For years, many Rhode Islanders wished they could have more choices in health insurance, instead of just market leader Blue Cross & Blue Shield of Rhode Island and national giant UnitedHealthcare. In late 2008, they got their wish.
Tufts Health Plan, a nonprofit based in Watertown, Mass., with roughly 740,000 members and national-level prestige, returned to the state after a nine-year absence, offering competitive rates and a promise of substantially higher quality.
A year and a half later, however, Tufts has yet to make big inroads. Its local membership is about one-tenth of United’s and just a fraction of Blue Cross’ – and like its two competitors, it’s now seeking double-digit rate hikes for 2011 to cover spiraling medical costs.
Brian Pagliaro, senior vice president of sales and client service at Tufts and the insurer’s top executive in Rhode Island, answered questions about the company’s experience in this market.
PBN: It seems that Tufts has been slow to grow its membership here. How much have you grown, and who’s your market? What are your biggest challenges?
PAGLIARO: We planned for steady growth, and are pleased with our membership. We cover 16,000 people working and living in the state, and another 9,000 [Rhode Island residents] working for Massachusetts-based employers, including me.
Every day we work to raise awareness of what we believe to be our chief market differentiator, which is Tufts Health Plan’s focus on quality. Our third-place national ranking for quality measures makes us the quality leader in Rhode Island. The criteria evaluated also takes into account employer and member satisfaction. So our national reputation for excellence is well founded, and we are serious about maintaining it.
Our greatest challenge continues to be one that health plans across the country are facing, which is increasing medical costs as the primary driver of premiums. We believe that getting this message out to stakeholders is the first step in identifying potential solutions.
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PBN: Have you found significant differences between Rhode Island and Massachusetts markets? People talk about Rhode Island as being HMO-averse, for example.
PAGLIARO: We came into the state first with our PPO because our research revealed that Rhode Island residents had the greatest comfort level with this product. As expected, it is doing well in the market. We then introduced our HMO [effective last July 1], which is enjoying significant employer interest.
We are particularly excited about selling our HMO because we see it as a natural model for integrated primary care. Our experience is that the HMO offers more coordinated care, and credible research indicates that coordinated care contributes to improved outcomes.
PBN: Tufts is starting to build up claims experience in Rhode Island. What have you found in terms of provider prices and members’ utilization patterns, versus Massachusetts?
PAGLIARO: It is too early to tell definitively, but early indications are that utilization patterns are similar in both states, and pricing is comparable.
PBN: How much has Tufts chosen to get involved in policy discussions about delivery system reform and in pilot projects for pay-for-performance?
PAGLIARO: I am proud to say that Tufts Health Plan’s leadership has had a voice in local and national health care reform. It is the organization’s belief that health care reform forces the conversation about reducing unsustainable health care costs. Moreover, we believe that access to affordable health care is a public policy issue.
One way to maintain quality while affecting cost is to align incentives. However, we believe that achieving large-scale change takes leadership, courage, commitment and trust among key stakeholders, all of whom must have a seat at the table.
We learn the most when we listen to local leaders. For example, we actively seek out legislators, providers, business and opinion leaders for their viewpoints. In addition, Tufts Health Plan’s CEO [James Roosevelt Jr.] is on the board of Rhode Island Quality Institute, which is another important touch point.
Fundamentally, we believe that leadership matters, not only in offering high-quality health insurance products but also by being part of the solution in improving affordability while maintaining quality.
PBN: Tufts just announced a substantial loss and is embroiled in a big legal fight with regulators in Massachusetts. How does that affect your Rhode Island business, and should we worry that you might have to pull out again, as you did in 1999?
PAGLIARO: We are firmly committed to growing our business in Rhode Island. Nevertheless, our issue in Massachusetts with unbalanced rate regulation is troublesome, because rate-capping does not address the underlying problem of rising health insurance premiums. It is a Band-Aid approach that does not attend to the root cause of the problem. As I have mentioned earlier, true reform cannot occur in the market until health care costs are controlled in a thoughtful and comprehensive way.
