Oldenburg: We have markets where we have achieved a 10% reduction without actually seeking rate reductions from providers. … (Given) the disparity that we have among providers in that market in terms of their cost structure, (it is) easier for us to drive to that 10% by reducing the size of the provider panel by culling out certain providers.
In other markets (that are) not as broad or we don't see as much disparity, we have used cost reductions or initial rate reductions with a provider in order to make sure that we can reach that 10% point. So it really has depended upon the local market.
MH: How do you get consumers or patients effectively engaged so that reduced utilization in a narrow network becomes practical?
Samitt: This is one of the critical concerns that current or future accountable care organizations have in participating in an open-network program. There isn't the ability to really align interests and align incentives with patients.
We're beginning to see more and more, especially driven by employers (who) are seeking to align incentives for employees as well as patients, wherever feasible, to reward them personally for a focus on wellness and prevention and adherence. But we haven't gone far enough yet. My prediction is we're going to begin to see the notion that gain-sharing, the sharing of benefits from a healthier population, doesn't just accrue to health plans or providers or hospitals but also accrues to patients. … Only when we achieve that level of alignment through a share-and-share-alike approach will we really improve the health of the population.
Schultz: Patient engagement and consumer engagement—and I use those phrases deliberately because they are different in our world—is critical to creating a real marketplace. Consumer engagement is where we are offering a narrow network-based product alongside a broad network-based product and we are engaging the consumer, the employee, with a fixed-dollar contribution from their employer and showing them what their choices are. We are very clear about the pros and cons of both, how these products work and asking them to make a decision that works best for them and their family.
Based on our experience in Massachusetts, where we have had the exchange in place for the past seven years, consumers are highly price sensitive. They will discount brand faster than a New York minute. This is a piece that's really worrying to high-cost, high-brand clinical-care systems because they have to rapidly figure out how do they remain a viable economic option for a lot of the market that will shift for price.