• As consumers are given more responsibility for how they spend their health care dollars, they can shop for coverage on private insurance exchanges.
• About 6 million Americans have enrolled in coverage through private exchanges. Enrollment is relatively slow so far but is expected to accelerate.
• Most of those consumers will shop for the lowest premiums, which means they’ll have higher out-of-pocket expenses.
• Providers who want to reach those enrollees must be part of an exchange.
• Marketing to these consumers means mastering the Triple Aim.
When a consumer shopping on Medica’s private insurance exchange enrolls in the Vantage accountable care organization, the staff at Fairview Health Services swing into action.
Vantage — actually, Fairview and North Memorial Vantage with Medica — is the product name for the ACO that includes Fairview Health Services and North Memorial Health Care and is sold on the My Plan by Medica exchange in Minnesota’s Twin Cities.
Automatically notified of every new enrollment, staffers check to see if the individual is already in Fairview’s electronic health record system. They look at the robust demographic information collected through the exchange’s online enrollment system. And they start an active onboarding process to welcome the consumer, answer questions about how the ACO works and start building a relationship.
“We ask questions about their health and, based on those responses, we make recommendations to get them connected with a primary care provider or some other member of our care team,” says René Coult-Calendine, Fairview’s vice president for market and product development. “In that way, we get in front of some of the potential risk of the population as well.”
Fairview and insurer Medica, both based in the Minneapolis area, are among the nation’s pioneers in private insurance exchanges. After three years of experience, both parties think they are at the forefront of an important trend in health care purchasing and delivery.
The Vantage ACO is one of four ACOs available through My Plan by Medica, the private exchange, which also includes an open-access option. Most individuals who shop on the exchange choose an ACO — and save money by doing so. More than 90 percent of those who choose an ACO one year go on to renew for an ACO the next year. And all the ACOs are exceeding expectations for financial performance, says John Naylor, senior vice president for commercial markets at Medica.
“I believe this gets back to the importance of the relationship and the access to complete information in an individual’s health record,” he says. “And we are providing better care than we were before.”
Why private exchanges matter
Private insurance exchanges are one facet of health care’s move to a retail orientation. Instead of choosing a health plan for their workers, employers give their workers a cash allocation and point them to an exchange, where they can choose from several options to buy the coverage they prefer.
In 2015, about 6 million consumers enrolled in coverage through a private insurance exchange. Jim Bonnette, M.D., executive vice president at the Advisory Board Co., expects that number to grow rapidly, with private exchanges eventually becoming the standard way that employees enroll in employer-sponsored health benefits. “By 2020, we could see 40 million to 60 million people in private exchanges,” he says.
That has major implications for health care providers for two reasons. First, many consumers shopping on a private exchange are looking for a low premium, and that means higher out-of-pocket responsibility.
“As individuals are buying down in coverage, provider systems will be on the hook to collect more from individuals,” says Scott Brown, managing director of Accenture’s private exchange offering. “That’s obviously a pain point for many providers today, and exchanges will only accelerate that.”
The other challenge: getting the patient’s business in the first place.
“You’ve got to be in one of the networks [offered on the exchange] so they can choose you when they choose the insurance,” Bonnette says. “You need to be front of mind for them so that they choose you again when they need services, because you’re not likely to be the only one in the network. And you need to stay top of mind because people can change their plan without a penalty every year.”
Positioning for the consumer
That is a new dynamic for most health systems. One of the ACOs vying for patients on the My Plan by Medica exchange touts same-day primary care appointments and online care; another offers a free wellness assessment with a nutrition and fitness specialist; and another promises a free “meet and greet” with a primary care provider, plus free home delivery of prescription drugs.
Naylor, the Medica executive, says the ACOs look for opportunities to get in front of potential customers who will be shopping on the exchanges. “For some of our larger employers, we set up a benefits fair where each of the ACOs has a booth,” he says. “An individual employee can walk around and say, ‘I’ve got a daughter with this condition; what resources and tools do you have to support us?’ They go shopping and see which of those they feel most comfortable with.”
Glimpsing the future?
Like most things in health care, private exchanges are gaining traction in some parts of the country much more quickly than in others.
In an attempt to prepare its members for the future, the Michigan Hospital Association in 2013 commissioned a major study about the implications of insurance exchanges, both private and public. But not much has happened in the private exchange arena so far, says Paul La Casse, D.O., who chaired the Task Force on Future Health Insurance Markets.
“There has been some movement into these private exchanges, but it has not been significant,” says La Casse, executive vice president of the post-acute care division and diversified business operations for Beaumont Health in southeastern Michigan. “I think we’ll see slow growth until there’s a tipping point.”
Leaders at Mayo Clinic Health System agree. That’s why it partnered with Medica to offer a new health plan — called Medica with Mayo Clinic Health System — offered in eastern Wisconsin and southern Minnesota through Medica’s private exchange. “We think that there will be more of these sorts of products and exchanges coming forward, and we’re trying to position ourselves well for that sort of an environment,” says Brian Whited, M.D., vice chair of operations for Mayo Clinic Health System.
The health system consists of Mayo-owned clinics, hospitals and other facilities that serve people in more than 60 communities in Georgia, Iowa, Minnesota and Wisconsin, along with the Mayo flagship in Rochester, Minn.
The health plan offered on the exchange aligns with Mayo’s efforts to deliver high-value care in two ways, Whited says. First, it is designed so patients will have all their care within the Mayo system, which means Mayo will have complete information about them.
“The second component is [that] it allows us to understand who signed up for this product, so we can reach out to them proactively to deliver more wellness care,” he says. “We can make sure they’re getting in for their screenings and their chronic disease follow-up labs in a proactive way, instead of waiting to get sick and coming to us.”
What it takes to succeed
Marketing to consumers requires mastering the Triple Aim — improving the patient experience, improving the health of the population and reducing per capita cost — because consumers are looking for value. Health systems that want to succeed on private insurance exchanges especially need to focus on patient experience.
“Care systems really need to be thinking about how they can create a differential experience that is not core to the clinical experience. I call it a wrapper of services around that clinical care,” Coult-Calendine says. “If we’re really trying to engage patients differently in this model, we need to think about that differently.”
Fairview made additions to its call center to support the onboarding outreach. And it added a new position, a clinical nurse who serves as a product navigator.
“Her role is to look across care within the system and make sure that there aren’t any members in these products who are falling through the cracks,” Coult-Calendine says. “It’s almost like an oversight umbrella over our care coordination.”
First in a Series on Insurance Exchanges
This is the first of a three-part series on the rise of health insurance exchanges and what they mean for hospitals and health systems. Part 2 will run in our May issue and will focus on public exchanges and the experiences of hospitals that have gained patients through them. Do patients regularly move among different exchanges? How can hospitals increase exchange enrollment? Have exchanges increased uncompensated care? How are hospitals educating patients to use exchanges wisely? What has been the overall impact on hospital finances?