BY EMILY CHARRIER-BOTTS INDEX-TRIBUNE ENTERTAINMENT EDITOR
Jun 6, 2013 - 07:21 PM
A year ago, Sonoma Valley Hospital partnered with Western Heath Advantage on an insurance product that would rival Kaiser Permanente but keep patients in the Valley for health care. Last week, the state’s health exchange – Covered California – officially accepted that product, which will be offered to thousands of residents once open enrollment begins in October.
“It’s like the ‘Good Housekeeping’ seal of approval,” said Garry Maisel, president of Western Health Advantage, “We were thrilled.”
Jun 6, 2013 - 07:21 PM
A year ago, Sonoma Valley Hospital partnered with Western Heath Advantage on an insurance product that would rival Kaiser Permanente but keep patients in the Valley for health care. Last week, the state’s health exchange – Covered California – officially accepted that product, which will be offered to thousands of residents once open enrollment begins in October.
“It’s like the ‘Good Housekeeping’ seal of approval,” said Garry Maisel, president of Western Health Advantage, “We were thrilled.”
It was one of 13 insurance products Covered California accepted, of the 32 that applied to be included in the state health care exchange for individual plans. Maisel explained that Covered California set rigorous standards for both level of service and price points; it was up to the insurance providers to meet those requirements to be included in the exchange.
“The benefits are very, very similar to the plans we offer today,” Maisel said. “What’s the most different about them is the cost savings.”
Western Health Advantage partnered with a wide range of medical providers, most notably St. Joseph’s Health Systems; Meritage Medical Network, which includes most of Sonoma’s primary care physicians; and the Marin Health Authority, including its affiliate partners Sonoma Valley and Palm Drive hospital. In total, the plan includes 15 hospitals and 3,000 doctors in Sonoma, Marin, Solano, Napa, Sacramento, Placer, El Dorado and Yolo counties.
To consolidate plans based on geographic data, Covered California divided the state into 19 health care markets, and companies had to apply for each region in which they sought to offer coverage. In region two, which includes Sonoma, Marin, Napa and Solano counties, there will be five plans available when open enrollment begins on Oct. 1.
“If you look at the other plans available, they will not have nearly as broad a network as we do,” Maisel said. He pointed out that Blue Shield is offering an exclusive provider organization (EPO) plan, meaning patients are limited to a smaller number of doctors who will accept their insurance.
“It’s a very narrow network list. The exchange hasn’t listed who will be included yet, so we don’t know which doctors that will include,” Maisel said.
He said the trick to having a high volume of local services at a lower price was reliant on developing solid relationships with providers, who had to agree to decrease their reimbursement rates for the plan to be cost-effective. The hope is that lower rates will attract a higher volume of patients, thus balancing out the decreased fee for service.
“All of the providers agreed to a deep discount,” said David Cox, chief financial officer at Marin General Hospital. “If 1,000 people enroll, it would be equivalent to about $250,000 a month in revenue.”
Cox said the hospitals have their own type of insurance to cover any catastrophically costly cases. Marin General Hospital has also agreed to take on the financial risk for Sonoma Valley and Palm Drive hospitals, meaning the smaller district hospitals will have a larger financial safety net should a Western Health Advantage patient require extensive treatment. However, all the medical providers are working to keep patients healthy with preventative measures to avoid larger health care needs down the road.
“The providers are incentivized to help our patients maintain or improve health,” said Kelly Mather, chief executive officer of Sonoma Valley Hospital. “We can benefit financially from this pool now if the people enrolled in the plan stay healthy and/or do not use as many costly services.”
Covered California estimates there are 44,000 residents in region two who would be eligible for subsidized insurance plans. With five plans to choose from, Maisel is confident Western Health Advantage will get its “fair share” of those newly insured patients.
“We’re not the cheapest, but we’re not the most expensive,” he said, again emphasizing the large network of providers included in Sonoma. “I don’t think people are going to want to drive out of town when they can get care closer to home.”
Mather pointed out that Sonoma Valley Hospital has contracts with multiple insurance providers that were accepted in the health care exchange. But it has financial incentive to boost the number of Western Health Advantage patients, and the hospital offers WHA plans to its own employees.
Maisel said Western Health Advantage will begin an extensive marketing campaign to inform potential new patients about its services, but added that Covered California will be taking on the bulk of the marketing with a $30 million advertising campaign set to launch this summer. It will teach prospective patients about the exchange, which offers plans at different price points based on age and the rate a person can afford to pay. For example, in a platinum plan a person pays more every month but is charged less for services rendered, versus a bronze plan which has a lower monthly rate but a higher out-of-pocket cost for service.
“It’s a whole new system,” Maisel said. “(Covered California) is going to have to do a lot of education for it to work.”
Across the state, 5.3 million residents will be eligible for health insurance under the Affordable Care Act, about 2.6 million of whom would qualify for federal subsidies on their health care costs because they are within 400 percent of the federal poverty line. However, new patients must sign up during the open enrollment period, which lasts from Oct. 1 to March 31 the first year; and Oct. 1 to Jan. 1 every year after.
