3 principles key to proper navigation of health insurance exchanges


The greater the game, the more players will want to join in -- it's the inherent nature of contest, from checkered chess boards to turf-laden football stadiums. But the latest grand-scale contest plucking top performers far and wide doesn't involve rooks or pigskin; it's reliant instead upon those standing on the cusp of healthcare's major game change -- mandated health insurance exchanges -- to implement a new wave of healthy competition.

Payers, physicians and several other healthcare professionals have all had to consider the prospect of health insurance exchanges in the aftermath of the Affordable Care Act’s passage. According to an Ernst & Young report, such exchanges not only beg for heightened participation on the patient side, but demand this kind of active engagement along industry and provider lines as well.

“The intent of these exchanges is to expand coverage and increase affordability,” Ernst & Young analysts wrote. “States have the option to operate separate individual and small-group exchanges for employers or combine into one exchange. States also have the option to set the size of the small-group market to 50 or fewer employees, or 100 or fewer employees. By 2016, the size of the small-group market must be set up to 100 employees. Beginning in 2017, states may allow exchanges to offer options to employers with larger groups of employees.”

And such intensive strategizing and play-booking indeed has its benefits for practices of all sizes Rebecca Ditmer, partner principal at Ernst & Young, told PhysBizTech.

The biggest opportunity is really to improve health outcomes; the access of this new marketplace,” Ditmer said regarding the potential of health insurance exchanges. “We just generally refer to it as the marketplace because there’s both the private marketplace that is already here and we’ve already seen movement of some very large employer groups opting out of defined health contributions and moving to a private exchange solution.”

“From the population management standpoint, getting that right patient in the right manner at the right time to the right physician solution is probably one of the biggest opportunities as well,” Ditmer continued.  

To maximize the wealth of this novel exchange atmosphere, Ditmer provided three aspects physicians and practice managers should consider when preparing for the match.

1. Operational consideration

“Operations are first and foremost — understanding the impact regarding what [exchanges] are going to do practice operations in terms of how they currently interact with payer organizations,” Ditmer said. “Today, the transaction is very much limited to a handful of [major] payer organizations, but now the amount of new players that are going to be hitting the market is non-traditional and significant. Their operations are aligned to dealing with the big guys — the Cignas, the Aetnas of the world — and now they’re potentially going to have a huge mix of payers that they may not officially have a relationship with.”

In this realm, physicians also must reconsider their role as educator.

“I think the exchanges put additional pressure on the physician to be part of the education solution,” Ditmer added. “Physician practice docs are going to see an increase in what they’re going to need to do in terms of educating that patient and making sure they’re part of the solution -- getting that right patient to the right level of care at the right time.”

2. Finances

“The shift of the payer mix, the diversification of that payer mix and then the potential for more Medicaid patients” all become top priorities in the health insurance exchange world, Ditmer said. “So just looking at that whole financial impact and that adjustment that practices may need to make to their revenue cycle both on the front end and the back end could potentially affect their cash flow.”

3. Altering behaviors

“Lastly, from a strategic standpoint, is looking at the relationships that practices have with their payer organizations. There are huge opportunities — when I think about the exchanges, the single biggest opportunity to improve health outcomes is that behavioral change, not just with the behavioral change around the patient but also that relationship that they may have with one or more traditional payers,” Ditmer concluded.

When evaluating past payer relationships intent on establishing new ones, it’s important to have the proper attitude combined with a keen financial outlook and sound operational standards. With such elements intact, navigating even the harsher waters of health insurance exchanges can not only be manageable, but quite advantageous.