Despite the federal government shutting down operations, health insurance exchanges launched yesterday across the country.
They experienced several technical problems and glitches, problems the Obama administration said will be fixed. The exchanges, also known as the insurance marketplaces, are a key component of the Patient Protection and Affordable Care Act, and consumers have until later this year to sign up for coverage.
It is estimated that up to 16 million people could gain health insurance in the exchanges next year. According to accounting and business firm PwC, roughly 70 percent of health insurers will offer plans in the exchanges by 2015. It's an unprecedented new flood of consumers for hospitals and health systems, but little attention has been paid to what hospitals are doing to manage these new patients.
Some providers — like the University of Mississippi Medical Center in Jackson and Sinai Health System in Chicago — received hundreds of thousands of dollars in federal grants to be "navigators." In other words, some providers are actively helping their local populations learn about and apply for coverage in the exchanges through paid staff.
Others are partnering with Consumer Operated and Oriented Plans, or CO-OPs. These nonprofit, consumer-governed health plans were created under the PPACA to provide new competition, mostly in the exchanges. For example, University of Iowa Health Alliance, a coalition of four Iowa health systems, signed an agreement to create two health plans with CoOportunity Health, a federally licensed CO-OP selling plans in both Iowa and Nebraska.
Cristine Vogel, an associate director in Navigant's healthcare practice, has been following the progress of health insurance exchanges closely over the past several years. Previously, Ms. Vogel served as the commissioner for Connecticut's Office of Health Care Access, overseeing the state's health system planning and hospital finances. She says hospitals have the ability to become great beneficiaries of the exchanges — but it takes the diligent leadership to wade through the uncertainty of the exchanges and find out how hospitals can help patients obtain coverage. That starts with understanding the evolving relationships between hospitals and payers.
"Providers and health plans will not continue to be adversaries in the future," Ms. Vogel says. "They're going to have to be partners in order for both to be profitable. The [exchanges] will change the game a bit, and hospitals have to pay attention to what their state is doing, or not doing."
A report released last month from PwC outlined specific exchange strategies to help hospitals and other providers, many of which may not be fully prepared to grapple with the new coverage expansion. For hospitals and health systems that have not yet interacted with the marketplaces head-on, here are 10 ways to proactively manage the health insurance exchanges, which will inevitably alter their patient base and reimbursement stream.
1. Calculate charity care vs. potential coverage. Hospital CFOs and finance professionals should compare their current amount of charity care to the new potential revenue from exchange patients, according to the PwC report. When calculating charity care, PwC recommends factoring in reductions to Medicare and Medicaid disproportionate share hospital, or DSH, payments and lower federal reimbursements due to sequestration and the PPACA. "Even if a patient enrolls in a bronze-level plan — the lower-tiered option with the highest out-of-pocket expense — the potential payments may still prove a better deal than unpaid care," according to the report.
2. Train or hire new financial counselors or insurance assisters. As mentioned earlier, the University of Mississippi Medical Center was one of several hospitals to earn navigator grants from the federal government. The organization plans to hire four new financial counselors on one-year contracts (with salaries ranging from $35,000 to $40,000) to help with all exchange issues. Hospitals that did not receive navigator grants are also looking to in-person assisters and certified application counselors to help individuals fill out paperwork and determine eligibility for both coverage and subsidies.
3. Follow the state exchange closely. The best way to know what the exchanges offer for patients is to stay in close contact with state and federal exchange administrators. Many state insurance departments, such as Nebraska and Minnesota, have actively disseminated news and updates on their respective exchanges, and it would behoove hospital executives to follow the announcements as necessary.
4. Find ways to engage the exchange population. Patients who previously qualified for charity care are now soon-to-be insurance customers, and hospitals should consider ways to educate this audience. According to the PwC report, St. Louis-based Ascension Health has considered sending out informational mail to charity care patients that explains the new coverage options. Visiting health fairs and community events are two other examples.
5. Have employees help with outreach locally. If hospitals can engage employees to spread information and exchange outreach efforts in their own community settings, hospitals will be more likely to have a well-informed local network.
6. Partner with community groups. When Massachusetts began offering new universal health plans to residents in 2006, many providers collaborated with advocacy groups and businesses — including the Boston Red Sox — to publicize what changes were occurring.
7. Improve health screenings and data analytics. Community partnerships are great for raising awareness, but one-on-one, individual discussions can be one of the most effective ways to ensure patients have the right health coverage. PwC said hospital staff can look to health screenings and predictive modeling of patient populations to identify individual patients for outreach.
8. Reshape the roles of hospital financial counselors. Financial counselors are often the main contact uninsured patients have at a hospital. Now, they have more responsibility to ensure patients have the right insurance and direct them to the right care provider. "It's no longer about writing a script, but rather it's about re-educating [financial counselors] to focus on the patient as a consumer," the report said.
9. Consider advertising. As more patients gain coverage via the exchanges, as well as through Medicaid expansion, hospitals can benefit from reaching that audience more frequently through strategic advertising. This includes word-of-mouth campaigns as well as radio, TV, Internet and newspaper ads.
10. Incorporate exchange strategies into the hospital's long-term goals. The insurance marketplaces won't manage themselves once the calendar flips to 2014. They will be an integral part of the health delivery and payment system for years to come, and they should become part of the hospital's long-term strategic plan. According to the PwC report, the exchanges also encourage hospitals to expand to regions with high levels of uninsured patients — areas that previously may have been viewed as "unattractive" due to the lack of reimbursement.
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