Mark E. Lutes Featured in Thoughtleaders Newsletter

Thoughtleaders Newsletter

Mark E. Lutes, a Member of the Firm in the Health Care and Life Sciences practice and Chair of the firm's Board of Directors, was featured in Thoughtleaders Newsletter.

Following is an excerpt:

With open enrollment season approaching this fall for Employers, Medicare and Health Insurance Exchanges, what major concerns or observations are in the forefront from your perspective?

This question spans at least three markets -- commercial, Medicare Advantage and Exchange mediated products. There are different dynamics at work in each. In the commercial market employers are watching to see whether the resumption of the climb of medical cost trend will, in conjunction with the Cadillac tax, move them closer to a defined contribution/private exchange choice.

In the Medicare Advantage market, plans are battling for higher star ratings, absorbing cuts and digesting the application of MLR rules. In the exchange world, payors are seeking better definition of the risk pool while dealing with shifts in the competitive landscape.

However, what is cross cutting among these markets is the open question of whether the medical expense line can be moved by value based purchasing and whether consolidation in markets will cause price increases that eat into any gains from those developments.

Self-funded employers and payors with insured products (commercial, MA or exchange) have shared interest in the proliferation of value based payment methodologies -- although their spread is inhibited by the work entailed in framing and negotiating the terms, limited data capabilities and lack of consensus as to what the "low hanging fruit" is among risk methodologies to be implemented.

Of equal concern is the inability of limited (single product or payor) innovations to "move the needle" and capture provider attention given the diffusion of patients across insured arrangements. Absent additional progress in "all payor" value based purchasing the issue for all these markets could be the absence of fundamental positive improvement in cost trend.