Insurer Bets on Transparency

Why was this insurance plan created?

We were taking on the challenge of delivering a better insurance product to the average American. We didn’t want to offer better navigation or tinker with the network. So we created a completely new insurance product type, and we couldn’t be more excited about it. UnitedHealthcare was an investor early on, and in June of 2021, we became part of UHC.

How do you think Surest delivers a better product than other plans?

Years ago, we started with the question of what is it the average person would really want. And we thought, they want to search on their phone, just like they do for everything else. We decided to figure out what we needed to build out to deliver that kind of experience, to turn what healthcare providers do into a product on a screen that is searchable. We also needed to turn insurance into something that people could understand and use effectively. When you look at Americans, we are good consumers. We can search online and fill up our shopping carts like no one else. So we set out to turn what healthcare purveyors do into products that people could understand. We wanted to take the vagaries, nuances, practice patterns and CPT codes [current procedural terminology] and turn them into about 500 concepts people understand by putting a price tag on them. Allow people to do what they do well—search for things, get options and see if something is valuable or not. We had to remove things that are confusing and don’t provide clarity or help. You can never give price certainty in advance when you provide co-insurance.

Providing people with a specific price they will pay for a treatment or visit, what does that do for the consumer?

When you turn care options into items or treatment products, they can discern what they are getting. If someone has a sore throat, they’ll see they can go to the ER and spend X, for an office visit spend a different amount, and for a video chat spend less money. You are giving optionality based on the need you detect from them and showing them their choices. When you give people the ability to see what their options are, they do make decisions that benefit them and end up benefiting their employer as well. For simple things like earaches, headaches and sore throats, people can go to the ER and spend a lot of money or have a virtual visit. We have 10 times more virtual visits than comparable plans and fewer ER visits among beneficiaries. If someone thinks they may need surgery for an orthopedic injury, a doctor may never tell them physical therapy is an option. But when they search for surgical options, it [the portal] will tell them people with a similar condition can do physical therapy, and maybe they will talk to their doctor about that first. Reduction in surgical rates and higher use of physical therapy are examples of how we save costs. Sometimes that can work much better for a person than surgery.

You can direct people to the most appropriate care at the lowest cost. How is that done through the portal?

Our goal is to help with the resolution of a person’s healthcare need in the moment. There are two decision points a person has. One is which treatments might they consider for what they have. Is it surgical? Over-the-counter medication? Wait to see if it gets better or worse? What are options here for treatment? We are setting values on various treatments. If there are two treatments for the same need with similar outcomes, we are going to put a lower price point on the things that cost less. Second, when they are locked on a treatment, they need to figure out where they can go to get it. We do an evaluation of people delivering treatments and where they deliver them. Our approach is to look at results longitudinally. We are evaluating, as well as can be done, how providers are resolving the underlying care needs an individual has. For instance, if it’s surgery, we look at how good provider outcomes are, if they tried physical therapy first or not and, post surgery, do they have effective rehabilitation for that encounter. We can see the entire episodes of treatment that were rendered. Based on that, we see variation among providers. Some places get better results than others, and we put lower price tags on those; when providers get not as good results, their price tags get higher.

How do you determine pricing when there are so many variables like quality and contracted rates?

Contracted unit rates are an input into the longitudinal calculation, and along with what treatment they are delivering, it gives the total picture of how someone is going to be treated at a location. Pricing also includes units of things you don’t want, like unintended infections and readmissions. All of these come to bear when you look at the total view of care delivered for someone with a specific condition at that place. Some people have more negative things, like hospital-acquired infections and greater use of diagnostics. Others use more therapeutic alternatives—some always try physical therapy before surgery. The same goes for office visits. We look at the people that those clinicians manage to see and what the longitudinal performance is for patient management. We can see if they perform excessive imaging, their patients are on more prescriptions, and patients are in and out of the hospital. That is what we use on the practice side to determine prices.

How does the employer’s cost fit into all of this?

