Gamification: The Realities of the Health Insurance Exchange Marketplace

I just returned from the fall Risk Adjustment Forum in Ft. Lauderdale with a greater appreciation of the perils of risk adjustment in the HIX marketplace in contrast with the Medicare Advantage world.  Then right on the heels of that, we noticed the headlines in Modern Healthcare that United HealthCare is having second thoughts about remaining in the HIX game due to $425M in losses.

Imagine that your HIX program invested a “chunk of change” in risk adjustment activities like you might under a Medicare Advantage plan.   With the MA plan, your CFO insists on a certain return on investment, and you have a high degree of confidence what that will be.  With the chart chases, in-home assessments, provider messaging and other initiatives, your MA recoveries have a predictable future. Not so with the HIX marketplace.

If matched by your HIX competitors, that same “chunk of change” dollar investment would still yield higher risk scores but the financial results would be zero.  If you just keep up with the competition, you will only ensure that you do not lose out on the zero sum risk adjustment game.  The only thing for certain is that, if you do not keep up with the other guys, you will lose.  And you might lose big time if they put the “pedal to the metal” (a HIX joke: bronze, silver, etc.).  

To quote RaeAnn Grossman from ArroHealth at the risk adjustment forum conference, the whole strategic situation is known as “gamification”.  This is a sophisticated approach to a strategizing how a local market will perform during the open enrollment season, given the competitors in the market and all the factors that impact risk selection (e.g., narrow networks, specific providers, plan designs, pricing, brand image, etc.).  Then the challenge is to leverage sophisticated approaches to risk adjustment based upon actuarial insights, advanced analytics and highly effective and efficient strategies and tactics. 

According to RaeAnn, if it were not for reinsurance, 61.9% of issuers would have lost money.  Those relying on risk corridors were paid out only 12.6 cents on the dollar.  Failures of so many co-op plans, for example, revealed the fragility and vulnerability of inexperienced plans.  Those issuers that are out to win and played their games effectively were the big winners in the virtual “Darwin” game constructed by HHS in this new world of HIX marketplace reality.

One thing is clear:  if you are not up to playing the game, your only hope is that neither are your competitors. Otherwise, lace up your shoe laces and get your game on.


Categories: HIX, risk adjustment
Tags: gamification, analytics

Log on to Your Rise Account

Forgot your password?
Create an Account

Sponsors

Latest Posts

CMS Gives EDPS Transition Some Breathing Room

CMS published the final call letter for 2018 yesterday, April 3, which included a welcome accouncement regarding the transition from RAPS to EDPS-based RAF scores. Citing numerous public comments on the subject, CMS throttled back the speed with which they plan to switch over to an encounter-based methodology. Instead of the blended rates originally contemplated, they announced that the more modest blend of 85% RAPS to 15% EDPS would be used in 2018, allowing more time to improve the reliability of the encounter data methods. While the RISE data collaboration study was not cited, we believe that the educational value of our study, along with our communication and advocacy of a more moderate approach by CMS, contributed to the confidence with which plans and other interested parties spoke up during the open comment period. Once again, we owe thanks to the folks at Avalere and Inovalon, as well as at AHIP, for the collegial and professional collaboration. Also, we want to thank the health plans that actively participated in our study for making this work possible. ...
Read More

Take Aways from RISE Nashville Summit

The 11th Annual RISE Nashville Summit continued the event’s tradition of yearly growth. The return to downtown Nashville was widely applauded by attendees, who were glad to be back near Broadway’s nighttime funk and fun. While festive, this year's event occurred in the wake of the new administration in Washington, D.C., and the healthcare themes surrounding the "repeal and replace" of the Affordable Care Act (ACA) cast a long shadow. In contrast to the upbeat, confident notes struck by last year’s keynote speaker Senator Tom Daschle, this year’s sobering keynote address by Howard Fineman, NBC/MSNBC political analyst, The Huffington Post Media Group global editorial director, and bestselling author, was an assessment of the pluses and minuses of our new president. Mr. Fineman's remarks indicated that the political alliances in power will seek to undo what Senator Daschle viewed as "irreversible” a year ago....
Read More

Upcoming Conference

 

Qualipalooza: The 2nd Annual RISE Quality Leadership Summit 

This unique event incorporates three conferences presented side-by-side: the Star Ratings Strategic Planning Forum, the HEDIS Forum, and the CAHPS, HOS & Member Survey Forum. Register for one conference for an in-depth examination of a single area, or design your own event by opting for the all-access pass and choosing the sessions from each conference which correspond exactly to your interests.

More

Upcoming Webinar

The Impact of Quality Incentive Models in Medicaid Markets

 

Thirty-one of our fifty states now have Medicaid managed care, and several markets are expected to implement managed care in the next few years. More than $160B in Medicaid spending occurs through the Managed Care Organizations. As more and more states seek to do more with less, increasing accountability for health quality outcomes is placed on health plans. Join this webinar to learn the typical quality payment approaches states use, issues often faced by health plans under each model and what states are expected to do with payment models tied to quality performance in light of near term Medicaid reform efforts.

More

Connect With Us

Copyright © 2014 Resource Initiative & Society for Education. All rights reserved.