A Supreme Court ruling on whether the U.S. health-care law is constitutional won’t stop market forces transforming how Americans get their medical care, said Cigna Corp.’s chief executive officer.
Employers are increasingly pushing workers into plans where they share more of the cost and responsibility for managing care, the health insurer’s CEO, David Cordani, said in an interview yesterday at Bloomberg’s New York headquarters.
The change, aimed at taming soaring health costs, has come to businesses including JPMorgan Chase & Co., the biggest U.S. bank, which asked Cigna to revamp its benefits for this year, Cordani said. The bank switched workers into high-deductible policies that include fixed health-savings accounts that can be tapped by employees for out-of-pocket expenses.
Even if the 2010 law is overturned, “the problem still exists, the problem of affordability, eroding health status, an aging population,” Cordani said. “The good news is, a lot of change is unfolding in the marketplace today.”
In a 45-minute interview, Cordani said health plans may flee the market for individual and small-business coverage if the court kills only the mandate that all Americans get coverage while leaving the rest of the legislation in place. That would leave insurance pools dominated by patients who wait until they get sick to buy a policy, he said.
Three days of oral arguments on the health law are scheduled to begin March 26 before the nine-member court. Twenty-six states have challenged the law, championed by President Barack Obama, saying its insurance-buying mandate is unconstitutional.
Cordani also said Bloomfield, Connecticut-based Cigna, the fourth-biggest U.S. insurer, would increase the number of patients covered by joint ventures with doctors -- so-called accountable-care organizations -- by 10-fold over two years.
By 2014, the company plans to have 1 million patients in such arrangements, in which physicians and insurers work to better coordinate care and share in any cost savings, he said.
“We philosophically believe it is a big part of the solution” to rising health-care costs, he said.
Cigna rose less than 1 percent to $46.81 at the close of New York trading. The shares have gained 10 percent in the last 12 months. The company provides medical benefits to 11.5 million members in the U.S. and operates in about 30 countries.
The so-called consumer-directed benefits Cigna put in place at JPMorgan this year are an example of the changes sweeping through much of U.S. health care, Cordani said.
Such plans can include a health-reimbursement account, funded by employers, or a health savings account, where workers can steer their own pretax contributions, said Paul Fronstin, a research director at the Employee Benefit Research Institute in Washington.
Companies are “hoping that it’s going to save them some money, that it’s going to control their costs, that people are going to think twice about the type of health-care services they use as a result,” Fronstin said.
In addition to JPMorgan, Fairfield, Connecticut-based General Electric Co., Wells Fargo & Co. of San Francisco, and American Express Co., based in New York, have shifted their workers to consumer-directed plans, Fronstin said. So far, the evidence on whether they reduce costs is mixed, he said.
These type of programs “are probably not really ready for prime time” in terms of saving money for customers, said Les Funtleyder, a health-care strategist and portfolio manager at Miller Tabak & Co. in New York. Consumers are at a disadvantage because prices charged by doctors and hospitals often aren’t transparent, he said.
“Without information, these consumer-driven plans will not deliver as promised,” Funtleyder said in an interview.
Cigna has tried to give members those tools, said a spokesman, Joseph Mondy. Earlier this month, the company debuted an online feature allowing customers to estimate the price of more than 200 procedures, from delivering babies to knee replacement surgery, he said in an e-mail.
Cordani said Cigna has enrolled about 100,000 JPMorgan employees in the new policies. For the insurer, “it’s an example of change and it’s an example of being much more retail-oriented,” he said.
The plans often include features such as 100 percent coverage of preventive care, personal health coaches and online tools to help workers choose doctors and hospitals, said Gloria Barone Rosanio, a Cigna spokeswoman.
Joseph Evangelisti, a JPMorgan spokesman, declined to comment in an e-mail.
Like consumer-directed plans, Cigna’s accountable-care partnerships with doctors are an attempt to focus more on the needs of individual members than the employers who buy their policies, Cordani said. The company now has 17 such arrangements, covering 100,000 people. It’s goal is to expand to 1 million by the beginning of 2014, he said.
Under the ACO model, Cigna “embeds” nurse-practitioners or health coaches in physicians’ practices, helping doctors to track which members are taking their medicines or need follow-up calls. Cigna uses its claims information to flag signs a patient may be relapsing.
“There are a lot of products designed now around incenting health, incenting behavioral change and lifestyle changes and where physicians and hospitals engage in a much more comprehensive fashion,” Cordani said. “With or without the health-care law, the economic forces are driving change in any regard.”