KTP Private Health Exchange Advisory Services

A recent poll by the National Business Group on Health (NBGH) found that 35 percent of large employers plan to offer their employees coverage through private exchanges by 2016.

Accenture released a report this past June 2014, which projects that the number of enrollees in private exchanges will surpass the number of enrollees through the ACA-mandated public exchanges reaching 40 million by 2018.

Private exchanges and marketplaces are also growing in number. Every day there is an announcement for a new exchange or marketplace for employers to choose from.

What does all this mean? Where do you fall? Are you thinking about launching a private exchange? Are you thinking about offering your products on an exchange platform? Or are you an employer that is thinking about a plan for your employuntitled2ees?

Here at KTP Advisors, we understand how confusing and complex the private exchange marketplace may be. We understand that most employers do not have the time to shop through the different private exchange solutions to figure out what may be the best fit for their organization’s benefit strategy. However, this decision is of utmost importance. Before employers sign on, they need to do their due diligence and learn about the various options. That is where KTP comes in! Here at KTP, we believe that finding the right private exchange strategy starts with asking the right questions.

KTP Advisors is constantly performing extensive research to provide a completely unbiased and independent evaluation of the private healthcare exchanges and marketplaces that have emerged. KTP does not have their own exchange and is not affiliated with any.

Please check back for updates as much more information, including a comprehensive market map, will be released in early October, 2014!

Mergers and Acquisitions in the Private Healthcare Exchange Market

On 9/26/14, Maestro Healthcare Technology announced the acquisition of Florida based Workable Solutions from Alegeus Technologies. This was a strategic move that strengthens Maestro’s benefit solutions with the addition of leading private exchange and billing capabilities. Maestro believes that by combining the capabilities of Workable Solutions with their own integrated administration, medical management, and consumer driven payment solutions, they will create enhanced value in the private exchange marketplace by establishing an integrated platform designed to provide simple administration for employers and an easy-to-understand marketplace for consumers.images70H34OKF

This type of merger and acquisition activity has been on the rise as, after all, an intersection of these two areas makes sense.  Veer Gidwaney, the CEO and co-founder of Maxwell Health, recently wrote an article titled, “Why Benefits Admin, Private Exchange Capabilities Should Be Merged.” In the article he describes how the intersection of private exchanges and benefits administration offers numerous benefits to employers and employees alike. “Rather than having one system for benefits administration or a private exchange, all information would be housed in one place, making it more accessible for the broker, employer and employees,” Gidwaney says.

As the health exchanges evolve, these platforms need to be more than just a distribution channel. Most exchange platforms currently lack easy to use, integrated billing and reconciliation capabilities. This is why Rob Butler, CEO of Maestro, hopes that they will have a competitive edge in the marketplace. Their acquisition hopes to provide a single solution that is streamlined for employers and user-friendly for employees. We expect to see more acquisitions like this.

Private Healthcare Exchanges: Fully Insured or Self Funded?

Picture1Every day there seems to be an announcement for another new private exchange; brokerage firms, consulting practices, health plans, associations and other organizations are creating and launching private exchange solutions for their members and clients. As of September 2014 there are at least 150 private healthcare exchanges and marketplaces announced or launched in the U.S. market. Although this concept is not new, private exchanges are getting a lot of attention this year. Employers of all sizes are faced with increasing healthcare costs and are looking for alternative options, making private exchanges a hot topic among employers and HR professionals.

While private exchanges remain a topic of discussion, a majority of employers are in a holding pattern or are taking a “sit and wait” approach to actually implementing one. According to Jonathan Field, Managing Editor of ‘The Institute for Healthcare Consumerism,’ “A top concern is that many employers remain largely unaware of the variety of solutions available today under the ‘private exchange’ label – or misunderstand the concept completely.” One question we have heard over and over again here at KTP Advisors is, “Can the employer remain self-funded in the private healthcare exchange?”

Some private exchanges allow employers to choose the funding methodology that best fit the employer’s needs. This means that the employer may choose between two different funding methods: fully insured or self-funded.  For example, there are private exchange strategies that offer “fully-insured” group health plans. In a fully insured model, the employer contracts with an insurance company, effectively shifting all of the health risks of its employees to the insurer. Private exchanges may also be utilized to offer “self-insured” group health plans to employees. This allows the employer to continue to manage the employees’ utilization of health care while retaining the risk.

Some exchanges that offer self-funding options include:

  • RightOpt- Buck Consultants
  • EmSpring Benefits Marketplace powered by bSwift
  • Towers Watson – One Exchange
  • Liazon’s Bright Choices
  • Gallagher Marketplace
  • Mercer Marketplace

Security and Compliance of Healthcare Exchange Platforms

imagesLast week news and media outlets disclosed that hackers breached a HealthCare.gov test server earlier this summer.  This announcement has increased concern about the overall vulnerability of healthcare organizations. With the rise of healthcare exchanges, both private and ACA, it is important to address the issue of security and compliance to protect sensitive data. While individuals browse the exchange platforms, personal information such as names, Social Security numbers, and date of birth could be compromised. The security of personal health information (PHI) should be a key focus for a successful health care exchange.

According to a recent article in InformationWeek, ‘10 Ways to Strengthen Healthcare Security’, “As providers, payers, employees, patients, and partners become increasingly intertwined through shared data, transparency, and analytics, the opportunities for loss, error, or theft grow exponentially.” This is why the security and compliance measures of healthcare exchanges need to be taken seriously. A “one stop shopping experience” that many private healthcare exchanges boast, requires additional security measures.

Looking to join a private exchange? An important consideration for employers looking to transition to a private exchange might be the security features of that exchange. Certain questions employers might ask when evaluating private exchanges include:

What Technology Platform does the exchange operate on and is that platform susceptible to hackers?

Does the exchange’s data reside in “the cloud” or on a physically and technologically secure, proprietary data warehouse?

Does the exchange have programmers and IT engineers on staff to manage security or is it outsourced to a software technology vendor?

Does the exchange’s security measures comply with – and exceed – current federal and state guidelines for protecting PHI (as defined by HIPPA)?

What are the exchange’s security procedures if there is a security breach?

For more on healthcare security measures, please click here.