Insuring Health: Making the Best Investment of Healthcare Dollars

There’s one thing we can all agree on when it comes to healthcare: it’s expensive for everyone involved.

UnitedHealth Group’s decision to exit the ACA insurance exchanges next year in most of the 34 states where it offers plans signals a need for continued evolution of payment reform. After suffering financial losses (and a projected $650 million in 2016), the largest U.S. health insurer’s withdrawal indicates growing concern regarding the sustainability of the marketplaces.

Something’s gotta give

It’s evident our healthcare system is desperately broken when you consider a large portion of our population can’t afford the cost of healthcare. The exchanges have helped pay for the cost of insurance premiums with tax subsidies from the government, but they have also attracted a sicker population that uses healthcare services more than the average consumer. That means the payer—an insurer like UnitedHealth—stands to make less or even lose money on the exchanges in comparison to the return available outside of the exchanges. So it’s not surprising that an insurer would choose the free market payer system.

With other payers (including Anthem and Aetna) struggling on the exchanges, it’s easy to imagine that in the future there could be fewer and fewer left in the arena to offer a product (i.e. insurance coverage) to consumers taking advantage of tax subsidies. Either costs for insurance will continue to increase so insurers offering individual plans on the exchanges can be profitable, or the government will have to provide more Medicaid/Medicare access to those who can’t afford insurance. If current conditions persist, there’s a real possibility that eventually no payers will offer coverage on the exchanges.

In the market for a better solution

The wrong conclusion to make here is that a single payer is the answer to the problem. A one-payer system won’t give us the access and care quality required to reach the Triple Aim. If the government ever institutes a single-payer system, this payment structure will be mandated to control costs. Free market principles driving competition in the primary care sector are essential for excellent primary care delivery, and a single-payer system would remove most of this competition.

My goal isn’t to debate the value of a single-payer system, but to instead advocate for why robust primary care offers us the only truly viable way forward to achieving the Triple Aim. What payers—the government included—should be doing is incentivizing and rewarding health.

Incentivizing health

Achieving the Triple Aim isn’t as simple as figuring out who’s going to foot the bill. The solution is to create a healthier population, thereby bringing down the overall costs of care. This can only be accomplished by a robust primary care system coupled with payment reform to address the damage done by the fee-for-service model. This payment model promoted sickness rather than health and encouraged both patients and providers away from primary care.

Robust primary care can be boiled down to three characteristics:

  • Relationship-based care with a strong provider/patient relationship, leading to increased patient engagement and better, more cost-effective healthcare decisions

  • Timely, convenient access to relationship-based care so patients can receive appropriate chronic disease management and aren’t relegated to urgent care from unfamiliar providers

  • Excellent quality of care

These attributes will enable us to provide the care our population needs while also driving the costs of care down, thus accomplishing the Triple Aim. We won’t get there by throwing more money at the problem—we’ve already (unsuccessfully) tried that with three trillion dollars. It’s becoming clear we can’t remedy the situation by paying more bills. We must create better health for our society. To do that, we need a strong primary care system with a payment system that incentivizes health and not sickness.

UnitedHealth Group probably won’t be the last insurer to struggle and opt out of the Health Insurance Marketplace—more of that seems inevitable. The likely reaction from consumers will be a cry for more financial assistance. But the government’s real effort should be aimed toward helping to develop a flourishing primary care system throughout the U.S. that can truly serve and improve the health of our citizens.


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