With Affordability Cures, an Investment in Lasting Change

Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas launched the $1.5 billion endeavor called Affordability Cures because the burden of paying for coverage and care is too often at odds with health and financial security.

Affording health insurance and medical care has become harder for many Americans each year. Premiums on average rise faster than wages, and the share consumers pay out-of-pocket is rising, too.

These burdens are often at odds with health and financial security, so Blue Cross and Blue Shield Plans in Illinois, Montana, New Mexico, Oklahoma and Texas have launched a three-year endeavor to invest $1.5 billion in strategies aimed at reducing costs across the health care system.

“We are doing this for our members — and we are doing it because we want more Americans to be able to purchase insurance,” CEO Paula Steiner said in a recent speech to the trade group America’s Health Insurance Plans. “But we know we can’t truly be there for our members, or welcome new ones, with an unaffordable product.”

The initiative, called Affordability Cures, was crafted with the recognition that achieving long-term, sustainable reduction in insurance rates requires real change in the underlying costs of care.

“These issues were not created overnight, and we’re not going to fix them overnight,” said Joel Farran, chief brand officer for the five Blues Plans. “There’s no silver bullet here.”

Affordability Cures gives new resources and focus to the company’s efforts to help forge collaborative solutions with medical providers, employers, legislators, community organizations and plan members. The specific needs of local communities in the states where the company does business will guide much of the work.

We know we can’t truly be there for our members, or welcome new ones, with an unaffordable product.

The U.S. health care system is complex, but the basic factors behind the costs of care are not. They’re a combination of prices — what we pay for each doctor visit, test, drug and every other medical service or product — and the volume and value of the care we use. Together they drive the cost of health insurance.

A growing body of research indicates that the relentless growth in what Americans pay for health care is not getting them better health care.

“Rising prices, especially for prescription drugs, surgery, and emergency department visits, have been primary drivers of faster growth in recent years,” Niall Brennan, president of the nonprofit Health Care Cost Institute, said in a news release announcing a recent analysis of commercial insurance claims.

“While consumers, especially those with employer-sponsored insurance, may not feel the direct impact of these charges via out of pocket payments, they ultimately pay through increased premiums and decreased benefits,” Brennan said.

Under Affordability Cures, the five Blues Plans will deepen its relationships with providers to promote efficiency, share timely data and improve health outcomes for members.

Tighter collaboration and aligned financial incentives may help reduce unwarranted variations in prices and care. Americans pay as much as $800 billion a year for unnecessary or ineffective treatments, according to some policy experts.

The initiative will also include continued investments in transparency tools that empower members to shop for quality providers in appropriate and cost-effective settings. The same MRI, for example, may cost thousands of dollars at a hospital’s outpatient department and a few hundred at an independent imaging facility.

Health and well-being, however, are not merely a product of quality medical care, so Affordability Cures will also bolster community partnerships that address the social determinants of health. Social, economic and environmental factors affect the prevalence and impact of chronic conditions like diabetes and heart disease, which are major drivers of overall health care costs.

Health insurance, meanwhile, is intended to help make the costs of care more affordable and predictable by helping manage risk — the variable needs for medical care across populations and lifetimes.

“We all use health care at some point,” Steiner said in her remarks to AHIP.  “We don’t all need the same amount and our needs aren’t even consistent over our own lifetimes.”

Managing risk relies on strong and stable insurance markets. The Blues Plans in Illinois, Montana, New Mexico, Oklahoma and Texas are providing coverage in the individual marketplaces in every county of those states. The Plans remained committed to those marketplaces while many insurers withdrew.

As part of Affordability Cures, the five Blues Plans expressed a commitment to working with legislators on adopting and funding stabilization measures aimed at giving Americans access to affordable, comprehensive coverage in the insurance marketplaces.

That includes protecting these marketplaces — which guarantee coverage to people with pre-existing conditions and have other important consumer protections — from losing young and healthy members to cheaper, less-regulated plans.

“Many people struggle to afford health insurance,” Steiner said. “We owe it to them to find solutions with staying power that aim for what has eluded us as a nation — and that’s what Affordability Cures is all about.”

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