Avoid bad legislation

In the short term, as reform legislation is being crafted, the healthcare industry would be best served by educating policymakers and, hopefully, would avoid bad legislation, according to a Milliman healthcare reform briefing paper.

“Looking forward into the post-reform world, execs will need to be prepared for the possibility of a different-possibly dramatically different-landscape,” says Thomas D. Snook, FSA, MAAA, principal and consulting actuary, Milliman. “All of us will need to be agile and flexible to adapt to new market conditions and perhaps give up old maxims. Evolve or prepare for extinction.”

The paper provides a primer on certain key variables that influence the cost of healthcare-and thus health insurance-in complex ways.

“Our primary intended audience is those outside the managed care/health insurance industry,” Snook says. “These individuals may not intuitively grasp some of these ideas, which those of us in the industry have dealt with for years and hence are intimately familiar with. Our goal is to caution those in a position to reform healthcare that the issues are very complex and will not be easily solved with a simplistic approach.”

Any reform legislation that does not adequately take these considerations into account will probably fail to meet its goals and may be counterproductive, according to Snook.

The primary focus of the paper is benefit design issues.

“We attempt to highlight commonalities and differences in plan designs present in the marketplace today, with an explanation of why the designs look and function like they do,” Snook explains. “We also address variability in cost due to geographic differences and provider reimbursement levels and note that all these factors interact in complex ways.”