Wednesday, July 22, 2009

Reporting requirements for health insurance carriers

One small item in the Senate bill that may be foundational to longer-term improvements in the healthcare system is the requirement for reporting of cost data by carriers. This stands in contrast to the paucity of information that is available today.

I was preparing for a call to WellPoint dba Anthem / Blue Cross of California and wanted to pull down California-specific statistics. I found the Insurance Commissioners website easily enough, and the Company Profile section. Finding useful information as a consumer or employer is more difficult. The Company Information page for WellPoint states that their two lines of business are Disability and Life. "Life Insurance" is a defined term in the glossary, and but is not defined to include Health. Not exactly confidence-boulstering for the non-expert who knows just enough to know that WellPoint is in fact a health carrier. Financial reports are available, from which certain premium revenues and administrative expenses can be derived, but it is not for the faint of heart.

Section 2704 of the new legislation provides for reporting on:

‘‘(1) on reimbursement for clinical services provided to enrollees under such plan or coverage;
(2) for activities that improve health care quality; and
(3) on all other non-claims costs, including an explanation of the nature of such costs."

Having these three pieces of information would make comparison shopping much easier for consumers and employers. If there is simply a "first mover" problem with the carriers providing this information, then maybe having the federal government mandate that all the carriers use the same standard will bring value to the carriers as well. In banking we had quarterly call reports and even the credit unions have an equivalent quarterly public report. It was a great way to compare league tables, both inside the financial institution and for potential business partners of the financial institutions.

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