Gayle is joined by Daniel Cruz, health actuary and consultant, to discuss the state of the actuarial profession in light of recent communications about rating of Affordable Care Act plans.  

The actuarial profession plays an important role in safeguarding the institution of insurance for the benefit of society.  We are a self-regulated profession.  We rely on a combination of standards of practice, professionalism, examinations, continuing education, and a disciplinary review process to ensure that we fulfill our obligations to the public ourselves, without oversight or control from outside the actuarial profession.  

Gayle mentioned two recent communications related to ACA rating, which cause her to wonder what is happening behind the scenes. Why are committees of the American Academy of Actuaries apparently implying that actuaries don’t have to follow laws and regulations when it comes to ACA rating, while patient advocacy groups are warning Health and Human Services that actuaries are not following rating rules?  Beyond the questions about the actions of actuaries rating ACA plans, these communications create concern about the AAA’s procedures for writing such letters.  What is the procedure for AAA committees to make pronouncements about how actuaries should do their jobs?  Are views of all ACA pricing actuaries solicited and considered before sending the letter to the government agency charged with regulating ACA plans?  If not, does that call into question the ability of the actuarial profession to self-regulate?

With the stage set with these questions, Gayle was joined by Daniel Cruz.  Daniel took us back through the history of the ACA marketplace and explained that the single risk pool requirement was not enforced in the chaos that unfolded in the first couple years of the ACA marketplace.  You’ll recall that numerous carriers left the market and others raised rates dramatically to ensure they could get to profitability and continue to offer ACA plans going forward.  At first it was not clear what precisely had happened, but everyone breathed a sigh of relief when the ACA marketplace stabilized, and carriers began to return.  

Continuing the story, Daniel explained how the problem became clearer after cost-sharing reduction payments were ceased and changes were made to the ACA subsidy system starting in the 2018 plan year.  Daniel shared his views of why the failure to follow the single risk pool requirement has not been remedied, and why it is coming to light now.  He explained how the interests of consumers are not being protected when the ACA single risk pool requirement is not enforced.  

While it would be preferable for challenges facing actuarial practice to be discussed in an open, transparent and timely manner so that we can collectively ensure we fulfill our obligations to the public, it’s not too late. Daniel left us with a possible silver lining.  He suggested that perhaps we are turning the corner on this issue; perhaps the letters signify that the actuarial profession is ready to have the conversation we should have had four years ago and show that we can self-regulate.

This actuary hopes he is right.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Gayle has launched the Primary Care Mindset newsletter and is soon launching the podcast Nurturing the Heart of Family Practice.  Subscribe here https://subscribepage.io/primarycaremindset 

In this episode, Gayle and Joyce are joined by Dr. Lee Kurisko, a Canadian radiologist who left practice in Thunder Bay Ontario to pursue a career stateside after becoming disillusioned with Canada’s centralized approach to healthcare delivery. His firsthand knowledge of waiting lines, physician and staff shortages, and outdated imaging equipment forced a change of heart from the great confidence he initially felt in Canada’s healthcare system. He soon discovered greater efficiency and less rationed care in the U.S. and while our current system is not without challenges, he feels it is far superior to Canada’s system. Canadians, Dr. Kurisko explained, are indoctrinated into the notion that government should provide healthcare and that U.S. citizens are being left in the cold because the government does not directly arrange and pay for all medical treatment. He shares how the Canadian cultural ethos takes considerable pride in the government’s role in healthcare. Indeed, surveys suggest that Canadians remain very proud of their system even though approximately 17 percent lack access to a primary care physician. This ethos is even more puzzling when you consider that in Canada, a primary care referral is needed in order to receive specialty care; those who do not have a primary care physician also do not have access to specialty care in Canada. 

Dr. Kurisko’s move to the United States was in part driven by exhaustion where he and his two colleagues daily confronted 10 to 14 hours of workload meant for 13 radiologists. He states that because governments are constrained by budgets (vs. profits seen with private enterprise) – it leads to a severe and perverse form of rationing which is not only impractical but immoral as well. The view that healthcare is a right necessarily implies that medical providers’ freedoms can be curtailed; after all, someone must provide the discounted or free service that another person claims a right to receive.

The inherent complexity seen in healthcare pleads the case for bottom-up solutions that lead to less rationed, better quality care. He suggests that because healthcare is so important it behooves us to seriously consider limiting the role of government. 

Dr. Kurisko advocates for an uninterrupted doctor-patient relationship without arbitrary price controls. He suggests that a better value proposition is possible if we embrace transparent pricing that facilitates the delivery of a desired service – just as we do with other goods and services provided in the United States. In that sense, healthcare is not special. Our conversation touched on “proper” insurance which only covers large, unexpected losses and preferably is purchased individually and not through an employer. Over-insurance (that is, using insurance for routine, inexpensive care) causes excess testing and other excessive utilization, which of course contributes to out of control spending.  Lastly, he emphasizes the need for supply side solutions associated with charity care to address our nations indigent patient population.

How to induce or layer such change within our current system vexed with bureaucracies and vested interests, remains to be seen. But it is a challenge we should not shrink from in light of Medicare insolvency concerns and ever-growing healthcare demand that continues to eat up a larger percentage of our GDP.  At least we have greater clarity on what to avoid as we promote a more bottom-up approach to healthcare reform, thanks to Dr. Kurisko’s insights about the problems in the Canadian healthcare system.

Gayle recently talked with Leo Wisneiwski, founder of Health Cost Labs (www.healthcostlabs.com) about hospital price transparency and how this newly disclosed data will be a game changer for health care expenditures.  

Leo described how his experiences with fee schedules and billing data at an insurer lead him to found a company that cleans hospital price data and makes it usable for brokers, employers and patients.  When insurers change fee schedules, providers respond by billing the same procedure with different codes to maximize revenue.  Insurers claim they are controlling costs, but the data does not support this claim.  Leo says this lack of empathy for patients who cannot afford care drives him to make the data available so people can shop for value and hold insurance companies and providers accountable.

Health Cost Labs data is available for purchase by state and more hospitals are releasing their pricing data every week.  So far, many of the Health Cost Labs customers are brokers who want to help employer groups save on hospital expenditures.  

Leo talked about the new fiduciary requirements that go into effect in 2022 that require employers to act on this sort of price data.  And uninsured patients will have new protections in 2022 as bills too far in excess of the good faith estimate will be arbitrated.  

Since Leo has an actuarial background, Gayle wanted to know his view of whether actuaries are doing as much as they should to address dysfunctions in the healthcare system.  Leo believes most actuaries are entrenched in their bubble; they trend and risk adjust but they don’t embrace broad price transparency efforts.  He says there’s apathy about the system from middlemen, whether it’s actuaries or other leaders in managed care; if there’s always a buyer for my services, I don’t actually need to do anything about spending.  Gayle and Leo touched on the importance of bottom-up empowerment and mindset in improving the results we see in healthcare.  And Leo warned that he sees a day of reckoning coming for the high cost players.  It will be exciting to see what happens as more people use newly disclosed hospital price data in 2022.