Health Insurance
Industry In New Mexico
Blue
Cross and Presbyterian Health
Lovelace
Health System
Lujan
of Lovelace
Blue
Shield
Mexico
saw a very big change in the health insurance industry with the coming of The
Affordable Care Act. At the same time three big health insurers were reduced to
two in 2013.
Lovelace
Health System, a Medicaid vendor since the Gary Johnson administration in 1997,
lost its bid last year for state Medicaid business, dubbed Centennial Care by
the Human Services Department. Lovelace sold its Medicaid business to Molina
Healthcare and the rest of the insurance business to Blue Cross and Blue Shield
in Mexico.
Blue
Cross and Presbyterian Health Plan will be the leading insurers in Mexico. The
Blue Cross and Blue Shield Medicare Advantage business will leap when the
Lovelace acquisition is completed Lovelace is an integrated system - one that
controls the insurance, hospitals and medical providers the patient needs -
offers better care coordination than separate systems of financing and delivery
of care can provide.
Members
also can access medical records, send email to providers and schedule
appointments, she said. The payers and providers of care can share data that
help them find the most effective way to improve outcomes.
Lujan
of Lovelace believes the community lost something when Lovelace decided to
leave the insurance business. "Whether it is our integrated model or their
integrated model, it is still integrated," she said. "You work in
different ways to provide great outcomes to a population. Not having another
fully integrated system changes health care somewhat for this community."
Blue
Cross and Blue Shield of New Mexico, are different, the company is focusing on
large scale operations. "You have to look at what you feel comfortable
with" as a customer, said CEO Kurt Shipley. "Our perspective is that
our whole focus is the health plan, with all the tools and resources we can
bring to members."
Blue
customers will experience "higher levels of service, higher levels of
support, because we have the tools and resources to make this happen."
"We had a lot of our business outside of the Albuquerque market," he
said, so the Lovelace transaction "allows us to have a volume of members
in the Albuquerque market where we can invest more in the programs we
offer."
Both
Presbyterian and Blue Cross are looking for ways to improve care and lower costs
by moving away from fee-for-service pricing. That approach compensates medical
providers for the service they provide. Sharing risk can work with big provider
groups that have the resources to manage care. The small groups that serve much
of New Mexico don't have the resources or deep enough pockets to take on such
risks. These practices need incentives to improve and manage care. "I'm
not surprised we're going back to a shared-risk model," Becker said.
"It's a more efficient system. I also think delivery systems want to take
on more risk because they think they can manage the patient better than the
health plan can."
Consumers
have an "intense loyalty" to their health plans, he said, so Health
Connections, Cigna, Molina and any other competitor will have to provide
customers a compelling reason to switch. With Albuquerque down to two
market-dominating health insurance companies, regulators face some unusual
challenges, Krahling said. Two large players could have too much pricing power,
which will require special diligence by state regulators.
Krahling
wonders if the large national companies like Cigna, UnitedHealth or Molina
Healthcare, which has both the scale and a presence in New Mexico, will push
into the market. "If I'm a big national guy, and I'm looking at where I
want to spend money, and I look at a state like New Mexico that is dominated by
two guys, I ask myself, 'Is that where I want to go or do I want to go to a
market with a million people?'" Krahling said.
"The
market does have a tendency to react to things," said Becker, who expects
one of the larger national companies to fill any void that Lovelace's
withdrawal from the market might leave. "Since you're already here, you
already have a provider network, all the heavy lifting is done, why not expand
your market share?" Shipley said competitors aren't standing still.
"I
see some of them making very strong efforts to be more engaged in the
four-county Albuquerque area," he said. "Carriers in this market will
have a broad range of product offerings that cover people across their
lifetime," Lujan said.
References:
Hannah
Punitha (IRDA Licence Number: 2710062)
Winthrop
Quigley, January 2014