The appointment of Christopher Koller, currently CEO of Neighborhood Health Plan of Rhode Island, as the state's health insurance commissioner is awaiting the approval of the state Senate.
How much money should Blue Cross & Blue Shield of Rhode Island keep in reserves to ensure that even in a crisis, it can still pay its subscribers’ health care bills?
How much can young, healthy people be made to subsidize older and sicker people’s insurance costs before they start dropping out of the system entirely?
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
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And how do you structure insurance plans to encourage Rhode Islanders to stay healthy, but discourage them from using costly services?
Christopher F. Koller had been thinking about these questions long before Gov. Donald L. Carcieri nominated him as the state’s first health insurance commissioner. As CEO of Neighborhood Health Plan of Rhode Island since 1996, he’s seen medical costs soar, faced tough budgeting decisions, and had to set priorities for how Neighborhood Health’s 73,000 subscribers – all beneficiaries of the state RIte Care program – will get their care.
He’s also had a voice in public policy, most notably as head of the health care committee on Carcieri’s transition team, which urged the governor to make Rhode Island a national leader in health care innovation and financing.
The transition team suggested several ways – some mutually exclusive – in which the state could increase access to health care, strengthen its primary-care infrastructure, improve the health insurance market, promote public health and stabilize the health care work force.
Now, in his new job, and as Carcieri’s new health policy chief and “health Cabinet” head, Koller will have a chance to implement some of those proposals, many of which have sat untouched for two years.
Koller still needs to be confirmed by the state Senate, and doesn’t expect to start until about March. But he has widespread support and is near-uniformly praised by legislators and advocates who know him.
So should people expect tough oversight of insurers? Broad reforms? Koller’s job definition seems to require at least some of that: he is to not only guard the solvency of insurers, as the Department of Business Regulation already does, but protect consumers, ensure that providers are treated fairly, promote quality and efficiency, and help improve the health care system as a whole.
As Koller sees it, the very creation of his job is a recognition that Rhode Island needed stronger oversight of the health care system, which he noted is “an important part of the local economy.” But that doesn’t mean he’s preparing for a crackdown.
Instead, in an interview last week, Koller said Rhode Island, as a state, needs to look at key questions that are now left to the health care industry, and set standards and priorities.
Asked, for example, how he would evaluate Blue Cross’ rates in light of a new law requiring that they be affordable, Koller didn’t try to define “affordable,” a concept that DBR officials left undefined when they rejected a direct-pay rate hike last month.
Instead, Koller suggested working backward. The bulk of insurance rates is medical costs, and those bills have to be paid, with annual inflation rates of 7 or 8 percent, he said. But a big part of the remainder, and what often boosts rate hikes into the double digits, is contributions toward reserves, he said. So Rhode Island has to determine, through careful policy analysis, what it’s going to deem to be “adequate” reserve levels, and hold Blue Cross to them.
“That’s the fundamental question,” he said.
Another key question Koller said the state needs to address is how health care costs are allocated: among young and old; healthy and unhealthy; large and small businesses, and individuals. One way to make insurance affordable to people who need extensive services is to impose community rating, where everyone pays the same regardless of loss experience. Koller didn’t dismiss that option, which most insurers reject outright, but he said there is “a real concern” about not only driving the young and healthy out of the system, but also that “companies will go with neither Blue Cross nor United, but self-insure.”
Asked about health savings accounts, which build on that principle but can’t be offered in Rhode Island because qualifying health plans would violate a new state law, Koller said that’s “clearly something we have to address,” especially if, as it appears, this is the only state without HSAs. But even without HSAs, Koller supports many of the principles of so-called “consumer-driven health care,” which includes financial incentives to avoid unnecessary procedures and a greater consumer awareness of what each service costs.
At NHPRI, Koller has seen how such health plan designs can control costs while promoting health and wellness. Despite serving a low-income population traditionally known for heavy ER use, Neighborhood Health still turned a profit in 2003, $1.2 million.
Rhode Island could do more in this area, Koller said, covering preventive – the foundation of health care, and the most cost-effective kind of services – and catastrophic care, but looking at ways to save “in the middle,” such as in people’s choice of prescription drugs.
Some “consumer price sensitivity” could help lower health costs, Koller said, but “I do think we’ve got to look at what that is. I’m not sure that as a consumer I want to have a financial incentive to say, ‘Well, you ordered an MRI, but a plain film that’ll only cost me so much, so I’m going to do that because that’s all I can afford, or it’ll save me some dollars there.’”
Yet “for better of for worse,” Koller added, “we are in a health care delivery system that emphasizes individual choice. We’re not prepared to make a commitment to a publicly owned delivery system. So as long as you have a private delivery system, you’re going to have people access that based on choice, and cost has to be part of the choice.”
