Insurers can help slow healthcare spending
Last week, the Centers for Medicare & Medicaid Services (CMS) released a statement indicating that healthcare spending growth in 2013 slowed to just 3.6 percent.
A few factors explain the slowdown--namely, the Affordable Care Act, the lingering effects of the recession, low price growth (driven by Medicare cuts and sequestration) and Medicare penalties for hospital readmissions.
But history suggests the trend cannot continue. Economic growth often triggers healthcare spending growth, since more people with jobs means more people with insurance. Sequestration is over, too, and states are spending more on Medicaid as a result of the program's expansion under the ACA.
That said, things may actually be different this time. I see three ways that insurers can make sure they play a role in making this happen.
First, while high-deductible health plans do have their faults, consumers increasingly prefer high deductible plans to high-premium plans. Used properly and with the right consumers, high deductible plans, with their lower up-front costs, can cut overall spending.
Second, while research shows that narrow networks don't always lead to lower premiums, a smarter narrow network, emphasizing quality and transparency in addition to cost, might make a plan with fewer options more appealing to consumers.
Third, while wellness programs certainly have their faults--witness the debate over whether employee wellness programs can penalize non-participants--it's also true that wellness programs that use positive incentives instead of negative consequences can help participants achieve healthcare goals. In the process, they cut costs for themselves, their employers and their insurers.
Kaiser Family Foundation President and CEO Drew Altman wrote in the Wall Street Journal that maintaining this slowdown in healthcare spending growth requires a coordinated effort among all parties. Luckily, today's insurers are well-positioned to demonstrate that what they offer does, in fact, align with this larger effort.
Or, at least, they should be. - Brian (@Brian_Eastwood and @HealthPayer)
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