Juggling Risk

By Cathy Eddy, Health Plan Alliance, November 4, 2015

The insurance industry is based on managing risk. Health insurance has managed medical costs for years. With the Affordable Care Act, the federal government has set a minimum target for the medical loss ratio at 80-85%.

But managing risk has become so much more challenging for the health care industry than just managing medical claims. We are now juggling lots of types of risk at the same time. We are hoping not to drop the ball on any of these or it could mean losing millions of dollars or even going out of business. The number of Co-ops that have closed this year is a clear indication of just how hard it is to do business in the public exchanges.

Here are the types of risk that health plans are now simultaneously juggling:

• Risk adjustment
• ORSA
• Risk Corridors
• Value-based reimbursement
• Bundled payments
• Upside risk and maybe downside risk
• Cyber Risk
• Business interruption and disaster recovery
• Key employee risk

And the Alliance health plans are right in the middle of these challenges. As we are planning our programming for 2016, we are looking at ways to share how plans are trying to align with providers to be successful.

During 2016, the Alliance will expand its membership to include health systems that our members identify. We will discuss their strategic priorities, build informational profiles on these systems and develop our meeting agendas to focus on the areas where our health plans intersect with the providers. We hope that health systems will take advantage of the content at these meetings:

• April 13-14  Clinical Integration and Payer/Provider Partnerships
• June 7:  Board and Governance Strategic Issues and Performance
• June 8-9: Health System/Health Plan Strategic Alignment
• Sept 28-30 Care Management/Care Coordination
• Oct 19-20: Managing Risk Reimbursement Arrangements
• Dec 6-8 Managing Populations with Data

We will also be collaborating with other organizations that are working with providers to serve as a resource for content. Many providers have indicated an interest in taking on more risk and either starting up a health plan or working with partners to offer a private label plan in their market. We would like to leverage the Alliance’s 20 years of experience in the provider-sponsored health plan space to help those providers that are entering or reentering the health plan business.

As the rest of the insurance industry consolidates into a few very large players, we’d like to see integrated delivery system with health plans and those independent health plans working closely with providers be able to offer a viable option to the other types of health insurers.

And to be successful, our plans and health systems will need to juggle all types of risk collaboratively.