Insurance Company Has A Deal For Utah Employers

aaaaaaaaaam“I gotta a deal for you!”

“The insurance company owned by Intermountain Healthcare is promising employers an annual 4% growth in healthcare costs……”

Is a 4% annual increase in health care costs a good deal? No says Homer G. Farnsworth, M.D. – “That’s outrageous! Under Reference Based Pricing, Direct Contracting, and the Asserta Health Cash Plan our clients are reducing health care costs, not increasing them!”

Intermountain has a deal for Utah employers

By Melanie Evans  | August 14, 2015

The insurance company owned by Intermountain Healthcare is promising employers an annual 4% growth in healthcare costs—with a catch. The companies must enter three-year contracts.

SelectHealth, Intermountain’s 30-year-old health insurance arm, is a major health plan provider in Utah, with membership that accounts for one-quarter of the state’s insured. Now, SelectHealth is hoping to win three-year contracts with the 2,000 large employers in its market. The insurer has promised 4% growth in healthcare costs for years two and three.

The multiyear contract allows employers to predict the growth of a major expense and the health plan has more time to see results from investments in care management and coordination, which may require more than 12 months to lower spending or improve health, said Scott Schneider, vice president of commercial sales for SelectHealth. “The variability in healthcare costs is challenging for employers.”

The contracts are essentially accountable care agreements, but seek to address concern expressed by doctors that interventions to improve health may not yield immediate results. Accountable care awards financial incentives to reduce healthcare cost and improve quality. Performance is typically reviewed annually.

SelectHealth will absorb any costs for employees’ medical care that exceeds 4% growth in years two and three, but will also keep savings should costs grow below 4%.

Large employer premiums for workers with family coverage have seen average annual growth of 5.6% during the past decade, according to an annual survey of employer coverage by the Kaiser Family Foundation. During that decade, annual growth varied widely from 2.4% to 10.6%.

Employers, employees and providers in SelectHealth’s contracts must also agree to certain conditions. Employers must limit employees’ choice of plans to those offered under the product. Businesses must finance at least 70% of the premium and match workers’ contributions to health savings accounts in high deductible options.

Employees have to agree to participate in wellness, health and disease management programs, when applicable. They also have to make contributions to health savings accounts and take part in two annual physical activity events at work, among other commitments.

Hospitals and doctors in the plans must meet Intermountain’s evidence-based and best-practice requirements; have electronic health records; share performance data; and use SelectHealth’s network and Intermountain’s facilities, when appropriate.

The new contract was in development for about five years as part of an effort to identify ways employers, employees and providers were accountable for healthcare spending and use, Schneider said.

SelectHealth just recently began to market the product and has yet to sign any companies.

For health systems, large employers have become a target of health system’s efforts to expand accountable care organizations and market share. Some national employers, too, have moved aggressively to negotiate directly with health systems for contracts that include incentives for lower healthcare spending, such as Intel and Boeing.