Covered Calif. Negotiated Lower Rates by Providing Data to Insurers
Details of Study
For the study, researchers from UC-San Francisco, the state Department of Health Care Services and the state exchange examined data from the Office of Statewide Health Planning and Development to determine the health risk for patients who in 2012 used:
- Acute care inpatient services; or
- Hospital emergency departments (Sierra Sun Times, 6/17).
Using an algorithm developed by UC-San Diego, researchers connected the OSHPD datasets with information on Covered California enrollees to determine risk scores.
The study showed that Covered California enrollees were healthier than expected and therefore presented less risk to insurance providers. Insurers then used the data to estimate the costs for a special risk-adjustment pool.
Covered California Executive Director Peter Lee said exchange officials used the data to negotiate better prices with insurers. The study stated, "After receiving these findings as part of their negotiations with Covered California, health plans covering the majority of enrollees decreased their proposed 2015 rates, saving consumers tens of millions of dollars in potential premiums."
Lee said the findings "represen[t] the best of what a health insurance exchange can do: Develop our own information about the health of our consumers so that we can come to the table as smart negotiators on their behalf."
Covered California Chief Actuary John Bertko, one of the study authors, said, "What was special about this effort is that we were able to give insurance plans something they did not have access to before," adding, "It gave them valuable information to better estimate their costs and offer more appropriate rates for consumers" (Covered California release, 6/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.