Chief financial officers can help support initiatives that strengthen member loyalty and address the challenges of sign-ups on the exchanges.
Given the uncertain fate of the Affordable Care Act, the future of the individual market is also unclear. For CFOs of organizations with provider-sponsored health plans on the exchanges, the next year could be challenging as politics create market instability, says Ken Janda, CEO, Community Health Choice, a Houston-based, not-for-profit health plan started by Harris Health System.
“Given the uncertainty that is being created by Congress, I would anticipate that different carriers will be making decisions about whether or not they stay in the individual market,” Janda says. However, he remains optimistic. “We are a community plan that is committed to sticking it out for 2018 if at all possible. We think 2018 could actually be a growth year for us, but the challenge will be determining the right rates for 2018 without knowing how many people might start leaving the marketplace without an individual mandate.”
Growing to Meet Community Needs
Community Health Choice was created by Harris County’s public hospital system when the state of Texas moved to managed Medicaid in the late 1990s. Today, the health plan operates in 20 counties in southeast Texas, representing one-fifth of the state’s population. Until the passage of the Affordable Care Act (ACA), Community Health Choice was solely a Medicaid safety net health plan. “We made the decision to enter the individual marketplace to serve the parents of our Medicaid and CHIP children and to serve other low-income people who were uninsured and who had no other option but to go to the public hospital here in Houston,” Janda says.
During the past four open-enrollment periods, the plan’s number of individual marketplace enrollees has grown from just 300 in the first year to 150,000 today. (The health plan’s cumulative membership includes nearly half a million lives covered by Medicaid, CHIP, marketplace plans, and related health plans). Approximately 95 percent of individual marketplace members enroll through Healthcare.gov, and only 5 percent are off-exchange, Janda says.
From the beginning, many exchange plans in Texas faced a rocky start. “In the first year, we were all guessing what the rates should be,” Janda says. In their second year, they lowered their rates and increased enrollment to 38,000 individual members. The third year, they increased to 90,000 enrollees and then to 150,000 today. “It is not a stable risk pool, so it has been challenging for us to work with our actuaries to determine the right rate level,” he says.
Determining the proper risk-adjustment formula is another challenge. “In 2017, what we are learning very rapidly is how to manage in the world of risk adjustment,” says Janda, adding that such struggles are common among carriers that began as managed Medicaid plans. “We are doing a lot to make sure that we accurately capture the risk of our members.” He thinks his plan has not fully captured the population risk to date. “We are trying to make sure that we don’t have the big risk-adjustment payments back to the federal government that we have had in the past,” he says. “That is our primary goal now that we have grown as much as we have.”
CFOs and other finance leaders should consider the following advice on guiding their provider-sponsored health plans during uncertain times.
Know when to partner. “To be competitive, you need more than just your own health system,” Janda says. “To be a successful health plan, you have to find other like-minded people in the community because there are just not that many individual systems that are actually going to be very competitive.” He says this is true even for multihospital systems.
What has worked well for Community Health Choice is that Harris Health is connected to other medical schools and large health systems throughout the Houston area, which have built up its network. “Our network is not primarily designed around providing revenue back into Harris Health System,” he says. “The vast majority of our community spend is actually with other community providers.”
Understand the target population. Designing the right product requires understanding the population that will be served by the health plan. For example, some of the most successful provider-sponsored health plans are those that are focused on Medicaid. That is because the plan leaders know the population and the potential risks associated with its health care. Defining goals that relate to the population can help increase the chances for success.
This is the strategy at Community Health Choice. “From the moment members sign up with us, we do health risk assessments over the phone,” Janda says. “We start identifying people to be in disease management programs right away.”
Consider using a third-party company to help with IT. This can help overcome some of the initial hurdles. Look for a secure, configurable infrastructure that can manage scale but still keep FTEs to a minimum.
Community Health Choice currently uses a third-party platform that serves as the interface with Healthcare.gov and handles eligibility, invoices, and collections as well. “As fast as we were growing, there was no way that we could have developed this capability ourselves,” Janda says. Community Health Choice’s partner helped link the sign-up portals in the exchanges with its health plan core systems. The middleware “normalizes” the high volume of data from the exchanges so they can be used by the plan’s own IT systems, and then pushes the files back out to the government in the required format.
Don’t neglect the private exchanges. Some provider-sponsored health plans have left the public exchanges and focused on delivering plans for the private exchanges. Whatever happens politically, 20 million people still need coverage, so exchanges will be a popular way to engage with consumers.
Building Loyalty for the Future
As Community Health Choice prepares for 2018, they are looking at ways to enhance member retention over the long term. “We want to hang onto our members for a long time and not just have them jump to the lowest cost plan each year,” Janda says. “We are working hard to improve our concierge services for members who need them most so they will stay with us going into 2018.”
Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill., and a member of HFMA’s First Illinois Chapter.
Interviewed for this article:
Ken Janda, JD, is CEO, Community Health Choice, Houston.
Forum members: What do you think? Please share your thoughts in the comments section below.
- How is the uncertainty of the health plan exchanges impacting your hospital or health system?
- What are some critical success factors when bringing provider-sponsored health plans to the market?