One Surgery with a Side of Blood Thinners?

Demands for transparency within the health insurance industry sets forward-thinking insurers on a crash course with consumer-friendly, rules-based systems.

Insurance Networking News, December 1, 2011

Carrie Burns

Daily, there's news affecting health insurers. What's becoming clear is that transparency is a demand from consumers and regulators that health insurers are going to have to keep up with.

Just recently, amidst the clamor surrounding New York-based health insurers making rate increase filings public, seven more health insurers followed UnitedHealth's lead in agreeing to disclose such information.

The insurers—Aetna Health, EmblemHealth, Empire HealthChoice, Excellus Health Plan, HealthNow, Capital District Physicians' Health Plan and Connecticut General Life Insurance Co.—represent 90 percent of the health insurers whose rate increases are subject to New York regulators' approval. In previous communications, the insurers objected, claiming that release of rate increase filings would results in competitive disadvantage. However, the insurers changed direction, offering agreement to the requirement.

And, of course there's health reform and the federal meaningful use incentive program, which directly affects health care providers and is predicated on "structured data," namely discrete, searchable data that is mined and exchanged. This program will ultimately force health insurers into a more competitive market.

In October, during a session at the Society of Actuaries annual meeting in Chicago, Joel Shalowitz, professor and director of Health Industry Management at Northwestern University's Kellogg School of Management, and Kurt Wrobel, chief underwriter for Large Group Underwriting and VP of Large Group Actuarial at Humana, discussed how health insurance has gone through many changes over the years. Both agreed it is now going through a potentially major disruption.

An attendee took the opportunity to ask a personal question: why couldn't he be told how much his mother's knee replacement would cost before the treatment? The presenters looked at each other, both with a look that said, "Where do we start?" There are many considerations—is the surgeon a specialist in knee replacement, does his mother have any pre-existing conditions that could make the surgery more dangerous, how much anesthesia will she need, etc.

It's just not possible to be able to have a "menu." Or, is it? Technology is constantly emerging and evolving, especially rules-based systems. Ever shop for a car online, on an auto manufacturer's website? Manual or automatic transmission? Leather or cloth interior? Add splash guards? A rear spoiler? As you build the car, the site calculates the total cost.

Why can't health insurers offer their customers the same level of price transparency? There are many reasons...right now. But, considering that demands for transparency are only likely to increase in the future, forward-thinking insurers may find that when it comes to sharing data, today's competitive disadvantage may well be tomorrow's competitive advantage.

Carrie Burns is an editor for Insurance Networking News.

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