Insurers are the new worried well (America's Health Insurance Plans annual meeting)

In the wake of declining profits, health plan executives discuss what they need to do to remain viable. Their solution: focus on changing patient behavior.

By Emily Berry — Posted July 28, 2008

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Paul Wallace, MD, a Kaiser Permanente medical director, stood before other health plan leaders during a packed session at the annual meeting of America's Health Insurance Plans in San Francisco in June and told them their job is no longer to pay bills, but to manage members' health.

They got the message. As Dr. Wallace concluded, he asked the audience: "Is anyone here not in the behavior-change business?"

No hands went up.

The admonition that health plans are meant to manage care might not sound new, given that back in the early 1970s HMOs were created to do just that. But health plans are now talking about managing care not only as essential for their members' health, but essential to their own.

That message echoed throughout the AHIP Institute, the name for the annual meeting of the trade group representing health plans.

For the moment, health insurance companies are very far from desperate for business. The country's two largest health plans, UnitedHealth Group and WellPoint, together brought in nearly $8 billion in net income in 2007. But executives say signs point to them having to justify to employers, and perhaps to the federal government, just what value their companies bring to a health system where costs are ever rising.

Employers are demanding that plans show how they can keep costs down by making employees healthier, rather than by outright coverage denials and heavy-handed control. Already, more employers are choosing to insure themselves and use health plans as mere administrators rather than risk managers. Or, employers are electing to drop coverage, deeming it too expensive.

Then there is the specter of government regulation. Plans have fought legislative attempts to cut their Medicare Advantage premiums as a way to ensure physician reimbursement doesn't go down. And, with the possibility of a Democratic president and a Democratic Congress, plans also are bracing for attempts at government reform of health care, and especially their role in it.

Former U.S. Sen. Bill Frist, MD, a transplant surgeon, said the public appetite for change is still short of where it was in 1993, the last time there was a sustained debate over government takeover or substantial reform of the health care system. But he said polls are showing a good number of Americans believe the health care system is ready for a complete overhaul: "We are at a breaking point."

And as for physicians' role in what health plans are doing? The insurers are debating whether to partner with physicians to reach patients, or to try to work around them.

Selling change

Browsing the booths at the AHIP meeting's exhibit hall, health plan representatives were faced with dozens of companies offering to help them manage their members' health in one way or another. Very few were offering ways to pay bills more quickly, or improve relationships or transactions with doctors.

Instead, many were offering some version or part of a consumer health Holy Grail -- the way to find a reliable and fairly quick return on investment for employers or health plans, demonstrating better health for members at a cost employers can swallow.

There were companies such as Eliza Corp., a Massachusetts-based telephonic messaging company that Kaiser has used to call its members to remind them of a doctor's appointment, ask them about their health, and offer to mail information about ways they can improve their health; and Hallmark Insights, a new division of the greeting card company, pitching incentives for employees to complete health risk assessment questionnaires or sign up for wellness programs.

Then there were technology firms promising ways to slice, dice, translate, analyze and use available information about patients to predict health problems and identify the people who might benefit from health coaching.

Industry experts led sessions offering ways to control or shape patients' behavior, do it cheaply, and without alienating too many doctors or members. "It's not a matter of what consumers are asking for, it's a matter of what employers are demanding," Roland McDevitt, PhD, director of health research at consulting firm Watson Wyatt, told his audience at a workshop.

Health plans must show they can save customers money and keep workers working, said Bruce Henderson, director of PricewaterhouseCoopers' Health Industries Advisory for health care payers.

"I think [employers] are looking for health plans to play a consultative role with them, to be able to aggregate the data, provide the reporting around that, and then to be a trusted adviser," he said. "At the end of the day they're still middlemen, but that doesn't make them less valuable."

Consulting firm Deloitte released a study at the AHIP meeting revealing what consumers want from their health plans. Diane Davies, national principal for Deloitte's health plan consulting business, said the firm's research has shown insurers aren't yet giving customers the tools and information they need to make good decisions.

"There's a bunch of unmet needs that consumers are asking for, and consumers are getting more engaged in their health care," she said. "We believe health plans actually have an opportunity to meet those needs -- and if health plans don't do it, someone else will."

At stake is more than just employer business. Health insurance industry experts say that if the government takes over paying bills, care management might be all they have to offer.

Dr. Frist and another former U.S. senator, John Breaux, joined former U.S. Secretary of Health and Human Services Tommy Thompson in a discussion about the potential for health reform in 2009 and beyond. To varying degrees, they all said the time is ripe for change.

All agreed that Congress was likely to be more heavily Democratic after November, but otherwise didn't agree on what the future will look like at the intersection of health care and politics and whether the end result would include a continuing role for private health plans.

