Yesterday, HHS announced aggressive goals to move from fee-for-service reimbursement to value-based payments to providers with a target of 50 percent of payments covered by value-based arrangements by 2018. And in earnings announcements, many large national players announced their goals for the same value-based payment models. UnitedHealth, for example, announced that they expect a 20 percent increase in these payment types, clearly shifting away from fee-for-service.
The risk landscape is changing. Risk is shifting to physicians and providers as they enter into different payment models and then accountable for the outcomes of the patients they treat. Likewise, risk in the selection of health insurance is moving from plan sponsors (traditionally employers) to consumers. As more consumers move to private exchanges, with or without a defined financial contribution from their employer, they are weighing the risk associated with plan choices and potential financial exposure.
What are consumers likely to see as financial incentives and risk change? First, they’ll see more choices on private exchanges, particularly products – such as critical illness and accident insurance – that, in conjunction with their medical insurance and other types of insurance (home owner’s insurance and disability, for example), help mitigate their overall financial exposure if they are struck with a bad health year. Or at least bring them peace of mind.
Second, they’ll have fewer options but more information about hospitals. As employers are more aggressive about managing cost with strategies like reference pricing, consumers will have clearer signals about where they can go for care and some insight as to why (cost, outcomes, etc).
And then if things go well, consumers will see another fundamental shift in risk, namely minimizing risk through a focus on health. Payers may realize their opportunity to be heroes, and other organizations will emerge to serve as trusted advisors to consumers as they work to maintain their health and reduce their health risk, perhaps leveraging their role as trusted advisor in other sectors, such as finance.
The Affordable Care Act was a step towards addressing access to insurance. Now HHS is once again trying to assert itself as a prudent purchaser of care and address cost. Quality may be deliberately addressed or else will be part of the value equation each consumer creates – a consequence of shifting risk to the new purchaser.