In the 21 months since Arches Health Plan--one of the 24 consumer oriented and operated plans (CO-OP)--received funding, the company already has taken steps that could send changes throughout the health insurance industry.
The Utah-based CO-OP, which essentially had to build an insurance company from scratch, isn't afraid to ruffle more than just a few feathers in the industry.
"We're different. We're new. We're disruptive," Ferris Taylor, chief strategy officer for Arches, told FierceHealthPayer in an exclusive interview. "We know we're going to make a lot of enemies in the competitive landscape in terms of things we're doing."
But Taylor knows full well how challenging it will be to innovate change across an entire industry. "It's going to be terribly hard," he said. "You have a great big boat and you have to turn it. There's going to be some screaming and hollering. It's going to be painful."
1. Offering unique benefits
While Arches decided what benefits it would cover, it identified about 35 billing codes health plans don't allow physicians to use, including telephone and online evaluations.
"We've stepped back and said why not? That's as good a consult or better," Taylor said. He explained that the Arches member and doctor can talk "face-to-face on a computer" through an online tool paid for by the insurer. If needed, the doctor can tell the member to come in for an in-person visit.
What's more, Arches is willing to pay for an online consult even for people who aren't members. Since most insurers don't typically pay for phone and online consults, few providers offer them. So Arches is working to educate its provider network about these benefits.
"We're actually saying to [their doctors], if you have non-Arches members that you see a need for them to have a consult on the Internet, go ahead and use our tool," Taylor explained. "As long as the utilization is in the majority for our Arches members, we're happy paying for that tool to be used."
Another unique benefit Arches provides is group visits. "Bringing 10 to 12 diabetic patients together on a group consult leverages the doctor's time and provides helpful interactions among the members," Taylor told FierceHealthPayer. Arches also has expanded the definition of preventive services. For example, it has classified diabetic supplies as preventive, saving many of its members from upwards of $300 monthly copayments.
2. Bending the cost curve with medical homes
Recognizing it's "absolutely critical to change the cost curve," Taylor said Arches hopes to lower costs through medical homes where the entire provider team, including physicians, health coaches, dietitians and nurses, all collaborate to care for patients.
Arches pays the medical home team a small per-member, per-month fee, which they receive every month regardless of whether they worked with each participating member. And it requires the medical home team provide certain services, such as ensuring that someone is always available to answer member phone calls.
"We don't want calls to go to a call center that says if it's an emergency go to the emergency room," Taylor told FierceHealthPayer. "We want someone on the care team to take that call and consult with them, and we're going to pay [the team] for that phone consultation."
3. Attracting young adults with innovative offerings
In developing its health plans, Arches worked hard to make its offerings attractive to young adults. Arches realized young adults want a low-cost health plan but don't always know that it comes with a high deductible. That leaves them paying 100 percent of the costs until they meet the deductible, all while not feeling like insurance is delivering any value to them.
Arches found a solution: Offer consumers two or three visits a year at no cost. "But more importantly, if you have an accident--because that's what the young healthy are worried about--we're going to waive the deductible," Taylor said.
That decision alone cost Arches about 3 percentage points on its premiums because it had to cover the deductibles it would be paying. But Taylor said the decision was worth it because Arches saw the average age of members fall by 17 years during the last four weeks of open enrollment, and 47 percent of its last-minute enrollees were young, healthy consumers.
4. Incentivizing high-quality care
Arches is currently developing what it calls "centers of excellence" to steer its members toward high-quality providers. For example, if a member needs knee surgery, Arches will provide a list of the highest quality providers in the market as well as their quality rankings.
"We're going to say to our members, 'here's the highest quality providers in each of these procedures and here's what it will cost you,'" Taylor said. Arches will then reimburse the member for 100 percent of the costs. But if the member chooses to see a different provider that charges $1,000 more, for instance, the member is responsible for the additional costs.
"We're giving you [the consumer] centers of excellence for medical conditions and quality and price transparency. That's going to create an engaged consumer," he added.