In our previous post, we discussed the rising cost of medical insurance and other health insurance trends.  In this post, we examine various potential solutions to the complex challenges of financing health care coverage.

Accountable Care Organizations

An Accountable Care Organization (ACO) is a network of health care organizations, hospitals and doctors that unite in order to provide coordinated medical care to patients. Until recently, health care in America has mostly been fragmented. Hospitals, pharmacies, skilled nurses, primary and specialty doctors operated as separate entities across the health spectrum. ACOs, born as a result of the Health Reform Act, are meant to integrate, coordinate and be held accountable for an individual’s health care, generating better medical outcomes at lower cost.

Studies performed on current ACOs including Mayo Clinic, Cleveland Clinic and Intermountain indicate that delivering efficient health care would help reduce health care costs in California by 50%. By driving out inefficiencies, reducing unnecessary hospital admissions and applying the best approaches to clinical care, ACOs provide a promising picture of affordable health care.

Micro Market Networks

Micro Market Networks operate in a similar vein to ACOs, without being quite as integrated. Many insurance companies, including Blue Cross, Blue Shield, Health Net and United Healthcare, are working on the initial phases of Micro Market Networks, with the intent to eventually provide self-contained health care within the health care system. The result is that health care plans would be structured around a single health care system in one region. An individual’s health insurance company may offer a variety of options including the purchase of an independent plan that only includes access to a particular group of self-contained health providers. The expectation over the coming two years is that many regional networks of this sort will develop. The hope is that these Micro Market Networks will operate in a similar fashion to ACOs, improving efficiencies and driving costs down.

Insurance Companies Purchasing Providers

In the past, insurance companies developed business relationships or partnered with health care providers. A new trend, driven by the business and economic realities of health care reform, is that insurance companies are actually purchasing health care providers. Over the past year in Southern California, Anthem purchased the CareMore medical group and United Healthcare purchased the Monarch medical group in Orange County. These are two examples of entities uniting with the expectation of improving health care outcomes and lowering costs concurrently. Whether this type of endeavor will indeed be successful remains to be seen.

Facing an uncertain future, employers encounter the challenge of determining health care coverage policies for their companies. Keeping informed and mindful of health care trends will facilitate effective decision-making. Projections indicate a steady rise in health care costs, which those with an optimistic outlook anticipate will be offset as various potential solutions develop, reducing expenses and providing better quality care.