AHIP Outlines Plan to Slash $145 Billion in Health Care Costs by 2015

By Sheri Porter

America’s Health Insurance Plans, or AHIP, recently released a health care reform proposal that it says could reduce America’s total health care expenditures by $145 billion by the year 2015, but some groups have problems with the proposal’s details.

“A Shared Responsibility: Advancing Toward a More Accessible, Safe, and Affordable Health Care System for America” (60-page PDF; About PDFs) centers on five key principles. It calls on stakeholders in both the public and private sector to collaborate to help achieve: 

  • access to information that compares the effectiveness and cost of treatments,
  • widespread adoption of health information technology
  • reform of the legal system to replace the medical liability system with a dispute resolution process
  • adoption of value-based payment systems, and
  • deployment of strategies that emphasize disease prevention and enhanced treatment of chronic diseases.

“The goal is to keep people healthy, and health insurance plans have pioneered the next generation of cost containment strategies necessary to advance this objective,” said AHIP President and CEO Karen Ignagni in an AHIP press release announcing the initiative.

Ignagni said only an integrated strategy that addresses costs, quality and access would “bend the cost curve” and help ensure all Americans have access to affordable health care.

AHIP is a national association representing nearly 1,300 members that provide health benefits to more than 200 million Americans. PricewaterhouseCoopers, a U.S.-based corporation that provides assurance, tax and advisory services to its clients, reviewed AHIP’s proposal and concluded the association’s initiatives could yield the multi-billion dollar savings estimated, if they were implemented broadly.

Analyzing the Proposal

After reviewing AHIP’s proposal, Anders Gilberg, vice president of economic affairs at the Medical Group Management Association, or MGMA, found the initiative lacking in specifics. He said that although it was hard for him to argue with the basic principles of the proposal, “this is one of those issues where the devil’s in the details.”

It’s obvious that “there’s been significant work done on many, if not all, of these issues,” said Gilberg, He noted that MGMA, the AAFP and others were already deeply involved in supporting initiatives to achieve patient access to information, health IT, evidence-based care coordination, and disease management and prevention programs. And medical liability reform has been on everyone’s plate for years, he added.

“We all support replacing the current medical liability system, and we’ve worked on that for at least a decade now,” said Gilberg. Unfortunately, he added, it was “unrealistic” to expect national liability reform — and any savings it might garner — any time in the near future.

“The makeup of Congress is moving more toward a majority that would be even less favorable to comprehensive medical liability reform,” he said.

Gilberg also questioned the end destination of any potential health care dollars saved. “If there are savings, to whom do they accrue?” he asked. “If they accrue to the health plan and its shareholders, it doesn’t really provide funds to fundamentally reform our health system or provide better access to uninsured members of the public.”

Points to Ponder

Robert Tennant, MGMA’s senior policy advisor, took issue with some of the underlying concepts of AHIP’s proposal. He pointed to the principle calling for widespread adoption of health IT tools.

“They (AHIP) are promoting and encouraging secure e-visits,” said Tennant, but physicians can’t treat patients — even in a virtual environment — for free. “There’s been a CPT code for e-visits for probably six years, but the issue is the plans aren’t paying for it,” said Tennant.

On the topic of electronic health records, AHIP points out that the United States lags behind other countries in adoption of health IT and reports that 83 percent of physicians in the United Kingdom rely on health IT in their medical practices compared to just 19 percent of U.S. physicians.

But Tennant argued that the U.K. government has invested tens of billions of dollars in health IT compared to about $600 million during the past several years by the U.S. government. The United Kingdom has a “commitment at the national level” lacking in this country, said Tennant.

He suggested that private health plans may have to kick in the majority of the funding needed to spearhead a stronger movement toward health IT — an effort that would have to move beyond current efforts to offer personal health records to patients.

To achieve health IT interoperability — another piece of the AHIP proposal — health plans would have to “discard their proprietary format” and voluntarily adopt national standards, something they haven’t yet done, added Tennant.

He also pointed to health plan drug tiering and disease management programs as examples of health plan interference with the physician/patient relationship. And he added that he would like to have seen language in the proposal that recognized initiatives such as the patient-centered medical home and a system “not centered on third-party” interventions.

“We’re encouraged by the principles,” said Tennant, but we strongly encourage (AHIP) to develop action steps that turn these principles into reality.

Debating Health Care Reform

AHIP spokesperson Robert Zirkelbach told AAFP News Now that AHIP is committed to having a seat at the health care reform table.

“As we go forward, we want to show that we have some ideas, we want to be at the table and we want to ensure that we can improve health care for all Americans,” he said.

Zirkelbach pointed out that PricewaterhouseCoopers analyzed the role of administrative costs in private health plans and concluded that administrative expenses comprise roughly 13 percent of total health insurance premiums. Of that, just 3 percent represents health plan profits.

He added that AHIP is focusing the health care costs debate on “underlying cost-drivers” rather than health insurance premiums.

“Right now is an important time in the health care reform debate. Voters are putting health care near the top of the issues they’re concerned about,” said Zirkelbach, adding that Congress also is beginning to take a closer look at issues surrounding health care cost and quality.

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