Mexico saw a very big change in the health insurance industry with the coming of The Affordable Care Act. At the same time three big health insurers were reduced to two in 2013.
Lovelace Health System, a Medicaid vendor since the Gary Johnson
administration in 1997, lost its bid last year for state Medicaid business, dubbed Centennial Care by the Human Services Department. Lovelace sold its Medicaid business to Molina Healthcare and the rest of the insurance business to Blue Cross and Blue Shield in Mexico.
Blue Cross and Presbyterian Health Plan will be the leading insurers in Mexico. The Blue Cross and Blue Shield Medicare Advantage business will leap when the Lovelace acquisition is completed
Lovelace is an integrated system - one that controls the insurance, hospitals and medical providers the patient needs - offers better care coordination than separate systems of financing and delivery of care can provide.
Members also can access medical records, send email to providers and schedule appointments, she said. The payers and providers of care can share data that help them find the most effective way to improve outcomes.
Lujan of Lovelace believes the community lost something when Lovelace decided to leave the insurance business.
"Whether it is our integrated model or their integrated model, it is still integrated," she said. "You work in different ways to provide great outcomes to a population. Not having another fully integrated system changes health care somewhat for this community."
Blue Cross and Blue Shield of New Mexico, are different, the company is focusing on large scale operations. "You have to look at what you feel comfortable with" as a customer, said CEO Kurt Shipley. "Our perspective is that our whole focus is the health plan, with all the tools and resources we can bring to members."
Blue customers will experience "higher levels of service, higher levels of support, because we have the tools and resources to make this happen."
"We had a lot of our business outside of the Albuquerque market," he said, so the Lovelace transaction "allows us to have a volume of members in the Albuquerque market where we can invest more in the programs we offer."
Both Presbyterian and Blue Cross are looking for ways to improve care and lower costs by moving away from fee-for-service pricing. That approach compensates medical providers for the service they provide.
Sharing risk can work with big provider groups that have the resources to manage care. The small groups that serve much of New Mexico don't have the resources or deep enough pockets to take on such risks. These practices need incentives to improve and manage care.
"I'm not surprised we're going back to a shared-risk model," Becker said. "It's a more efficient system. I also think delivery systems want to take on more risk because they think they can manage the patient better than the health plan can."
Consumers have an "intense loyalty" to their health plans, he said, so Health Connections, Cigna, Molina and any other competitor will have to provide customers a compelling reason to switch.
With Albuquerque down to two market-dominating health insurance companies, regulators face some unusual challenges, Krahling said.
Two large players could have too much pricing power, which will require special diligence by state regulators.
Krahling wonders if the large national companies like Cigna, UnitedHealth or Molina Healthcare, which has both the scale and a presence in New Mexico, will push into the market.
"If I'm a big national guy, and I'm looking at where I want to spend money, and I look at a state like New Mexico that is dominated by two guys, I ask myself, 'Is that where I want to go or do I want to go to a market with a million people?'" Krahling said.
"The market does have a tendency to react to things," said Becker, who expects one of the larger national companies to fill any void that Lovelace's withdrawal from the market might leave. "Since you're already here, you already have a provider network, all the heavy lifting is done, why not expand your market share?"
Shipley said competitors aren't standing still.
"I see some of them making very strong efforts to be more engaged in the four-county Albuquerque area," he said.
"Carriers in this market will have a broad range of product offerings that cover people across their lifetime," Lujan said.
Hannah Punitha (IRDA Licence Number: 2710062)
Winthrop Quigley, January 2014