Health systems should develop payer partnerships now to be positioned for success when public health insurance marketplaces start on Jan. 1—and for the coming sea change in the way coverage is selected and paid for.
Although some health systems are taking a wait-and-see approach to the advent of state health insurance marketplaces, Trinity Health’s Preston Gee thinks proactive—even aggressive—preparations are appropriate.
Trinity Health, based in Livonia, Mich., recently combined with Catholic Health East to form the second largest not-for-profit health system in the nation. The new organization has more than 87,000 employees, 82 hospitals and 89 continuing care facilities, with revenues of approximately $13.3 billion, and facilities in 21 states.
Helping the new state health insurance marketplaces (formerly known as exchanges) accomplish the goal of expanding health coverage aligns with Trinity’s mission. “We were very active in terms of lobbying for the Affordable Care Act because it’s one of our core beliefs that everybody should have access to care, and the insurance route is certainly better than having to rely on the emergency room,” says Gee, who is senior vice president of strategic planning and marketing at Trinity Health.
On top of that, Trinity executives believe state marketplaces, which are supposed to start marketing Oct. 1 for coverage that begins Jan. 1, will be a tipping point in the way health coverage is purchased. Gee thinks health systems must organize themselves to succeed financially in a consumer-oriented retail environment in which many—and eventually most—people choose their coverage and shoulder an increasing amount of financial responsibility to pay for it.
“This is where things are heading so providers need to be able to operate in this space,” he says. “To say, ‘We’re not going to wade into those waters,’ is somewhat precarious because I think this marks a significant shift.”
In the new environment, consumers rather than employers will be making decisions, and consumers will focus on cost and quality from an individual perspective, which is very different from that of an employer, which needs to balance the needs of an entire workforce. “There are huge implications on several levels, and for us, ‘winning’ means successfully transitioning into that new wave of consumer/patient interaction and retail orientation,” he says.
Trinity Health’s goal is to encourage and facilitate consumer enrollment in the exchanges and to be a major player in the state insurance exchanges in each of its markets. Gee identifies several keys to success for health systems:
• Establish good relationships and alignment with marketplace-oriented payers
• Develop the ability to provide consumer assistance and educational efforts
• Ensure consumer preference for the health system
• Confirm capacity to handle increased volume, especially at the primary care level
• Be transparent about quality and costs
• Ensure ease of navigating the health system, both virtually and in real life
• Develop a retail mindset among health system leaders
Trinity Health started its preparations more than two years ago when leaders helped educate state leaders about the decisions they faced as they developed state exchanges. The early work also involved studying how the introduction of the Massachusetts Health Connector exchange influenced the health insurance and health delivery markets in that state.
That review convinced Gee and his colleagues that the state exchanges present an opportunity not only to reduce uncompensated care and gain market share, but also to get a jumpstart on the future of healthcare purchasing and delivery. Gee and his colleagues educated Trinity Health’s senior leaders about the magnitude of the situation—Gee calls it a sea change— and started communicating about the importance of preparing for the state marketplaces throughout the organization.
Trinity Health went on to develop a predictive model to understand how the exchanges are likely to affect the health system’s patient volume and finances. Trinity also created an organizational structure to develop and implement its health insurance marketplace strategy, assigned accountability at each hospital, and developed work plans and accountability milestones to stay on track with its goals.
Aligning with Payers
Trinity Health’s review of Massachusetts’ experience included this finding: A health insurance marketplace serves as a “store” for health plans and health plans become the “store” for health systems. “So, from our standpoint, it is very important to have alignment with the right plans—and not necessarily just one plan because there are going to be multiple plans in each market,” Gee says.
The goal is to identify the payers that are most likely to succeed in the health insurance marketplace in each of the 10 states in which Trinity Health operates and to be ready to offer the low-cost, high-quality care that makes those payers want to partner with Trinity Health.
Gee and his colleagues evaluated payers in each Trinity Health market and prioritized them on several factors: One is the historical rapport between Trinity and the payer. Second is the payer’s understanding of the insurance exchange market: Gee wants health plans that recognize that exchanges represent a seismic shift in the insurance industry as opposed to viewing the exchange as a way for a few uninsured people to get coverage.
A third key factor is the payer’s preparations to date. “The key thing for us is ‘How seriously are they taking this effort?’” he says. “What kind of resources are they committing to it? How astute are their financial folks and their actuarial people in terms of really understanding this market?”
Through conversations with leaders at each plan, Trinity Health identified the payers that are most enthusiastic about succeeding in the state insurance market. “It is important to first determine who is going to be a player in the first round of the exchanges,” Gee says. “Secondly, who is going to be a viable player in terms of pricing appropriately? Because we learned from Massachusetts that pricing is very significant.”
After identifying the payers that the health system wants to partner with, Trinity Health started discussing how they can work effectively together. In addition to the financial aspect of their relationship, payers and providers need to share goals for capturing market share and delivering high-value care that insurance marketplace shoppers will demand.
“We want to approach this in tandem so that both of us are well-positioned and we have a good understanding of how to approach this new group of individuals who will be coming into the insurance market,” Gee says.
Meanwhile, Trinity Health is also making plans to engage in consumer education that will be necessary to make the health insurance marketplaces a success.
A provision of the ACA requires each state insurance marketplace to provide “navigators” who help consumers understand their options and enroll for coverage. These navigators will work differently in different states; for example, some exchanges will contract with organizations to provide a certain number of navigators while other exchanges might employ navigators directly.
Trinity Health wants to see all eligible consumers gain coverage, so it intends to be proactive in helping members of the public understand their state health insurance options, such as whether they may qualify for subsidies to help pay for coverage and how to enroll.
In many states, the navigators have not yet been identified. When they are, Trinity Health representatives will build relationships with navigators with the goal of enrolling as many eligible consumers as possible. In addition, the health system is creating its own educational materials to help consumers learn about the insurance marketplaces in their state, and Trinity may offer to help consumers enroll. (While the ACA prohibits health systems from being paid as official navigators, it does allow health systems and others to help consumers use the insurance marketplace website to enroll.)
In Massachusetts, Gee says, consumers were confused about their insurance options even though the state had a big educational campaign. For many who are newly eligible for insurance coverage, basic terms like “copay” and “deductible” must be explained before they can begin to choose a plan. Others who have traditionally had insurance through an employer will struggle to choose among a broad array of cost and coverage options, some of which require a big out-of-pocket responsibility.
“We are talking about a different dynamic with individual purchasers, and a lot of upfront education and clarification is going to be very important,” Gee says. “Providers are going to realize that it’s a different day.”
Lola Butcher is a freelance writer and editor based in Missouri.
Interviewed for this article:
Preston Gee is senior vice president of strategic planning and marketing, Trinity Health, Livonia, Mich.
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Publication Date: Wednesday, May 22, 2013