These days it seems everyone has an opinion on how to fix the health care system and Stephen Farrell, CEO of UnitedHealthcare Connecticut, is no exception.
In a recent interview with the Hartford Business Journal, Farrell laid out his vision for a workable health care system that he says is both sustainable and affordable for Americans.
His views are shared by many within the insurance industry, which, with its powerful lobby, will play a major role in health care reform, an issue that both state and federal lawmakers will be tackling head-on this year.
Q. What type of overarching changes need to be made to the health care system?
A. First of all, I think it’s important to expand access to health insurance to all citizens, but I think it should be an individual mandate rather than a group one. With an individual requirement, it will be important for states and the federal government to provide subsidies for people who can’t afford to buy coverage on their own.
States may also need to develop risk pools for individuals who might not qualify for coverage.
Q. Speaker of the House Chris Donovan will be bringing back his pooling plan from last year, which attempted to extend the state’s health plan to municipalities, small businesses and nonprofits. Where did UnitedHealth stand on that issue?
A. We were willing to enroll municipalities on a test basis, but we didn’t agree to take on small businesses and nonprofits. We felt like we could take on municipalities because their population of workers had very similar demographics to the state workers already in the pool. The problem with small businesses and nonprofits is that they have different benefit plans and different risks that could damage the rates of the state population.
Q. Insurance companies seem to be pushing the concept of consumerism. What is it?
A. Consumerism is about empowering individuals by allowing them to be directly engaged in selecting, purchasing and making decisions on their health care services. It urges people to research and find the best and most efficient care that is available.
Q. Why is consumerism needed?
A. It’s needed because the American consumer is unengaged and uninformed about the health care system. Right now, most consumers pay such small co-pays that they don’t realize how much a doctor’s visit or medical procedure actually costs. That makes for an inefficient model that wastes lots of money on unnecessary treatments and care. By encouraging people to be more engaged, it will inspire more thought about the costs involved with their care.
Q. How does consumerism work?
A. There needs to be an incentive-based system for consumerism to work. One example would include urging people to have a health savings account that employers contribute to. A health savings account is a high-deductible health plan coupled with a personal savings account that is used to accumulate funds for qualified medical expenses. The idea is that if consumers have to pay a higher deductible, they will look more closely at the relationship between medical costs and medical outcomes.
Q. What else needs to be done?
A. As a country, we also must take on health problems like obesity, which creates huge risk factors for other diseases like diabetes and heart disease, both of which put strains on the health care system. So far, we’ve failed at fighting obesity partly because it’s not a great stance to take politically.
Q. Why do you think there should be a pay-for-performance type system put in place for doctors?
A. Physicians get paid for each service they provide to patients so they make more money when they provide additional services. Pay-for-performance links compensation to measures of quality outcomes and efficiency. That encourages doctors to perform more appropriate preventive care so that patients remain healthy in the long term reducing the potential for more expensive medical care like [emergency room] visits and hospital admissions.
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Greg Bordonaro is a Hartford Business Journal staff writer.
