U.S. health plans today operate in a world of rising expectations, from government regulators, providers and members. The pressure to deliver value efficiently and cost-effectively has never been higher. Health plans are redesigning their networks to attract and keep providers who deliver the best quality care. In addition to the economic and regulatory pressures forcing change, health plans are subject to the same digital business trends impacting every other industry. Consumers expect convenience when enrolling and using coverage.
Consumer satisfaction and designing high-quality, cost-effective networks are interrelated goals. To thrive in the new healthcare economy, health plans must seize the opportunity to engage with providers and consumers in a positive way. Recognizing this, Florida Blue and McKesson are working together to break down the silos between the organizations and information systems that serve providers and consumers. By engaging providers differently, with streamlined tools and business processes, we believe we can reduce administrative and medical costs, improve member health outcomes, and make Florida Blue the plan of choice for providers as well as members.
Here’s our plan of attack for four concurrent trends facing the industry:
Value-Based Reimbursement
By the end of 2018, the federal government plans to shift 50 percent of Medicare payments to alternative payment models, such as Accountable Care Organizations or bundled-payment arrangements. We’re expecting that two-thirds of payments will be tied to value-based measures by 2020.
To meet the regulatory requirements and to improve care, we recommend designing provider networks to steer consumers toward the providers with the best value measures. New care models may encourage consumers to demand less expensive early interventions over hospitalizations, but health plans also need to ensure providers are incentivized to encourage healthy behaviors and order preventative tests.
Consumerization
Consumers are playing an ever-bigger role in the U.S. healthcare system. Overall, patients now pay almost 25 percent of medical bills and 37 percent of the cost of health benefit premiums. Exposing consumers to more of the true cost of health care is an effort to motivate them to help control costs.
To help consumers have a positive experience with their health plans, we recommend designing custom networks for targeted populations. Give consumers the current and accurate information they need to choose a plan and providers within the network. That means explaining plan options in plain language, providing tools for calculating the costs of alternative plans and ensuring provider directory data is accurate and up to date.
Healthcare Cost Management
U.S. healthcare spending has reached $2.9 trillion annually, and one of the biggest complaints about it is that too much of that goes to administrative overhead. Claims processing is estimated as a $400 billion expense. Providers spend $31 billion annually interacting with payers. Excess administrative costs — those we ought to be able to eliminate — are pegged at $190 billion annually.
To tackle overhead and excess costs, it is important to streamline processes to reduce the cost of claims and other administrative overhead, keeping expenditures focused on actual care. Eliminate unnecessary rework, resubmission of claims, and appeals; by allowing providers to see their claims processing status online; and by paying them right the first time. Get members with the right answer on their first call as often as possible by enabling streamlined provider enrollment and accurate provider directories.
Regulatory Compliance
Regulatory change is occurring on multiple dimensions as a result of the Affordable Care Act and Centers for Medicare and Medicaid Services initiatives. CMS is setting minimal requirements for “network adequacy.” Meanwhile, 29 states have set price transparency standards requiring clear bottom-line figures when considering given network and a given premium.
We recommend staying ahead of government requirements. For example, provider directories are expected to be accessible to the public and updated regularly. For now, fines and other regulatory action on inaccurate directory data have been limited to a few egregious examples. However, if payers fail to take these new regulations seriously we expect to see more of it. Consumers who feel they’ve been misled about the scope and quality of a network will make sure their legislators hear about it.
The right approach to each of these trends highlights the importance of the provider directory. Keeping the directory current might not sound like a big deal, but it is. A single payer may be supporting hundreds of provider networks, each targeted at a different demographic and with different providers enrolled. In our experience, during the average month up to 3 percent of provider data becomes outdated.
Instead of focusing narrowly on the regulatory or technical challenges associated with providing accurate provider directories, consider making that more accurate information part of a broader redesign of your relationship with providers. Consumer and provider satisfaction, and the design of a high-quality and cost-effective provider network are all interrelated goals. Providers who have the right quality characteristics and know they’re in demand will sign up and stay with payers who are easy to do business with. The presence of those quality providers will make a network more attractive to consumers.
In a nutshell, transforming your provider relationships can be the key to:
This is the strategy being pursued by Florida Blue, which believes the provider relationship with the payer is core to the entire provider and member experience. As a result, Florida Blue is breaking down silos in their organization and technology infrastructure to make certain data can flow between internal systems and both consumer and provider portals. To present accurate information to consumers, Florida Blue is striving to make it as easy as possible for providers to update their information. Florida Blue has its share of high-cost, inflexible legacy systems standing in the way of this vision, and anticipates a three-to-five-year migration to a new platform.
The goal is an easy self-service experience that rivals online banking, another consumer experience that has set high expectations for what people expect from a digital business. We expect up-to-the-minute, accurate information about our bank balances, which checks have cleared, auto-payments, and so on. Why should healthcare be different?
Dianne Wagner is Senior Director of Provider Engagement & Enablement at Florida Blue (Blue Cross Blue Shield of Florida). Carolyn Wukitch is Senior Vice President and General Manager of McKesson Health Solutions.