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The Committed Perspective — Policy Principles for Regional Health Plans

Article · June 2, 2017

At a recent Washington gathering, a bipartisan contingent of health policy wonks compared the Affordable Care Act (ACA) to the Beatles. Take away the individual mandate and purchasing subsidies, and you’re left with George and Ringo. Wipe out the Medicaid expansion and you’re down to just Ringo — a good drummer, but hardly enough to provide a reminder of the music being missed.

As lawmakers engaged in a contentious debate over the dismantling of the ACA, the discussion focused on what might be lost if various parts of it were removed. To what extent might insurers pull out of various markets? Would health care providers slow down the move to value-based payment programs? And how many millions of patients would lose insurance or otherwise be harmed as a result? The withdrawal of the proposed Republican replacement legislation on March 24, 2017, provided a reprieve from the immediate threat to the ACA, but efforts to unwind it continue, and all stakeholders agree that the status quo is not stable.

There is a path forward, the outlines of which are informed by what we call “the committed perspective.” Throughout the debate over the possible repeal of the ACA, insurers who did not have the option of withdrawing from their communities and providers who could not turn away their patients could only spend so much time asking, “How bad will this be?” Our experiences with regional, nonprofit health plans — particularly those that are closely aligned with provider organizations — suggest that different questions are relevant for stakeholders that are irrevocably committed to their communities. They must ask “What comes next?” and “How do we make it work?”

When we say “committed,” we mean “in it for the long haul.” Regional health plans cannot withdraw from their regions — they have nowhere else to go. And because they have deep roots in their communities, they tend to collaborate closely with local providers; many, such as Geisinger Health Plan in central Pennsylvania and SelectHealth in Utah, are part of provider organizations that are equally committed to their regions.

Being committed reduces one’s flexibility but brings a certain clarity to strategic thinking. Regardless of whether they practice in a state that is led by Republicans or Democrats, health care providers are better off if their patients have insurance. If health insurance in their community is “broken,” regional health plans have to figure out how to make it work. Failure is not an option.

In that context, committed stakeholders must focus not just on which parts of the ACA to fight hardest to preserve, but also on what core principles should characterize coverage and care in the future (see Principles for Health Plans Committed to Their Communities). Collectively, we have to reflect on what we have learned during the past 7 years — and the fact is, we’ve learned a lot. One of the key lessons is that we need a health insurance system that’s less about gamesmanship and more about value.

Principles for Regional Health Plans Committed to Their Communities

  Click To Enlarge.

The first principle, in our view, is that universal participation is central to success. To have uninsured citizens is not just morally intolerable, it is also illogical. Insurance should be about managing risk, not avoiding it. If insurance is optional, the focus for whoever is paying for care is shedding as much responsibility for costs as possible. That approach provides a lazy way out of our health care finance challenges, and that lazy way will ultimately prove unsustainable and thus short term.

The second principle is that the movement from volume to value as the focus for payment must continue. This principle is intertwined with the first, since universal access makes payment models that reward efficiency inevitable (unless all stakeholders somehow develop a preference for pay cuts).

The third major principle is that the needs of patients must be the dominant focus of health care financing — rather than preservation of the business viability of payers or providers in their current structures. This principle requires changes in the way care is actually delivered and in the way payers work with providers. Simply shifting risk from payers to providers is not enough to ensure that care will improve. At the same time, providers must be responsible financial stewards in partnership with their patients and health plans.

That insight leads to the fourth principle, which is that the marketplace needs innovation at every level from both health plans and providers — including creativity in benefit design, care delivery, and payer–provider collaboration. We think these types of innovations are best driven by the combination of competition and commitment — the latter implying that stakeholders cannot simply exit markets when conditions are adverse. For this reason, we support the policies of some states (such as California and Pennsylvania) that health plans that exit insurance exchanges cannot reenter for some designated period. Such a requirement forces payers to focus on creating value over the long term rather than simply cutting losses.

The fifth principle is that to develop innovations that create real value, payers and providers have to collaborate on improving outcomes. The organizations with which we work have long recognized that when the relationship between payers and providers is mainly a struggle over money, patients lose because their needs are not prioritized. But when payers and providers are aligned with one another in aiming to improve value, combine data, and rationalize payment models, it’s possible to better manage chronic conditions, reduce low-value care, and address the social needs that drive so many adverse health outcomes.

We know from experience that better results are possible when organizations are ready to collaborate across traditional silos. For example, by embedding behavioral health case managers in primary care offices, Capital District Physicians’ Health Plan in upstate New York reduced emergency department visits by 76% for patients with mental health conditions, saving more than $1,100 per patient. To meet social needs, collaboration with regional organizations outside the health care sector is often essential. Presbyterian Healthcare Services in New Mexico for instance, works with La Cosecha, a community-supported agriculture program, to grow fruits and vegetables and distribute them to low-income families.

It might seem idealistic to talk about principles and hopes at a time when elected officials are still focused on what reductions in access to health insurance are politically viable. But the health of millions of Americans remains at risk if leaders simply try to minimize the damage. We think health care is just one area in which Americans are rediscovering the values and principles that matter most to them. These five principles seem likely to define the goals and nature of collaboration, and asserting them now can guide policy positions in the months ahead.



From the Alliance of Community Health Plans, Washington, DC (C.C.); Press Ganey, Wakefield, MA (T.H.L.); and Harvard Medical School, Boston (T.H.L.).

This Perspective article originally appeared in The New England Journal of Medicine.

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