A recent consumer study indicates that people think insurers should be the ones to educate on health reform and take responsibility for lowering costs. Why is this? American Medical News weighed this question:
Given that the reform law mainly reforms the insurance market, it’s possible consumers believe insurers are going to be the best reference for what is changing, said Tim Lee, principal and consulting actuary in the Houston office of the consulting firm Milliman. “Nobody in any industry understands it better than people who work in the insurance industry.”
Robert Zirkelbach, spokesman for the health insurance trade group America’s Health Insurance Plans, said insurers have done what they can to help lower the cost of care, including creating disease management programs, providing incentives to take generic drugs and investing in health information technology.
Lee called the survey results about who should reduce costs “a combination of funny and surprising.”
He said there could be a couple of explanations for so many people saying insurers should take responsibility for cutting health care costs: One is that they may remember insurers’ success at cutting costs in the heyday of managed care in the 1990s, and they are willing to see some of those methods return.
Lee said consumers will require a great deal of education to remain open to changes that might keep them from seeing the doctor of their choice or create more hoops for their doctors to jump through.
“Ultimately, it’s going to be up to the doctor, the hospital and the consumer to control the cost,” he said.
But it might be giving the public too much credit to think they are ready for insurers to bring back tightly managed care, Lee said. It’s possible that consumers are considering only their own insurance premiums when it comes to health care costs: “What they may be thinking is, ‘Health care costs are manifested in my premium rate … so clearly the health insurance company must be responsible.’ “
Negotiations between providers and insurers have significant healthcare cost implications–just look at California as an extreme example of this. And the variation is not just on a state-by-state basis. An article in today’s Dallas Morning News clarifies this dynamic:
Average health care costs for Texans with insurance are higher in two midsized markets — Lubbock and Tyler — than in the big urban centers, according to Houston actuary Tim Lee.
In Lubbock and Tyler, there are two dominant hospital systems “that can leverage higher fees” from insurance companies, said Lee, principal and consulting actuary with Milliman Inc., a large national actuarial firm. He spoke at a panel at an Association of Health Care Journalists meeting in Chicago.
In Dallas, Fort Worth, Houston and San Antonio, “they have more systems competing,” which drives down the prices that big hospital networks can negotiate with insurers, he said.
Milliman principal Tim Lee is presenting today with veteran health reporter Trudy Lieberman at the Association of Health Care Journalists. The presentation, “Understanding Health Insurance,” offers healthcare journalists a basis for reporting on health insurance and understanding healthcare reform. Here is the Tip Sheet of key concepts, sources, and story ideas distributed to reporters.
Understanding Health Insurance
Health reform is all about insurance. The new law further complicates an already complex marketplace. Consumers will need all the help they can get to navigate through it. This tip sheet offers a brief guide for reporters wanting to cover this enormously important subject.
Premium: What people pay for insurance coverage.
Coinsurance: Usually a percentage of the bill someone must pay.
Copayment: A flat dollar amount that a person must pay for a service.
Out of pocket maximum: The maximum amount a person will pay out of pocket.
Deductible: The amount a person pays before insurance kicks in.
Cost sharing: The amount of the medical bill a person will pay out of pocket; can also encompass payroll deductions as well as out-of-pocket.