United profit 57 percent more than N.E. average

A new report on Rhode Island’s top two health plans shows that while premiums in the state remain lower than across New England, the gap is quickly narrowing and enrollment and subscriber satisfaction with the plans and the care provided are all declining.
The report, released jointly by the R.I. Department of Health and Health Insurance Commissioner Christopher F. Koller, also shows what Koller called “striking” differences in how the two insurers spent premium dollars in 2006 – the year on which the review focused.
Though Blue Cross & Blue Shield of Rhode Island’s average monthly premium was $11.54 higher than UnitedHealthcare of New England’s – $316.72 versus $305.18 – United spent far more on administration, $55.54 versus Blue Cross’s $38.57; the regional average was $40.45 per member.
And while Blue Cross, a nonprofit, kept $8.48 per member, per month for its reserves, United’s profit was $15.07, or 57 percent more than the New England average of $9.60.
Koller said part of the point of a new rate-review process for both large and small-group rates is to take “a public and explicit look” at such differences.
But United CEO Stephen J. Farrell said it’s the bottom line that should matter to employers.
“We have a very competitive premium in this marketplace,” he said. “If we did not, employers would not purchase from us.”
The report, the ninth published since a 1996 state law required these annual reviews, provides plenty of ways to gauge that, looking at 32 measures in eight categories: enrollment, costs, utilization, prevention, screening, treatment, access and satisfaction.
The goal of the analysis, state Health Director Dr. David R. Gifford and Koller said in a joint cover letter, is to help focus health care improvement efforts, hold health plans accountable, help track progress and guide policymakers in their efforts “to create a more ‘balanced’ health care system.”
But the report only covers the commercially insured market, excluding hundreds of thousands of Rhode Islanders whose employers are self-insured and those in Medicare and Medicaid plans, and it omits plans with fewer than 10,000 members.
In 2006, the report says, Blue Cross covered 64.8 percent of the commercial market, United 14.6 percent, and smaller carriers 20.6 percent. Blue Cross’ share has held relatively steady, but United’s, which peaked at 18.5 percent in 2004, has eroded since.
Altogether, commercial enrollment has declined sharply, from 402,723 in 2004 to 342,039 in 2006 – a 15-percent drop – and the report attributes that to a combination of a decline in coverage and many companies’ decisions to self-insure.
United members’ satisfaction with their plans, meanwhile, dropped from 57.8 percent in 2003 to 50 percent in 2006, while Blue Cross’s held fairly steady, at 65.3 percent in 2006. Satisfaction with care has dropped for both, to 79.5 percent for Blue Cross and 75.7 percent for United.
Premiums, meanwhile, have risen faster in Rhode Island than regionally, especially United’s. In 2004, the New England average was $301, Blue Cross was at $282 and United was at $227. By 2006 the gaps had narrowed, with United just $20 below the regional average of $325.
On emergency-room use, both insurers are doing better than the region, especially Blue Cross, which had 194 visits per 1,000 members versus United’s 208. Both are also keeping usage steady, while regionally, the average rose from 196 in 2004 to 211 in 2005 to 218 in 2006.
On preventive care, routine treatment and other primary-care measures, Rhode Island’s health plans generally did worse than the region, the report found.
Blue Cross fell short on seven of 20 quality measures – such as adolescent immunizations, chlamydia screenings, diabetic eye exams, cholesterol control and antidepressant medication management and only surpassed regional benchmarks on postpartum care.
United fell short on nine measures, including many of the same as Blue Cross as well as prenatal and postpartum care; it shone, however, for its work trying to get smokers to quit.
Overall, the report shows, both insurers have improved on those measures, but Koller said the shortfalls reflect Rhode Island’s weaker primary care infrastructure. Given the low payments that primary care providers get here, he said, “it is reasonable to think that there may not be the capacity to do the preventive outreach required.” &#8226