CHICAGO – Love it or hate it, the Patient Protection and Affordable Care Act offers a slew of business opportunities to third-party administrators and others serving self-insured group health plans.
That was the message Wednesday from Adam Russo, the CEO of the Phia Group, a Braintree, Mass., health care cost-containment firm, at a presentation at the Self-Insured Institute of America annual meeting.
“You didn’t ask for it but you’re now the experts on PPACA,” he told those in the room. “Now you need to use that expertise and start charging for it.”
One of the more clear-cut business opportunities to stem from PPACA, he said, lies in its wellness provisions. Under the law, premium discounts of 30 percent to 50 percent are available to those who lose weight, take part in health risk appraisal programs or stop smoking.
“When it comes to wellness, you should be thanking Obama,” Russo told the audience. “Thanks to health care reform, there’s much more than gym membership discounts now.”
TPAs can take advantage of that, he said, by promoting their expertise and programs (or a wellness partner’s) to employers weighing whether to self-insure.
That’s just one area of many where TPAs can assert themselves, he said, especially as compared to carrier administrative services only arrangements.
“You have a better understanding of risk, real wellness programs, you have better stop-loss rate (options) and can offer more creative options for plan design,” Russo told the TPAs.
Carriers, he said, can promote how “easy and simple” it is to do business with them, but it can cost employers “triple” the dollars.
That said, he warned the audience that employers interested in self-funding aren’t necessarily locked into the idea of using a TPA.
That’s why TPAs, as well as managing general underwriters, which represent reinsurance carriers, need to be more aggressive about distinguishing themselves from ASOs, he said.
One way they’re doing that, he said, is by developing direct relationships with providers. “It’s not something we’ve seen a lot of in the past. But it’s now happening,” Russo said.
Those relationships, he said, can lead to better rates for health services, as well as the capacity to offer a specialized network of providers.
The ability to customize a plan, he said, is one of the biggest advantages favoring TPAs.
“Focus on this,” he urged the audience. “You don’t see that in the ASO world.”
Russo said TPAs and others serving self-insured employers shouldn’t worry about PPACA eating into their business.
Self-funding, he said, grew from 50 percent to 66 percent of all large employers in Massachusetts after it passed its own health care reform under then-Gov. Mitt Romney.
“So use Obamacare to your advantage,” he said. “Health care reform presents many opportunities. And the good news is that people are finally looking at alternatives” outside of traditional fully funded group health plans.