HHS Pushes Competition With Health Insurance Site

When HealthCare.gov was launched on July 1, it was billed as the only website that comprehensively lists both public and private health insurance options. Since then more than 1.1 million people have visited the site and 32,000 individuals have given their feedback on how to improve it.

These are the facts that we know. What is yet to be determined is how the site will affect the health insurance industry, especially after October 1, when the site will post health insurance plan price estimates as a way for consumers to compare prices in the marketplace.

"The provision of information is actually in and of itself a market force, so if you provide information it does actually change consumer behavior, and change in the consumer will change industry behavior," explained Todd Park, the Department of Health and Human Services (HHS) chief technology officer who has led the HealthCare.gov initiative. "In that regard, absolutely, we would hope that empowering consumers with information through HealthCare.gov does in fact inform the market to be ever more consumer friendly."

In an interview with InformationWeek, Park said the website is meant to be a consumer tool to help individuals and employers make better healthcare decision.

Yet, while consumers use the website to compare prices, the potential to drive price competition and reduce costs among health insurance plans is a prospect that HHS secretary Kathleen Sebelius alluded to when she spoke about the site during a July 7 YouTube event with WebMD. "Putting prices side by side is often a good strategy for competition. Companies don't like to be the most expensive plan in the market," Sebelius said.

Currently, the site allows visitors to search for information by entering their state and zip code and answering questions on their health status. In return, the site provides information on health coverage options and ways to access the insurance coverage required. The site includes information on the Pre-Existing Condition Insurance Plan, the Children's Health Insurance Program (CHIP), individual health coverage offered by health insurance issuers, Medicaid coverage, and coverage within the small group market for small businesses and their employees.

The site also has yellow boxes where visitors can give feedback and make suggestions. So far, pricing inquiries top the list of requests, according to Park.

"Pricing is the top request that we are getting for how to enhance the information currently on the site, so consumers clearly want it," Park said. "Our interpretation of that is that they want to know more about the affordability of the plan, so on HealthCare.gov on October 1, you'll see not just some guidance around what your premium estimate could be, but also very importantly your deductible, your out-of-pocket maximum, and other dimensions that are really important for consumers to understand their ability to afford health insurance coverage," Park added.

One visitor to the site is Dave deBronkart, known on the internet as "e-Patient Dave." He's a cancer patient who blogs about patient empowerment, including internet use among patients. deBronkart said he likes the idea of publishing health plan price estimates on the site and hopes the site will enable consumers to drive quality and price competition into the health insurance industry, simply so that patients can get better care for themselves and their families.

"In any industry, transparency on price and quality drives things toward the theoretical ideal of perfect competition, because it enables consumers to make better informed decisions," deBronkart said. "At the same time, it gives enormous leverage to vendors who've been busting their butts to do a good job, and accelerates payback for companies who do a good job of worthy innovation. It's win-win-win, except for players whose business strategy is 'I hope nobody finds out.'"

As the website evolves, HHS is also planning to include more information, including the percentage of claims each insurer denies. One can only speculate on how much of an impact that will have on visitors to the site, deBronkart said.

"It depends what significance the individual shopper attaches to the denial rate, and on that I can only speak for myself. If one insurer had by far the best prices but easily the most denials, I'd think perhaps they keep their costs down by not holding up their end of the bargain when the going gets rough," deBronkart said.

One organization expressing caution about publishing each company's claim-denial percentage is America's Health Insurance Plans (AHIP), an organization that represents nearly 1,300 companies providing health insurance coverage to more than 200 million Americans.

"Without proper context that type of information can be misleading for consumers," said Robert Zirkelbach, a spokesperson for AHIP.

According to Zirkelbach some of the claims that are being denied occur when a doctor has submitted an insurance claim to the wrong insurance company, or when a physician files duplicate claims to the same insurance company.

"Those types of administrative errors happens all the time, so without the proper context about what the reasons for those denials are it doesn't tell the whole story," Zirkelbach said.

According to Park, HHS is keenly aware of the concerns AHIP has raised and hopes to allay their fears.

"Every metric that we put on HealthCare.gov we are going to think through very carefully. We are going to think through how to make it understandable to the consumer, and how to put it in the right context, so we are committed to doing that for each and every metric that we put up," Park said.