The Insurer and Addiction Treatment Provider Dynamic

Last updated on November 4th, 2019

I attended a recent aXis conference in Florida, where an entire session was dedicated to the challenges that exist between commercial insurers and treatment providers of substance abuse services. It was fascinating to witness the disconnect between the two in such a public forum. On the one hand insurers want to manage costs, while on the other providers want to extend treatment periods.

This fragmentation favors the insurance field which cannot be blamed for exploiting the absence of a single powerful treatment voice.-Howard Meitiner

This dichotomy highlighted the need for more discussion between the parties involved. The problem begins for the substance abuse treatment providers because of the fragmented representation of their views in the country and in each state. This fragmentation favors the insurance field which cannot be blamed for exploiting the absence of a single powerful treatment voice.

New York state is a wonderful example of this very problem. The substance abuse/behavioral health field is represented by many different, well-intentioned associations, but their agendas and priorities are not always aligned.

There are more than 15 representative bodies for the substance abuse field, which is in complete contrast to the hospital industry, that has the Greater New York Hospital Association, (GNYHA), as a single lobbying entity representing their needs and interests. The substance abuse field must evolve similarly otherwise we will fall behind during these transformative times to those who are better organized and more powerful.

Therefore, the first problem that must be addressed is how we move toward a more enlightened and productive dialogue between insurers and treatment providers about treatment solutions and long-term recovery?

The solutions are as follows:

  • The legislature must be engaged on the benefits of individualized treatment for people suffering with substance abuse.
  • Each state needs a consolidated representative body to promote the viewpoints of all the other SU state associations.
  • Promote a political urgency for enlightened solutions by identifying the number of lives affected and the enormous impact the issue has on communities.
  • Draw the insurance industry into a more proactive dialogue about changes in funding policies using the threat of legislative appeal to discuss changes in funding policy.

But let’s return to the conference and two speakers who represented the insurance providers. Doug Nemecek of CIGNA and Marty Waters of Value Options were credible and thoughtful presenters. They clearly understand the nature of the disease and the fact that it is a chronic condition that requires ongoing and active recovery management. So, on the face of it, there does not appear to be a philosophical disconnect at the insurer leadership level. Yet, there appears to be a disconnect with lower level insurance staff.

So, on the face of it, there does not appear to be a philosophical disconnect at the insurer leadership level. Yet, there appears to be a disconnect with lower level insurance staff.-Howard Meitiner

The reasons for this would appear to be as follows:

  • The goals and objectives of insurer employees vary in accordance to the level within the organization. Those involved in utilization review appear to be driven by cost containment rather than by a recognition of the necessity for individualized treatment.
  • We live in a capitalist society where organizations seek to reward investors and shareholders by maximizing profits and returns. Insurance companies are part of this system and are motivated by the same market forces.
  • Although there have been some recent legislative moves (most notably in NY state), the insurers have been left relatively free to pursue their own profit-driven policies related to treatment preferences and duration.
  • The insurance industry is undergoing a consolidation that is creating more powerful organizational entities, making it more difficult for treatment providers to be heard. The recent merger of Value Options and Beacon is an illustration of this.

The second problem therefore is the challenge of how to educate insurers about the clinical importance and value of individualized care that does not artificially compromise any necessary residential component of treatment. In my view, this can be achieved by taking the following steps:

  • Provide insurers (and legislators) with the facts surrounding trends in addiction, relapse and associated costs to healthcare and criminal justice using research from CASA, TRI and other research leaders.
  • Develop outcome data for both progress achieved while in treatment and post treatment. The challenge for the industry is that there is inadequate funding for outcome tracking studies. Government contracts should include this provision. Foundations should prioritize this as an area of support and insurers should partner with providers on pilot tests for outcome funding.
  • An organization such as the National Council in Washington should host an annual conference of all the leading insurers, large treatment providers, researchers and others. Such a conference could review the latest research data, discuss new treatment initiatives, outcomes of recent pilot tests and establish working committees to address specific problems or challenges that require resolution. I have been impressed by the leadership of Linda Rosenberg (CEO National Council) and she is capable of organizing a good quality and productive gathering.

  • Providers must embrace evidence-based practices, the use of appropriate medicines and a more open-minded approach toward treatments that work.-Howard Meitiner

  • Providers must embrace evidence-based practices, the use of appropriate medicines and a more open-minded approach toward treatments that work. We are in the 21st century. Medical science is providing us with more tools, the acuity of our clients is far more complex and everyone should adopt the concept of “Whatever Works.” The insurers will increasingly demand this from providers.
  • Organizations within the substance abuse field must consolidate through strategic mergers and acquisitions. There are very few large providers and far too many smaller treatment programs that could disappear over the next five years. It is critical to be a part of a viable entity that by necessity should embrace service diversity and integration. A good recent example of this was the merger of three entities to form the Aspire Group in Florida, which resulted in a more powerful, influential and diversified organization. Like it or not, merger and acquisition is a necessity for the future.

Partnership – The Future

…technology will transform healthcare in profound ways we cannot yet predict, but every organization is going to be forced to acknowledge this change.-Howard Meitiner

We can learn from history and respond accordingly. Look how technology changed forever music and video delivery systems. Blockbuster once owned the video delivery marketplace. In a similarly dramatic way, technology will transform healthcare in profound ways we cannot yet predict, but every organization is going to be forced to acknowledge this change.

Although there is little funding at present for these services, they provide an opportunity for partnerships between insurers and providers that will create a more balanced relationship. Lower cost treatment delivery systems with verifiable outcomes will be part of that future and one that is mutually beneficial.

For now, we must remain informed and accepting of change. We must be prepared to engage with funders as this transformation unfolds. Flexibility and creativity will be critical in this regard by all parties involved.

Leaders such as myself remain available to assist organizations willing to begin that journey of opportunity and challenge as part of future strategy.

Photo Source: istock

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