Health insurer talks volatility
Dave Milich, a longtime UnitedHealthcare executive, took the reins of his company’s employersponsored health plans in Texas and Oklahoma in April.
With the insurance industry at the center of the white-hot debate raging about the nation’s health care, Milich spoke with the Chronicle this week about the challenges his company faces and how it is preparing for the future amid such turbulence.
Edited excerpts follow.
Q: How is uncertainty in the market for individual insurance affect-
ing group plans?
A: Employers are making decisions on the benefit plans they are going to offer their employees for 2018 right now. They are weighing similar options to what people have to weigh on the exchanges in terms of cost and the benefit design that they offer. Our responsibility is to try to provide as broad and most affordable of a portfolio that we can. I think any volatility in the market does tend to bleed into the commercial side.
Q: What might that look like?
A: Volatility in the individual market grabs employers’ attention. We’ve seen them examine benefits differently than before. They ask different questions. It hasn’t been wholly negative; it’s created a buzz and an awareness.
Q: UnitedHealthcare pulled out of Affordable Care Act’s exchange in Texas last year. Any plans to return?
A: I would never say we would never come back in. I think that our goal is to make health care affordable and accessible for as many people as we can. What we’re looking for is for that individual market to be more stabilized, but more than anything we’ve got to make sure the customers we have aren’t negatively impacted by entering a new market.
Q: Are there plans to reduce your offerings on the commercial side? A: No.
Q: But will there be fewer providers in your network?
A: We’ve got a very broad portfolio. Here in Houston, just about every hospital and about 4,500 physicians are part of that network. Our goal is to help individual consumers understand who are the highest quality and most cost-efficient providers. So either through benefit design or in some instances, by narrowing the network, we’re going to steer individuals to those high-quality, highly cost-efficient providers.
Q: What makes a doctor cost-efficient?
A: This is about their utilization of resources as a provider. It’s not even that we pay them per unit less. In many instances they are the higher-perunit physician, but they utilize those resources much more efficiently than some of their peers.
Q: What do you think of the rise in high-deductible plans?
A: When we talk about high-deductible plans, it’s generally in combination with a health savings account. We’re a big supporter of it. We do believe, and frankly have seen, the impact on health care when the consumer has a little bit more accountability in terms of the cost of things.
Q: Price-shopping sounds good in theory, but it does not always translate well to people’s health care. How do you address that?
A: Part of it is generational. There is no doubt the younger consumers are more likely to use some of the technical resources, especially since their world exists on their phone. I also think the consumer-directed health plan (with more patient cost-sharing) has definitely pushed people to be a more conscious consumer. Myself included. I can honestly say that until we moved to a consumer-directed health plan I never asked for the generic prescription because it might have been the difference of a $2 or $3 copay. Now I’m a little bit more inquisitive. As we do a better job as insurers of communicating and educating, you will see that level of consumer engagement increase.
Q: How much clout do insurers have to bring prices down, especially with drug manufacturers?
A: Here in Houston, we have the clout of a halfmillion consumers and 2 million across the state. Our responsibility is to try to get the most costeffective product as we can in the marketplace. We’re always trying to make sure we are negotiating the best possible total cost we can. But we’re also subject to market forces just like everyone else.
Q: How does the price-shopping model work with rare and specific treatments that often require expensive drugs?
A: Again, part of it is negotiation with the pharmaceutical industry. Part of it is promoting more research being done to try to get those biosimilar medications to market. Another way is to make sure we effectively are helping the consumer understand and their utilization is appropriate.
Q: How would the Republican-backed proposal to remove the employer mandate affect UHC’s employersponsored plans?
A: I think on the surface the (removal) of the employer mandate would be impactful. I’m just not 100 percent sure I could quantify what the value of it would be. But I think many employers, especially the ones we engage with, were providing those benefits anyway.
Q: Is there any part of the current law you would like to see changed?
A: One of the areas we are focused on is the health insurance tax. It’s a tax that frankly impacts your smaller employers more than larger ones. It’s a tax that is tied to insurance premiums, so it in effect increases the cost of the insurance premiums. At the very least we would like to see it postponed. It is supposed to go into effect on Jan. 1, 2018. It’s our responsibility to make our products as affordable as we can. That is an identifiable cost.
Q: Where do you see the overall insurance industry going amid all of the upheaval?
A: Our contractual relationships with providers are shifting away from fee-for-service to pay-for-value, accountable care, value-based care.
Q: That kind of accountability is happening under the current law. If the law is repealed, what will happen to such momentum?
A: Now that the data are there, the analytics are there, all the infrastructure is there, I personally do not see us going back to fee-for-service. I think it would be tough to argue there is benefit to going back.
Q: Are the changes made in past seven years now part of the fabric of the nation’s health care even if there is a repeal?
A: l absolutely believe that the changes that have been made in the relationship between insurers and providers is not going back.