Small employers struggle to pay rising health insurance bills, year after year — but this year could be different.
Horizon Blue Cross Blue Shield of New Jersey is rolling out two new plans that cut premiums 15 percent and waive deductibles if small employers and their workers get their care from Horizon’s network of 3,700 “patient-centered” doctors. Those doctors are working with the state’s largest health insurer to lower costs and keep patients healthy and out of the hospital.
On July 1, Horizon will launch the two new “Patient-Centered Advantage” plans in the small, under-50-employee market: a bronze version with a $2,500 deductible, and a silver plan with a $2,000 deductible. Horizon said premiums will be 15 percent lower than its current small-group plans. But in addition to that premium discount, the deductible won’t apply if members use Horizon’s patient-centered network: people will just be responsible for co-pays of $40 in the bronze plan and $20 for the silver.
Small employers and their workers will still have access to the entire Horizon doctor network — they won’t be forced to use patient-centered doctors. But the company hopes that, by waiving the deductible, they can encourage more members to use these innovative practices.
With 3,700 patient-centered doctors, specialists and other health care professionals in Horizon's networks — and half of its primary care physicians now in its patient-centered model — the insurer has achieved the critical mass to offer a health insurance product built around patient-centered care, according to Christopher M. Lepre, senior vice president of market business units for Horizon.
Since 2011, Horizon has been expanding its patient-centered network by offering coaching and financial incentives to doctors who agree to work with Horizon to focus on the quality — rather than the quantity — of the care they deliver. And Horizon said it’s working: In 2012, these practices saw a 23 percent reduction in hospital admissions, 12 percent fewer visits to the ER and a 9 percent lower cost of care for diabetics.
“Now we are ready to pass on these savings and these reduced costs to our small group members,” Lepre said.
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Joel Cantor, director of the Rutgers Center for State Health Policy, said the new Horizon products are a significant development: “This is good stuff — they are putting their money where their rhetoric is, and that is a sign they believe in this. This will be a big boost to transforming the way medical care is delivered in New Jersey.”
Cantor called the new products “a huge vote of confidence” in the patient-centered care model. And he said research indeed shows that patient-centered care makes a difference: “They improve care and can save some money with the most complex patients, who have multiple chronic diseases” such as hypertension, diabetes and heart failure.
Horizon is the largest player in New Jersey’s small, under-50 group market, with 325,000 lives. That market covered a total of 647,374 lives in the fourth quarter of 2013, down from about 900,000 in 2006.
Lepre said the dramatic decline in the small group market “is related to the economy and to the fact that small businesses have not been able to afford health care for their employees.”
Lepre said that, for years, small employers have faced premium increases of 10 to 15 percent a year; now Horizon is rolling out new products where premiums are going down instead of up.
“This is not just a one-year product offering: we are transforming the way health care is delivered in the entire state,” he said.
Currently, 500,000 of Horizon’s 3.7 million members get care in patient-centered practices, and Lepre sees that rising to 750,000 by the end of 2014. Today, 50 percent of Horizon’s primary care physicians are patient-centered; Horizon wants that to be 75 percent in two or three years.
And Lepre said in three to five years, Horizon is looking for the majority of its 3.7 million members to belong to patient-centered practices.
The 15 percent reduction in premiums will be across the board for small employers who choose these plans. The company could not provide an average premium in this market, where prices vary widely depending on the age of the workers, but it’s not unusual for family coverage to cost more than $15,000 a year in New Jersey.
Lepre said Horizon has the largest network of patient-centered primary care doctors in New Jersey — which is why it can build products dedicated to these practices. The two new plans will be launched July 1 in the state’s small group market, and starting next January will also be sold on the Affordable Care Act exchange, at healthcare.gov.
Other insurers, including AmeriHealth New Jersey, Aetna, Cigna and UnitedHealthcare, also make incentive payments to patient-centered practices, in some cases through accountable care organizations or other “collaborative care” models that all have the same goal: getting the payers and the doctors working together to improve quality and lower costs.
AmeriHealth New Jersey said it covers just under 100,000 lives in the small group, under-50 market, and has contracts with patient-centered medical practices throughout the state, but declined to say how many.
Aetna spokeswoman Susan Millerick said the company has 4,300 physicians in “collaborative care agreements,” and about half are primary care doctors. She said another 2,650 are projected to be coming on board this year. Millerick declined to disclose the size of Aetna’s small group business, but said it has grown 10 percent this year.
Cigna spokesman Mark Slitt said the company is providing financial incentives to 535 New Jersey doctors in four “collaborative care” arrangements with several providers, including Atlantic Health and the Summit Medical Group. Cigna does not disclose market share, but Slitt said the under-50 insured segment is a small part of the company’s business in New Jersey.
Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, said the new product launch from Horizon “shows that the leadership at Horizon is convinced” that patient-centered care is working. She said Horizon has been transforming primary care in New Jersey by providing doctors with additional financial support, training and data on patient behavior: “The doctor needs to know if the patient has been in and out of the ER several times over the past two months, or is bouncing around and seeing a lot of different specialists.”
Schwimmer said, “It’s exciting that there is going to be a 15 percent reduction” in premiums. She said the irony of health coverage is that costs have been rising fastest for individuals and small employers — the groups generally least able to afford health care.
Marc Feingold is a family physician whose patient-centered practice in Manalapan is part of the Horizon network.
“A lot of doctoring is reactive, but we are proactive, and that takes a team approach,” Feingold said. “You need to teach patients why they need to care about themselves. Instead of treating heart attacks, we want to control blood pressure; do bone density screening to prevent hip fractures; give flu shots and avoid visits to the ER.”
Feingold sees sick patients the same day they call, or provides advice by phone, then gets them in the next day — thus avoiding excess use of the ER, a major contributor to health care spending.
He said the additional reimbursements from Horizon and other insurers allow him to hire the staff he needs to offer comprehensive care that keeps people well.
It is also helping him stay independent.
Instead of going to work for a hospital or merging with another practice, Feingold said, “I want to hire more doctors to work with me.”
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