ACO's Are Coming to Town

Yagents

Guru
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Arizona
Get ready for the new biz model of ACO's. Smaller restricted network = lower price. Ex: 1/4 the network, 20% off the price.

Aetna IFP is rolling out a Banner Health Network plan here in AZ/Maricopa county only.

& BCBS AZ just brought our similar relationship for small group.

Good or bad? Will people want it?
 
I just heard about the new Aetna plans...smaller network, lower cost... I have been telling clients one of the repercussions of health care reform will be limited networks... And I tell the client deal with it.. Elections have consaquencies. Like that spelling?
 
Same percentage as other plans. They still got MLR to deal with.

I guess it's back to managed care......
 
ACO's are more or less the next generation IPA and staff model. I would anticipate limited availability, at least for the near term. They will have much of the look and feel of an HMO which has geographic limitations.

Limited networks have been used with some success in EPO's. Some carriers are also testing limited networks that also act like HMO's.

Choice of only a few docs and hospitals in major metro area's. Pricing is usually considerably lower than the same plan that has a larger network.

The long term success of these plans remains to be seen as far as market share is concerned. People like choice, unless it applies to Medicare . . .

Speaking of Medicare, the Select plans available in some areas are another variation of the HMO, EPO, ACO concept.

If the plans that market the ACO are self funded they won't have MLR to deal with.

Same is true if the carrier is small.

There is a small GA carrier with a VERY limited network and VERY limited footprint that has had marginal success with their plans.
 
An important thing to keep in mind about ACO's is that they will be taking risk. For us older guys, we have seen this movie before and like most sequels, it can be a stinker.

Sam is correct in that the ACO is coming together much like they providers came together in the 80's and 90's. Then the providers started to believe that they could finance healthcare better than the HMO's, BUCHA's, etc. So payment models changed from FFS to some kind of risk transfer, such a per diems, capitation, etc.

During that the smarter HMO's and insurers could not wait to run down the provider offices and enter into these arrangements. The math changed for both sides. Instead of the HMO/insurer needing to calculate what claims would be all they had to do was calculate what they needed for administration to make a profit. (this is overly simplified)

By the late 90's many provider groups (IPA's, PHO's) were bleeding so much money that they reminded me of the boxer Chuck Wepner! So they went to politicians, the media, and anyone who would listen to talk about how bad the insureres and HMO's were.

So while limited networks are the immediate issue, sit tight because in about 10 years the fan is going to be hit. And I won't be old enough to retire then.
 
Sam is correct

Who is Sam?

But you are correct, the ACO's are a walk down memory lane. When they take on risk they become subject to the same rules as carriers and have additional state filings over and above the usual for an MCO.

They also need a lot of financial backing and reinsurance. The reinsurance part can be tricky unless they find an underwriter that hasn't ridden that horse before.

in about 10 years the fan is going to be hit.

I don't think it will take that long, but a lot depends on the fall elections.

If Obama and Obamacare survive I give it 3 - 5 years before private insurance as primary is circling the toilet.

If both are thrown out by a new prez and Congress we may get a reprieve.
 
Well, maybe I am closer to retirment than I thought. Sam is a friend of mine from upstate ny with the last name of Somarco.

All good points about the 10 years down the road, except I think many of these ACO's will survive regardless of what happens.
 
I've talked to a few clients about the new ACO plans in AZ. Most of our carriers now have them. It seems the clients have a pretty good memory of HMO's and aren't interested (at least the handful that I've talked to about it).
 
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