There is an upfront cost for the plan sponsor if they are self-funded. We get paid as a flat administrative fee. By paying that flat fee, it creates a better benefit for their people. It unlocks the power of people to make good decisions. And when those are made, the amount employers spend on claims drops. Up front, employers immediately start to see savings in what they are paying per month because their people are making different healthcare choices. It’s saving employers money, and at the same time people are spending half as much to access care. From a total all-in perspective, we tend to save plan sponsors considerable double digits on average. And what we are saving people out of pocket on care, we are cutting that in half on average.

Why do you think deductibles are so problematic?

Our point of view is that deductibles are applied consistently, whether it is for something we want people to consume or not. Deductibles are a barrier even for services people should be getting. There are better forms of sharing costs of healthcare coverage than something as blunt and crude as a deductible. We want people to be consumers of healthcare, and we believe we can create the ability to consume more of what is valuable and less of what is not. Sometimes the question is whether they should even go see a doctor or not. Should they go to a doctor, physical therapist or orthopedist? Should they go to the emergency room, see their doctor tomorrow or have a virtual visit now? There are so many decision points, so there is a huge opportunity to impact someone and their employer. We can take away a deductible and, in our app, serve up services that we know are preventive and aren’t costly treatment modalities. We want people with chronic conditions to go to the doctor and get preventive treatment, but we also have to fund that. When you are saving $1,000 because one person didn’t go to the emergency room unnecessarily, you can now fund five office visits for someone with diabetes. We can lower the amount the plan is spending in areas of questionable value and move it to areas of proven value. By removing unnecessary ER visits and surgeries, we can put more into prevention. We give people a rich benefit, and they can still save more money.

This kind of plan relies on the fact that consumers are going to proactively use the information and seek the best, lowest-cost options. Does that work in reality?

When we started, we didn’t know if it would work. We are relying on people making good decisions. We thought, if you give information that is useful at the time of care, they are going to make good decisions. There had to be a behavioral change on the consumer end. With this plan, people don’t have to know about charges, out-of-pocket costs, deductibles and co-insurance. What people really need is certainty about what hits their pocket. When people do engage with us, they make good decisions. When we look to see if people are engaging with the portal before seeking care, we see that six or seven out of 10 that have a care need are interacting with us in the 30 days prior to treatment. That level of engagement is really high, and it gets higher as their need intensifies. Engagement is closer to eight or nine out of 10 before having a surgery. We make sure we let beneficiaries know here’s the tool, shop away.

To date, it seems it has been difficult to take healthcare procedures and turn them into a product. How are you able to do this?

We had to amass data sets knowing, as a health plan, we are assuming risk. If someone goes in for treatment someplace, what is the likely financial impact of that to us as a health plan? We decide how much the price tag will be for the patient on a treatment event at that location. We can turn it from an estimate to a price-certain event for a person to evaluate. This is a data challenge. You can’t just go buy a data set in the U.S. that tells you in simple terms where you can get things done and the cost. That step alone is a challenging data problem. We take into account the performance and quality of treatment and set a price tag. Then we had to build systems that understand and keep track of that information. What beneficiaries see is backed by a tremendous investment in data and technology.

There are a few other, similar plans popping up across the country. How difficult has it been to put in place, and do you think others will succeed?

Pulling something like this together requires a great amount of effort and thought leadership. There is a huge dollar investment, and you have to aggregate the highest level of talent across so many domains. I think people will try to replicate what parts of the plan they can and try to compete well enough. I imagine that’s what we’ll begin to see. I am hopeful, though. I would like more of this type of plan to enter the market because it’s good for people. I think the challenge goes back to the introduction of a new plan design which requires different technologies and know-how. It always comes down to the people; that is the special part of startups. It’s really about the innovator’s dilemma. An insurer has to ask if they really want to change the way they do things, because it’s going pretty well for them. They have amassed an organization that delivers on their product. They didn’t amass an organization to figure out what that product could be. Most companies sustain innovation and improve on the products they have until something comes along to disrupt that.