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Extended Health Reform Contracts Allow Insurers To Improve Beneficiaries’ Health

Insurers Satisfied With Rate Renegotiations, Though Government’s Program To Become Direct Contractor Draws Mixed Opinions


June 19, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

The Calderon administration’s decision in 2002 to extend Health Reform contracts to three years is already showing positive results, according to participating health insurers in Puerto Rico. They are also pleased with the process to renegotiate rates with the Health Insurance Administration (ASES by its Spanish acronym), the results of which are to be announced this week.

"The three insurance companies participating in the Health Reform have been able to implement disease- and case-management projects," said Humana President Victor Gutierrez.

"We had implemented our disease-management project even before the contracts were extended from one year to three, and we have already observed how it is improving the health of our beneficiaries."

The disease-management projects that all insurers have implemented aims to ensure that patients suffering from one of four specified illnesses—hypertension, diabetes, asthma, and cardiac arrest—comply with their designated treatments. Compliance helps to avoid medical complications and costly hospitalizations and to improve their quality of life. The program also allows insurers to analyze health trends among the population. The insurers can then use this information to achieve more cost-efficient operations.

"In six months, we were able to increase the percentage of cardiac-arrest patients who were watching their weight from 5% to almost 40%," said Luis Marini, president of Triple-C. "This is very important because gaining weight can be a warning sign." Marini also noted that the percentage of female beneficiaries over 50 years old in Puerto Rico who are getting mammograms every year has surpassed the percentage on the U.S. mainland.

Medical Card Systems (MCS) has also begun to see the results of its disease-management program. "The results have been positive for us," said MCS President Carlos Muñoz.

"The number of hospitalizations and emergency-room visits has been reduced by 20% compared with two years ago."

Regarding the renegotiation of Health Reform rates, Humana’s Gutierrez told CARIBBEAN BUSINESS that it was performed on a "financially sound basis," though he emphasized that ASES would announce the final results this week.

Marini said he is satisfied with the renegotiation process. "The rates in each region were renegotiated individually because the health trends in each region are different," he said. According to Marini, the rates for the all the regions combined could end up increasing 8%. This is in line with Gov. Sila Calderon’s earlier projection of an 8% increase in the budget for physical health services.

Muñoz said the renegotiation process was very positive and that rates in general (excluding mental health) are expected to go up by approximately 8%. "This is a positive and necessary increase that will allow us to serve our beneficiaries appropriately," he said.

Some of the insurers aren’t so upbeat about a new pilot program whereby the government becomes the direct Health Reform contractor while the insurers remain management partners. "I don’t think this measure will help the government contain costs," said Muñoz of MCS. "Just look at Medicare. Trends show that with the government in charge, costs have increased, and that’s why it is transferring the risk to private insurers." Nevertheless, Muñoz said MCS would help to make sure there is a smooth transition, as 12% of the 22,334 beneficiaries participating in the pilot program are in regions served by MCS.

Humana’s Gutierrez, however, thinks the pilot program will demonstrate that the government could control costs by becoming the direct contractor of health providers and leaving the administration processes to insurers. "By becoming the direct contractor in charge of 1.6 million lives [beneficiaries], the government will be able to dilute the financial risks more than insurers can. The larger the group of beneficiaries, the fewer the risks," he said.

Last Friday, the government announced that it is ready to launch the pilot program with insurer Cooperativa de Seguros de Vida (Cosvi).

This Caribbean Business article appears courtesy of Casiano Communications.
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