Exchanges: Incorporate lessons learned from abroad


We're not alone. And we're certainly not the first. What am I talking about? Health insurance exchanges.

Although it's a radical idea for us Americans to think of shopping for our health insurance coverage through an online marketplace, it's commonplace in other countries like Switzerland and the Netherlands. Those countries have been regulating exchanges since the 1990s, successfully leveling competition throughout the insurance markets and enrolling thousands of people in health plans.

And since insurers stand to gain much business by selling plans through the exchanges, it stands to reason that learning from those who have walked before them will make the transition a little smoother.

Researchers from Harvard's School of Public Health discovered the most important lessons to help the United States on its path to achieving high enrollment, improving outcomes and lowering costs through the exchanges, according to a study in the April issue of Health Affairs.

Insurers will be particularly interested in knowing they need adequate bargaining power to negotiate prices for the plans they offer on the marketplaces. They also must have access to "meaningful information" about providers' costs and quality of care so they can make meaningful decisions about their networks. This will help tame costs since managed competition alone won't decrease costs enough, the researchers said.

Risk-adjustment mechanisms are another key factor contributing to the success of exchanges in Switzerland and the Netherlands. Exchanges must provide a "sophisticated and continually updated" process for adjusting premiums to compensate insurers with more members who have high medical costs.

And since the researchers determined lawmakers must uncover the real blockades to enrollment, they should then test and analyze various approaches to best educate consumers about the value in using exchanges. That includes understanding why some consumers who are eligible for coverage don't enroll through the exchanges and plan targeted campaigns that help those people overcome whatever barriers they face. Otherwise, the online marketplaces are doomed to fail right from the start.

Although the researchers didn't specifically address this point, I would suggest it's worth insurers'' efforts to reach out directly to consumers, telling them the advantages and benefits of signing up for a health plan through an exchange, especially because federal and state officials haven't made much progress in educating the public about exchanges. That's why some companies, like Blue Cross Blue Shield of Texas, have launched their own outreach campaigns to promote exchanges.

Ultimately, the goal is to have efficient exchanges operating in all 50 states, operating like a well-oiled machine. But the researchers cautioned that to meet that objective, lawmakers and policymakers must continually analyze the marketplaces "to learn what works best to create incentives for efficiency."

Perhaps the greatest lesson, then, is that insurers should take matters into their own hands, working to educate the public about exchanges, lobby policymakers for needed changes in exchange policies and ensuring they're compensated for taking on higher-cost consumers.

We all know the fast pace at which federal and state lawmakers approach any sort of legislative action, so it would behoove insurers to take their own steps to protect their best interests. So I suggest they pick some high mountains and shout atop them, informing as many consumers as possible about the benefits of enrolling in an exchange. I look forward to hearing their messages. - Dina (@HealthPayer)

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