Michigan Association of Health Plans

Addressing Our Industry Challenges

As I noted in a previous post, the health industry is facing some serious financial challenges as it seeks to provide quality health care and health insurance to all in the state, particularly low income families. We know from survey research that Michigan voters support steps that ensure all residents have access to high quality, cost effective health care, and back additional funding for that care. But we also now the political realities, and that smart people in our business need to look for ways to be more efficient in providing services.

Here are some ideas I think are worth exploring:

Prudent health plan rate adjustments.  Let’s start with our industry to show we are serious about addressing these challenges.

Significant savings can be achieved through the following steps:

  • Tightening up the Medical Loss Ratio requirements—i.e. reduce administrative costs where it makes sense to do so.  This also means that the imposition of new or questionable existing administrative requirements cannot continue.
  • Reducing Medicaid health plan Emergency Department and Hospital Readmission of certain conditions to no higher than the national average.  This should also be combined with targeted incentives for health plans to meet this objective.
  • Restraining the growth of Medicaid health plan pharmacy expenses.  One of the lessons learned from the past year is that the policy of chasing rebates is false savings. Rather the focus must be on proven products, higher generic rates and more effective medication management.
  • Enabling and facilitating the movement of payment reform for Medicaid health plans that has proven successful in other states and products.

Fully implement the requirements of the Federal Deficit Reduction Act with a rigorous Third Party Liability program including designation of health plans as agents of the state.  Medicaid is payer of last resort and beneficiaries who continue to have other forms of insurance should have those carriers pay for coverage. Let’s get this in place.

In the next post, I’ll offer some additional ideas that can cut costs and improve outcomes for Michigan citizens.