HUNTINGTON - Representatives from Mountain Health Network said a plan to switch Cabell County employees' health insurance plans to PEIA coverage may not assure better value or lower overall costs for taxpayers.
In a letter to Cabell County commissioners, President and CEO of Mountain Health Network Michael Mullins outlined why "making the switch to PEIA's seemingly less expensive rates would come at Mountain Health's expense."
During a Thursday meeting, commissioners will consider switching from Highmark Blue Cross Blue Shield to the PEIA Health Plan. The switch would come with slightly higher deductibles and more out-of-pocket costs for employees, but would save an estimated $3.7 million a year, according to projections.
Commissioners were set to make the switch during a May 23 commission meeting before St. Mary's Medical Center CFO Angie Swearingen asked they hold off on it. Swearingen manages care for Mountain Health Network's Cabell Huntington Hospital and St. Mary's Medical Center. The two hospitals joined Huntington Internal Medicine Group and Marshall Health to form an Accountable Care Organization (ACO). An ACO is a group of health care providers that come together voluntarily to coordinate care for the patients they serve.
She said if the county will agree to work with the ACO, they would work to negotiate lower health care costs between the county and Highmark.
For years the commission has grappled with the rising costs of health care and an overall dwindling of revenue. Commissioners have expressed frustrations with trying to budget for the self-insured health plan and costs that are prone to fluctuate from year to year. Commissioners tabled their decision until they could hear from the ACO about its proposal.
In Mullins' letter, which will be presented during Thursday's meeting, he gives several considerations in keeping the county's self-insured model while also lowering health care costs. The considerations come from the hospitals' own experiences in providing health insurance for their employees, he said.
Mullins said Mountain Health Network requested and received 24 months of claims and utilization data from April 2017 to May 2019. They did not access patient-level data or individually identifiable health data for the review.
Their analysis showed Mountain Health Network provided 80% of the inpatient and outpatient services used by participants in the commission's plan, Mullins writes.
"PEIA pays rates that are 70% to 80% below market rates for in-state hospitals, and based upon our initial assessment of current Commission Health Plan data, it is estimated that 60-70% of the less expensive cost of PEIA is at the expense of Cabell Huntington and St. Mary's hospital in the form of payments well below prevailing market rates," he writes.
PEIA is projecting a 9% to 10% medical cost increase and double the cost of drug costs. He said the commission incurred no increased costs in its current plan year and overall costs have been stable over the past four years.
He said PEIA is not expected to be full-funded until 2037 and any PEIA deficit affects all participating employers, affecting future rates.
Among the other considerations are those employees with chronic conditions that may raise the cost per individual. Lifestyle changes the hospital implemented helped save approximately $13,700 per person at risk for diabetes, he said. There are also prescription costs and lost productivity to consider for employees who are chronically ill.
"Undiagnosed conditions and chronic illnesses not under effective control represent 'hidden' future costs in the current Commission Health Plan that will not be avoided by switching to less expensive coverage," Mullins writes.
Mullins said he recommends the county work with Mountain Health Network to develop a strategic plan to help lower overall costs with its current provider.
"The future savings from our local efforts may more than offset any one-time gain to be had by the proposed switch to the seemingly less expensive coverage under PEIA," Mullins said.
The Cabell County Commission meets at 10 a.m. Thursday, June 13, at the Cabell County Courthouse in Huntington.
Travis Crum is a reporter for The Herald-Dispatch. He may be reached by phone at 304-526-2801.