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Coalition Development Obstacles


Guest Pete Alles

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Guest Pete Alles

The IFEBP recently held a forum for multiemployer and public sector coalitions and some of the discussion focused on myths and misperceptions about coalitions that keep some funds or employers from joining. Among the myths and misperceptions identified were the idea that funds or employers lose some autonomy in joining a coalition and the thought that coalitions are no different from PPOs. Has anyone been confronted with these or other misperceptions and how did you address them?

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Guest Jerry99

Pete:

You are correct in that some companies and organizations perceive the loss of autonomy when looking at joining a coalition. We have encountered some of that thought process when recruiting new members for our coaltion. That is why we emphasize that the

member themselves determines what coalition products, if any, they want to access. We also avoid locking in plan designs wherever possible so that each member can overlay the plan that they already have...good example of this is our PBM products.

Jerry Custer

Heartland Healthcare Coalition

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  • 2 weeks later...
Guest Ann-Christin

As more employers move to a defined contribution for healthcare, coalitions will become increasingly important, serving as "health marts" in which employees can use a voucher provider by their employer to select from a larger universe of health plan options. Employees will be free to choose the plan they want within the "health mart" and will not be required to limit the selection to the plan(s) their HR staff selects. This will make employees happier and will reduce the complaints that we hear about their limited plan choices under the current employer-driven model. Also, we will avoid the increasing liabilities connected with being a health plan fiduciary under ERISA. Plus we won't need to have as many people in our benefits area, providing employees with a phone number for one of the new breed of consumer intermediaries that assists folks as they navigate the healthcare system. Finally, we expect healthcare inflation to rise less fast, as employees will for the first time become full-fledged healthcare consumers.

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Pete:

Did any other issues regarding coalitions come up in the forum?

I must confess that I'm not very knowledgeable about how they actually work, and I'm sure that other readers are in the same boat. Is there any basic discussions regarding how coalitions work that you could refer us to?

Kirk Maldonado

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Guest Pete Alles

Kirk,

Other issues discussed at the Forum included:

- possible sources of revenue including alternative types of membership charges;

- building membership and keeping people active in the coalitions;

- strategies coalitions use to purchase in

different market circumstances or for different types of services.

The IFEBP has a coalition newsletter and maintains a clearinghouse of coalition documents (bylaws, membership agreements). These are available to members. We also hold educational conferences on health care coalitions and cost management which are available to members and non-members. The next will be April 2-5 in San Francisco. More information is available at www.ifebp.org. Or if you e-mail contact information to palles@ifebp.org I'll send you some more information.

I'm not aware of a written handbook for coalitions, although we've had some discussions about producing one. There was a series of case studies done by AHCPR and the National Business Coalition on Health (NBCH). You can find out more about the NBCH at www.nbch.org.

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Guest Pete Alles

Ann,

I agree some coalitions could be in a position to serve as "health marts" if and when a major shift takes place to dc health plans and if and when sweeping national changes make something like this happen.

But I think there's a lot of uncertainty and questions to consider. I would expect a transition like this to be very difficult. I wonder how such changes will be perceived by employees (as a choice enhancement or benefit reduction?) and what type of fallout would await employers.

And how would adverse selection problems play out in terms of health mart offerings and the price/affordability of appropriate options for individuals?

Also, if employees don't make choices appropriate for their situations, or can't afford to because of adverse selection and limited contributions and personal funds, then is the employer out of luck when adverse outcomes keep employees off the job longer or less productive on the job? Then what options do employers have to regain some control of that situation?

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  • 2 weeks later...
Guest Jerry99

Ann:

Your reference to "Health Marts" is not that

far fetched as it pertains to coalitions involved with group purchasing. We currently have our coalition members accessing our products and other coalitions offering our products to their member companies too.

Your reference to reducing an employers fudiciary responsibility through such "health marts" may have some merit..but I don't see that the employer is going to be able to "walk away" from some obligations under ERISA.

As far as the employees becoming full fledged

health care consumers..that echoes an interesting presentation that I heard at the national NBCH conference..Dr. Robert Galvin, Medical Director for GE highlighted the employers/coalitions new role in health care

1) Use of comparative rating of providers and care systems

2)Use of substantial incentives (volume/price and public recognition)

3)Move to employees as purchasers.

What will make the market work?

Patients must be engaged with information and empowered financially

Physicians must be rewarded for quality.

Coalitions (purchasers)must re-direct the incentives.

Jerry Custer

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  • 4 weeks later...
Guest jlcowden

Pete,

Starting a coalition (or Consortium as we sometimes call them) does require a lot of work. You must address issues like underwrittiing and pricing, governance and alliances(carriers etc.); however the results can be very rewarding and profitable for participating members; if no one gets greedy.

I ahve an old outline of does and dont's, let me know if you would like more.

Jere

------------------

jlcowden

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Guest Jerry99

Jere:

You are right....coalitions do take alot of work to set up and run. But the ROI for participating employers is very good. The

National Business Coalition on Health (NBCH)

also can also be an excellent source for assistance in starting a coalition. Our coalition has been a member of NBCH (formerly a part of the Washington Business Group on Health) since the late 80's.

Jerry Custer

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