Administering health insurance to 50,000 beneficiaries in a 26-county area, Matt Aug is keeping tabs on the ever-evolving Affordable Care Act.
2016 Projection Commercial insurance carriers will follow Centers for Medicare & Medicaid Services in adopting new payment models aimed at reducing costs by incentivizing coordination of patient care.
SBJ: How did 2015 shake out for health insurance providers?
Matt Aug: The thing that’s been challenging for us has been drug prices. Those have gone up in double digit increases over the past few years particularly in specialty drugs, which affect about 1 percent of our membership but account for 40 percent of our total drug costs, and that number is probably going to go to 50 percent over the next two years. We’ve seen the cost of drugs as a percentage of our health care costs go from about 14 or 15 percent to about 20 percent of the total health care costs.
SBJ: Are there still questions about the ACA’s effectiveness?
Aug: The ACA improved the access in our area. In the 658 zip codes, it was probably somewhere between 15,000 and 17,000 people that got insurance through the federal marketplace who didn’t have it before. That’s a significant amount. The flip side is affordability. A lot of the plans mandated by the government are medal levels that relate to benefits. Bronze is typically $6,000-plus in out-of-pocket costs; silver is probably $3,000 to $4,000 in out-of-pocket costs. That’s still high in terms of what people have to pay via a deductible, co-insurance or co-pays. The affordability piece I think is still out there.
SBJ: How is Cox HealthPlans answering the affordability question?
Aug: We’re involved in a bundled payment project since 2014 and it’s a three-year program. (Centers for Medicare & Medicaid Services) is moving to this. Their goal is to move 50 percent of their system to alternative payments, moving away to a value-based format where you’re providing more quality care and assuming the risk on it. So you’re increasing quality, but you’ve paid a set amount for certain services or procedures. Medicare just released the CJR in July – the Comprehensive Care for Joint Replacement model. It’s a mandatory bundled payment they released to 67 (metropolitan statistical areas) and about 800 hospitals. Springfield is not one, but St. Louis, Columbia, Kansas City and Cape Girardeau all have to do forced total-hip and knee bundles for CMS starting in April. (CMS) looked at the costs, so they know those procedures in the entire Medicare population – not commercial – is very high.
I think they will expand the mandatory programs and the next subset is probably cardiac care. It carries a high cost, and cardiac episodes in the Medicare population are very high. The goal, again, is 50 percent and I think they’re at 25 or 30 percent now so they have room to go.
As CMS goes along, you’ll see carriers want to do these things, too – basically align the incentives amongst all the parties involved. That’s one thing we’re working on in 2016 that’s very important: helping health care systems understand how they affect risk and cost. The key is hardwiring all those activities. It will improve affordability once everything is in place.
SBJ: Is there a push for Medicaid expansion this year?
Aug: I don’t know from a state perspective. It’s going to take something to move it forward, and I don’t know if it’s going to be this year or next year. Every one of us who has health insurance, whether it be through your employer group or an individual carrier, is paying fees related to ACA and those funds are leaving Missouri, going to the federal government and being used for Medicaid expansion in other states.
SBJ: What is Cox HealthPlans keeping an eye on in 2016?
Aug: The other piece that continues to be at the top of my list is data security and privacy. You heard about the Anthem breaches this year and there have been other smaller health plan breaches. It’s not getting any easier. Four years ago, Cox HealthPlans was one of the first 20 covered entities in the country that got audited by the Office for Civil Rights on our policies and practices. We’ve followed that playbook on what the requirements are, so we hire someone to hack our systems once a year – and don’t tell our security people – to test and see what happens.
We’ll have them send phishing emails to our employees and see who clicks on the button you’re not supposed to click on – things like that that will really tell you if all the training you’re doing is really working or if you need to change the training methodologies.
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