Is there profit in health care changes?
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.
Indeed, a report compiled by the Washington State Insurance Commissioner estimates that by 2014, when ACA plans to take effect, the uninsured rate in Washington, which rose last year, will drop from an expected high of 15 percent in 2013 to approximately 6 percent, leading to possible questions about the relevance for-profit ventures like Sprig will retain once the Affordable Care Act mandates are in place.
Morris also speculates that Sprig may need to adapt its model by the end date of 2014. “Right now Sprig probably works best for people without insurance,” he says. “I’m not sure what kind of applicability they are going to have if more people enroll on health insurance after the Obama health care plan is instituted, but it is working very well right now.”
But because the individual mandate of ACA requires most Americans to maintain “minimum essential” health insurance coverage, Gorriarán sees her company as still being a valuable resource to the underinsured.
“A majority of plans under ACA will have high deductibles,” Gorriarán says. “Many may elect to forego policies. We still believe there will be a cash market. We foresee a greater focus, awareness, and understanding of the true cost of health care.”