Friday, February 3, 2012
Several carriers in Massachusetts have begun to issue health care policies for “Tiered Health Insurance Plans”. Tiered plans are designed to have lower premiums and out-of-pocket expenses than traditional health insurance plans. Co-pays, deductibles, and other out-of-pocket member paid expenses for tiered plans vary by the cost tier of the facility or provider. The higher the cost tier of the facility or provider relative to its peers, the greater the out-of-pocket expenses associated with that specific provider. This variation on Consumer Driven Health Care plans is designed to motivate the member to make economic value based decisions as to where to obtain care.
Blue Cross Blue Shield of Massachusetts, Tufts Health Plan, and Harvard Pilgrim Health Care are among the carriers which have recently begun to provide Tiered Health Insurance Plans to private policy holders. Currently, Blue Cross Blue Shield is using a two-tier system, Lower vs. Higher, to separate hospitals in the state. While the member is free to use any hospital which is a member of the Blue Cross Blue Shield network, members will pay more out-of-pocket at “Higher” cost facilities.
For example: the Blue Cross Blue Shield “Hospital Choice Cost Sharing” plans typically cover “inpatient care, outpatient day surgery, outpatient high-tech radiology, outpatient diagnostic lab tests, outpatient diagnostic X-rays and other imaging tests, and outpatient short-term rehabilitation therapy.” If the member elects to use a High cost facility, generally there will be a deductible and a co-pay; however, for the same service at a Low cost provider, the co-payment is generally waived. This could result is a savings to the member of several hundreds of dollars. Combined with additional savings from lowered monthly premiums of approximately $170 for a family size of three (3) and it is easy to see why such plans may be attractive to individuals, and potentially to employers.
The primary issues in Tiered Health Insurance Plans is the ability of subscribers to have access to cost, reliable provider quality, and their knowledge of own health risks. Carriers and self-funded employer sponsored plans have a substantial knowledge of provider and facility cost; in addition, they have the ability to derive the quality of procedures via analysis of outcomes based on their access to diagnostic and treatment histories. Unfortunately, there is currently not a universal system of provider and facility evaluation. Although Massachusetts is planning to require carriers to use standard quality criteria in the near future; provider and facility ratings may still vary since carriers often weigh the criteria differently. Medicare currently provides provider and facility comparison information about Medicare-enrolled providers, facilities, and health care professionals. However, these evaluations may not be appropriate for non-Medicare populations. Furthermore, non-chronic individuals may have an especially difficult time judging their future health needs and risks.
Employer sponsored plans may find some provider and facility quality data in the form of national, state or local based business health care coalitions formed by employer associations or groups. The National Business Coalition on Health (NBCH) is a national organization of employer-led health care coalitions. At the state and local levels, organization such as the HealthCare 21 Business Coalition and the Savannah Business Group on Health work to provide employers with community impact programs, address patient safety and quality processes, value-based purchasing of health benefits, data warehousing, and research and dissemination of ‘best practices’ in health care and health care plans.
Whether or not employers will embrace Tiered Health Insurance Plans in significant numbers is predicated on their ability to obtain valid and reliable data on cost and quality of care delivery and resulting outcomes. In parallel, employees will need to gain the knowledge and access to tools with which to analyze their current and near-term health care needs. Lastly, short of total abandonment of non-Consumer Driven Health Care plans, employers will need to continue to offer more traditional plans for those members with chronic medical conditions.
Blue Cross Blue Shield of Massachusetts, Tufts Health Plan, and Harvard Pilgrim Health Care are among the carriers which have recently begun to provide Tiered Health Insurance Plans to private policy holders. Currently, Blue Cross Blue Shield is using a two-tier system, Lower vs. Higher, to separate hospitals in the state. While the member is free to use any hospital which is a member of the Blue Cross Blue Shield network, members will pay more out-of-pocket at “Higher” cost facilities.
For example: the Blue Cross Blue Shield “Hospital Choice Cost Sharing” plans typically cover “inpatient care, outpatient day surgery, outpatient high-tech radiology, outpatient diagnostic lab tests, outpatient diagnostic X-rays and other imaging tests, and outpatient short-term rehabilitation therapy.” If the member elects to use a High cost facility, generally there will be a deductible and a co-pay; however, for the same service at a Low cost provider, the co-payment is generally waived. This could result is a savings to the member of several hundreds of dollars. Combined with additional savings from lowered monthly premiums of approximately $170 for a family size of three (3) and it is easy to see why such plans may be attractive to individuals, and potentially to employers.
The primary issues in Tiered Health Insurance Plans is the ability of subscribers to have access to cost, reliable provider quality, and their knowledge of own health risks. Carriers and self-funded employer sponsored plans have a substantial knowledge of provider and facility cost; in addition, they have the ability to derive the quality of procedures via analysis of outcomes based on their access to diagnostic and treatment histories. Unfortunately, there is currently not a universal system of provider and facility evaluation. Although Massachusetts is planning to require carriers to use standard quality criteria in the near future; provider and facility ratings may still vary since carriers often weigh the criteria differently. Medicare currently provides provider and facility comparison information about Medicare-enrolled providers, facilities, and health care professionals. However, these evaluations may not be appropriate for non-Medicare populations. Furthermore, non-chronic individuals may have an especially difficult time judging their future health needs and risks.
Employer sponsored plans may find some provider and facility quality data in the form of national, state or local based business health care coalitions formed by employer associations or groups. The National Business Coalition on Health (NBCH) is a national organization of employer-led health care coalitions. At the state and local levels, organization such as the HealthCare 21 Business Coalition and the Savannah Business Group on Health work to provide employers with community impact programs, address patient safety and quality processes, value-based purchasing of health benefits, data warehousing, and research and dissemination of ‘best practices’ in health care and health care plans.
Whether or not employers will embrace Tiered Health Insurance Plans in significant numbers is predicated on their ability to obtain valid and reliable data on cost and quality of care delivery and resulting outcomes. In parallel, employees will need to gain the knowledge and access to tools with which to analyze their current and near-term health care needs. Lastly, short of total abandonment of non-Consumer Driven Health Care plans, employers will need to continue to offer more traditional plans for those members with chronic medical conditions.
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