Federal health care reforms are triggering dramatic changes in the health insurance arena. David W. Anderson is president and chief executive officer of HealthNow New York, parent company of BlueCross BlueShield of Western New York. He assumed the duties about six months ago. Anderson sat down with The Buffalo News’ Brian Meyer.
Brian Meyer: Discuss the early impacts of “Obamacare.”
David W. Anderson: The early phases for us started about 2½ years ago. The market- effect phases that we’re seeing now, which is mostly centered around the exchanges, are just coming up to the market now ... We are on the exchanges in both Western and Eastern New York. We have seen some new enrollment. Fortunately, the New York exchange models have worked pretty well by comparison to some of the federal exchange models ... But really, it’s just a little bit early to know just how it’s going to play out.
BM: You see insurers who have not been in this market before. More competition. How do you think that’s going to affect the big insurers – the ones who have had a real hold on this marketplace?
DA: Any market like ours welcomes competition. I think that, in the end, it is good for all of us and makes us better companies. The competition has really only existed on the exchange for the new entrants ... We have seen actually an increase (of more than 2,100) in our enrollment through the exchanges ... So I think that our experience as one of the longer-term players in the market is that we are getting more than our fair share.
BM: Talk about the challenge of walking the line between trying to control costs and preserve or perhaps even enhance services.
DA: There’s an interesting phenomenon in health care. And that is that higher quality almost always actually saves money. One of the things that we’re working with is how do we connect in a more effective way to increase the quality of care. To help eliminate unnecessary and duplicative care, such that we can control the costs that way.
BM: People are worried. You look at health care costs. Virtually every year, those costs are higher than the rate of inflation.
DA: And that process is not sustainable. Part of the reason the conversations (that we’re having with health providers) are happening ... is because it is known that unless we can get medical costs’ inflation down to a normalized rate of the rest of our economy, that it’s simply not sustainable. And that is the sole purpose of redefining the relationships between us and the health care providers.
BM: Looking ahead over the next year ... what kind of (rate) projections are we looking at?
DA: Initially, there has been a little bit of bump, because we are bringing many, many people into the system because of health care reforms that weren’t there before. So that naturally has to be paid for somehow. ... However, the actual per-member, per-month cost is where the focus needs to be. And we know that we have to get that down to a more rationalized level of inflation. That’s just job No. 1 for us, and we expect that to get down into that level in the years to come.
BM: But not in 2014?
DA: Not in 2014.
BM: Do we know what those rate increases will be going forward later in the year?
DA: It would depend on the specific regional area that you’re in, the nature of the product that you would have. It’s very difficult to generalize that. But health care reform just in and of itself, by bringing people into the system that weren’t there before, by redefining what essential benefits are, the additional taxes related to the uninsured, if you add those up, add somewhere between 2 and 3 percent to what would be a normalized increase in premiums.
BM: The developments that we’re seeing on the Buffalo Niagara Medical Campus ... what impact does that infrastructure have on health care costs and the job you face as an insurer?
DA: Ultimately, we believe that the campus-type of format can help with costs because of an interrelated process for data processing and the way that we can begin to work the relationships at each point of the health care delivery system. A more unified approach ... will allow us to control costs, and we expect will increase quality as well over time.