Mark Lutes Quoted in Article, “Good News for Small Carriers: Exchanges Could Dilute Brand”

Inside Health Insurance Exchanges

Mark Lutes, a Member of the Firm in the Health Care and Life Sciences practice, in the Washington, DC, office, was quoted in an article titled "Good News for Small Carriers: Exchanges Could Dilute Brand."

Following is an excerpt:

Behemoth health plan operators have advantages over their small competitors in almost every way. But insurance exchanges could change that.

The reform law requires HHS to develop a rating system for health policies offered through the exchanges. The ratings are likely to be based on premium costs, payment policies and practices, enrollment and disenrollment levels, claim-denial rates, financial soundness of the company, medical loss ratios and member satisfaction surveys. In the eyes of consumers, ratings might trump brand recognition.

Scale will ultimately dictate price, and that is a key advantage for large carriers. So if small insurers aren't able to compete on price, they might be able to set themselves apart on quality, suggests Mark Lutes. "I don't think that small is inherently beautiful. On the other hand, if you're a small player, you need to create a better mousetrap in terms of care management," he tells HEX.

The article also appeared in Health Business Daily on Oct. 25, 2011.