December 1, Wisconsin Health News
Group Insurance Board members questioned the amount of savings the state receives under its current health insurance model and called for increased access to data as they discussed a possible move Wednesday to self-insurance.
Michael Heifetz, state Medicaid director, said the board needs better access to data to make sure they're providing the best care at the best price to employees who "have more skin in the game - a phrase I hate but gets used all the time - than they ever had before.”
"We need data to know if we are getting the best deal and to know if we are getting the best quality," he said. "For us not to have that control and to rely on the vendors puts us at a disadvantage."
The board selected Truven Health Analytics to serve as its data warehouse vendor at the meeting. But Heifetz noted that if the board doesn't have "any actual good data to shove into that data warehouse, it's not going to help us very much."
"Folks can analyze the self-insured vs. fully insured model, but if we don't have data, whatever decision we make is not well-founded," he said. "Politics at the national level have changed. Great. Maybe the Affordable Care Act goes away, maybe it doesn't. This board's mission hasn't changed and we still have to ensure high quality at a reasonable price for our members. And again, it takes data to do that."
He questioned the $283 million in cost reductions over the last nine years under the current model, described in a memo prepared by the Department of Employee Trust Funds. The reductions were determined by the difference between the preliminary and final bids by health plans.
"Without the right data, I don't know if those initial bids are great numbers or not, or if it's 'Let's see what the state will give us or not,'" said Heifetz, a former lobbyist for SSM Health Care of Wisconsin. "I've been on the other side of this to some degree and that number keeps being thrown at us as if it's sacrosanct and absolute. And I simply don't accept that premise."
He said it's "pretty self-serving" for someone to provide a number, then lower it and "tell us how much they saved," he said. "We don't know if we really saved that much."
Heifetz added that "a piece of me would love" to have the discussion on self-insurance held in open session, rather than the closed session the board held Wednesday afternoon.
"There are folks who will criticize us for being in closed session even though it's all proprietary things that they probably wouldn't want aired in the public arena," Heifetz said. "I have mixed emotions about going into closed session to discuss these things. I am a member of the public, I'm a taxpayer and I'm a member who gets benefits for my family through this process."
Phil Dougherty, senior executive officer for the Wisconsin Association of Health Plans, noted that health plans' rates for the State Group Health Program match the healthcare risk they cover.
"Driven by the market competition structure of the program, annual premium increases for the program over the past nine years averaged 3.7 percent, significantly below the national trend," he wrote in an email.
The state's decision to contract with Truven will provide data to ensure it gets competitive rates from health plans serving the program, he added.
J.P. Wieske, deputy insurance commissioner, noted that the average costs of the plans sold on the state's individual exchange are cheaper than those sold though the employers' exchange.
"Some of these carriers in Milwaukee and Dane County are carriers in the exchange as well," he said. "And the fact that their rates have been lower in the exchange than the employee plan is really surprising given the risks. I don't believe the population inside the exchange, especially with the problems that they have, especially with how (the Department of Health and Human Services) has administered it, the health of that individual market is probably worse than the state employee population, which is stable, large and consistent."
Herschel Day, a professor at the University of Wisconsin-Eau Claire, said that part of the problem could be that members are insulated from the carriers. He noted that they pay the same amount for plans in the highest tier regardless of how plans charge and called for more transparency.
"Folks can see what the actual premiums charged are, but given that there's no impact within Tier 1 for the member, I think in some sense we're insulating them from that difference," he said. "That could feed into the higher rates."