“You have to buy in that period, or wait for the next open enrollment period,” Maisel said.
In terms of financing, patients pay Western Health Advantage, which in turn reimburses the medical providers. “If we run over, it’s our problem,” said Cox.
Western Health Advantage will also pay Covered California a fee based on its total membership to offset the cost of running the exchange. While federal funds have covered the cost to launch Covered California, including the extensive costs of setting up the infrastructure of the new exchange, it’s up to the state to become self sufficient during the first year – after that federal funds will dry up.
Blog Source : http://www.sonomanews.com/News-2013/Hospitals-insurance-product-approved/
For help with your health insurance questions, please call John Caris at 707 935 6294 x103 or Contact Us.
“The benefits are very, very similar to the plans we offer today,” Maisel said. “What’s the most different about them is the cost savings.”
Western Health Advantage partnered with a wide range of medical providers, most notably St. Joseph’s Health Systems; Meritage Medical Network, which includes most of Sonoma’s primary care physicians; and the Marin Health Authority, including its affiliate partners Sonoma Valley and Palm Drive hospital. In total, the plan includes 15 hospitals and 3,000 doctors in Sonoma, Marin, Solano, Napa, Sacramento, Placer, El Dorado and Yolo counties.
To consolidate plans based on geographic data, Covered California divided the state into 19 health care markets, and companies had to apply for each region in which they sought to offer coverage. In region two, which includes Sonoma, Marin, Napa and Solano counties, there will be five plans available when open enrollment begins on Oct. 1.
“If you look at the other plans available, they will not have nearly as broad a network as we do,” Maisel said. He pointed out that Blue Shield is offering an exclusive provider organization (EPO) plan, meaning patients are limited to a smaller number of doctors who will accept their insurance.
“It’s a very narrow network list. The exchange hasn’t listed who will be included yet, so we don’t know which doctors that will include,” Maisel said.
He said the trick to having a high volume of local services at a lower price was reliant on developing solid relationships with providers, who had to agree to decrease their reimbursement rates for the plan to be cost-effective. The hope is that lower rates will attract a higher volume of patients, thus balancing out the decreased fee for service.
“All of the providers agreed to a deep discount,” said David Cox, chief financial officer at Marin General Hospital. “If 1,000 people enroll, it would be equivalent to about $250,000 a month in revenue.”
Cox said the hospitals have their own type of insurance to cover any catastrophically costly cases. Marin General Hospital has also agreed to take on the financial risk for Sonoma Valley and Palm Drive hospitals, meaning the smaller district hospitals will have a larger financial safety net should a Western Health Advantage patient require extensive treatment. However, all the medical providers are working to keep patients healthy with preventative measures to avoid larger health care needs down the road.
“The providers are incentivized to help our patients maintain or improve health,” said Kelly Mather, chief executive officer of Sonoma Valley Hospital. “We can benefit financially from this pool now if the people enrolled in the plan stay healthy and/or do not use as many costly services.”
Covered California estimates there are 44,000 residents in region two who would be eligible for subsidized insurance plans. With five plans to choose from, Maisel is confident Western Health Advantage will get its “fair share” of those newly insured patients.
“We’re not the cheapest, but we’re not the most expensive,” he said, again emphasizing the large network of providers included in Sonoma. “I don’t think people are going to want to drive out of town when they can get care closer to home.”
Mather pointed out that Sonoma Valley Hospital has contracts with multiple insurance providers that were accepted in the health care exchange. But it has financial incentive to boost the number of Western Health Advantage patients, and the hospital offers WHA plans to its own employees.
Maisel said Western Health Advantage will begin an extensive marketing campaign to inform potential new patients about its services, but added that Covered California will be taking on the bulk of the marketing with a $30 million advertising campaign set to launch this summer. It will teach prospective patients about the exchange, which offers plans at different price points based on age and the rate a person can afford to pay. For example, in a platinum plan a person pays more every month but is charged less for services rendered, versus a bronze plan which has a lower monthly rate but a higher out-of-pocket cost for service.
“It’s a whole new system,” Maisel said. “(Covered California) is going to have to do a lot of education for it to work.”
Across the state, 5.3 million residents will be eligible for health insurance under the Affordable Care Act, about 2.6 million of whom would qualify for federal subsidies on their health care costs because they are within 400 percent of the federal poverty line. However, new patients must sign up during the open enrollment period, which lasts from Oct. 1 to March 31 the first year; and Oct. 1 to Jan. 1 every year after.
“You have to buy in that period, or wait for the next open enrollment period,” Maisel said.
In terms of financing, patients pay Western Health Advantage, which in turn reimburses the medical providers. “If we run over, it’s our problem,” said Cox.
Western Health Advantage will also pay Covered California a fee based on its total membership to offset the cost of running the exchange. While federal funds have covered the cost to launch Covered California, including the extensive costs of setting up the infrastructure of the new exchange, it’s up to the state to become self sufficient during the first year – after that federal funds will dry up.
Blog Source : http://www.sonomanews.com/News-2013/Hospitals-insurance-product-approved/
For help with your health insurance questions, please call John Caris at 707 935 6294 x103 or Contact Us.
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