD, vice president and senior medical director for healthcare management, Anthem Blue Cross of California, says the plan created a program for the California Public Employees' Retirement System (CalPERS), which provides retirement and health benefits to more than 1.6 million people. The program, which began in January 2011, limits benefit coverage to $30,000 for hip or knee replacements. Because members pay the balance out of pocket, they have an incentive to seek lower-cost care sites.  

Price variation was the key driver. Dr. Kamil also noticed a variation in implant costs with no correlation to outcomes. In 2009, an analytical unit at Anthem found that reimbursement for the total cost of care for a hip or knee replacement episode ranged from $15,000 to $110,000-with no justification for variations in IMD pricing among the filed claims.   

"We've had the average cost of procedures drop by $30,000," says Dr. Kamil. "We saved millions of dollars for CalPERS." 

Service agents explain the policy to members when the procedure is authorized. According to Anthem, members still have choices because 45 facilities currently meet the price point, including Cedars-Sinai in Los Angeles, and Loma Linda University Medical Center, for example.  

Anthem expects to apply the model for other clients, using the CalPERS program as a benchmark. In addition, Dr. Kamil says the out-of-pocket pricing could be applied more broadly, such as for cataracts and other elective procedures.  

While such incentives drive cost-effective choices for most members, the model has limitations. For example, he believes spinal-fusion surgeries-which show a recent increase in claims-aren't suited for the incentive program. 

"It's not as straightforward because there are many different devices used for many different reasons," Dr. Kamil says.  

With implant-device costs on the rise, encourage members to seek preferred sites of care.

Drive members to low-cost sites for implant device procedures

CLOSE PATIENT MONITORING and education are among the measures health plans are employing to help members with Rheumatoid Arthritis (RA). Physicians also can benefit from incentive programs that support their practices with pathways for treatment decisions and optimal medication dosing advice. 

Of all the biologic classes, drugs used to treat inflammatory conditions-such as RA and Crohn's disease-have the highest price tag. The class shows an average cost per month of $2,066, according to Express Scripts' 2011 Drug Trend Report. 

"Inflammatory conditions are the number-one specialty disease state we see," says Julie Kulawiec, senior director, product management, for Express Scripts specialty pharmacy. "Obviously, that's not specific to RA, but RA is a big chunk of it." 

For members who need biologic drugs, the cost and administration are usually managed under the medical benefit rather than the pharmacy benefit. Cost- and utilization-management techniques can vary. 

"There are a lot of different moving parts," says Alwyn Cassil, director of public affairs for the Center for Studying Health System Change (HSC) in Washington, D.C. "When these drugs are paid for under the medical benefit, you lose a lot of utilization data. You lose some management ability."  

She says the industry has good data in real-time at the point of transaction for prescription drugs, but the delivery of biologics at a care site can make the data more difficult to gather. 

To better manage RA patients, plans are turning to patient monitoring as well as keeping tabs on physicians and dosing practices. 

For example, many plans offer a nurse who provides a point of ongoing contact available over the phone 24/7. Nurses can gather information from patients regarding symptoms, current treatment and self-care. 

In Aetna's RA disease management program, a physician can refer patients for participation or they can self-refer. The plan tracks a member's use of healthcare services and medications.  

"We also do active monitoring, meaning we will actively reach out to members if they are due for an office visit, a lab test or filling their medication," says Melissa Welch, MD, head of Aetna's regional care management. "If you can keep RA's symptoms stable, meaning that RA is not active, then the risk of long-term complications is reduced." 

Like most plans, Aetna requires prior authorization for RA biologics. Guidelines ensure that the evidence supports the dosages and indications for treatment, Dr. Welch says. 

Plans are turning to patient monitoring programs to better manage rheumatoid arthritis patients.

Evidence-based tools contain treatment costs for RA patients

"Providing managed care services for this population could be a great opportunity for the health plans and the members," says Sherry Rohlfing, principal, DeltaSigma, LLC, a healthcare consulting company, based in Littleton, Colo. "These are the people for which managed care can actually make a difference in regard to access, quality and the overall reduction in the cost of inappropriate care."  

New competencies insurers might develop include collaborating with community advocacy groups and expanding their current provider networks to include specific long-term care providers. Not all organizations or practices will be used to working under managed care models. In some cases, reimbursement arrangements will need to be created from the ground up. 

Fee-for-service Medicaid remains the largest payer of LTC services. Although half of all Medicaid beneficiaries are enrolled in managed care, payments to MCOs comprise only 20% of total Medicaid spending, according to a February report by the Kaiser Commission on Medicaid and the Uninsured. The disabled and elderly, who receive the most costly Medicaid services-including long-term care-are typically covered under fee-for-service. 

According to Genworth Financial, care choices are increasing. In 2008, there were 9,200 certified home-healthcare agencies, but the number has grown to more than 11,000 today. At the same time, the cost of care in home, community and facility settings has shown five-year annual growth as high as 5.71%. Nursing home care in a private room has increased 4.23% over last year alone. 

The need to manage care for the more costly segments of the population has become so urgent that lawmakers included a dual-eligible pilot program in the Patient Protection and Affordable Care Act (PPACA) that would allow 15 states to test ways to effectively integrate the care for duals.  

As a commitment to the project, the  Medicare-Medicaid Coordination Office has awarded contracts of up to $1 million to each of the 15 states to design "person-centered approaches" to coordinating care across primary, acute and behavioral health, and long-term services for dual eligibles. After the states complete the design phase, they will be eligible to apply for additional Innovation Center funds for implementation. 

Funding is a significant factor in driving solutions. One dual pilot in California represents $150 billion over five years. 

According to Gary A. Snider, chief operating officer for Center for Elders' Independence (CEI) health plan, the California pilot is "the single largest procurement in U.S. history." CEI is a not-for-profit health plan that participates in the national Program of All-inclusive Care for the Elderly (PACE), which is operated under a cooperative agreement with Medicaid and Medicare. After 40 years in existence, PACE has only 30,000 enrollees in 82 service areas across 29 states. 

"The state and Feds want the managed care plans to take these people off their hands," says Snider. 

CEI is participating in the pilot along with Anthem Blue Cross of California and Alameda Alliance in Oakland, Calif. He says many of the recent pilot project proposals seem to resemble the basic model of the PACE program. PACE's integrated and capitated financing mechanism has been shown to lower the cost of care by 10% to 20% compared to dual-eligible members in nursing homes. For example, PACE members require an average of fewer than three days of hospital care annually. 

Managed care organizations need to look toward the future market in long-term care.

Susan Schooleman

Articles

How to be member-centric

Drive members to low-cost sites for implant device procedures

Evidence-based tools contain treatment costs for RA patients

MCOs must cultivate networks for long-term care