Thompson was the most optimistic that major reform would come in 2009.

"We have two candidates running for president talking about health care, five GOP senators retiring; the Democrats are going to have a greater majority in Congress, whether we like it or not," he said. "The stars are lining up right now for 2009 to be the biggest year in health care reform in a long time."

A mandate for individual insurance, being attempted in Massachusetts, is a more likely scenario for reform than a single-payer system, Breaux said. "Doing it through private insurance is a possibility," he said.

What about physicians?

How doctors fit into health insurers' plans for behavior change is not yet clear. Henderson said he believes engaging members will require the participation of physicians.

"We've learned that we, the industry, needs to play a support role, not an intervention. We need to embrace the clinical decision-making and help the patient follow that path," he said.

But Paul Keckley, PhD, executive director of Deloitte's Center for Health Solutions, said the health plans' opportunity stems in part from what he sees as physicians' failure to give their patients the help they want.

"We found that they would love a lot of those tools to be available through their doctors, but they say, 'My doctor doesn't do that,' and therefore they're going to look other places," Keckley said. "That sets the stage for really interesting dynamics in the market."

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Patients open to plan-supplied information

At the America's Health Insurance Plans annual meeting, consulting firm Deloitte presented a survey of 3,031 adults to gauge what health information they were seeking and where they wanted it to come from. Here are some of the responses. Respondents' use and interest in information, online services and tools:

Interested Used
Quality information
Offered by health plans 73% 26%
Offered by doctors 67% 9%
Price information
Offered by health plans 73% 22%
Offered by doctors 65% 5%
Health problem or treatment information
Offered by health plans 67% 22%
Offered by doctors 69% 30%

Source: "Opportunities for Health Plans in a Consumer-Driven Market: A Point of View based on Deloitte's 2008 Survey of Health Care Consumers," based on a poll conducted in September 2007

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Stakeholders trust doctors with their records

TriZetto, a health insurance software company in Newport Beach, Calif., surveyed patients, insurance brokers, health plans, physicians and hospitals about health system change. Respondents said they expect plans to accomplish integrated health care management. But most thought personal health records belonged with a doctor, not the health plan.

Consumer Employer Broker Payer Physician/hospital
Who will lead the way to achieve integrated health care management?
The health insurance company 20% 31% 46% 55% 28%
Consumers themselves 22% 18% 17% 5% 8%
The government 18% 11% 13% 7% 23%
Physicians and hospitals 13% 12% 9% 6% 27%
Not sure/other 27% 28% 15% 27% 14%
Where should personal health records reside?
My physician 47% 42% 35% 26% 53%
The consumer 32% 31% 31% 17% 10%
The health insurance company 5% 10% 9% 18% 3%
Regional health information network 3% 5% 9% 20% 16%
My hospital 4% 8% 5% 2% 7%
Not sure/other 9% 4% 11% 17% 11%

Source: TriZetto

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Health plans push for more health coaching

Health Net investigated a question that other health plans are looking into: When it comes to disease management and health coaching, is more better? More specifically, does it save money?

Lance Lang, MD, national vice president and clinical quality officer for Health Net, told colleagues at the annual America's Health Insurance Plans Institute that the answer turns out to be a clear "yes."

Health Net and its care management partner, Health Dialog, presented results from a project they called a "deep dive" -- a ramped-up, targeted program using nurses who worked with members over the phone on improving their health. The pilot program involved nearly 180,000 patients, half with the standard care management, half with higher-intensity coaching and education.

Mary Jane Favazza, senior vice president of business development and client services for Health Dialog, said Health Net already had been targeting members with multiple chronic conditions, such as heart disease and hypertension.

In the pilot, Health Net expanded that population to include people who had only one condition, or were generally healthy but were undergoing a hip replacement or some other procedure. Then Health Dialog called members in the expanded group more often than those in the standard one.

Research found that even for people who, under conventional wisdom, don't need health coaching, the extra attention ultimately saved Health Net money by avoiding expensive health crises and emergency department visits, and helping people with chronic diseases better manage their health.

Where Health Dialog usually delivers an overall cost savings to health plans of 1% to 3%, the overall savings from this demonstration was between 7% and 10%, Favazza said.

Some of the details are yet to be published. But the results could send a message to other plans that investing more in nurse educators than doctors can pay handsomely.

That could mean that patients would be talking to nurses -- paid by their health plan -- far more often than to their own physicians.

Dr. Lang said in a phone interview after the meeting that he understands physicians are likely to view disease management and health coaching sponsored by health plans with suspicion. "I understand there is a deeply embedded skepticism that a health plan could do anything constructive."

But he said Health Net's program specifically emphasizes physician involvement.

"It works best when the doctor can kind of be the captain of the ship without having to do everything himself or herself," he said.

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