Jared Short: Federal reform of health insurance will continue to evolve




2011 Outlook

• Consumers who renew or purchase health insurance can obtain coverage for dependents up to age 26 and have better access to preventive care.

• State legislators are likely to take up a requirement that Washington establish a health insurance exchange.

• There will be a renewed focus on sharing information about health coverage and costs, aimed at guiding patients and doctors to the best affordable care.

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Regence has long been an advocate for reform, and we support many of the new federal health reform provisions.

But change can also be complicated, and we are working with our members, employer groups and agents to help them understand what reform means for them.

One thing is certain: Federal reform is the first step, and it will continue to evolve as implementation takes place.

In September 2010, provisions were implemented that expand access and improve benefits for employer groups and individuals.

Consumers who renew or purchase coverage today are already benefiting from these improvements, which include coverage for dependents up to age 26 and improved coverage for preventive benefits, which aim to avoid future health problems.

Locally, a major focus of the 2011 legislative sessions will be the health insurance exchanges. States will be required to establish health insurance exchanges to promote access, competition, and clear ability to compare rates and features.

While the federal government has outlined the general parameters of the exchanges, the real design and execution details will be determined at the state level.

On the national level, the federal health reform bill, when fully implemented, will not only expand coverage but shift the culture of our entire health care system in crucial ways.

The reform bill endorses and funds models pioneered in the private sector, which can increase efficiency and curb medical spending

• Reimbursement models: Patient-focused models such as medical homes are intended to coordinate patient care and shift the way health care is reimbursed from paying for quantity to paying for quality and patient outcomes.

• Quality: Reform legislation funds numerous pilots to improve quality and efficiency of health care. Regence has participated in local collaborations with the medical community for more than five years with groups such as Puget Sound Health Alliance in Washington.

• Transparency: Reform promotes the concept that people need information on costs and quality in health care to make wise care decisions. State regulation in both Oregon and Washington already supply a great degree of transparency on hospital and insurer rates, finances and consumer issues.

Regence has helped develop tools to promote consumer transparency, posted on our member site, https://myregence.com. It is critical that we curb the rise in medical spending by focusing on efficiency and quality. To do this, we must understand where and how the costs are incurred.

• Comparative effectiveness: Research is funded to examine what treatments work better than others. Providers and insurers can then act on this information to improve outcomes.

RegenceRx, our pharmacy benefit manager, has built a national reputation for evaluating effectiveness of newly approved medications. Its efforts have bent the cost curve more than $1 billion in the past decade while preserving quality of care.

• Wellness: The federal reform legislation has several wellness pilots, including financial incentives for small businesses to start these programs. Employers can help employees manage chronic conditions such as obesity, diabetes and heart disease, which take as much as 75 cents of each health care dollar, and which diminish worker productivity.

On average in the U.S., 87 cents of the health insurance dollar already goes to medical treatment and related goods and services. Every aspect of this sector, one-sixth of the national economy, must improve its overall value.

To temper medical rising costs, it is critical that we work together to refine and implement reforms with the potential to improve quality, efficiency and outcomes.