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Insurance Think Tank Points to 'Cradle-to-Grave' Approach

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What You Need to Know

  • The Geneva Association study also recommends an approach that combines life and health insurance.

The report from the Geneva Association, a Geneva, Switzerland-based insurance think tank, looks at new care models such as Accountable Care Organizations (ACOs), fully integrated models that meld insurance and provider systems, direct-to-provider arrangements, and consumer-directed payments.

It notes that health care costs are increasingly driven by chronic and complex medical conditions. The authors suggest that new care models, or NCMs, are a way to restructure traditional insurance strategies to better respond to a changing health care industry. This includes efforts to meld health and life insurance products to address the long-term needs of consumers.

“Insurers and consumers are increasingly shouldering the burden of this evolving risk landscape and people with complex chronic illness are often faced with high deductible plans that exacerbate unmet need for care, a process that also makes it harder for insurers to grow their market,” the report said.

“At the same time, in a protracted low-yield environment, life insurers face stagnation in the demand for retirement and long-term savings solutions at the very juncture when this is needed to address the long-term health and well-being needs of aging populations,” it added.

Sharing Responsibility

The NCMs that the study examines generally feature a holistic approach to health and wellbeing, the authors said, and a shared responsibility among providers, insurers, and consumers, who are empowered to take a bigger role in their own health care.

As an example, the use of ACOs in the U.S. is mentioned as a good model for a range of desired outcomes, including improved patient care, cost containment potential, and potential consumer attractiveness. ACO models made up three of the highest-scoring categories in a comparison chart included in the report.

However, the highest-rated model was the “fully-integrated model,” which the report described as a system where the insurer and providers operated under a single governance structure and a global budget.

“The advent of ACOs in the U.S. and other countries has been associated with financial savings of between 6–25% when compared to standard practice,” the report said. “In part, this success has been as a result of the change in relationship between the insurer/payer and provider — models that bring them closer together into risk-sharing arrangements where pooled funds can be used in innovative ways.”

New Directions?

The report concludes with a set of recommendations for insurance carriers, which may give some insights to where the industry is heading in coming years.

For instance, the authors suggest that insurers look at more than convenience and choice when it comes to designing new models of care. Those two elements have driven much of the conversation around health care delivery.

But the report calls for a broader view that promotes the values of the “triple aim,” a popular health care quality concept that calls for delivering quality care at optimized costs, while improving population health.

“The current narrative should evolve to reflect the triple aim to promote its value to consumers, distributors, providers, and internally within companies,” the report said.

The authors also call for insurers to become “strategic payers” that share risk with providers and put more emphasis on value-based payments.

Lastly, the report urges an approach that combines life and health insurance, saying that NCMS create an opportunity to provide a “cradle-to-grave” system.

“As both life and health insurance solutions try to expand by becoming attractive to new market segments and ensuring enough cross-subsidization in their risk pools, it paves the way for a joint health-life service proposition,” the report said.

“Pooling, analyzing, and sharing data in real time as well as a joint marketing and distribution plan are the obvious starting points. Externally, [insurers] need a clear plan that navigates the issues around health licenses; price caps; provider and payment reforms; and the local ethical and legal climate before engaging with policyholders,” it explained.

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