Savings, competition, future plans aired at PBN Health Care Summit

Speaking at Providence Business News’ Summit on Health Care Reform and the Insurance Exchange on Thursday, Coastal Medical Inc. President and CEO Dr. Alan Kurose shared the news that Coastal reduced its costs by 5.5 percent compared with Centers for Medicare and Medicaid projections during Coastal’s first year as a shared savings accountable care organization. More

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Savings, competition, future plans aired at PBN Health Care Summit

PBN PHOTO/MIKE SKORSKI
HEALTHSOURCE RI Executive Director Christine Ferguson (right) told an audience of 300 doctors, nurses, government officials and executives at PBN's Health Benefits Exchange Summit on Thursday that state’s health, business and legislative leaders hold responsibility for deciding how to fund the exchange after federal funding runs out.
Posted 2/27/14

WARWICK – Speaking at Providence Business News’ Summit on Health Care Reform and the Insurance Exchange on Thursday, Coastal Medical Inc. President and CEO Dr. Alan Kurose shared the news that Coastal reduced its costs by 5.5 percent compared with Centers for Medicare and Medicaid projections during Coastal’s first year as a shared savings accountable care organization.

Coastal was named Rhode Island’s first accountable care organization in July 2012. Under the Affordable Care Act, the Medicare Shared Savings Program is designed to encourage better coordination of care for Medicare patients and lower costs without duplication of services or medical errors.

Kurose’s announcement drew applause from the 300 doctors, nurses, government officials, insurance executives and insurance brokers who attended the PBN summit at the Crowne Plaza Providence-Warwick to gain a sense of the ever-changing health care landscape in the state.

Cost containment, in a more or less abstract way, was a running thread at the event. Coastal’s successful experience containing costs brought visible relief to the crowd.

“We did more than bend the cost curve,” said Kurose, one of the summit panelists. “We saved $4.6 million in the care of these 10,000 people.”

Kurose indicated that the introduction of the “Coastal 365” plan, which allows members urgent care visits with their primary care practice 365 days a year (preferably with an appointment), contributed to the savings.

“We found that 44 percent of the people who used us would have gone to the ER if they hadn’t used us,” said Kurose. “Between 2011 and 2013, hospitalizations declined 26 percent. The reduction in admissions was responsible for half the Medicare cost savings. We’re excited about that.”

Several other summit panelists, including HealthSource RI Executive Director Christine Ferguson, spoke to the role of competition in keeping costs under control. Ferguson has repeatedly said that small business owners opting for full employee choice on the Small Business Health Options Program exchange, or SHOP, create competition among carriers that she believes will drive down premium prices.

“Of the small businesses that have come into the exchange,” Ferguson said, “about 60 percent have chosen full choice and 40 percent have chosen a specific plan.”

Also announced at the PBN summit was the news that Tufts Health Plan would be unable to join Blue Cross & Blue Shield of Rhode Island, Neighborhood Health Plan of Rhode Island, and UnitedHealthcare at the beginning of next year as an option on SHOP as previously planned.

In explaining the company’s change in plans, Tufts President Thomas Croswell, a panelist, cited Massachusetts’ recent struggles with its own exchange, known as the Massachusetts Health Connector, through which Tufts currently offers health plans.

“The Connector in Massachusetts has experienced some extremely difficult challenges” since the implementation of the Affordable Care Act, Croswell said. “A week ago they had a backlog of 50,000 people, applications – these are people who are either securing continued coverage or are new entrants to the insurance program. For months now, we’ve been dealing with patient and spread-sheet rosters of individuals on a daily, weekly, monthly basis. At the moment we cannot commit to entering the exchange in Rhode Island on Jan. 1, 2015.”

During the event, Ferguson spoke to the somewhat contentious subject of how to fund HealthSource RI after federal funds dry up at the end of the current calendar year. The exchange director turned the question around, laying responsibility for how to fund the exchange and what size and kind of exchange it should be on the state’s health, business and legislative leaders.

“The cost of the exchange is going to be whatever you all think it should be,” she said. “I was appointed to implement a vision that was outlined in an executive order and in a board vision statement, and we have been implementing it. The question that has to be answered is what is that the legislature, the business community and the candidates for government want? If we in fact want to be able to leverage and push back and bring something to the table that has some power, that’s up to the people of this state. At the end of the day, that’s your decision.”

Ferguson also addressed concerns revolving around brokers’ role in the exchange, and in the state’s insurance market, moving forward.

Another conversation thread related to the planned private health insurance marketplaces that are planned for Rhode Island. Recently UnitedHealthcare of New England said that it was going to be opening an online portal that would offer more plans than it offers through HealthSource RI, along with additional support to insurance purchasers. Both Tufts and Blue Cross & Blue Shield of Rhode Island said that they were planning similar marketplaces in the future.

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