emiller@westhawaiitoday.com
BY ERIN MILLER | WEST HAWAII TODAY
Hawaii’s largest medical insurance provider is promoting two new measures to help bring down medical costs, a move company officials say may also help bring down premiums — eventually.
Hawaii Medical Service Association earning a profit one year doesn’t mean the company can forgo rate increases the next, said Steve Van Lier Ribbink, HMSA’s chief financial officer.
“We can’t do that until we get a health care cost that’s a zero percent increase,” he said.
Van Lier Ribbink offered a hypothetical example to illustrate why the company continues to raise premium rates. Say HMSA finished 2011 with a net income of $50 million and a reserve of $410 million and opted not to raise premiums for 2012. The company projected an average increase in health care costs of 6 percent annually, which would take costs in 2012 from $1.9 billion to $2 billion. The company would end the year with a net lost of $61 million, which it would cover with its reserves. That would end 2012 with $348 million in reserves.
In 2013, costs would go up 6 percent again, to $2.1 billion, while the amount of interest on the reserve investments will have also decreased, because less was invested. That would lead HMSA to take another $183 million out of the reserve, leaving a balance of $165 million. And in 2014? The company would dip into the reserve early, running out of money by May, Van Lier Ribbink said.
“That’s why you can’t just hold rates,” he added.
What HMSA executives want to do to address that is to have hospitals and participating doctors work with patients more, improving the quality of the care, and the resulting medical outcomes, as well as giving doctors incentives to get patients in for more routine care, Senior Vice President Hilton Raethel said.
On the primary care side, he said, is the Patient-Centered Medical Home. This type of health care assigns teams of medical professionals, not just a doctor, but also nurses and others, to a patient. Patients see their doctor at the office, then get follow-up calls from nurses or other medical staff, checking to make sure they are taking medications and collecting information to track a patient’s progress over time, he added.
This model, for now, is primarily being used for patients with chronic diseases, such as diabetes, Raethel added.
HMSA officials want to offer doctors more incentives to bring patients in for regular exams and checkups, providing more preventative care and potentially heading off expensive medical care from health problems diagnosed later, rather than earlier, Van Lier Ribbink said.
A health system in Pennsylvania, Geisinger Health System, uses such a model and has seen a 25 percent reduction in hospital admissions, a 23 percent reduction in patient days in hospitals and a 53 percent reduction in hospital readmissions following discharge, according to information HMSA officials provided.
Hospitals around the state will participate in the second program HMSA is promoting. This program, Premier, tracks a number of metrics, data points that can indicate the quality of care a patient receives at Hawaii’s hospitals. Fifteen percent of hospitals’ HMSA reimbursements will be tied to meeting those quality metrics, Raethel said. Those metrics also include routine follow-up calls with discharged patients, making sure they filled prescriptions and meet with their primary care doctors, to prevent readmission to the hospital.
That goes back to educating insurance consumers to bring down health care costs, Van Lier Ribbink said.
“We think you have to have an informed consumer to make an informed decision about health care,” he said. “That leads to better choices. We absolutely gotta have a more knowledgeable public.”
emiller@westhawaiitoday.com