Medicaid Health Plans of America CEO Jeff Myers wants the industry to embrace Medicaid managed care-style plans, an effort that could carry clues for how payers can make public exchange plans financially sustainable.
Top-performing ACA exchange products have solved the question of how to offer low-cost, high-value medical services, Myers tells The Hill.
If the Affordable Care Act exchanges have been troublesome for big-five insurers, the healthcare reform law's Medicaid expansion provision has been a boon for managed care plans. Profit margins on Medicaid managed care plans increased from 2.1 to 2.6 percent in 2015 as revenues grew 30 percent to $144 billion, FierceHealthPayer previously reported, encouraged by the Affordable Care Act’s Medicaid expansion provision.
Meanwhile, health plans that design plans similar to Medicaid managed care plans, with slimmed-down provider networks, have performed better on the exchanges. For example, Medicaid managed care powerhouse Molina Healthcare has more than doubled revenue since joining ACA exchanges, and is notably absent from the growing list of payers citing significant financial losses on their exchange products.
What's more, negotiating with pharmaceutical companies to pay for drugs on a value-based model could be payers’ next move to control costs, according to Myers. The industry must understand that payment models for drugs have changed since 1975, when drug companies could raise prices and “force it down as many people’s throats as you can," he said.
In today's healthcare landscape, that fee-for-service-style model can't continue, says Myers, who points out that doesn't place any risk on drug companies, as they get paid irrespective of the health outcome.
But payers are moving manufacturers toward value-based pricing. Humana agreed with 13 firms to pay-for-performance deals for treatments to cancer, multiple sclerosis and diabetes. Meanwhile, UnitedHealth’s Optum subsidiary negotiated a value-based deal for a hepatitis C treatment that ran $1,000 per dose, according to FierceHealthPayer's coverage.