Supreme Court aside, insurers 'still committed' to reform

Jim O'Neil
In the courtroom, with the strike of a pen, by the Supreme Court Justices. Ever play the game of Clue? This week, with all the coverage and analysis of the Supreme Court's health reform hearings, I'm repeatedly reminded of that favorite childhood game of mine. It seems to me that everyone wants to solve a murder before it's even occurred. Will the individual mandate bite the dust? Maybe the whole law will get rubbed out? Pundits, political experts and industry insiders all are espousing their interpretation of the justices' comments and predicting how they will rule.

But, at the end of the day, none of the forecasting matters (except perhaps for personal bragging rights). Fortunately, it seems that, based on insurers' responses to the landmark oral arguments, they're acutely aware that predicting the future is a waste of time. Cigna, for example, is working toward providing its members with access to quality, affordable healthcare, regardless of whether the individual mandate is ruled constitutional. Healthcare reform should "strive for a value-based market" that rewards doctors for providing accessible, quality care and positive outcomes. "The individual mandate, in and of itself, does not address these issues," Cigna spokesperson Gloria Barone Rosanio told FierceHealthPayer.

Blue Cross Blue Shield of North Carolina (BCBSNC) had a similar reaction to the Supreme Court hearings. "Whichever way the decision goes, we are still committed to transforming the larger issues facing the healthcare system," BCBSNC spokesperson Lew Borman told FierceHealthPayer. "We face systematic inefficiencies and demographic trends that will continue to strain our system. Nothing that happens in Washington, be it in the courts or in Congress, will change these factors."

Perhaps Robert Zirkelbach, spokesperson for America's Health Insurance Plans, said it best: "We aren't speculating on the ruling," he told FierceHealthPayer. "Nobody knows what the Supreme Court is going to do."

Although the justices pondered Wednesday whether their ruling could render insurers bankrupt, and thereby potentially extinct, I don't think that's the fate of the health insurance industry. Private insurers already have proven themselves adept at taking charge of reform--overhauling payment models, establishing accountable care organizations, incentivizing preventive care, opening new retail stores. The success stories abound; just peruse through FierceHealthPayer for an overflow of examples (Here are some for your immediate reading pleasure: Illinois Blues ACO reduces hospital, ER visits, Cigna ACO leads to readmission rates drop, Blue Shield ACO reduces readmission rates, CareFirst succeeds with tailored payment reform). And payment reform has become a hot trend this year, with UnitedHealth, Aetna and WellPoint leading the charge toward a healthcare system focusing on quality care and healthier patients. These initiatives are clear evidence that insurers know how to remake themselves.

And it would behoove insurers to continue reforming how they provide health coverage while they wait for the Supreme Court to issue its ruling in late June. "They have to operate on assumption that the health exchanges, essential health benefits, and other provisions of the law will stand and advise their group and individual policyholders accordingly," Paul Keckley, executive director of the Deloitte Center for Health Solutions, told FierceHealthPayer.

Of course, the health insurance industry inevitably will face market changes if the mandate is struck down but the rest of the law is upheld. "The impact will be felt in two areas: plans will see shrinkage in their group market over time as premiums will increase and groups will drop coverage," Keckley said. "Their retail businesses will grow somewhat, but not equivalent to the loss in the group business. The net result: bigger, more stable plans will survive. Smaller plans will no doubt be forced into merger/consolidation discussions."

But, again, I think the key takeaway is that insurers have thus far weathered the storm. Since reform went into law in 2010, for example, health plans have posted better-than-average financial results, further solidifying themselves as strong and stable market participants. Humana and Aetna just saw their profits soar 86 percent and 73 percent, respectively, in fourth quarter 2011.

It won't always be smooth sailing, of course. Insurers surely will face choppy waters that run the risk of blocking or even completely thwarting some reform efforts. But I have no doubt that these resilient companies will reformulate and try again.

So while others continue to play the guessing game, I shall retire my favorite Clue candlestick game piece and sit this round out, confident that the insurance industry isn't going the way of the dinosaurs anytime soon. The industry might not resemble the original concept of a simple payer of healthcare services, but I know we'll be talking about Aetna, Cigna, UnitedHealth, WellPoint and the like for years to come. -Dina (@HealthPayer)