Mark White on Who Wins, Who Loses With Obamacare

by Arkansas Business Staff  on Monday, Nov. 11, 2013 12:00 am  

Mark White

Mark White first joined Arkansas Blue Cross & Blue Shield as a staff accountant in 1970. He held various positions throughout his career before being named the company’s president and CEO in 2009.

He earned a bachelor’s degree in business and economics from Hendrix College in Conway. He has also received his CPA designation and completed the Kellogg School of Management Advanced Executive Program at Northwestern University.

Why is health care so expensive?

Several factors including overall health status, an aging population, consumer demands for new technologies and the increasing use and cost of pharmaceuticals contribute to the cost of health care. Government mandates for services that may not be efficient or effective in improving a person’s health status as well as instances of fraud, waste and abuse are also cost drivers.

Are there easy ways to reduce health care cost?

The obvious answer is no or we would have already seen significant progress on the cost component. Our goal, on behalf of our customers, is to slow the rate of future cost increases by focusing on ways to improve performance outcomes and ultimately the value of those services.

One approach underway is the payment improvement initiative. This is where we and other payers have partnered to develop an approach that focuses on the episode of care for certain procedures such as knee replacements. The initiative normalizes the unexplained variances between higher and lower cost episodes and rewards the principal providers for both the efficiency and quality of the care they deliver. However, this is a small step in addressing the long-time problem of rewarding increased use through our fee-for-service approach to paying for health care.

Who are the winners in Obamacare?

For individuals it will depend on income, age, gender and existing health status to determine if you personally are advantaged or disadvantaged by the law. Clearly, those individuals who could not afford insurance coverage or medical care regardless of the cost will be obvious winners.

In Arkansas, this group is addressed by legislation enacted earlier this year creating the private option. Those individuals who were categorized as uninsurable due to pre-existing medical conditions will also benefit. Then there are those who may be the beneficiaries of lower individual costs due to the change in traditional rating practices related to health conditions, age and gender.

And finally, physicians, providers and hospitals will benefit because more individuals will have coverage and there will be fewer instances of uncompensated care for their services.

The losers?

The younger and healthier population will see a very different marketplace. The ACA establishes Qualified Health Plans that require certain benefits be applied uniformly and, as a result, generally increase costs. This is because additional benefits will be delivered to all policyholders (even if they never use the benefit, e.g., maternity coverage for single males) and paid for by the insurance companies. Some new taxes and fees also will be a part of the product price.

You’ve been in the insurance business 40 years. What about it has changed the most?

The fact that more individuals have coverage for health-related expenditures due to Medicare, Medicaid and even the implementation of Medicare prescription drug coverage. These programs helped narrow the gap in the uninsured population, which is being further addressed by the ACA.

Also, the continuing pace of change in delivery of care, technology and pharmacology is simultaneously a blessing of our country’s medical economy and a large component of our cost issues.

 

 

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