Health Plan Weekly

Insurers’ Venture Capital Firms Pay With Influence Over Vendors

Launching a venture-capital (VC) fund has become commonplace for many health insurers, even smaller ones, industry insiders tell AIS Health. They typically do not disclose returns — and many of these funds are so new that there haven’t been enough exits to judge performance. But the investments pay dividends for insurers in the ability to influence the strategic direction of their vendors, get preferred contracting terms — and hopefully still make some money.

There are a lot of reasons that insurers launch VC funds, says Ari Gottlieb, a principal at consulting firm A2 Strategy Group. “They don’t have the pure profit motive that a traditional venture fund has, which is just making sound investments,” he says. “They’re not designed, though, to lose money.”

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© 2024 MMIT

Marketplace MLR Rebates Likely to Drop After Record Highs

Health insurers will likely issue about $1 billion in medical loss ratio (MLR) rebates this year, according to data from the Kaiser Family Foundation (KFF) and Mark Farrah Associates. That amount is a drop from both 2020 and 2021, which set the all-time highs for MLR rebates disbursed since the Affordable Care Act came into effect. Experts tell AIS Health, a division of MMIT, that the dropoff in rebates is related to pandemic utilization and a more stable policy environment for the individual marketplace.

Health plans selling insurance on the individual, small group and fully insured large group markets are required to return any premium revenue that is not spent on care (or care quality improvements) to members.

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© 2024 MMIT

FTC Files Lawsuits to Block Hospital Deals in N.J. and Utah

The Federal Trade Commission (FTC) on June 2 said it had filed lawsuits to block hospital mergers in New Jersey and Utah. Health policy experts tell AIS Health that health insurers and other payers likely will welcome the FTC’s actions as mergers limit competition and lead to higher prices.

The FTC is looking to block HCA Healthcare, Inc.’s acquisition of five hospitals that Steward Health Care owns in Utah. The agency is also aiming to deny RWJBarnabas Health’s purchase of Saint Peter’s Healthcare System, a non-profit that operates a hospital in New Brunswick, N.J. The Utah trial is scheduled to begin on Dec. 13 and the New Jersey trial is scheduled to start on Nov. 29.

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© 2024 MMIT

MCO Stock Performance, May 2022

Here’s how major health insurers’ stock performed in May 2022. Anthem, Inc. had the highest closing stock price among major commercial insurers as of May 31, 2022, at $509.61. Molina Healthcare, Inc. had the highest closing stock price among major Medicaid insurers at $290.22.

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© 2024 MMIT

News Briefs: Inflation Hasn’t Yet Affected Health Care Prices

Inflation has not yet impacted health care prices, according to new research from the Kaiser Family Foundation (KFF). The KFF study reports that in the 12 months ending in April 2022, “overall prices grew by 8.3% from the previous year, while prices for medical care increased by only 3.2%.” The authors added, “This is unusual, as health prices historically outpace prices in the rest of the economy. However, the relatively high rate of inflation seen in the rest of the economy may eventually translate to higher prices for medical care. This may lead to steeper premium increases in the coming years.” Generally speaking, according to the report, prices have grown faster for commercial insurance than public payers, a trend that held up in 2022. Though inflation is greater than it has been for a generation, its impact is likely delayed in health care because of contracting cycles. “Health prices are generally set in advance, administratively or via private insurance contracting, so there may be a delay in observable price increases,” the authors observe.

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© 2024 MMIT

With Elections Coming, Chances for Telehealth Reform Dwindle

Despite a pressing need to revise telehealth laws to match the new, post-pandemic expectations of patients, payers and providers, D.C. insiders tell AIS Health, a division of MMIT, that Congress may not actually pass legislation on the issue. With Congress preoccupied by the midterm elections and the possible revival of the Biden administration’s signature Build Back Better Act (BBBA), chances for standalone legislation on telehealth are slipping away.

That doesn’t mean that Congress won’t address telehealth regulations. But telehealth reforms will likely have to pass as part of a larger piece of legislation. That’s how the No Surprises Act, which banned surprise billing, finally made its way through Congress.

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© 2024 MMIT

Plans Should Strive for ‘Seamless’ Digital Engagement

Health insurers have ramped up their use of digital tools to improve customer satisfaction, but still have more work to do — particularly as utilization returns to normal two years after the pandemic’s start. Customer satisfaction is lagging after several years of improving scores, and digital tools are disappointing some enrollees.

J.D. Power’s 2022 U.S. Commercial Member Health Plan Study identified call center customer support and digital tools as “key areas in need of improvement,” the advisory firm said May 26. “Health plan members expect a personalized, hands-on experience when dealing with customer support and they expect a seamless digital experience when engaging online. Health plans have some work to do to get the formulas right,” said Christopher Lis, managing director, global healthcare intelligence at J.D. Power.

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© 2024 MMIT

Studies: Telehealth Ups Low-Income Members’ Care Access

Several new studies have found that telehealth flexibilities introduced during the COVID-19 pandemic increased access to care for patients who would otherwise struggle to get it. However, the same researchers say that telehealth can’t solve health care disparities on its own — and that lots of work needs to be done to make sure that the incremental improvements made possible by improved telehealth access are durable.

A study published in the May edition of the journal Health Affairs by researchers from Johns Hopkins University found that Medicare patients “living in the most deprived neighborhoods had the highest rates of telemedicine use….Overall, our findings are encouraging, as they suggest that the Medicare telemedicine coverage waiver could improve access to health care for people in the most disadvantaged US neighborhoods without worsening disparities.”

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© 2024 MMIT

Key Financial Data for Leading Health Plans — First Quarter 2022

Here’s how major U.S. health insurers performed financially in the first quarter of 2022. Health Plan Weekly subscribers can access more health plan financial data — including year-over-year comparisons of leading health plans’ net income, premium revenue, medical loss ratios and net margins. Just email support@aishealth.com to request spreadsheets for current and past quarters.

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© 2024 MMIT

News Briefs: Consulting Firm Sold

Health care consulting firm Avalere Health has been sold to Fishawack Health, by previous owner Inovalon Health. In a letter to clients disclosing the deal, Avalere President Elizabeth Carpenter said that Avalere would “retain our logo and brand,” and “your client teams will remain the same and there will be no change to your current business relationship with Avalere. Everyone you know and love from Avalere is joining Fishawack, including all of our practice leadership.”

A new report by the Government Accountability Office (GAO) found that little information is available about the role that short-term health plans played during the COVID-19 pandemic — and that state regulators are not watching the industry closely. Short-term health plans are not required to meet all the standard benefits mandated by the Affordable Care Act. Per the report, “GAO found that limited and inconsistent data hinder understanding of the role short-term plans played during the COVID-19 pandemic for those who lost [employer-sponsored insurance], such as whether they were used by consumers as temporary coverage or as a longer-term alternative to ACA-compliant plans….State officials in the five states with plan sales were not able to report on the role of short-term plans for consumers, as none of them collected data on the duration of short-term plan coverage.”

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© 2024 MMIT