With 2014 fast approaching, the Affordable Care Act's centerpiece provision -- new online insurance exchanges -- are under the microscope. The federal exchange got off to a "rough" start, as President Obama put it, but many state exchanges were ahead of enrollment targets after the first month. Consumers must enroll in a health plan by December 23 to have coverage on Jan. 1, 2014. Insurance companies and state insurance commissioners meanwhile, must decide whether to extend for one year individual policies that do not meet all ACA standards. It will be a tight timetable.
The state exchanges, coupled with private exchanges, mark a significant milestone in the rapid consumer-centric transformation of the US health system. Insurers, hospitals, and physicians will face greater competition and demand for value, potentially paving the way for new players to gain power. In a series of reports, HRI examines the far-reaching impact exchanges will have across the industry – and what companies need to consider as they develop both short and long-term strategies.
New state health insurance exchanges will draw an estimated 24 million new customers to the individual market by 2023 – requiring a fundamental change from a wholesale focused to a retail business model. HRI conducted in-depth research, interviews with more than 20 industry and consumer experts, and commissioned a survey of over 100 insurance executives and found the following:
Insurer participation in the exchanges
New exchange entrants
Preparing for exchange customers
Of the insurance executives surveyed by HRI whose companies were participating on the exchanges, 63% said technology integration and 61% said coordination of subsidies were major barriers to implementation. Only a minority said that understanding newly-eligible consumers was a major barrier, suggesting that insurers may need to shift gears quickly after initial implementation to focus on their customers.
IT development and costs, regulatory compliance, and premium billing/collection top the list of concerns for insurers on the exchanges. Only 20% say they are most concerned about supporting customer service and marketing/consumer education.
In HRI’s survey, price dominated the list of things insurers thought consumers will care most about – highlighting the industry’s widespread emphasis on cost. At the bottom of the list was mobile technology. Yet because many low-income consumers access the internet primarily through their mobile phones, insurers may be undervaluing the importance of a mobile strategy.
Insurers may be focusing on the importance of premiums to consumers, to the detriment of other cost elements such as deductibles and co-insurance. Consumers have historically struggled to understand the financial implications of their health plan choices, so it will be up to insurers to make sure that customers have access to adequate educational and cost comparison tools and resources.
Run the numbers. Hospitals should review the amount of charity care they provided, and then compare it to the potential new revenue it would receive as patients gain some level of coverage. The model should include Medicare and Medicaid DSH reductions, lower federal payment rates and the government dollars that are in play under a variety of quality reporting programs. Even if a patient enrolls in a Bronze level plan—the lower-tiered option with the highest degree of out-of-pocket expenses—the potential payments may still prove a better deal than unpaid care.
Tap frontline staff to become counselors. Develop exchange training for financial counselors and hospital volunteers. Consider adding staff but be aware the first open enrollment crush ends March 31, 2014. The University of Mississippi Medical Center plans to hire four new counselors for one-year only, at salaries between $35,000 to $40,000.
Wire into state exchange boards. Stay close to the decision-makers at the state and federal level. One medical center has staff that monitor all of the state’s insurance exchange activities, and some even sit on a state task force.
Target the right audience. St. Louis-based Ascension Health, a non-profit system with more than 113 hospitals, is considering sending out a mailer that explains the new coverage option to those patients who qualified for charity care in the past. More novel ways of reaching the new customers include visiting health fairs, community events such as football games, and businesses such as laundromats with to help people sign up on the spot.
Plug into local networks. Outreach efforts have a better chance of success if they are targeted, tailored and hyper-local. One strategy is to identify a hospital employee who matches the profile of those eligible for subsidized coverage. For instance, a member of the hospital’s food service team may also be a respected deacon in the local church. When armed with the right information, these community leaders can effectively carry the hospital’s message.
Tag team with state, community and local groups ... It worked in Massachusetts, where leaders from the health sector partnered with advocacy groups and the business community to help publicize the new mandate and plan options. They even enlisted the Boston Red Sox, which allowed ads to be filmed at Fenway Park to reach younger audiences.
... But remember, there’s no substitute for one-on-one discussions. While broad coalitions can help raise awareness, few will actually be concerned about enrolling people in the “right” coverage. Hospital staff have the experience—and the incentive—to help identify the appropriate level of care through initial health screenings and predictive modeling.
Rethink the role of financial counselors. Remember, they’re often the first contact a patient has with the hospital. And now that most patients will have more of a say in their care—including where they choose to receive it—it’s important that financial counselors have a full picture of the expanded insurance options that are available. It’s no longer about writing a script, but rather it’s about re-educating them to focus on the patient as a consumer.
Invest in advertising. Couple word-of-mouth campaigns with targeted ad buys. Radio, television, Internet and newspaper ads reach a large share of those who will qualify for Medicaid and exchange subsidies since more and more people will have coverage, they’ll have choices. Advertising also can build brand loyalty.
Rethink the hospital’s long-term goals. It’s not just about preparing for the first wave of newly insured Americans. Rather, use the prep work to revisit the hospital’s long range strategic plans, especially when it comes to potential growth opportunities. It could make sense to expand the hospital’s footprint to regions that have seemed previously unattractive due to a high concentration of uninsured.
Fold in discussions about staffing levels—especially in areas such as primary care—and capital investment as well. The broader conversation should focus on connecting the healthcare experience to the consumer.