In Brief: CAHP Says Margins Are Low, CalHIPSO Launches Consulting Service
CAHP Says Health Plan Margins Are Low; Disputes Consumer Perceptions
A new study by California's leading lobby for health insurers suggests the sector in the Golden State relies on less than golden margins.
According to the data compiled by the California Association of Health Plans, the average profit margin for a health insurer is 3.6%. CAHP officials say the margin is much higher in other sectors of healthcare.
“Some people and organizations have misled the public about insurers' profits, so we compiled accurate information that shows the lion's share of premiums goes to medical care — rather than profits,” said CAHP President Patrick Johnston. “The truth is California's health plans have a very small average net profit margin, especially when compared to profits of up to 16.7% for others in the healthcare industry.”
Johnston added that mandated spending ratios from the Affordable Care Act require health insurers spend at least 85 cents on each premium dollar the collect on healthcare services for its enrollees.
“Even if we put together all the net profits earned by the nation's 10 largest health plans over the course of an entire year, we would only be able to cover the costs of three days of national medical expenditures,” Johnston observed. “Healthcare costs will continue to climb as we move forward with the Affordable Care Act. Health plans remain steadfast in their commitment to effectively expand coverage and implement the Affordable Care Act. But we recognize that new insurance taxes, more benefit requirements, limits on geography-based pricing and age rating restrictions will ultimately add to the cost of healthcare coverage."
CalHIPSO Launches Consulting Service
The California Health Information Partnership and Services Organization, or CalHIPSO, has launched a consulting service to assist providers in optimizing the shift to electronic health records and meet the first two stages of federal Meaningful Use requirements.
The new service is being launched as federal grants for CalHIPSO, a federal extension center that serves 56 of California's 58 counties, end in early 2014.
“It is our mission to partner with California's clinical providers to transform health care delivery through the effective use of technology,” said CalHIPSO Chief Executive Officer Speranza Avram. “This is a long-term responsibility that extends beyond our initial four-year federal funding period.”
The services CalHIPSO is offering include an EHR readiness assessment, a 90-day Meaningful Use tracking service, and a Meaningful Use gap analysis, which provides clients a list of what they need to do in order to achieve Meaningful Use, which makes providers eligible for federal incentive payments. An ongoing concierge-style service is also available for those entities that have already achieved Meaningful Use.
The pricing for the indivdual services ranges from $599 to $1,100, while the concierge-style services costs $199 a month.
