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Nov 1 2011 10:17AM
New health insurance co-op aims to cut costs for patients, doctors

As a primary care physician running a private practice for more than 30 years, Dr.David Thompson sees firsthand the problems with health insurance from the perspective of both a physician and an employer.For people without insurance through their employer and too young for Medicare, health insurance is often too expensive or, when affordable, covers too little. But if you do not have health insurance,your whole approach to health care changes, Thompson said, speaking to The Day between seeing patients at the busy West Main Street practice he shares with three other doctors.You donot want to see doctors, you do not want to have tests done.Too often, these patients wait until a problem reaches a crisis and then seek care in a hospital emergency room. By then, the cost of care has skyrocketed over what it would be if the problem were addressed earlier, and the prognosis usually is not as promising, Thompson said.You see what happens to people who do not have health insurance,and it is not good,he said. While he sees the problems individuals have with health insurance costs, he also understands the tough choices small businesses face in trying to insure their employees. Providing coverage for his medical practice is eight employees keeps getting harder, he said,as costs keep rising and limits on coverage multiply.I have a lot of friends who have small businesses, and they just shake their heads at the continuing frustrations of trying to provide health insurance, he said. With those experiences, it is perhaps no surprise that Thompson has become a leader in the creation of a new nonprofit health insurance company.A co-op for Connecticut This month, the Connecticut State Medical Society and the affiliate Thompson has headed since 1993, the Connecticut State Medical Society Independent Practice Association, filed an application with the federal government for loans and grants to help start HealthyCT, a nonprofit health insurance co-op for Connecticut. The co-op would be started under a provision of the federal Patient Protection and Affordable Care Act that became law in March. 2010. The co-op provision was written into the law, Thompson said, as an alternative to a government-run insurance company that originally was proposed, but did not survive to the final version.But since the law requires everyone who can afford it to have health insurance by 2014, proponents wanted another mechanism to accomplish what the government option intended lowering insurance costs by increasing competition in insurance markets. CO-OPs must use profits to lower premiums, improve benefits or improve the quality of members health care, a fact sheet on www.healthcare.gov, the Affordable Care Act website, reads. Co-ops should also offer better coordination of consumers medical care.According to the fact sheet, insurance is expected to be available through co-ops as soon as January 2014, purchased either through the affordable insurance exchanges being set up by states through the law, or outside of the exchanges. Terry Gardiner, vice president of policy and strategy for the advocacy group Small Business Majority, said the portion of the health reform law enabling creation of co-ops likely will be key to the law is long-term success at helping individuals and small businesses struggling with health insurance costs and quality. The problems are most pronounced for those who are self-employed or who own companies with fewer than 10 employees, he said. We are very supportive of the development of co-ops,said Gardiner, who was also a member of the CO-OP Advisory Board to the Department of Health and Human Services.Across the country, he said, a variety of groups have submitted or are preparing applications for the federal loans to start coops. Some are small business groups, while others are coalitions that include physician organizations, he said.Unlike other aspects of the law, the co-ops provision did not generate rancorous debate or much attention at all, Gardiner noted, even though it is significant to achieving the laws purpose.It is been below the radar, he said.It has not gotten caught up in the political back and forth.Insurance co-ops predating the health reform act already exist in three states - Washington, Wisconsin and Minnesota - and Minnesotas HealthPartners is often cited as a model of quality and economy credited with positively influencing the costs and quality of other health insurers in that state.When you have high quality competition, everybody begins to perform better,Gardiner said. Medical-home model In keeping with the purpose of the co-op provision in the law, HealthyCT would offer insurance to those who find it hardest to obtain - individuals and businesses with 50 employees or less - and be run by a board made up of patients, small business owners and doctors, Thompson said. He would be among the board members, representing his 7,000 fellow doctors in the Independent Practice Association.NOTE This corrects the number given in an earlier version. Thompson said an actuarial analysis done for the medical society shows HealthyCT can expect to insure about 44,000 people statewide, offering them lower cost premiums than commercial for-profit carriers. We will also have to be cost-effective,he said.It will seek to control costs by using the medical home model, in which each patient has a personal physician to oversee and coordinate visits to specialists, tests and other aspects of care.HealthyCT will be created using the knowledge of the doctors organizing it about where to find efficiencies and cut waste, Thompson added. For example,he thinks there are ways to lower costs for imaging services but still provide doctors with the information they need on their patients.That is exactly why these two organizations are doing this,he said.We are always being told that if we want to have a say in how things are done, we need to do it ourselves. We want to be able to design a health insurance program in a way we think is better.In addition to government loans and grants, the medical society and its affiliate are investing some of their own resources into the project, Thompson said, and seeking other funding.The Universal Health Care Foundation of Connecticut recently awarded HealthyCT a $50,000 grant. While declining to give a specific figure, Thompson said start-up costs are significant,especially after the cash reserves needed to cover very high claims are factored in.Nationally,Congress has authorized $3.8 billion in funds to foster the creation of at least one nonprofit insurance co-op per state. Because Connecticut is a small state, Thompson does not expect it will have more than one co-op. The doctors organizations were the logical entities to start the co-op, he said,because they already have a statewide network of health care providers to build from.Healthy CT would also work to sign up as many hospitals in the state as possible to be part of its network, he added. This is a good thing for the citizens of Connecticut,because it means we will have some local control over health insurance, he said.j.benson@theday.comCO-OP FACTS .•$3.8 billion in federal funding is available as loans to cover CO-OP start-up costs and grants to meet states solvency requirements to be licensed as an insurer.•The federal funding for the establishment of at least one CO-OP per state will be disbursed no later than July 1,2013.•If no applications are received from a particular state, the federal government will set funds aside to encourage the establishment of a CO-OP there or for an applicant from another state to expand into that state.•The CO-OPs must be structured so that their main characteristics are consumer orientation, control and focus.•Solvency and financial stability of coverage must be maintained and promoted.•CO-OPs should encourage greater coordination of care, quality and efficiency.•Approval for the first round of loan applications is expected in mid-January.
 
 
 
 
 
 
 
 
 
     
 
     
 
 
 
 
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