Retooling Health Care Borrowing from the marketing world

by Shellie Pruden DCMS director of medical practice relations

In a stressed healthcare system, consumers are seeing an age-old trick from the sales and marketing world–repackaging. Health plans, physicians, and employers are taking a hard look at the changing healthcare environment and retooling to attract or satisfy patients, clients, or consumers.

April saw the launch of a Blue Cross Blue Shield of Texas product called Blue Choice Solutions Network. BCBS designed a network within a network of its PPO providers, creating an exclusive insurance product to attract employers and possibly the state of Texas. BCBS developed criteria based on the cost of episodes of treatment and included the physicians who are “cost effective,” by the standard developed. The insurance product will look like an HMO model, with gatekeepers and in-network incentives to help contain costs. This is not a new concept, rather a retooling of an existing network and insurance model that will attempt to contain rising premiums for employers.

Aetna has jumped on the retooling bandwagon with development of a product called Aexcel Network, an exclusive network within its contracted physician network. This pilot program targeted six specialties and based the criteria on a complicated formula that looked at the episode of care, based on outcomes, cost, and time. The largest client of the new plan is Aetna employees, although Aetna plans to broaden the pilot to other areas in Texas and, ultimately, market it to employers.

Health plans aren’t the only ones repackaging services. Physicians are exploring concepts such as patient care via the Internet. Providing service over the Internet has become so prevalent that the AMA has a CPT code for the service, allowing physicians to submit charges for evaluation and management services. Although inappropriate for preservice or postservice work, this code encompasses the time a physician spends related to phone calls, lab, and prescription orders. Many physicians are embracing this type of contact with existing patients, and the encounter follows the protocol established by the practice for patient care. This Internet service is generating some of the controversy that using “physician extenders” did a few decades ago, but this concept simply is a retooling of how physicians care for their patients.

Other repackaging ideas haven’t been as successful. Some practices began charging a premium for more timely access to a physician and a greater level of service from a physician. Practice management consultants touted this concept as a new revenue stream for busy medical practices. Physicians left a few appointment slots open for patients who paid a premium for the availability. Although the concept was creative, the Office of the Inspector General recently provided an opinion reminding Medicare participants that physicians are not allowed to charge this type of fee for extra time, coordination of service with other providers, or comprehensive physical assessments because these already are covered services.

More and more employers are repackaging employees’ health insurance to try to contain health insurance costs. In recent years consumer-directed health plans and health savings accounts have come into vogue. Consumer-directed health plans typically split the financial responsibility of a higher deductible health plan; the employer pays for the first portion of the deductible and the employee is responsible for the portion between the limits the employer contributes to the baseline for the insurance to kick in. Health savings accounts are another way employers help employees handle higher-deductible health insurance. Employers and patients can contribute tax-excluded dollars to an account that can be used to pay for medical and health services. Patients access the account with checks or debit cards and can pay at the time of service. Because the patients are spending money he controls, they likely will price shop, and therefore be more aware of the cost of services they consume. Physicians will enjoy being paid up-front for their services, unless they contractually are prevented from doing so. Many PPO contracts do prevent physicians from being paid before submitting the claim.

Ideas are plenty there are no magic answers in this competitive and resource-intensive environment. Employers are looking for ways to cap their contributions, yet still provide health insurance, physicians are beginning to look at their services in a more market-sensitive way, and health plans are searching for the magic price-sensitive product that will meet the needs of patients.