Working Out the Details of the Exchange

James Robinson can sum up the ultimate ideal and goal of the health benefit exchange in California:

“We want to cover all services, for everyone, without prior authorization,” he said. “And without having to pay for it.”

Robinson, director of the UC Berkeley Center for Health Technology, was part of a panel discussion at yesterday’s California Health Benefit Exchange board meeting. Health experts chimed in on a series of panel discussions designed to help the board make sense of the complexity of the new exchange. 

With a June deadline looming for submitting its Level II implementation grant, the exchange board finds itself grappling with some of the hard questions and sticky details around creation of the Health Benefit Exchange.

“The exchange has ambitious goals. And the most difficult of those goals is moderating cost,” Robinson said. “That boils down to saying no at some point, and that’s a very unpopular thing to do. What we want is everything. And that’s the one thing the board cannot do.”

Robinson said the board needs to find the “least worst set of options” or “the least disliked form of cost control” to keep premium costs down. That can’t be done by trimming the fat in the health care system, he said.

The common notion is that the health care system is like a steak, where you get a sharp knife and carefully pare a thick slab of fat off the meat. “But there’s no painless way to reduce cost in the health care system,” he said. “The real image is that the fat is marbled all the way through the steak. There’s no way to use a knife. The only way is to throw that steak in the fire.”

Plans will likely have to cover a broad range of services, which drives up premiums. So one answer, he said, is cost-sharing, where patients who want certain services pay a higher price. Networks can be designed with fewer providers, which could lower cost, or base reimbursement in part on financial incentives. A third possibility is through medical management, Robinson said.

“There is always this back-and-forth between choice and efficiency,” Robinson said. “You have to either rely on the individual to make choices among a broad menu of choices, or you have to use the leverage of enrollment and limit contracting to a small number of plans. You have to figure out where to say no — is it a decision for individuals, or is it a collective decision to be made by the board?”

According to executive director Peter Lee, other news discussed at the exchange board meeting included:

  • The exchange board will consider cost-sharing with qualified health plans, Lee said, and will expand its scope of inquiry to include vision and dental.
  • The CalHEERS (California Healthcare Eligibility, Enrollment and
  • Retention System) solicitation deadline has been extended till Feb. 29.
  • The exchange issued a SHOP (Small-Business Health Options Program) solicitation last week. Bids are due at the end of February.
  • The exchange hopes to select a partner for the outreach, marketing and assisters program by next week.
  • The board will soon post information giving the relative cost of the benchmark plans for essential health benefits.


 

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