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Is there profit in health care changes?

Sprig Health, an Oregon-based online health care website, has jumped into the Seattle area. But when Obamacare starts in 2014, how well will their model blend with Affordable Care?
Sprig Health's Kris Gorriarán

Sprig Health's Kris Gorriarán

Back in June of 2012, a small crowd gathered outside the Bank of America tower in downtown Seattle to celebrate the Supreme Court’s upholding of the Affordable Care Act (ACA). Supporters shared stories about rounds of chemotherapy, the frustrations and uncertainty of living without insurance, and stressed the importance of universal health care when Affordable Care is implemented in 2014.

With that kind of dissatisfaction, the health-care sector is seeking to give consumers new options.

Washington consumers are starting to see one change with the entry of Sprig Health, a growing Oregon-based company offering an online market place providing customers with direct access to health care. In August 2012, they expanded into Washington, giving the 14.5 percent of Washington’s currently uninsured perhaps some relief until ACA takes effect.

Sprig, which runs under auspices of Cambia Health Solutions, offers discounted medical services such as preventive care, therapy, chiropractic, vision, dental, fitness, nutrition, and diagnostic imaging.

How it works is simple: A customer schedules an appointment with a care provider partnered with Sprig on their website, pays a reduced upfront fee, then sees the provider.

By handling the administrative paperwork that typically the health care provider needs to process, Sprig Health says it is able to produce significant cost savings — a boon to the approximately 75 percent of Sprig customers who are uninsured or face high deductibles.

“It felt like it would be a natural thing to create this consumer market place,” said Kris Gorriarán, president of Sprig Health. “We really serve the need for the uninsured and the underinsured.”

Sprig has grown rapidly in the greater Portland area, teaming with 186 different providers that offer 92 different services. But since it is a privately held company, they will not disclose its yearly earnings. Since expanding into Washington, they have teamed with 55 providers that offer 32 different services, stretching from Tacoma to Everett.

Timothy Morris, a Naturopathic doctor working out of a private practice in Ballard, is one such care provider that has partnered with Sprig in hopes of reaching out to more customers.“Sprig takes care of things for me like patient recruitment, scheduling, billing and collecting payment,” Morris said.

Sprig customers pay an initial bill online that insures a low risk partnership with providers. There is no hassle of a 24-hour cancellation fee, co-pays, and providers do not need to wait on insurance claims to go through before treatment can be made.

“With Sprig, the patient's payment is locked in,” Dr. Morris notes. “I don't have to worry at all about the billing. It's a great feature of the Sprig service.”

Despite Sprig’s advocacy of providing access to low cost health bills, recent rate increases at Regence is not without its industry critics. Cambia is the parent company of Regence.

The Lund Report, an Oregon website which “brings [the] healthcare system into focus by going beneath the surface,” has been critical of Regence, which sought Oregon state approval in 2011 for a 9.6 percent rate increase for individual plans to residents.

According to an article in the Lund Report, investment cash from Regence’s surplus fund went into developing for-profit enterprises of which Sprig is apart. “It’s important for the insurance commissioner in Oregon and Washington to review this,” said Diane Lund-Muzikant, editor of the Lund Report, speaking about the rate increases. “It should be called into question."

(An email sent to the Oregon Insurance Division seeking comment was returned and stated that Sprig has applied for a license as a discount medical plan, but that the division does not comment on pending applications.)

In Washington, Regence BlueShield has requested at 14.7 rate increase for 88,667 people who purchase individual coverage effective as of Oct. 1, according to documents filed with the insurance commissioner.

However, rate increases are not being practiced by Regence alone, but are part of a national trend, as Dr. Roger Stark of the Washington Policy Center, a free-market-oriented think tank, notes. “All insurance companies are raising their rates because of ACA taking effect. They’re having a difficult time mitigating risks. Affordable Care will stifle a lot of these things,” Stark said.


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Comments:

Posted Fri, Sep 21, 7 a.m. Inappropriate

I'm kind of amazed at the writer following the dubious quote from right-wing analyst Roger Stark that the Affordable Care Act "will stifle a lot of these things" with the fact that the ACA will greatly reduce the uninsured rate in Washington state. Is that a bad thing? Stark may think so but does the writer?
The whole idea of people buying health care on an a la carte, cash basis really doesn't hold up to scrutiny because once a person has a serious condition, the need for tests, specialist visits, and procedures cascades and so do the costs. That will quickly overwhelm the uninsured person, and then guess what? The rest of us who are insured will have to pay for that person.
That's why the Affordable Care Act requires everyone to get coverage and provides subsidies to help people afford coverage. This kind of a la carte cash system only works for people with very minor medical issues, or else for wealthy people who can take the risk of having to pay tens or hundreds of thousands of dollars for a serious medical episode.

Posted Fri, Sep 21, 10:56 a.m. Inappropriate

Congratulations to Sprig Health's PR firm for getting this placement. It's a terrific way to puff up a tiny little fee-for-service medical group that will essentially add zero value to health care consumers in this state.

Look what this little sprig will give us:

"...an online market place providing customers with direct access to health care." (Oh. I guess no other healthcare organizations are on line, eh? I guess this means that we can get our medical visits online too?)

"...offers discounted medical services..." (Great! Discounted from what baseline, resulting in fees of exactly what?)

"...giving the 14.5 percent of Washington’s currently uninsured perhaps some relief until ACA takes effect." (I always like to perhaps get some relief...particularly when I'm uninsured and have very limited ability to pay; I'm happy to write an up-front check for that discounted rate.)

Not a word about this company's policies for providing access despite an inability to pay. Not a word...because the policy is almost certainly "NO, you can't see one of our docs unless you write that check."

These little physician practice support businesses are there for very limited, but vitally important, reasons (and your article, to its credit, does describe those reasons in the words of grateful small businessmen/physicians): Bringing in paying customers, reducing the hassle factor of running an office and working with insurance companies (or their counterparts, called third-party administrators (TPAs) or 'administrative service only' (ASOs) for self-insured companies).

There's nothing wrong with giving, or getting, administrative help at all. It's much the same as having a bookeeper/accountant take care of many back-office functions in any other small business (invoicing, the books, financial reporting, etc.).

But it's cynical and inaccurate to characterize these firms as playing more than the slightest role in giving access to those who can't pay. Even the uninsured may still have the ability and willingness to pay, but if you open this kind of business on the expectation that the uninsured are going to generate enough revenue, you're unlikely to be in business very long.

And, as your article also hints, such a business model will be sorely tested in 2014 and beyond, when the Affordable Care Act brings hundreds of thousands of uninsured under reliable coverage. No one who is enrolled in a 'real' insurance plan will have to go shopping in "an online marketplace" for extraneous services.

Seneca

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