On our Web site, relentlesshealthvalue.com, there is a little orange button that says send us a voice message. If you have a question, feel free to click on that button and we’ll try to round up a posse to answer your question if we can.
So, let’s do this thing.
“Hey, Stacey! Really big fan. Really loved the last episode. I had a question. Could you provide more clarity on what the key takeaway was about the actuaries and the different timelines that they’re working on versus physicians? I would greatly appreciate it. Thanks.”
Great question.
And yes, I did kind of drop in an episode something about risk horizons with no explanation. Instead of trying to answer that question myself, I reached out to a couple of actual actuaries, Keith Passwater and JR Clark. I’m gonna play their answers and give a little color commentary before and after to kind of knit together this whole thing into a few succinct takeaways for you.
Keith Passwater is former senior vice president and chief actuary over at Anthem. Keith founded Havarti Risk Services. He brings better risk products and services to healthcare clients. Keith is also a Fellow of the Society of Actuaries, a member of the American Academy of Actuaries, and he serves on the General Committee of the Actuarial Standards Board.
JR Clark is SVP of health plan product and strategy at Paytient Technologies, where he partners with thoughtful employers, insurers, and health systems to help people better access and afford healthcare. JR is known for his public exchange marketplace strategies (and that’s relevant for today) and the creation of alternative products in the individual and small group segments.
So, our panel here is strong is the bottom line. I do want to take a moment to underscore five times that if any healthcare transformation is going to happen, whomever is transforming pretty much anything must—and this is mandatory—they are going to have to be hip to hip with an actuary. But a special kind of actuary—one who applies their considerable smarts to factor in the patient or member as an actual stakeholder in their equations, because what now? Came to discover that in most actuaries’ current models, the impact on the patient or member is not part of their equation. Yeah, yes, you heard that right. Despite the fact that study after study shows that once co-pays or coinsurance reaches a certain dollar amount, patients will start abandoning care, as just one example. And despite financial toxicity being clinical toxicity, and how the cost of care can be a comorbidity, as Cody Coonradt has put it, you only have a small percentage of actuaries who are factoring this in when adding and subtracting and toting up the benefit design.
So crazy, especially because even if you forget about the human aspect here (just ignore it), I’d suspect the math is actually wrong if you ignore the patient as a stakeholder. There are financial consequences when patients abandon meds and care, and some of them manifest fairly quickly—and not in a way that is revenue positive for the plan: Diabetes patients who don’t take their insulin. Guy sees a spot on his arm. Is it melanoma? I don’t know, but I do know I’ll be $600 in the hole if I go see the doctor, so he doesn’t go until it’s really big. I mean, unless the patient dies on the quick, you’d think that there’d be some statistical contemplations about this (ie, how much does it cost plans in the short/medium term when patients who need care fail to seek it).
Actually, Alex Sommers, MD, wrote a post on this the other day. In this post about how much it actually costs when patients abandon care, he references the Four Horsemen of the Apocalypse, which is probably why I remember it.
Any actuaries out there who are taking the patient into account—or health equity is another thing—let me personally give you a round of applause. It’s really easy to feel powerless inside a big machine where everybody is a cog in the wheel, and therefore it’s really hard for anybody to have accountability for the outcomes that we all contribute to.
So, it’s a hugely impressive thing when I meet someone who is figuring out how they can create some net positive patient impact. Okay, so you heard the listener question, “What do you mean by risk horizons?” I played the same question for Keith Passwater. Listen to his response.
You can learn more by connecting with Keith, JR, and Paytient on LinkedIn.
02:39 Why is it a problem for actuaries to ignore the patient as stakeholders in benefit design plans?
04:37 What is a risk horizon for actuaries?
05:38 “What’s the time interval over which we hope to impact healthcare costs?”
07:25 What is a risky investment from an actuary’s point of view?
08:05 How do you keep premiums down when the time horizon is short in an actuary’s point of view?
10:31 How do actuaries assess risk horizons or health insurance, and why do they choose those risk horizons?
14:05 What options are on the table when the risk horizon is longer?
16:06 How does the length of risk horizon affect benefit design?
You can learn more by connecting with Keith, JR, and Paytient on LinkedIn.
Recent past interviews:
Click a guest’s name for their latest RHV episode!
Lauren Vela (Summer Shorts 6), Dr Jacob Asher (Summer Shorts 5), Eric Gallagher (Summer Shorts 4), Dan Serrano, Larry Bauer, Dr Vivek Garg (Summer Shorts 3), Dr Scott Conard (Summer Shorts 2), Brennan Bilberry (Summer Shorts 1), Stacey Richter (INBW38), Scott Haas