“[Kaiser Health News chief Washington correspondent Julie Rovner:] So Covered California operates very differently from most of the other state-based marketplaces. And, as a result, it has done a better job covering more people at lower premiums than I think any other state, right?
[Executive Director of Covered California, the largest state-run ACA marketplace, Peter Lee:] Absolutely. Well, lower premiums relative to where we start. California’s an expensive state, but our premiums in California in the last seven years went up about 45%. Nationally, they went up about 80%. So we’ve seen premiums increase dramatically. But you’re right, we’ve done a lot to enroll people and we’ve enrolled more people who are, by [one] definition, healthier, which means lower costs for everybody. That’s the secret sauce of what we’ve done. With another element, if I could, Julie: It’s both having a healthier risk mix, but by being a pretty active purchaser with standard benefit designs, consumers create a competitive market that means health plans can’t walk away with big profits or not spending it on health care. Because if they do, consumers will buy from another health plan. So we have actually made things more efficient and effective by actually having true competition for quality and value.
[..] Covered California said from day one, we’re going to turn health plans away if they don’t meet minimum standards beyond regulatory standards. We will look closely at what they do in terms of having things like the same, identical benefits. So if you’re picking between Blue Shield of California or Anthem and Kaiser [Permanente], you’re comparing the networks and their approach to health care, not confused by differences of benefit design. That isn’t the norm. Across the nation, if you are shopping for a silver plan in New Orleans or in Miami, you would have dozens of plans – with each health plan offering four or five silver variations. Not because they’re better for consumers, because they’re better for health plans getting people in their door. We say that’s not the right way to compete. So being an active purchaser means sitting in the corner where the consumer sits and say, Let’s help you pick the right plan for you. But then let’s also require that health plan to pay differently for primary care. To approach equity, that we talked about earlier, constructively. We require all of our health plans to have not just standard accreditation, but to be accredited for addressing multicultural health care needs. We’re the only marketplace in the nation that does that. And it’s the right thing to do because we don’t want people just to get an insurance card. We want people to get the right care at the right time. And so that’s what it means to be an active purchaser. We’ve got a contract provision that’s got re-upped that raise[s] the bar even higher because we don’t think we’ve done enough in many ways to hold health plans to the standard that any Americans want their health plan held to.
[..] Health plans have not been rewarded financially or called to account financially for really delivering better care. And whether you’re a large employer, you’ve done on the margins “pay for performance” — say, pay doctors a little bit differently. But have health plans faced any consequence from the last 20 years not doing better for diabetics, for people with heart disease? Absolutely not. Now the one micro-exception of that — well, two, they’re not that micro — is one: In Medicaid, more and more Medicaid beneficiaries are served by managed-care plans, and states are looking actively at how to hold Medicaid plans to account. In Medicare, there’s a bonus program for Medicare managed-care plans, but that bonus program has a very low bar. And in Medicare Advantage plans — boy, are consumers confused, because you’ll get Medicare Advantage plans saying, “Come to us because of our hearing aids, come to us because of our exercise program,” not “Come to us because you’re more likely to be alive if you have heart disease.” That’s bad for consumers, it’s bad for the health care system. And I think that if we could wave a magic wand and have single-payer, is that better or worse? I’m not sure. I don’t believe in magic wands. What we can do is, whether you’re a state or the federal government, say, if we’re going to have an environment that has multiple health plans, let’s have consumers pick on things that are meaningful. Which is, does that plan do a better job? Meaning you’re going to live if you have hypertension, you’re more likely to not have your leg amputated if you have diabetes. That is not on the table today, and it should be for every major purchaser.
[..] It is true you can’t improve what you don’t measure. Measurement is vital. What did happen, though, was the hope we had for electronic health records, of being engines of improvement, became engines of work and burden on clinicians that have driven them bonkers and not provided them tools to improve. So what we did at Covered California is select a very small set of measures — for the key measures that we’re looking at — for blood pressure control, diabetes control, preventing people from having colorectal cancer, because if you screen for that you can actually prevent it, and childhood immunizations. Now what we’re doing at Covered California is on these very small set of measures putting what will be up to 4% of premium at risk. Four percent. I want to know — we’ve looked at our data over the last seven years. On average, our plans, we had 11 plans, made 2.5% profit. Four percent is a big number. But coming back to the question of being an active purchaser, does that mean health plans don’t want to play in the individual market in California? Absolutely not. We’ve got national plans knocking on the doors of Covered California, even while we’re raising the bar for quality. Every employer, every public purchaser should be saying: Health plan, you need to focus on quality and it’s going to cost you if you don’t. If we don’t monetize quality, if we don’t make it actually matter to a health plan’s bottom line, it won’t get the care, attention and focus that it should get.
[..] What employers are doing by and large is saying, “If you pick a big PPO, we’re going to address cost by playing with cost shifting, not by making sure care is better organized. I think that’s a problem. And it’s a problem in particular because about 30% of Americans that have employer-based coverage are lower income and their health care costs mean they unlikely to get care when they need it. That’s wrong. The Affordable Care Act addresses that well and functionally by having income-adjusted subsidies, income-adjusted benefits. I think one of the things we as a nation need to look at is to have an employer system — if we’re going to keep it — make it work for lower-income people as well as for high-income people. So those are, Julie, domains I’m interested in working in. Where will I plan to do that? I’m not sure, but those are the right issues for me to try to contribute in the years to come.”
Full transcript, J Rovner, Kaiser Health News, 2022.4.21